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Board Not Obligated to Put Reserves on Agenda

Q:        Historically, the unit owners in our condominium are given the opportunity to vote on waiving reserve funding each year. When approved, this resulted in lower assessments. This year, the board adopted a budget with fully-funded reserves and did not give the owners the opportunity to vote to waive. Is this allowed? (C.O. via e-mail)

A:        Yes. Section 718.112(2)(f) of the Florida Condominium Act governs annual budgets and reserves for condominium associations. The law provides that the annual budget must include reserve accounts for capital expenditures and deferred maintenance. Those accounts must include roof replacement, building painting and pavement resurfacing regardless of the amount of replacement/deferred maintenance expense. Reserves are also required for any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. The statute outlines the formula for funding reserves and provides that reserves must be fully funded unless the owners vote in advance to waive or reduce full funding.

The board is authorized, and arguably even required, to adopt a budget with fully-funded reserves in the absence of an owner vote waiving full funding. If the board elects to not put that matter to an owner vote, the association is obligated to adopt a budget with fully-funded reserves. There is a process where owners petition for the call of special meetings to address any lawful subject, and that would include consideration of reserve voting. If enough of your owners want to have the right to vote on waiving reserves, then that would be the process to follow if the board does not choose to offer the choice, which many do not.

As discussed in this column previously, while condominium associations are required to have reserves as provided by statute, homeowners’ associations generally are not required to have reserves under the statute. However, if a homeowners’ association has reserves that were created in the developer’s budget, or created by a majority vote of the members, such reserves are treated in the same manner as condominium reserves.

Q:        I am a seasonal resident. I recently e-mailed the manager for my homeowners’ association and asked that they e-mail me a number of records, including all of the contracts that the association has ever been a party to. The manager wrote back and told me that the records would be available at the management company office, but that they only had contracts going back seven years. I am currently out of state and asked for them to be emailed to me. They refused. Can they refuse to e-mail me the records and are they only obligated to have the last seven years of contracts? (A.J. via e-mail)

A:        Yes on both counts. Owners in both homeowners’ associations and condominium associations have the right to inspect the records of the association and have copies made at their expense. Both statutes contain broad definitions of what constitute the “official records” of the association, and include a catchall provision stating that any written record of the association not specifically listed in the statute, but which relates to the operation of the association, is considered an official record.

Therefore, written contracts to which the association is a party would be official records of the association and would be a record that the unit owners are entitled to inspect and copy. However, such records are only required to be kept for seven years.

Additionally, the right of an owner is to “inspect” the records, and have copies made at their expense after they have inspected them. Associations are not required to have copies e-mailed, mailed or otherwise delivered to owners on their request. If you are out of town, you are entitled to designate a third person as your authorized representative to inspect (and copy) the records on your behalf.

Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@bplegal.com. Past editions may be viewed at floridacondohoalawblog.com

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