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Community Living

Rebuild depleted reserves instead of suing past boards

By RICHARD WHITE
Published November 26, 2005

Q. Our condo, 20 years old, has a history of underfunding the reserves. A professional study indicates our reserves are about $2-million short. Many of the reserve items are approaching the end of their useful life, and I can see obvious deterioration around the property because we haven't spent the money to maintain things. (The painting schedule, for example, moved from five to seven and now 10 years.) Can we sue past boards for failure to fund the reserves adequately? Our only other way to recover is a special assessment of the members.

A. Unless you're taking about gross neglect, fraud, or other criminal activity, I advise you to forget about suing former board members and spend your time resolving your situation another way. Keeping reserves low is no favor to the unit owners. Failure to provide for impending needs will only hurt more in the future. I remember a unit owner who got up every year at the budget meeting and gave a speech about why the members should vote down the reserve budget. The time came when a special assessment was the only solution to some desperate needs for work around the property. Then he stood up and whined that he didn't have the money and wanted to pay over time. If unit owners had paid a small amount in reserves over the years, they would have had plenty of money to keep the property in good shape. A funded reserve budget enhances the value of the property and increases buyers' interest. Learn the bitter lesson of the past, look ahead and rebuild your reserves.

Q. We are a small condominium of several duplexes and one four-unit building. We have spent a lot of money to maintain the four-unit building. Several owners have suggested creating two associations, one for the duplexes and one for the four-unit building. Is this possible? Who pays for this?

A. To do this is extremely expensive. It will cost thousands of dollars for new documents and other legal costs. You may need 100 percent unit-owner approval. My advice: Forget it. Recognize that when you restore and repair other units in your association, you are increasing the value of your unit as well.

Q. Some recent manipulations and interpretations of Robert's Rules of Order and the bylaws have been very offensive, and sometimes detrimental, to many unit owners. Are there national or local codes of conduct our board can adopt?

A. I've always maintained that it's not important if Robert's Rules are followed to the letter. The important thing is that the board conduct its business openly, fairly and in a civilized manner. Any decisions made under those circumstances would be proper. You feel that your board is not behaving appropriately. Send a letter to the board outlining your concerns and ask that the matter be discussed at the next meeting.

- Richard White is a licensed community associations manager. Write to him 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@cfl.rr.com 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 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.

[Last modified November 25, 2005, 09:00:07]