Q: Our condominium association just held a vote to less than fully fund reserves for the 2024 budget. It passed by a majority of the quorum, but not a majority of the entire voting interests.
There seems to be some question as to whether the recent statute change to “majority of the entire voting interests” applies to a vote that took place in November of 2023. I understand we can still waive reserves for structural items until the 2026 budget but didn’t think that affected the threshold change to the waiver vote in the meantime. I would appreciate your explaining how this law change is applicable to 2023 votes for 2024 budgets. (K.C., via e-mail)
A: Chapter 2023-203, Laws of Florida, commonly known as Senate Bill 154, became effective on June 9, 2023, so it would apply to a vote taken in November of 2023. SB 154 amended a 2022 law commonly known as SBD-4, which implemented significant changes to Florida law, including the requirement that buildings of 3 floors or more obtain a “Milestone Inspection,” have a “Milestone Inspection Report” and “Milestone Summary” and that associations obtain a “Structural Integrity Reserve Study,” often referred to as a “SIRS.”
Depending on the age of the building, many associations will need to have the Milestone Inspection, Report, and Summary completed by December 31, 2024. All condominium associations operating residential buildings of 3 floors or more, regardless of age, must complete the SIRS by December 31, 2024.
SB 154 made several notable changes to SBD-4, including:
- Clarifying that one and two-story condominium buildings are not required to have a SIRS.
- Changing the vote to waive or reduce the funding of reserves from a majority of those who vote at a meeting where a quorum is established to a majority vote of all voting interests.
- Providing that the funding of certain reserves, commonly referred to as “SIRS Reserves” (structural items), cannot be waived or reduced, regardless of any vote, for a budget adopted on or after December 31, 2024.
- Essentially delaying the implementation of SBD-4 by one year by applying it to budgets adopted on or after December 31, 2024. Associations with calendar fiscal years are legally required to adopt their 2025 budgets by December 18, 2024. Accordingly, the law will not, in essence, “kick in” until the 2026 fiscal year for most associations since they will have adopted their 2025 budgets before December 31, 2024.
Q: Recently, the board of directors of my condominium association posted notice of a board meeting stating that it was closed to membership. It was later disclosed that the purpose of the meeting was to discuss the annual reviews of association employees. I was under the impression that board meetings must be open to the membership of the association. Was this meeting appropriate? (C.K., via e-mail)
A: Pursuant to Section 718.112(2)(c), Florida Statutes, the Florida Condominium Act, generally board meetings, which are when a quorum of the board is present and discussing association business, must be properly noticed and open to members and members are permitted to speak to each agenda item. However, pursuant to Section 718.112(2)(c)3. of the Act, the board is permitted to meet in a meeting closed to the members when the board is meeting with its attorney if the association is seeking or receiving legal advice regarding proposed or pending litigation or when the meeting is held for the purpose of discussing a personnel matter.
Therefore, if the board of directors of your association was meeting to discuss the annual reviews of the association’s employees, that would appear to be a proper purpose for a closed board meeting.