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Commonly Asked Questions and Answers
1. What reserve accounts are condominiums required to
maintain? Section 718.112(2)(f)2., Florida Statutes (F.S.)
2. What is the difference between a capital expenditure and
deferred maintenance? "Deferred maintenance" is defined in Rule 61B-22.001(3), Florida
Administrative Code, as any maintenance or repair that:
3. May a reserve account be used for purposes other than that for which it
was originally intended? A: The Condominium Act requires that reserve funds and any interest accruing thereon remain in the reserve account or accounts, and be used only for the purpose(s) for which they originally were set aside. However, funds in a reserve account may be used for other purposes if approved in advance by a majority vote at a duly called association meeting. Section 718.112(2)(f)3., F.S.
4. In an association that funds reserves, if unit owners write one check to
pay their shares of quarterly assessments - - and the association deposits these
checks into their operating account, is this considered commingling? A: Not if the association transfers the reserve portion of the payments to the respective reserve account(s) within thirty days of the deposit or if the accounts are combined for investment purposes. (The monies must still be accounted for separately) Section 718.111(15), F.S.
5. May candidates for the board of administration engage in campaigning for
election? A: The Condominium Act and the related administrative rules do not address the topic of campaigning for election. Condominium associations would need to refer to their governing documents to determine if any regulations exist concerning campaigning issues. The Condominium Act does provide for the use of an information sheet for candidates to submit to the board to be included with the second notice of election. The information sheet can include the candidate background, education and qualifications as well as other factors deemed relevant by the candidate. The information may not be altered or edited by the association. Section 718.112(2)(d)3. F.S., Rules 61B-23.0021(7)&(8), F.A.C.
6. May the board of administration simply appoint an individual to fill a
vacated position on the board without conducting an election? A: Unless the condominium documents provide otherwise, if a vacancy on the board of administration occurs due to a resignation, or any other reason prior to the expiration of the term (except in the event of a recall), the position may be filled by the affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. The board may, at its discretion, hold an election to fill the vacant position. Section 718.112(2)(d)8., F.S.
7. What if during the election process, an association has the same number of
candidates for positions to be filled as there are vacancies on the board? Do
they still need to prepare ballots and hold an election?
8. Is an association permitted to use proxies in the election of directors? Section 718.112(2)(d), F.S.Section 718.112(2)(d)3., F.S.
9. May the board fine unit owners for breaking the association's rules? Section 718.303(3), F.S.
10. May the association charge me $100 to lease a unit? A: Maybe. This type of charge is generally referred to as a transfer fee. If an association is required to approve of the transfer (sale, mortgage, lease, etc.) of a unit then they may be able to charge a fee if such approval, and a fee for such approval, is provided for in the condominium documents. The maximum charge allowable under the Condominium Act is $100 per applicant, and no charge may be made on renewals with the same lessee or sublessee. Section 718.112(2)(I), F.S.
11. How are the annual $4 per unit fees collected by the Division used? A: As provided in section 718.501(2)(b), F.S., these fees are deposited into
the Division's trust fund. The Division of Florida Land Sales, Condominiums, and
Mobile Homes is comprised of four bureaus and two sections. See the Division's
home page for further information. Section 718.501(2)(b), F.S.
12. Where can I get a copy of Chapter 718, Florida Statutes, the Condominium
Act. A: A copy of Chapter 718, Florida Statutes, the Condominium Act, may be obtained by calling or writing the Bureau of Condominiums. Copies are provided free of charge. Tallahassee Tampa Ft. Lauderdale
Additionally, the Florida Legislature maintains copies of the Florida Statutes
on the Internet, including Chapter 718, the Condominium Act.
13. What is considered a board meeting? A: A board meeting is defined in Rule 61B-23.001(1)(a), Florida Administrative Code, as any gathering of the members of the board of directors at which a quorum of the members is present, for the purpose of conducting association business. Any situation that meets these requirements would be subject to board meeting noticing requirements and open to all unit owners. Rule 61B-23.001(1)(a), Florida Administrative Code (F.A.C.)
14. What is the difference between a general proxy and a limited proxy, and
when are they used? A: A general proxy allows a proxyholder to vote however he or she sees fit on any matters that may be undertaken at a specific unit owner meeting in the absence of a voting interest. A limited proxy lists only certain items that a proxyholder may cast a vote for on behalf of a voting interest, and also instructs the proxyholder on how to vote on those items. The Condominium Act requires the use of limited proxies for votes taken to waive or reduce reserves, votes taken to waive financial statement requirements, amend the declaration, articles of incorporation or bylaws, and for any other matter for which it requires or permits a vote of the unit owners. A proxy form may grant a proxyholder both general and limited powers. The Division maintains a Sample Limited Proxy Form, known as BPR form 33-033. Section 718.112(2)(b)2., F.S.Rule 61B-23.002(2)&(3), F.A.C.
15. Are unit owners allowed to attend and speak at meetings (board meetings,
committee meetings, membership meetings)? A: Yes. Unit owners have a right to attend any and all meetings of the board, committees, and membership meetings. Unit owners also have the right to speak with respect to all designated agenda items. A board can adopt rules pertaining to the frequency, duration, and manner of unit owner statements at meetings but it cannot limit the total number of unit owners authorized to speak at any meeting. For example, a board may limit a unit owner's maximum time to three minutes or more. A board can also adopt a rule requiring a unit owner desiring to speak to file a request with the association a reasonable time in advance of the meeting. All rules adopted by the board regarding a unit owners' ability to speak at a meeting must be adopted in written form and become a part of the board rules, bylaws, or articles of incorporation. Section 718.112(2)(c), F.S., Rules 61B-23.002(12), (13), & (14), F.A.C.
16. Is my association required to hold regular meetings on a monthly basis. A: The Condominium Act requires every condominium association to hold an annual meeting and also a meeting to adopt its annual budget. Both of these meetings may be held on the same occasion, depending on the provisions in the condominium documents and the circumstances of the association. There is no requirement otherwise for regular, or a certain number of, meetings of the unit owners or the board of directors. Section 718.112(2)(d), F.S.
17. How does an association amend its bylaws? A: Section 718.112(2)(h), F.S., states that the method used to amend bylaws should be located within the bylaws and should be consistent with the provisions of the Condominium Act. Unless otherwise provided in the bylaws, a vote of at least two-thirds of the voting interests is required to approve amendments. The full text of the bylaws to be amended must be included with new words underlined and words to be deleted stricken through with hyphens. If the change is too extensive and would hinder, rather than assist, the understanding of the proposed amendment, it is not necessary to use underlining and hyphens as indicators of words added or deleted, but, instead, a notation must be inserted immediately preceding the proposed amendment in substantially the following language: "Substantial rewording of bylaw. See bylaw ___ for present text." Section 718.112(2)(h), F.S.
18. When does an amendment to the bylaws become effective? A: Amendments to bylaws become effective once they are recorded in the public records of the county where the declaration of condominium is recorded. Each county should be able to provide more specific details on its own recording procedures and the location of its public records. Section 718.112(1)(b), F.S. 19. Where do the official records of the association have to
be maintained?
A: Section 718.111(12)(b), Florida Statutes states: Section 718.111(12)(b), F.S.
20. How would a condominium go about becoming an adult community (55 or
older), and would all the residents under 55 years old have to move out? A: A property must meet certain requirements to be designated as an adult community. All questions pertaining to fair housing in Florida are addressed by the Florida Commission On Human Relations. You may contact them at (904) 488-7082 [ask for housing area], or 1-800-343-3442 (for copies of Federal Fair Housing Act).
21. Does an association have to hire a licensed community association
manager? A: Chapter 718, Florida Statutes, does not require the board of directors to hire a licensed community association manager. Therefore, the association may be self-managed. The board as a whole is the entity responsible for operating and managing the condominium association. As of July 31, 1996, the Bureau of Condominiums no longer regulates the community association management "CAM" industry pursuant to Chapter 468, Florida Statutes. The licensing function is now under the Division of Professions. All questions regarding CAM licensure should be directed to the CAM office under the Division of Professions at (904) 488-2141. The regulatory function is now under the Division of Regulation. To file a complaint about a community association manager call 904-488-6603 or 904-487-2252. Rule 61B-23.001(6), F.A.C.
22. May the association pay a board member for his or her services as a board
member? A: It depends. If the bylaws of an association specifically provide for board members to be compensated, then board members may be paid. Otherwise, the Condo Act states that members of a board shall carry out their powers and duties without compensation.
23. Who adopts the annual budget, unit owners or the board of directors? A: The Condominium Act sets forth the minimum noticing requirements for a meeting to consider an association's annual budget; however it does not specify who actually must approve the annual budget. An annual budget is to be approved in accordance with an association's bylaws. The bylaws should specify whether unit owners must approve a proposed budget or whether the board alone may approve it. Section 718.112(2)(e), F.S.
24. How are special assessments approved? A: Special assessments should be approved in accordance with an association's documents. The Condominium Act sets forth minimum noticing requirements for meetings to consider nonemergency special assessments, but does not address the responsibility for approving special assessments. Just as regular assessments for the payment of common expenses, special assessments should also be levied in the proportions or percentages provided in the declaration of condominium. In a residential condominium, unit owners' shares of common expenses must be in the same proportions as their ownership interest in the common elements. Section 718.116(10), F.S.,Section 718.112(2)(c), F.S., Section 718.115(2),
F.S.
25. How is the type of financial statement an association is to prepare
determined? A: Rule 61B-22.006 (10)-(12), F.A.C. provides this information. For associations that have over 50 units the following requirements apply: Associations having annual revenues over $100,000 and less than $200,000 prepare compiled financial statements. Those with revenues of at least $200,000 but less than $400,000 must prepare reviewed financial statements. For those associations with $400,000 or more in annual revenues, audited financial statements must be prepared. Associations with 50 or fewer units are simply required to provide an annual financial report of receipts and expenditures. Section 718.111(13) and (14), F.S., Rule 61B-22.006 (10)-(12), F.A.C.
26. What part of the condominium property is the association required to
maintain? A: The association is responsible for maintaining the parts of the condominium property not included within the units. These are referred to as the common elements of the condominium. You also need to pay careful attention to the provisions in your condominium documents, specifically, your declaration of condominium, since these provisions may define the association's maintenance responsibilities. Section 718.113(1), F.S.
27. I own a townhouse. How can I tell if it's in a condominium? A: If you own a condominium unit, you would have a deed as if you owned any other type of real property. What makes a condominium unit different is that the owner also owns a share of the properties or facilities which are not included in that unit or in the other units. These considerations are addressed in a legal document called the declaration of condominium. The declaration of condominium creates a condominium when the developer records it in the public records of the county in which the land is located. If your townhouse is not a condominium, there will be no declaration of condominium. There may be some other legal document which established the community in which your unit is situated. Section 718.103(14), F.S.
28. I thought that as a unit owner and a member of my association I had the
right to vote. Why is it that most of the decisions of the association are made
by the board of directors? A: The association has a variety of powers and duties, which are described in the Condominium Act, the condominium documents, and also (in most cases) the Corporate Act. These powers and duties are carried out by the board of directors, as is the case with any other private corporation, except in circumstances in which the applicable provisions in the law or in the condominium documents may provide otherwise.
29. I am a first-time condominium unit owner. How do I know where my association’s money is going? A: Every association is required by the Condominium Act to prepare a financial report or a complete set of financial statements following each fiscal year. You are entitled to receive a copy of the report or the set of statements. Also, the Condominium Act gives you the right to inspect the association’s official records. By inspecting the records, you can obtain information that is more specific than what you will find in the year-end report or statements. Section 718.111(12), F.S. Cooperatives: Section 719.104(2) & (4), F.S. Section 718.111(13) & (14), F.S.
30. When does the association have to provide me with a financial report, and how do I know that they are providing me with the correct report? A: An association which operates more than 50 units with annual revenues from all sources in excess of $100,000 must prepare a full set of financial statements, unless this requirement is waived before the end of the fiscal year by a vote of the membership. In the event of such a vote, the association would be required to prepare an annual report of actual receipts and expenditures. In turn, the level of reporting in the financial statements depends on the amount of revenues from all sources for the year in question. Compiled statements are required if that amount is over $100,000 and less than $200,000. Reviewed statements are required if that amount is $200,000 or more, but less than $400,000. Audited statements are required if that amount is $400,000 or more. If financial statements are required, as described above, copies must be furnished to each unit owner by mail or personal delivery within 90 days from the end of the fiscal year, unless the condominium documents provide an alternative due date. The due date for the distribution of an annual report of actual receipts and expenditures, if required, is 60 days from the end of the fiscal year, unless there is an alternative due date stated in the condominium documents.
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