Q: Our board willfully used funds from the reserve account without unit owner approval for other purposes. The state imposed a fine on the association and not the board. Who is responsible for such action?

R.E., Miami

A: The fine will be paid from general funds of the association or by special assessment. This means that each member will pay their share. It is said that the board is responsible for the operations and maintenance of the association. This is true, but each member is responsible to elect trustworthy and knowledgeable members to the board. In addition, each member has a responsibility to monitor the actions of the board and this means reviewing the financial reports and attending meetings. If the members are complacent and the board fails to comply with the statutes or the documents, then the members must pay for the errors of the board and any fine imposed on the association.

Q: I am puzzled by your comment establishing a members meeting quorum that, ``In Condominiums, you only need 20 percent of the ballots to be returned.'' FS 718.112 (2) 2(b)1 states, ``Unless a lower number is provided in the bylaws, the percentage of voting interests required to constitute a quorum at a meeting of the members shall be a majority of the voting interests.'' Our bylaws state, ``A quorum at meetings of the members shall be attained by the presence, either in person or by proxy, of persons entitled to cast at least one-third of the votes of the entire membership.'' Both seem to run counter to your advice.

K.E., Naples A: Keep in mind that the condominium statute sets limits for two parts of a condominium members meeting: the election and the business to be conducted. You do not need a quorum of members to make the election official; you only need 20 percent of ballots returned. To conduct business at the members meeting, you need a quorum present. It was the intent of the state to allow the election to be completed even if members did not attend the meeting or did not return a proper number of proxies. HOAs are still required to have a quorum present for the election unless documents say otherwise.

Q: Who appoints a committee? Once a committee makes a decision, where does its recommendation go? Does a committee have the authority to implement recommendation(s) or does it give recommendations(s) to the board for final approval? We have a committee that believes, along with several board members, that it makes the decision as to how to spend funds collected at a community social event, as they were the coordinating entity. The committee said the process was put in place by a previous board several years ago, therefore, it will proceed as directed.

M.I., Dunedin

A: Committees are formed by the board of directors and sometimes created by the documents. I like to say the board appoints and establishes the policies under which a committee operates. In either situation, the board assigns the duties or operational instructions.

Normally, a committee is formed as a fact-finding or planning group under the control of the board. While a committee usually is not authorized to make final decisions or spend funds, the board can authorize it to do so. However, if a committee does make a final decision or commits to expenditures, its meeting must be noticed and open to members. If the committee uses association funds and/or collects money by selling tickets, you would have other problems in that the association or committee might have IRS tax reports and sales tax collections and payment situations and accounting records that must be completed and retained. In any case, the association attorney, the CPA and the insurance agent must provide guidance to the board and the committee.

Q: I am the association manager for a small HOA and I have a question regarding when to start foreclosure. What about associations that have wording in their documents that makes their liens for unpaid assessments subordinate to the lien of the first mortgagee? If the association were to be successful in foreclosing on a unit for unpaid assessments, would it not wind up with a mortgage to be paid and in a worse financial position than having a delinquent owner?

C.W., Key West

A: You are correct in that the unit would have a mortgage lien on it, causing the title to have an obligation, the first mortgage. But the association would not be legally responsible, as it was not the signer on the note and mortgage.

My primary intent is for the association to get the property paying as quickly as possible. If you wait for the bank to foreclose, it could take years. The association can take title in months. You need legal guidance to lien and foreclose, and advice on what to do once you have title.

Here are some of the solutions to have the property generating income: rent or sell the property (maybe a short sale), or contact the bank to see if it will accept a deed to the property. Thus, the bank would then be responsible to pay the fees. Write to Condo Line, Home, 1 Herald Plaza, Miami, FL 33132, or e-mail CAMquestion@cfl.rr.com. Include name and city.

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