Today’s column is the third installment of our annual review of the new laws affecting condominium associations and will begin to review the new laws affecting cooperatives, which will become effective July 1, 2018. So far we have looked at changes to the condominium laws involving official records, websites, financial reports, meeting notices, term limits, condominium recalls, material alterations and electric vehicle charging stations.
Conflicts of Interests of Condominium Board Members
- Deletes Section 718.3026(3) regarding contracts or other transactions between the association and one or more of its directors or entity in which one or more of its directors are financially interested.
- Amends Section 718.3027(2) regarding a director or officer, or a relative of a director or officer, who proposes to engage in an activity that is a conflict of interest. In addition, the following applies:
- The association shall comply with the requirements of the not for profit corporations statute, and the disclosures required by that law shall be entered into the written minutes of the meeting.
- Approval of the contract or other transaction requires an affirmative vote of two-thirds of all other (non-conflicted) directors present at a meeting.
- At the next regular or special meeting of the members, the existence of the contract or other transaction shall be disclosed to the members. Upon motion of any member, the contract or transaction shall be brought up for a vote and may be canceled by a majority vote of the members present.
- If the contract is canceled by member vote, the association is only liable for the reasonable value of the goods and services provided up to the time of cancellation and is not liable for any termination fee, liquidated damages, or other form of penalty for such cancellation.
Condominium Fining and Suspension Procedure
- Amends the fining and suspension procedures to require that the fining committee be composed of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director or employee.
- Requires the committee to “approve” the fine or suspension by “majority vote” in order for the fine or suspension to be imposed.
- Payment of a fine is due 5 days after the date of the committee meeting at which the fine is approved by the committee.
- The association must provide written notice of the fine or suspension by mail or hand delivery to the unit owner, and if applicable, to any tenant, licensee or invitee of the unit owner.
Condominium Bulk Buyer
- Removes the “sunset” date of July 1, 2018 in the condominium “bulk buyer” law, thereby making the bulk buyer law permanent.
Cooperative Official Records
- Requires the minutes of all meetings of the association, the board and the unit owners to be permanently maintained. (The previous law only required the minutes to be maintained for 7 years).
- Requires electronic records relating to voting by unit owners be maintained in the official records for 1 year from the date of the election, vote or meeting to which the document relates.
- Extends the amount of time that cooperative associations must respond to a written records request from 5 business days to 10 business days.
Cooperative Board Member Eligibility
- In a residential cooperative of more than 10 units, co-owners of a unit may not serve as members of the board at the same time unless the co-owners own more than one unit or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.
- A director or officer more than 90 days delinquent in the payment of any monetary obligation due the association shall be deemed to have abandoned the office, creating a vacancy in the office to be filled according to law.
Next week we will continue with review of the rest of the changes applicable to cooperative associations and then explore the new laws for homeowners’ associations.