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Board Spending Authority Not Unlimited

Q: My condominium association has a number of committees including a social committee. Recently there was a discussion at a board meeting concerning the association paying for certain social committee activities, including providing food and drinks at parties. However, the board stated that it cannot use the association’s funds to pay for social events and told the social committee to raise its own funds. Is the association prohibited from funding social events? (S.V., via e-mail)

A: This is a difficult question that is not clearly addressed in the statute or in any case law from the courts. Section 718.115 of the Florida Condominium Act sets forth what proper “common expenses” for condominium association are. Generally, these are the expenses related to the operation, maintenance, repair, replacement and protection of the common elements, and the costs of carrying out the lawful powers and duties of the association.

The statutes identifies some particular items that are proper common expenses (such as bulk cable television contracts) but the list in the law itself is by no means exhaustive. The law goes on to state that the declaration of condominium or bylaws may specifically designate specific items as proper common expenses. Keep in mind, this is money collected from owners under penalty of lien and foreclosure if they do not pay.

Therefore, the best practice is to specifically address these issues in your governing documents, and this is an issue I always recommend to associations when considering a document update. On the one hand, you would not want the board to have unlimited spending powers (such as contributing to political candidates), but putting out a pot of coffee and box of cookies at an association meeting should not be fodder for a complaint to the Division of Florida Condominiums, Timeshares and Mobile Homes (I actually defended such a complaint once).

In the absence of clear authority in the governing documents, the Division does take a restrictive view on this issue. For example, in one ruling, they found the association at fault for spending association funds to send condolences to the families of deceased unit owners. In my view, the operation of most associations contains a “recreational” component (swimming pools, tennis courts, etc.) and social gatherings are an extension of that.

However, given the absence of statutory authority to spend money on such items and given the dim view of the state’s regulatory agency on the issue, it is always my advice to clients to let their governing documents be the guiding light on this issue.

Q: All of the driveways constructed by the developer of our community are concrete. Some owners want to install pavers, but the board says no. What do you say? (M.B., via e-mail)

A: Section 720.3035 of the Florida Homeowners’ Association Act was enacted in 2007 to provide specific requirements for when associations wish to exercise the authority to approve alterations made by homeowners. Generally speaking, the authority to control use of private land must be set forth in the declaration of covenants and there should be written standards to be followed. It is debatable whether the statute applies to pre-2007 associations, but the common law (court decisions) on point are generally consistent with the current statute.

So, the first thing you need to consider is what the governing documents for your community say on the matter, specifically the declaration of covenants and any written rules or design guidelines. Next you must consider what those guidelines say. It is not possible for written guidelines to contemplate every request an owner might make, so I believe that some degree of general guidelines (like uniformity of appearance) are likely to carry weight, while others (like “aesthetically pleasing”) don’t.

There is no doubt that uniformity of appearance is a compelling interest in community associations. Conversely, many communities support upgrades which improve property values and I would suspect many would characterize this type of change as such. I would recommend you ask the board to meet with you and discuss this in the context of your community’s governing documents.

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

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