Published November 5, 2024
As budget season is in full swing, and annual meetings / elections are just around the corner, I thought it a good time to review some basic meeting information that is very frequently not done properly.
Let’s start with budget meetings. As you should be aware by now, there have been some significant changes to this process. To begin with, the condominium statutes now provide that the board shall adopt a budget within fourteen (14) days of the beginning of the fiscal year. Failure of a board to adopt a budget a second time is a minor violation of the Florida Administrative Code, which can lead to fines and other penalties.
In addition, condominium and cooperative budgets adopted after December 31, 2024, must provide full reserve funding for all structural integrity reserve study (“SIRS”) items. The members cannot waive funding SIRS reserves in any budget passed after December 31, 2024. If you have questions regarding waiving SIRS funding for your 2025 budget, you should discuss this issue with your community association attorney. Another recent change to the law is that unless your governing documents require a higher threshold, the vote to waive reserves is a majority of all voting interests. It used to be a majority of those preset at a meeting where a quorum has been obtained; that was changed to now require a majority of all voting interests.
In a condominium and cooperative association, typically the board passes a budget at a duly noticed board meeting, which must be noticed at least 14 days in advance by statute. However, you need to check your Association governing documents, as they may have a longer budget meeting notification requirement, such as thirty (30) days. Generally, you must always follow the more stringent requirement; 30 days is more stringent that 14 days. That is why you should always check with your community association attorney regarding proper notification.
The membership can vote to waive reserves (non-SIRS) at a membership meeting. A very common mistake I see is that the budget meeting notice is either a board meeting notice, with waiver of reserves on the agenda, or a membership meeting notice, with passing the budget on the agenda. These generally have to be 2 separate meetings – a membership meeting if reserves are being waived or reduced, and a board meeting to pass the budget. Remember, after December 31, 2024, only non-SIRS reserves can be reduced or waived by the membership. Limited proxies may be utilized in a vote to reduce or waive non-SIRS reserves; however, there is specific statutory language that must be contained in such limited proxy. Do not take the risk of going through an improper vote to reduce or waive non-SIRS reserves because of a defective limited proxy. Work with your community association attorney to prepare such documents.
Finally, remember that as circumstances change throughout the year, the board can adopt a revised budget, if necessary, by following the same procedures as approving the annual budget.
A few comments on annual and election meetings. I will not go into the basics of condominium and cooperative annual meetings and elections, and generally, homeowner association annual meetings and elections are in accordance with the provision in the association’s governing documents. In condominium and cooperative annual meetings and elections, the statutory deadlines are strict. Deadlines for submitting notice of intent to be a candidate forms and candidate information sheets cannot be waived or modified. Accepting either form after such deadline can invalidate an election and require a new election. The Association cannot modify a candidate information sheet. The required mail out dates are also strict, and failure to comply with such mailing deadlines will also invalidate an election and require a new election.
There are new board member certification requirements, and new board member mandatory educational requirements. Speak with your community association attorney to ensure your association and its board members are complying with such new requirements.
Don’t forget about the statutory term limits, and the exceptions thereto, which may or may not apply to your board members and board member candidates.
Everyone is aware of the effect the new condominium and cooperative laws in regard to SIRS, reserve funding, existing 40 and 50 year milestone requirements in south Florida, and other required maintenance is having on association budgets, assessment and special assessments. Many owners are challenging the budget process, the assessment process, and special assessments. Don’t take the risk of a successful challenge to the approved association annual budget, adopted assessments, or special assessments due to improper notice or other improper procedures. All of these items should be coordinated with your community association attorney.
Happy budget and annual meeting season!
Top photo by iStockphoto.com/jacoblund
Howard J. Perl, Esq.
Shareholder, Becker
Ft. Lauderdale | bio
