Question: My condominium association holds an annual holiday party at a nearby restaurant. The association pays for everything, including the banquet hall, food and refreshments, by using common funds. Is this a proper common expense? J.A.
Answer: Maybe. Your condominium association’s governing documents likely include a definition of “common expenses.” If this definition specifically includes social event expenses, like the expenses referenced in your question, it is likely that these expenses will be considered a proper common expense. If, however, your governing documents do not include social event expenses within the definition of common expenses, these expenses may not be considered a proper common expense. Like many community association legal issues, the specific facts of a given situation will dictate the answer.
The Division of Florida Condominiums, Timeshares and Mobile Homes has jurisdiction to investigate complaints from owners who allege that their condominium association is impermissibly spending common funds. As part of any investigation, the Division will closely scrutinize the subject expense and the scope of the common expenses, as defined by the governing documents. If the Division feels that the subject expenses exceed the authority contained in the governing documents, they have the right to pursue enforcement efforts against the association. The amount of the social event expenses and what the expenses are being used for will be relevant factors in any Division investigation.
Many condominium association governing documents do not include social event expenses within the scope of the common expense definition. For those associations, who wish to pay for social event expenses via common funds and avoid the risk of a legal challenge or penalty being imposed by the Division, an amendment to the governing documents can be pursued.