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Can condo association challenge any contracts made by board?

Posted on Thu, Feb 07, 2013 @ 07:27 AM
  
  
  
  
Florida recently enacted a Statute that provided owners with the right to challenge a contract entered into by the Board at the next owners meeting. Prior to the Statute the Board entered into a ten year contract which was not beneficial to seasonal residents. Without disclosing it to owners the Board have extended the contract for three years. Questions:- 1) Should a material amendment to the contract be treated in the same way as a new contract? 2) If so, should the owners be able to challenge the amendment at the next owners meeting when thet became aware of the amendment? Any thoughts would be appreciated?

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COMMENTS

Absent FL caselaw research, I'd say, claim the right to challenge the material changes of the amendment as a "new contract" at the next meeting. Substantive/material changes could very well fall within the meaning of the challenge statute. 
If your group and the board take opposite positions, you would likely have to retain an condominium attorney and then perhaps go to court to win.  
But I think that challenging would be the place to start.

posted @ Thursday, February 07, 2013 7:43 AM by George Cameron, Esq. Farmington, CT


A few comments -- (1) An owner may be a seasonal resident, but not a seasonal owner (2) Renewing a contract is typically seen as a new contract (3) If it was signed by the Board since the new statute went into effect, address it at the next meeting. 
 
Also, check your governing documents and see what is required for owners to call a meeting. Why wait?

posted @ Thursday, February 07, 2013 7:45 AM by Lynn


Any contract can be brought in questioning -if the BOD members did a poor job executing a contract that was not a benefit to the paying membership, it is the duty of the current sitting BOD (or paying member in good standing) to do their duty and correct any errors if need be - Common sense prevails to be enacted for the word of the day- no great mystery

posted @ Thursday, February 07, 2013 9:02 AM by jim


 
 
Copied below is the specific subsection of the statite which the OP refers to. My interpretation is that it only applies to contracts entered into with a corp owned by a board member or one in which a board member has an interest. I doube this statute applies to the OP's concern. 
 
 
718.3026  
(3) As to any contract or other transaction between an association and one or more of its directors or any other corporation, firm, association, or entity in which one or more of its directors are directors or officers or are financially interested: 
(a) The association shall comply with the requirements of s. 617.0832. 
(b) The disclosures required by s. 617.0832 shall be entered into the written minutes of the meeting. 
(c) Approval of the contract or other transaction shall require an affirmative vote of two-thirds of the directors present. 
(d) At the next regular or special meeting of the members, the existence of the contract or other transaction shall be disclosed to the members. Upon motion of any member, the contract or transaction shall be brought up for a vote and may be canceled by a majority vote of the members present. Should the members cancel the contract, the association shall only be liable for the reasonable value of goods and services provided up to the time of cancellation and shall not be liable for any termination fee, liquidated damages, or other form of penalty for such cancellation.  

posted @ Thursday, February 07, 2013 3:26 PM by mary


Mary's post got me to look at Florida statute 718.3026. I concur with Mary, the members of the HOA can only vote to revoke a Board approved contract is if the contractor is somehow connected to a Board Director. 
 
Bottom line, the owner of article is wrong. 
 
The reason for the existence of a HOA Board of Directors is to conduct the business of the HOA on behalf of all owners. The HOA members (owners) to not have the right to challenge any contract the Board approves except for those contracts wherein a Board Director has some sort of financial connection/interest. 
 
If you want to have a say in every contract before your Board of Directors, put yourself on the ballot to become a Director.

posted @ Friday, February 08, 2013 11:47 AM by Ron - NC


to add to Ron's post: 
 
Too many well meaning members get in the bad habit of trying to second guess every move the board makes. Some people refer to those members as Pita's! I'm certainly not saying the OP is in that class. However, the point is that most of these members really don't know what the governing docs say; or oftentimes have the wrong interpretation and most always have no clue about the state statutes. If the board is lucky they have a manager who has a good working knowledge of the gov docs and also state law. And they can always get a legal opinion if need be. This allows them to be much more knowledgeable than most members. I'll be the first to admit that there are some errant boards out there, but they definitely are not the norm. As Ron says, if you are the type of person who wants to have a hand in every action the board takes then run for a position on the board. Otherwise, it's best to sit back and let the board do their job without trying to second-guess everything they say. You elected them to run the assn, so let them do thier job.

posted @ Friday, February 08, 2013 12:13 PM by mary


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