Often the 6 o’clock news highlights the plight of a homeowner fighting his or her homeowners’ association (HOA) because the association is enforcing a rule that the owner doesn’t like and claims to have been unaware existed. The rule was probably there all along had the homeowner read their association documents. Also in the course of everyday conversations in this economy, homeowners who have fallen behind on their assessments are asking, “Can my condo/homeowners’ association really evict me for just a few thousand dollars I owe?” Following are answers to five common questions owners ask, often when it’s too late, about purchasing and living in a community association:
1. Can my association really “evict” me for unpaid assessments?
Yes, although it is not an eviction, but a foreclosure. In Florida, condominium associations, by law, and HOAs, if provided in their recorded documents, do have a lien to secure the payment of assessments, late fees, interest and attorneys’ fees and costs of collection.
The lien can be foreclosed in the same manner as a mortgage. If an owner becomes delinquent in paying its association assessments, the association can foreclose on the owner’s property and the property will be sold at foreclosure auction. The association also has other remedies against delinquent owners, including, the right to suspend use of certain common areas, the right to suspend voting, and the right to demand the payment of rent from the owner’s tenant until the assessments are fully paid. The association can also evict the tenant if such payment is not made after proper demand.
2. Can the Board of Directors make rules without an owner vote?
Yes, if the governing documents of the association give the Board that authority. Rules and regulations may not conflict with the declaration of condominium or restrictions, or the articles or bylaws of the association. Further, rules and regulations adopted by a Board of Directors must be reasonably related to the purpose of the association as set forth in the governing documents. Not all rules and regulations are valid and enforceable, and the enforcement of rules by a Board must be fair, reasonable, and uniformly applied.
3. My community doesn’t have any amenities. What are my assessments for?
Association assessments are determined based on an annual budget. All of the operating expenses of a community are included in the budget and, in addition to maintenance and operation of amenities, such as pools, clubhouses, or fitness centers, assessments include expenses necessary to operate and maintain the common infrastructure of the community. Such things may include private roads, drainage systems, common area landscaping and mowing, and irrigation. Administration, management, and legal fees are also included in the common expenses. Condominium common expenses also include the expenses necessary to maintain the building structure, roof, painting, cleaning, and insurance. Unless waived annually by a majority of the members of a condominium association, reserves for deferred maintenance and capital expenses of roofs, roads, painting, and other items that will need to be repaired or replaced over time are also required to be funded. HOAs may also be required to fund reserves if the developer originally included reserves in the budget or if homeowners have since voted to fund reserves. Condominium owners are entitled to receive notice and a copy of the proposed budget prior to any meeting in which a budget is considered. HOA owners are entitled to receive a copy of the budget upon adoption or notice that a copy is available upon request.
4. I bought into a community and now am being told there are restrictions I don’t like. How was I supposed to know?
All sellers of single-family homes or condominiums are required to provide disclosures about their associations. Developers selling condominium units are required to provide extensive disclosure documents. Resale sellers of condominium units are also required to provide, at the seller’s expense, a current copy of the declaration of condominium, articles of incorporation of the association, bylaws and rules of the association, latest annual report and a document entitled “Frequently Asked Questions and Answers” which the Association should maintain up to date. Sellers of single-family homes that are subject to an HOA are not required to provide copies of the restrictions or governing documents, but are required to provide a statutory disclosure form providing information about the HOA(s) and applicable assessment information. The actual restrictions are public records which can be obtained from the clerk of court, but the buyer is also likely entitled to a copy of the recorded restrictions as part of their title commitment provided pursuant to the contact, although the buyer may have to request a copy from the title agent. Reviewing and understanding the documents prior to closing (within the time provided in the contract) will help the buyer avoid surprises once they have moved into the home. Whether or not a buyer actually reads the governing documents, because the documents are recorded in the public records, buyers will be deemed to have knowledge of their contents and are deemed to have accepted the documents when they take title to the property. Owners should be aware, however, that the association documents can be amended, so, if enough owners vote to amend as provided in the applicable document, changes may be made.
5. I always find out the Association has taken action and I knew nothing about it. How do I know what my association is doing?
If your HOA or condominium association is acting properly, all board meetings, with a few exceptions, should be open to all owners and owners should be receiving notices of owner meetings and special board meetings in which assessments are considered. It is up to the owners to attend these meetings to keep themselves informed. Further, in both condominiums and HOAs, every owner is entitled to have access to the official records of the association, which includes, without limitation, the budget, financials, meeting minutes, owner roster, and governing documents. There are a few exempt records, but, generally, most association records are accessible and access must be provided within 10 business days after the association’s receipt of a written request for access.
A number of issues between homeowners and their community associations can be avoided by owners reading and being familiar with the governing documents of their association, particularly before they buy into the community. Prior to buying, the buyer should understand their rights and obligations and whether the particular community and its restrictions are compatible with the buyer’s lifestyle. Any questions should be directed to competent legal counsel before the buyer has made an investment in the property.