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CAN THE BOARD SPEND
YOUR MONEY ON ANYTHING THEY WANT?
By
Eric Glazer, Esq.
Published June 13, 2016
I always get lots of e-mails from people
complaining that the Board is spending their monies wildly and
out of control, for things they don’t want, don’t need and for
which there was no mention in the association’s budget.
As we know, the Board must pass a budget to
pay the association’s "common expenses." The Florida Condominium
Act states:
718.115 Common expenses and common surplus.—
(1)(a) Common expenses include the expenses
of the operation, maintenance, repair, replacement, or
protection of the common elements and association property,
costs of carrying out the powers and duties of the association,
and any other expense, whether or not included in the foregoing,
designated as common expense by this chapter, the declaration,
the documents creating the association, or the bylaws. Common
expenses also include reasonable transportation services,
insurance for directors and officers, road maintenance and
operation expenses, in-house communications, and security
services, which are reasonably related to the general benefit of
the unit owners even if such expenses do not attach to the
common elements or property of the condominium. However, such
common expenses must either have been services or items provided
on or after the date control of the association is transferred
from the developer to the unit owners or must be services or
items provided for in the condominium documents or bylaws.
For Homeowner Associations, the statute says:
720.303 (6) BUDGETS.—
(a) The association shall prepare an annual
budget that sets out the annual operating expenses.
The Condominium Act goes even further and
specifically indicates what items MUST appear in the
association’s budget:
1. Expenses for the association and
condominium:
a. Administration of the association.
b. Management fees.
c. Maintenance.
d. Rent for recreational and other commonly
used facilities.
e. Taxes upon association property.
f. Taxes upon leased areas.
g. Insurance.
h. Security provisions.
i. Other expenses.
j. Operating capital.
k. Reserves.
l. Fees payable to the division.
Not to be a scrooge, but year after year I
always get asked about the Board’s right to dip into the
operating account to give Christmas bonuses to association
employees. Unfortunately, the answer is that, unless the
association is contractually obligated to pay these employees a
gift or year end bonus, and this amount is included in the
budget, the association cannot use the members’ funds for such a
purpose.
Not surprisingly then, is this information
found on the Division’s own website:
12. Can the board of administration use
association funds to purchase gifts for condominium or
cooperative board members?
The purchase of gifts for board members from
association funds is not a valid common expense, unless the
condominium declaration, articles of incorporation or bylaws of
the association or cooperative governing documents provide for
such to be a common expense.
Condominium: Section 718.115(1)(a),
Florida Statutes
Cooperative: Section 719.107(1)(a),
Florida Statutes
So, the bottom line is that if your about to
cut a check from the association’s operating account, make sure
that it is for a true "common expense" and meets one of the
above categories before signing. And at Christmas time, do what
we did in the co-op I grew up in in Brooklyn. One person goes
around collecting money from everyone for all of the employees.
Those who contribute get their name on the Christmas card that
is given to the staff. Those who didn’t contribute ran the risk
of no heat or hot water in the winter or extended wait times
when service was needed in their apartment. I guess down here
though, staff would need to know how to turn off the a/c.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Associates, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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