Question: The president of our homeowners association may be acting illegally. Many of the people who are listed as board members never attend meetings, and some no longer live in our community, as required by the bylaws. Seven of our nine board members say they have never attended a meeting, but their names appear on attendance sheets. Our "regular meetings" are turned into social events, and business is seldom discussed. A new resident who asked to see last year's budget was told to request it in writing and was informed he could view it only at the president's home, even though the bylaws say he can get a copy by mail.
Now a group of concerned neighbors has requested a special election. We are concerned that the president has covered up illegal activities, including the "fixing" of the records and the purchase of supplies he has billed to the association but kept for his personal use. Can we call the police if we discover theft or fraud? Is there a state agency that can help us?
Answer: A quick solution to your problem is this: Another director can be elected immediately by the board as president. This can be done at a properly called special board meeting at which the election of a new president is the sole item on the agenda. The seven or so board members who have been kept in the dark can call that meeting.
They cannot remove this man as a member of the board, but they can strip him of all power, such as check-writing authority. The directors can then order him to turn over all records to the new president and cease all activities. Then the new president and the board can plan the annual meeting and election of new directors.
No state agency regulates homeowners associations. If you find strong evidence of embezzlement, misappropriation or unjust rewards, you can report the matter to the state attorney's office or file a civil claim to recover the funds, or both. If your association has proper insurance, you can file a claim to recover lost funds.
You should be aware that all the directors can be held accountable if there is evidence of embezzlement or improper fund disbursements unless they take action to correct the problems.
Charges may be hard to prove
Question: Over the last few years, our homeowners association has had serious money problems that resulted in drastic fee increases and special assessments. Decisions by our board and officers appear to be self-serving and unethical. Some service contracts were assigned to relatives rather than awarded on the basis of fair bids.
Now board members have purchased several homes that were in foreclosure. Apparently they used association records to obtain information about the properties. My gut tells me this is more than a conflict of interest. Does this violate any law, or do we have a case of an entrepreneurial, not-so-neighborly, self-interested neighbor?
Answer: Foreclosure information can be found in the public records. You'd have to prove that the board members derived their information from confidential association documents rather than from public records, and that could be difficult. Seek an attorney's advice here. I recommend that you get involved with the operation of your association, become a candidate and serve on the board.
No proxies for board members
Question: Both chapters 719 and 720 of the Florida Statutes specifically deny proxies at meetings of the board of directors. Can you comment on this and explain the background?
Answer: Attorney Daniel Perry writes: "I was not involved in the drafting of either of these statutes, but doesn't this just make sense? You elected the board members to represent YOUR interests. One way to force the board to discharge its fiduciary duty to you and the other home owners is to prohibit proxies. Then the board members must attend (even if by telephone)." When board members exercise their fiduciary duty, they are responsible for their actions. Responsibility cannot be delegated or transferred to another person. Power of attorney is another document that cannot be used by directors to transfer their duties and responsibilities to another person.
- Write to Richard White, c/o Community Living, St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731. Sorry, he can't take phone calls or provide personal replies by mail, but you can e-mail him at CAMquestions@att.net Please include your name and city. Questions should concern association operations; legal opinions cannot be offered. For specific legal advice, contact an association attorney.
Readers may call the state Division of Condominiums Bureau of Customer Service at toll-free 1-800-226-9101 with questions or requests for materials. Access the Bureau of Condominiums Web site at http://www.state.fl.us/dbpr/lsc/index.shtml or write to Bureau of Customer Service, 1940 N Monroe St., Northwood Centre, Tallahassee, FL 32399-1032.
Please note that this office provides no information about homeowners' associations. The state has no bureau or department covering those associations.
