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Boards of Directors Can Hold Closed Meetings for Certain Purposes

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Q: When can a condominium board of directors hold a meeting which is closed to the owners? (P.C., via e-mail)

A: Pursuant to Section 718.112(2)(c) of the Florida Condominium Act, meetings of the board of administration at which a quorum of the board members is present must be properly noticed and open to all unit owners. Generally, notice must be posted on the condominium property at least 48 hours before the meeting. Unit owners have the right to attend the board meetings and, subject to reasonable restrictions, unit owners also have the right to speak at board meetings with respect to designated agenda items.

The Florida Condominium Act contains two exceptions to the open meeting requirement. The open meeting requirement does not apply to meetings between the board and the association’s attorney, with respect to proposed or pending litigation. Additionally, the open meeting requirement does not apply to board meetings held for the purpose of discussing personnel matters. While such meetings can be closed to the attendance by unit owners, such meeting must still be properly noticed.

Q: The board of directors for my homeowners’ association was recently discussing association finances and the use of a debit card for purchasing supplies for the association’s office. It was my understanding that associations were prohibited from using credit or debit cards. Is this correct? (G.R., via e-mail)

A: For a homeowners’ association governed by Chapter 720, the Florida Homeowners’ Association Act, there is no restriction on the ability of the association to use either debit or credit cards. The use of a debit or credit card by the association should be properly controlled by the board of directors and the board of directors should have a policy in place concerning who is authorized to use any card issued in the name of the association and such use should only be for proper common expenses.

However, there is a restriction on the use of debit cards in Chapter 718, the Florida Condominium Act, concerning condominium associations. Section 718.111(15) of the Florida Condominium Act prohibits a condominium association and its officers, directors, employees, and agents, from using a debit card that is issued in the name of the association or that is billed directly to the association for the payment of any association expense. While there is an express prohibition on the use of debt cards, there is no prohibition on the use of a credit card by a condominium association. However, again, the expenditure of the association’s funds by any method should only be for proper common expense of the association and should be controlled by the board of directors.

Q: Does my association have to record its rules? (M.W., via e-mail)

A: You have not specified if your association is a condominium association or a homeowners’ association, and what type of association you are dealing with will matter. Chapter 718, the Florida Condominium Act, does not require that board adopted rules and regulations be recorded. Some condominium associations choose to record their rules in order to put any prospective purchaser or other individual on notice of what the rules are. Whether or not a condominium association should record its rules is, ultimately, a business decision for the association and if the association has questions about recording its rules, it should review that issue with its legal services provider.

For homeowners’ associations, the situation is somewhat different. While there has historically not been a requirement that board adopted rules and regulations be recorded, Chapter 720, the Florida Homeowners’ Association Act, defines the governing documents of a homeowners’ association to include rules and regulations. Section 720.306(1)(e) of the Florida Homeowners’ Association Act states, in relevant part, that an amendment to a governing document is effective when recorded in the public records of the county in which the community is located. As such, while the original rules and regulations may not have been required to be recorded, amendments to governing documents, including the rules, must be recorded. Accordingly, if a homeowners’ association has questions regarding the status of their rules, they should review that issue with their legal services provider.

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