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HOA Board Meeting - Traps for the unwary

Homeowner's Association (HOA) Law - Attorney Holly Rice's notes from the arena:

Recently, I had sat in on an interesting Board of Directors meeting for a homeowners' association. I liken the experience to watching a shark maul its next meal. This particular HOA had only FOUR members, and they were all on the Board. Alliances had been created, such as you might see on that show, Survivor. Two on two. To me, that meant basically nothing was going to get done. Two issues stood out: FIRST - suspension of voting rights of one of the members. SECOND - enforcement of the covenants to compel removal of a boat from one of the docks. Let's take a look at each issue.

The first issue was whether one member would have his voting rights suspended. Curiously, the member in question was permitted to vote on whether his voting rights would be suspended. However, the President refused to allow him to speak. Not surprisingly, it was a 2-2 vote. Florida Statutes Chapter 720 deals with Homeowners' Associations. Fla. Stat. ยง720.303 provides that members have the right to attend and speak at board meetings. The President violated Florida law when he refused to allow this board officer to speak. Interestingly, the Florida Statutes do not directly address whether a board member has the right to vote on the suspension of his own voting rights. However, one should always look to not only the Covenant Declaration, but also to the Association Bylaws for guidance. Also, Florida's Not For Profit Corporation Statute, governs where the HOA statute doesn't address an association issue.

The second issue was slightly more complicated,

but I will simplify for our purposes. One of the homeowners had docked a boat in a continuing violation of the covenants. My client simply sought enforcement of the covenants, which had specific restrictions about the docking of certain vessels. The violating homeowner and the president voted to NOT enforce the covenants! Another 2-2 vote.

Wait -Stop. Aren't Board members obligated to enforce the covenants? YES. Must the covenants be enforced if the vote is 2-2? YES! Chapter 720 tells us that the board of directors have a fiduciary duty to the members. Florida law and most covenants provide that the prevailing party in such situations is entitled to an award of attorney fees. (There are also administrative remedies).

If there is a conflict of interest, such as where an officer proposes to engage in activity that conflicts with his or her fiduciary obligations, for example, there may be a duty to disclose the conflict. While there is no direct provision in Florida's HOA law, Florida's Not For Profit Corporation statute does address this.

When your association has a meeting, there are several steps that must be taken, such as providing notice, and you as a unit owner and/or a board member of the association have certain rights, including speaking rights. For more information on your rights and obligations, or for advice regarding your dispute with your homeowners' association, contact our law firm to schedule a consultation.

HOLLY RICE is an associate attorney with the law firm of Lanier & Deifik, P.A.

Visit our videos at http://www.naplesattorney.net/videos/ and click on "What is a limited common element?" to learn more about community associations from Ms. Rice.

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