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Subject: HoA attempting to sign lease with county for wall
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JustinG2
(Florida)

Posts:1


07/22/2020 10:04 PM  
So my HOA is attempting to sign a Forever lease taking a wall from the county to supposedly beautify it. The wall resides next to a major highway and the lease terms are for 25 years and it automatically renews for 10 years at a time unless the county "AND" 75% of the HOA vote to end it. So essentially it's forever with these terms.

The board is under the impression that they can vote for this and get it signed without a vote of the members. I'm located in Florida and wondering if there is anything I'm missing in the FL Statutes that forbid them from doing this without at least a vote from the community. It was added to an agenda and attempted to be voted on during a meeting last week during COVID.
GenoS
(Florida)

Posts:3925


07/22/2020 11:03 PM  
Who's going to beautify the wall? The HOA or the county? Who benefits from this contract (a lease is a contract)? HOAs usually enter into contracts in order to obtain goods and/or services. What goods or services would the HOA be getting in such a deal? Has control of the association been turned over to the members other than the developer?

Not that any answers to the above will drastically change the thinking (as long as none of your board members have a financial interest in "the wall"), but if your CC&Rs don't limit the HOA's ability to enter into such contracts, I think your board can absolutely enter into such a contract. Your remedy, as homeowners, is to recall the board before the contract is finalized, and replace them with directors who will not sign the lease. The statutes say nothing about giving the homeowners a voice or a vote on contracts (with the exception of cable TV and internet service contracts).
SheliaH
(Indiana)

Posts:3358


07/23/2020 5:17 AM  
Geno's questions are good - I'd start with asking them of the board, and then see whether this warrants a recall (those aren't always easy to do and you may need more reasons to pull it off besides this issue).
ND
(PA)

Posts:471


07/23/2020 5:21 AM  
While your docs likely permit the Board to enter into contracts, my understanding is that those contracts can only be for goods and/or services that the HOA is responsible (per the docs) to acquire on behalf of the HOA and all owners, thus giving the Board the ability to pass the cost of those contracts onto the homeowners in the form of assessments that all have agreed to pay by moving into the neighborhood in the first place.

Unless your docs indicate (or are appropriately amended with necessary agreement from a % of owners to indicate) that the HOA is responsible for acquiring this wall and then beautifying it, I do not think it is allowable for this lease to be signed, the HOA be obligated to cover the costs of acquiring/beautifying/maintaining the wall, and those costs be passed to the homeowners via increased assessments.

There are likely some vague catch-all statements that may provide the Board the ability to do things that they deem necessary and appropriate. However, it would be inappropriate for the Board/HOA to acquire responsibility for a wall structure that is a significantly expensive item which will require maintenance, repair, and eventual replacement in time, thus obligating the HOA to all associated costs in the future . . . unless the lease is written in such a way that the county is covering those costs.

If HOA is hell-bent on being able to beautify the wall, then I'm sure some sort of agreement can be worked with the county to permit that without acquiring any responsibility to continually maintain, repair, replace the wall. However, there's still the issue of overall cost and whether passing those costs to the homeowners is allowable.
JohnC46
(South Carolina)

Posts:9678


07/23/2020 6:59 AM  
One could argue this is a Capital Improvement thus must have owner approval.
BenA2
(Texas)

Posts:758


07/23/2020 10:11 AM  
Unless there is something in the law or your governing documents stating otherwise, I don't see any reason why they would need owner approval.

It is odd that the board can approve the contract but it requires 75% of the HOA to end the contract. I, as a board member, would not agree to that without at least doing a survey of the members.
GeorgeS21
(Florida)

Posts:2902


07/23/2020 1:30 PM  
I also believe the Board can act in the manner generally discussed.

Think about it - if every decision like this required a membership majority agreement, how would anything be accomplished.

The Board was elected to act on behalf of the association - not in absolutely every situation, but in most situations - especially like this one.
GenoS
(Florida)

Posts:3925


07/23/2020 1:49 PM  
Posted By JohnC46 on 07/23/2020 6:59 AM
One could argue this is a Capital Improvement thus must have owner approval.

I don't think that's the case in a Florida. In a condominium, perhaps, but not in a FS 720 HOA.
JohnC46
(South Carolina)

Posts:9678


07/23/2020 2:16 PM  
Posted By GenoS on 07/23/2020 1:49 PM
Posted By JohnC46 on 07/23/2020 6:59 AM
One could argue this is a Capital Improvement thus must have owner approval.

I don't think that's the case in a Florida. In a condominium, perhaps, but not in a FS 720 HOA.




Geno

I believe any purchase of land, buildings, something not original, improvements, etc. not in the budget could be considered a Capital Improvement. I also consider a long term lease (such as the wall) to be such but we, unlike others, can agree to disagree. You Ahole........LOL
BenA2
(Texas)

Posts:758


07/23/2020 2:54 PM  
Posted By JohnC46 on 07/23/2020 2:16 PM
Posted By GenoS on 07/23/2020 1:49 PM
Posted By JohnC46 on 07/23/2020 6:59 AM
One could argue this is a Capital Improvement thus must have owner approval.

I don't think that's the case in a Florida. In a condominium, perhaps, but not in a FS 720 HOA.




Geno

I believe any purchase of land, buildings, something not original, improvements, etc. not in the budget could be considered a Capital Improvement. I also consider a long term lease (such as the wall) to be such but we, unlike others, can agree to disagree. You Ahole........LOL



I would not argue about it being a capital improvement but I don't think a board has to have owners' approval for capital improvements unless your governing documents or state law require it.
JohnT38
(South Carolina)

Posts:352


07/23/2020 3:31 PM  
I'm not sure I follow this. Are you saying the Board could build a brand new clubhouse without owner approval? If so, that's kind of scary.
BenA2
(Texas)

Posts:758


07/24/2020 11:01 AM  
Yes, that is true for our association as long as it is in the budget and the board sets the budget. Of course, it couldn't be done in secret so the owner's would have an opportunity for input.

I don't have a problem with owner approval for major projects but I don't think it's that unusual for a board to not need approval, is it? I would be interested in hearing from others.
AugustinD


Posts:3683


07/24/2020 11:31 AM  
If the covenants do not explicitly provide for the maintenance of infrastructure item X, then I believe for a board to agree to such maintenance amounts to an attempt to amend the covenants without the required membership vote. Specifically for a Florida HOA subject to Florida statute 720:

720.31 Recreational leaseholds; right to acquire; escalation clauses.—
(6)
...
All leaseholds, memberships, and other possessory or use interests existing or created at the time of recording the declaration must be stated and fully described in the declaration. Subsequent to recording the declaration, agreements acquiring leaseholds, memberships, or other possessory or use interests not entered into within 12 months after recording the declaration may be entered into only if authorized by the declaration as a material alteration or substantial addition to the common areas or association property. If the declaration is silent, any such transaction requires the approval of 75 percent of the total voting interests of the association.
..
JohnC46
(South Carolina)

Posts:9678


07/24/2020 11:57 AM  
Posted By JohnT38 on 07/23/2020 3:31 PM
I'm not sure I follow this. Are you saying the Board could build a brand new clubhouse without owner approval? If so, that's kind of scary.




Yes they (we) could if there is enough money in the budget. That is the catch. The BOD has to have the money. The money could be allocated in a General Improvement Fund without exact specification of what improvement such as a new clubhouse. As few HOA"S would have this amount of money on hand, it will typically be done via a Special Assessment and that is when owners will have a say. I know some docs limit the amount a BOD can spend without owner approval but this could well be a bit of over control.

FYI, our docs allow our BOD to raise the dues any amount they want to. It can be done but there is a procedure to follow:

1. Owners must be notified of the increase on or before 12/01 via presenting next years budget.

2. The increase becomes automatic on 01/01 unless a Special Meeting is called by the owners and 51% of all (I repeat of all) owners vote not to accept the upcoming Yearly Budget. If this happens we have to fall back to the existing budget with an automatic 5% increase.

Our last dues increase was 40% but the BOD went through great lengths (mailings, meetings, etc.) to explain why. Not that everyone liked the increase but we only had one owner questioning our ability to do so. He was quickly silenced with a letter referring him to the Section of our Covenants that allowed our action.
JohnT38
(South Carolina)

Posts:352


07/24/2020 1:26 PM  
Thanks for the explanation John. I've been reading our docs since this subject came up and it appears we have a similar situation here. I guess what was bothering me is could a board in theory install a new amenity that home owners might not want or need? It sounds like it could happen.
JohnC46
(South Carolina)

Posts:9678


07/24/2020 2:07 PM  
Posted By JohnT38 on 07/24/2020 1:26 PM
Thanks for the explanation John. I've been reading our docs since this subject came up and it appears we have a similar situation here. I guess what was bothering me is could a board in theory install a new amenity that home owners might not want or need? It sounds like it could happen.




Basically they could so that is one reason to pay attention to what is happening and not get caught by surprise. Not all are going to agree with a new amenity but if enough do not like they could band together and probably stop such form happening.

I stay on my BOD as I am afraid some other ahole will get elected.....LOL
JohnT38
(South Carolina)

Posts:352


07/24/2020 2:39 PM  
Posted By JohnC46 on 07/24/2020 2:07 PM
Posted By JohnT38 on 07/24/2020 1:26 PM
Thanks for the explanation John. I've been reading our docs since this subject came up and it appears we have a similar situation here. I guess what was bothering me is could a board in theory install a new amenity that home owners might not want or need? It sounds like it could happen.




Basically they could so that is one reason to pay attention to what is happening and not get caught by surprise. Not all are going to agree with a new amenity but if enough do not like they could band together and probably stop such form happening.

I stay on my BOD as I am afraid some other ahole will get elected.....LOL




Well the good news is I'm going to have the 6 hole putt-putt course I've always dreamed of having built right behind my condo. Of course this will include a stylish Tiki Bar.
AugustinD


Posts:3683


07/24/2020 3:57 PM  
Posted By JohnC46 on 07/24/2020 11:57 AM
Posted By JohnT38 on 07/23/2020 3:31 PM
I'm not sure I follow this. Are you saying the Board could build a brand new clubhouse without owner approval? If so, that's kind of scary.


Yes they (we) could if there is enough money in the budget. That is the catch. The BOD has to have the money. The money could be allocated in a General Improvement Fund without exact specification of what improvement such as a new clubhouse.
If the covenants say what JohnC46 claims, okie-doke. If not, a board's creating new common areas and maintenance responsibilities continues to appear to me to violate the covenants.
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