Condo Line

Compensation is not allowed

Q. You recently discussed an association that voted to exempt board members from payment of fees as compensation for serving. You answered that the statutes FS 720.303(12) did not allow directors to receive compensation. Our HOA voted to waive the fees of the president. It appears that our HOA has improperly voted. Could you support your position that this exemption is improper?

F.L., Fort Lauderdale

Most times we think of a transfer of money as compensation, but compensation includes a forgiveness of debt, promises, or other valuables. The statutes, including condominium and cooperative statues, say that compensation is prohibited for directors and officers. Most associations are corporations not for profit and this action could result in loss of your corporation’s rights. Members cannot vote to compensate directors and officers.Q. We are a small condominium, 14 units with garages. Recently, one of our owners suffered the loss of a garage door. I read our condominium documents but it is not clear about windows, doors and the garage doors. Is this a common loss or is it the responsible of the owner?

K.K., Seminole

Each condominium has different responsibilities and different common areas. The board needs to engage an attorney to provide a letter that provides an interpretation of the question. Without this, the board and condominium would be more subject to a possible lawsuit. Yes, you will have a legal expense, but such a letter would be a one-time cost and provide information for future expenses. If garage doors are a common expense, future budgets — more than likely reserves — can have line items for such repairs. If owners are responsible, then each owner can budget for it.

Q. I was at a seminar that discussed reserves. I believe they said that a condominium was required to keep $100,000 in reserves and not drop below that amount. If our condominium falls under the $100,000, can the state step in and fine our condominium?

S.Z., Tampa

No, I am sure you misunderstood the $100,000 limit. There is no dollar limit, but an amount to be calculated. The condominium act, FS 718.112(f) establishes how the budget and reserves must be calculated. It requires three major components and any additional component that has a value of over $10,000. The three reserve line items are roofing, paving and painting. The formula to calculate reserves is the replacement cost divided by the years of useful life. If you have collected reserves in past years, then that would be included in the formula. To allow time to properly develop the budget for next year, most boards start in August and September. This allows time to seek information to properly calculate the future expenses.

Go to the state site ( and search for the “Budgets & Reserve Schedules.” . Or, send me an e-mail and I will forward the PDF file for this document. I suggest you seek professional help to create the expense and reserve budgets.

Write to Condo Line, Richard White, 6039 Cypress Gardens Blvd., #201, Winter Haven, FL 33884-4115, or e-mail Include name and city.

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