Condo Association Management Blog

Your Prtesident is violating the provisions in your bylaws. In addition if you download and read your state;s condominium act you'll probably find he is violating state law.n Doing so subjects him to losing the immunity granted to board members for their actions since his position is a violation of state law. Download your state condo act and extract the portion relating to budget and its preparation and send it to you board President and other board members pointing out the possible loss of immunity if he persists in this mistaken position.

If you want to see an example of a Bylaws clause that shows the board does not have immunity if violate the law or bylaws see the first graphic at www.wvnorthface.info/nf/pg.php?&page_name=fiduciary which is a clipped image from my association Bylaws. I created that website to try to educate my board and owners about what was going on in my association after the board, in addition to their not following the law and legal documents, stopped me from speaking at an annual owner's meeting. That same web page shows excerpts from my condo assoc. liability insurance which shows the insurance also will likely not pay if the board violated the law and legal documents. 
 
Unfortunately, I recently filed a lawsuit since in my case the grievances were too great and the lawsuit ended up being the only option left. Each board member is individually named in the suit.

Can you post an entire section dealing with a budget meeting. From your current post it's hard to interpret if this apples to a board meeting or all owners meeting

Florida Statute 718.112 Section 10 
(e) Budget meeting.— 
1. Any meeting at which a proposed annual budget of an association will be considered by the board or unit owners shall be open to all unit owners. At least 14 days prior to such a meeting, the board shall hand deliver to each unit owner, mail to each unit owner at the address last furnished to the association by the unit owner, or electronically transmit to the location furnished by the unit owner for that purpose a notice of such meeting and a copy of the proposed annual budget. An officer or manager of the association, or other person providing notice of such meeting, shall execute an affidavit evidencing compliance with such notice requirement, and such affidavit shall be filed among the official records of the association.

Mark, thanks you. 
 
This language so clear that there is absolutely no question about it. You must provide a copy of your proposed budget. There is no way around it. Tell your board that they are violating bylaws and have direct knowledge of it. They can be held personally liable and not covered by insurance.

I wrote the President and the Board with a CC to the rest of the Owners that..Part of their individual and collective fiduciary duties as Board Members is to read and understand the Florida Statutes that govern our Condo Association. And asked them to explain what part of the phrase ."Any meeting...." did they not understand. 
 
The response from the President was... he was in touch with the Association attorney who agreed with the Board's interpretation and decision not to provide the "draft" budget to owners who wanted to following along while the Board discussed it. 

If that's the board approach there is not much you can do without getting an attorney yourself. 
 
It might cost few dollars to get an attorney to just write a letter and send it. 
 

Rick, 
 
 
 
Thanks for the info regarding a breach of fiduciary resp. One thing should be kept in mind though and that is a breach only occurs if the board does not know what their resp. is. Only when they knowingly violate the law does a breach occur.

Mark, 
 
 
 
Sure makes we wonder if they did, indeed, get an opinion from their attorney!! I can't imagine an attorney not knowing what "proposed" budget means. "Proposed" to me is the same as "Draft". Also, the statute is very clear that it applies to either a meeting of the members or the BOD. IMO, you should inform the board that they are in violation of their fiduciary resp to the assn if they do not follow state law, in which case their D&O ins would not pay for their defense. 
 

Unfortunately you may have to get an attorney involved, check with Legal Aid Society in your area.  
 
Why do they wait so late to finalize the budget after the year starts anyway? We are required to have our new budgets in our owners hands by December 1 regardless if the fees increase or stay the same. I would also write the attorney for your Association and give him a copy of the state code and any section from your Association bylaws regarding budgets requirements and the letter you sent to the board president, and let him know what they are doing and saying. He has to respond to you, can't imagine he advised them to violate the law. Get proof of mail delivery to attorney.

I am having the same problem with my condo assoc and the master condo association in NE. The only remedy seems to be to sue. They do not think they need to follow state law or the by-laws.

We have run into similar problems with our Board in MA. For example, our by-laws state that owners are to receive an annual report of the receipts and expenditures at the end of each fiscal year. The report is to be sent promptly to each Unit Owner. Come to find out the Board decided the report would only be available upon request but neglected to amend the by-law or inform newer owners. We’ve been led to believe that if you need to get a lawyer in order to have the Board fulfill its legal obligations, chances are you can recover your legal expenses from the association.

Bob, 
 
 
 
Usually it's up to the judge to award attorney's fees. At any rate they would be awarded to the prevailing party. 
 
 
 
The annual report of receipts and expenditures would be a financial statement. Does the BOD have one prepared each month and is it made available to members? Our board sends the year-end financial report along with the notice of the annual meeting. Do you think it's worth the expense of a lawsuit just to obtain a copy of the year-end financial statement?

Mary, 
 
 
 
Massachusetts State Law requires trustees to keep financial records including records of all receipts and expenditures, invoices, records of the replacement reserve fund, bank statement, audits, accounting statement, financial reports, contracts for work to be performed, and all current insurance policies. Unit owners are entitled access to the records including the right to photocopy. There is no requirement that a monthly financial statement be provided. 
 
 
 
Were it not for the fact that our Board eventually fulfilled its legal obligation and provided the annual report, I would have taken legal action if for no other reason than to send a message – the law is the law until it’s amended. Nobody gets to pick and choose which laws will be followed.