Condo Q&A: Amending Documents, Bylaws and Boards

Is it appropriate for a rental association to “self-insure” and terminate their present-day insurance? Also: Can a board steer clear of naming a director to an empty posture?

STUART, Fla. – Question: My cooperative dock association board of directors is discovering the ability to “self-insure” by cancelling the wind coverage on the docks and increasing the reserves. The existing windstorm insurance is virtually fifty percent of the once-a-year price range and is efficiently ineffective owing to the deductible. The board thinks they can do this by amending the governing paperwork to eliminate the insurance prerequisite. Can this be finished?

Reply: Almost certainly not. Though the governing paperwork can be improved by an modification, the paperwork can’t be improved to circumvent the prerequisite of the Cooperative Act. Precisely, F.S. 719.304(three) which requires a cooperative association to insure all association home. In a cooperative, the association “owns” the docks and leases them to the members. So, the statutory prerequisite that the association insure “association property” includes the “docks” even though Statute 719.104(three) does not basically use the term docks.

The Cooperative Act also enables an association to “self-insure” as an option to common insurance. Having said that, “self-insurance” is not simply just preserving reserves. It is controlled by Florida Statute 624. To boil it down, it requires the association to in essence develop its have insurance company and fund it. It is particularly elaborate and cost prohibitive in the sense of the real personal savings.

Question: We have a five-member board, just one of the members resigned. The remaining 4 refuse to appoint a fifth member. When questioned at a recent assembly why they did not appoint a fifth member, the response was that the attorney educated them that all that is needed is a quorum to complete board business, which was under no circumstances questioned. Our Bylaws have been and are as follows: “The affairs of XYZ POA shall be managed by a Board consisting of five (five) Directors”

In your belief aren’t five directors necessary at all times? This has nothing to do with a quorum.

Reply: Certainly, I assume your board is necessary to appoint a fifth director. The section you cite from your bylaws gives that the board “shall” consist of five directors. The use of the term “shall” means it is necessary. As you accurately level out, the quorum is not the concern. A board can conduct lawful business as lengthy as a quorum of the board is existing at the assembly, which in your situation means 3, having said that this does not necessarily mean the board can ignore the prerequisite that the board is supposed to have five directors.

Question: A man or woman in my condominium submitted their name to be a candidate for the board. Having said that, the man or woman was delinquent in the payment assessments. Prior to the candidate deadline handed, the supervisor contacted the man or woman and instructed them they have been delinquent and needed pay out up right before the candidate deadline. The man or woman paid and their name was mentioned as a candidate. Is it right for the supervisor to have finished this?

Reply: Chapters 718 (condominiums) and 720 (HOA/POA) each call for that a candidate for the board need to be a hundred% present-day on all monetary amounts owed to the association at the time they submit their name to be candidate. If they are not, then their name can’t be mentioned on the ballot. The candidate is the man or woman mainly accountable for creating absolutely sure he or she is eligible to be a candidate. Having said that, it is not unlawful or automatically inappropriate for the supervisor to have notified the candidate about the dilemma in time for the candidate to appropriate it. Having said that, if the supervisor was going to do this then it really should be finished for all candidates as well.

Richard D. DeBoest II, Esq., is co-founder and shareholder of the Regulation company Goede, Adamczyk, DeBoest & Cross, PLLC. The information and facts delivered herein is for informational purposes only and really should not be construed as lawful tips. The publication of this short article does not develop an attorney-consumer marriage in between the reader and Goede, Adamczyk, DeBoest & Cross, PLLC or any of our lawyers. Visitors really should not act or chorus from acting centered upon the information and facts contained in this short article with no to start with getting in touch with an attorney, if you have inquiries about any of the challenges lifted herein. The hiring of an attorney is a final decision that really should not be centered solely on advertisements or this column.

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