Liability insurance on common areas is required

Q: Our HOA board of directors has not carried general liability insurance on our common areas for almost 18 months. The homeowners found this out when one could not close on his unit sale because the title company wanted insurance. The homeowner paid for the insurance so closing could take place.

The builder controls the board of directors and said there was not enough money to pay the insurance. In your opinion, is this criminal negligence on the part of the board?

J.J., Broward

A: The failure of the developer/board is more of a poor business decision than criminal neglect. An attorney would need to answer your question about civil liability versus criminal neglect.

Not having enough money to pay for insurance is not a valid answer. When boards are short on funds to pay for required items, they are then obligated to increase the budget or pass a special assessment.

I believe the major reason the developer did not have the funds was strictly his economic position in this slow market. He feared that increasing the budget or approving a special assessment would hurt his sales.

As the statutes and I’m sure your documents require liability insurance, he was clearly in violation of these requirements. Since there were alternative methods to raise the funds to pay for necessary insurance, he made a poor business decision.

Q: I am on a homeowner association committee to decide what to do with our tennis court. It was in the original documents from 30 years ago and needs to be resurfaced. We have only 40 units. Some owners want to remove it and make a parking lot, a park, etc., and some want it to remain a tennis court.

Can you tell me whether you are allowed to remove one of the original amenities and if so, what kind of vote needs to take place?

E.M., Minneola

A: What you are addressing is a common area that you are trying to eliminate. When you start altering common area elements, it can create a serious liability for the association and for that reason I strongly recommend you seek legal guidance.

Most documents would define how the removal of a common area would be conducted. The major reason that I recommend legal guidance is because I have seen one owner sue the association when it removed a common element.

Say one owner purchased in the community primarily because he had use of the tennis court. If you remove the tennis courts and he did not vote for the removal, you may find that he sues the association because you took away the one amenity that was very important to him.

An attorney would research documents as to the correct procedures, draft a legal motion, and assist with the required votes.

Q: At our HOA monthly board of directors meeting we have a member who attends every meeting and asserts that she can address and discuss any business that the board members discuss. Her interference sometimes has caused dissent and has predisposed some of the board members’ votes. Do the statutes say that any member can sit in on all board meetings and talk to those items placed on the agenda?

B.S., Stuart

A: The statutes allow the board to establish meeting policies. Those policies could include allowing members to address any agenda items up to three minutes. They can also require that a request to talk on a specific agenda item must be in writing and presented to the secretary before the meeting is called order. They can also limit when the owner can speak — just after the motion has been made and directors have discussed it but before the vote.

If an owner does not submit a request in writing to discuss an agenda item before the meeting is called to order, the owner can be denied the right to talk. Using such a policy will limit discussion from the floor but allow an owner to present their information or concerns.

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