Print

Email story

Comment

Email editor

Community Living

Jumpy directors may feel underappreciated

By RICHARD WHITE
Published January 14, 2006

Q. The board of our association consistently reminds unit owners of the risks which can face board members: that they can be sued individually and stand to lose their personal assets if they don't act in a certain manner. Our insurance rates have increased to cover them. We appreciate the work they do, but their concerns seem to dictate every decision they make. Their fears of being sued and losing their personal assets have permeated our community, making it more and more difficult to find candidates willing to serve on our board. Under what circumstances may board members be sued individually? Is this common?

A. Directors acting in good faith are protected by state statues, FS 617 and others. In addition, your documents should have a section on indemnification and insurance for directors and officers (Directors and Officers, or D&O coverage).

What is not covered is any situation where a director has committed a crime, such as stealing money from the association, or possibly discrimination or similar violations of federal and state laws.

Directors are protected from loss of personal assets as long as they act in good faith. In your situation, I suspect that board members are seeking a little understanding: They are performing a demanding, time-consuming job, and they need a little stroking.

Q. Our board recently voted to institute equal assessment for all units regardless of size. Our documents specifically state that they are to be prorated in proportion to the size of the unit.

A. Your board has exceeded its authority. The board has no power to change the percentage listed in the documents.

Q. Our condo has sustained deterioration and water infiltration in many units and other areas. We had an engineering study done to determine whether there are structural problems. The board announced that the results would be presented at the next association meeting, but that was more than three months ago and we still have no information. Nor has the board said what its plans are for repairs or maintenance. Pieces of concrete have fallen from the exterior, the paint is peeling and the water infiltration has worsened. What can the owners do?

A. You can sue the board, but it will take years and be very expensive. A more effective approach may be to vote in a board that will make repairs. If you don't elect a board that will act, your property values will drop. While you await the next election, I suggest you and your neighbors write the board about your concerns that they have failed to take steps to solve the problems.

Q. Our documents say the homeowners association is responsible for maintaining common areas. The manager won't fulfill these responsibilities. The common areas are depressing and run-down. Many areas aren't properly maintained and our monthly fee is too high for the service we receive. Advice, please.

A. This is what I call "landlord syndrome." Owners regard their boards and managers as landlords. Boards are elected by the members. Usually they are inexperienced about association operations, and they need support and understanding from the members. However, the state has placed fiduciary duties on them that require them to properly represent the owners and the operations and to maintain the association. The manager does not share those responsibilities but does have duties assigned by the board. It's up to each member to volunteer to help with the work. You'll become aware of what's really involved, the financial burdens and the effort required to serve on the board.

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 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.

[Last modified January 13, 2006, 08:17:05]