Question: My association is going to sign a new bulk services agreement for basic cable television. I have satellite TV and will now have to pay twice for TV service. A third of the residents don’t want bulk cable service. Majority rules, I was told. What do you have to say? S.B. (via e-mail)
Answer: Both the Florida Homeowners’ Associations Act and the Florida Condominium Act provide that the board may contract for communications services, information services, or internet services obtained pursuant to a bulk contract. This includes cable television. In my August 21, 2014 blog entitled “Wi-Fi For All is Likely a Common Expense For Associations”, I touched upon the unresolved legal issues that pertain to the retroactive application of these statutes, which have a different history in the context of condominiums and homeowners’ associations.
These statutes also provide that bulk contracts entered into by the board may be canceled by a majority of the voting interests present at the next regular or special meeting of the association, whichever occurs first. At such meeting, any member may make a motion to cancel the contract, but if no motion is made or if such motion fails to obtain the required vote, the contract shall be deemed ratified for the term expressed therein. Just how this cancellation vote might proceed raises some interesting questions.
There is no obligation for the board to place the cancellation issue on the meeting agenda. A cancellation vote would most likely only take place if a member in attendance makes a motion, and a majority of the members in attendance (which I believe, although the statute does not directly say so, includes those attending by proxy) vote in favor of cancellation. Since a designee of the board typically serves as the proxyholder for most of the members who submit proxies, it is highly questionable whether such a director would (or even could) vote for cancellation. To further complicate the issues, in the condominium setting, a proxy vote on an issue of this nature would require the use of a limited proxy.
Therefore, successful cancellation of such a contract would likely require a well-planned effort by those seeking to accomplish that result.