Q: Recently our homeowners’ association negotiated a new bulk cable and internet contract. One of the new provisions of the contract is the service provider is going to pay the association over one hundred dollars for every home in the community. The money is to be paid to the association in a lump sum. Many of the owners would like to see the money applied to everyone’s assessments to offset the increase in cost under the new contract. However the Board has stated they intend to apply the money to the budget as general revenue and have not specified any designated purpose for the funds at this time. Is there a way to require the association to give the money back to the owners as a credit against their assessments? (J.W., via e-mail).
A: A per door fee paid by service providers in connection with an association’s execution of a long term bulk telecommunications agreement is not uncommon. Typically the service provider will pay a one-time per door amount in connection with the association’s execution of the agreement, usually the amount is paid 60 or 90 days following the commencement of the contract. While Chapter 720, the Florida Homeowners’ Association Act, Chapter 718, the Florida Condominium Act, and Chapter 719, the Florida Cooperative Act, all authorize associations to enter into bulk telecommunications contracts as a common expense of the association, the statutes do not address this issue.
Therefore, in the absence of any specific statutory restrictions on the association’s receipt of such funds, any of the amounts paid by the service provider would be income, sometimes called non-assessment revenue, to the association. While such funds would have to be properly accounted for, there is no requirement that the funds be credited back to the owners. With regard to properly accounting for the funds, the association should review this issue with its accounting professionals. In addition to properly accounting for the funds in the association’s budget, there may also be tax consequences, given that the funds paid by the service provider are not income derived from owners’ assessments.
As such, there is no legal requirement for the association to use the funds for any particular purpose, other than for a proper common expenses of the association, there may be accounting and tax issues that the association would need to review with an appropriate accounting and tax professionals.
Q: What guidelines or suggestions do you have on crafting board meeting minutes? I would like to reduce confusion about what should and should not be entered into the minutes. (J.A., via e-mail).
A: The purpose of minutes is to record what was done, not what was said. A typical set of board minutes should reflect: the date, time, and place at which the meeting was called to order; the presiding officer; the establishment of a quorum, with attendees listed by name; proof of proper notice for the meeting; disposal of unapproved minutes from previous Board meetings; a brief summary of reports given to the board and a statement by whom the reports were given; unfinished business; new business; and adjournment.
Whenever an item of board business is put to a vote, the person making the motion for approval of the item should be identified in the minutes, as should the name of the person who seconds the motion. The exact wording of the motion should be included in the minutes too. The points raised in debate are typically not included in the minutes. Both the Florida Condominium and the Florida Homeowners’ Association Acts require the vote of every director to be recorded in the minutes. If a board member abstains from a vote, he or she is considered to have taken no position on the matter at hand and such abstention should be noted in the minutes.
If additional documentation is recommended for legal reasons, it should either be set forth in a formal resolution or attached to the minutes.
This article originally appeared in News-Press.