Q. As a former board director for a cooperative, I attended a legal seminar given by an attorney. The attorney listed the chain of authority as: U.S. Constitution, federal law, State Constitution, state legislation (Florida statutes), Declaration of Covenants and Restrictions also called the Declaration, Articles of Incorporation, Bylaws and Rules and Regulations. When I became a director at my new association, I asked what we needed to go by if any of these documents conflicted. I was told by the president of the board at the time that we needed to go by whichever was more restrictive. Is this correct? Please explain.
That order of the laws and documents is called the order of powers. Each has a higher power over the suborder of the lower documents or laws. This means that if there is conflict between the different powers, the higher power would prevail. There is an exception and that is if the lower power is more restrictive, than the lower power would be superior. Here is an example: The statutes say that a notice for board meetings must be communicated/posted 48 hours in advance. If the bylaws say the notice must be posted 72 hours before the meeting, that rule must be followed. Q. Our HOA will soon elect a new board. Securing enough candidates was very difficult since many residents declined to volunteer. Most claim that they are too busy. Anticipating that there may not be enough volunteers to seat a board next year, what would happen to our association? What should the new board plan in such an event? How do we avoid an implosion?
There is the option of having a judge appoint a receiver. Keep in mind that this is a very expensive option. It would be better to engage a licensed manager or management company. To reduce the workload on the directors, the manager could shoulder the day-to-day work. Correctly managed, you could reduce board meetings to every other month or even quarterly. The board needs to seek professionals to help with decisions. That professional team includes an attorney, a CPA, insurance agent, as well as a licensed manager. Done correctly, this would reduce most of the work, thus allowing the directors to do a better job of administrating the association.
If you communicate to owners that it is important for each to volunteer to serve the community and explain that they will have professional help to not only provide guidance, but to do the work, perhaps you could find enough volunteers to serve. Explain that if they fail, fees will go up if a receiver is needed. The big job is to sell the members on the need of their support.
Q. Our Homeowner Association (HOA) has the common problem of some homeowners not being current on their annual dues. I am considering doing something to spur them into paying. That would be to publish a newsletter to be mailed to each homeowner along with the annual assessment statement. That newsletter would include a list of delinquent accounts, identified by lot number and street address, which would list the current dollar amount that each account was in arrears. The thought behind this action would obviously be to embarrass some homeowners into paying their dues. Since this information is part of the official records of the association, I think that sharing it with all members would be legal and permitted. I am asking you if you agree with this.
There are better ways to approach delinquent accounts. In fact, you will not embarrass the owners into paying, but you may find the board being sued by them. If you publish their names or addresses, you may be in violation of the Fair Credit Act. You have the most powerful tools to force collections and the cost is usually paid by the delinquent owner. That right and solution can be found in the statutes and your documents. First engage an attorney and most legal costs will be charged to the delinquent account. After proper letters are sent to the delinquent account, the attorney will file a lien on the home. In about 45 days the attorney can file foreclosure action. You should start any such collection action within two months of the delinquency. That is what you need to put in your newsletter. Explain to members that the board has approved a collection policy in accordance with the statutes, documents and attorney’s advice. Let the members know that the board is serious about delinquent accounts. The goal is to collect delinquencies or put the owners on the street in order to get the home paying.