“Four Amendments Your Association Should Consider” – CAI Central Florida Times
For community associations in Florida, proactive governance is essential for long-term stability and effective community management. Governing documents provide the foundational framework for this management, and periodic amendments are crucial to ensure smooth, efficient operation of the Association and compliance with evolving statutes. Depending on the nature of your association, there could be a number of other amendments to consider, but this article outlines four common amendment areas that associations should consider to fortify their legal and financial footing. While this article specifically references Chapter 720 homeowner associations, these amendments may apply to condominiums, as well, where the law overlaps.
- Implementing Capital Contributions: A Proactive Financial Strategy
Capital contributions, or one-time assessments collected upon a property’s transfer of ownership, offer an alternative mechanism for associations to build or replenish working capital. Historically, charging the buyer a capital contribution when purchasing a new construction home has been a common developer practice to seed new associations. By formally amending the Declaration to permit capital contributions on resales, an association can establish a consistent, non-assessment-based revenue stream. This approach provides supplementary funding for significant projects or unforeseen expenditures, mitigating the sole reliance on annual and special assessments. Given the potential for legislative changes that may disallow future amendments to include capital contributions, associations are strongly advised to consult legal counsel to implement or review capital contribution amendments, ensuring their resilience against evolving statutory provisions.
- Enhancing Fine Enforcement: Promoting Covenant Compliance
The effectiveness of an HOA’s enforcement powers directly correlates with its ability to maintain community standards and property values. Florida Statute Chapter 720.305 permits associations to levy fines for rule violations. By statute, these fines are limited to $100/violation, up to $1,000 in the aggregate for a continuing violation – unless the association’s governing documents say otherwise. In some communities, the statutory amount may not be a sufficient deterrent. To strengthen the deterrent factor of the fine, you may wish to consider raising the minimum fines and establishing that significant fines can become liens against a property.
Amending the Declaration to explicitly state that fines of a certain threshold (e.g., $1,000 or more) will constitute a lien significantly strengthens the association’s enforcement capabilities. This clarity in the governing documents reinforces the seriousness of violations and provides a more robust mechanism for ensuring compliance, ultimately fostering a more harmonious community environment.
- Modernizing Election Procedures: Fostering Orderly Governance
Recent legislative adjustments to Chapter 720 of the Florida Statutes have granted HOAs increased flexibility in structuring their election processes, notably by removing the mandate for nominations from the floor. This presents a timely opportunity for associations to review and update their Bylaws to reflect modern, more efficient, and orderly election procedures. Boards should consider amendments that streamline the nomination process, eliminate nominating committees, establish clear deadlines for candidate submissions, and outline comprehensive election protocols. Such revisions contribute to greater transparency, reduce potential for disputes, and enhance overall member confidence in the association’s governance.
- Refining Architectural Control Powers: Safeguarding Community Aesthetics
Architectural control is a cornerstone for preserving the aesthetic integrity and long-term value of many HOA communities. However, this authority is subject to stringent statutory and case law regulations. It has become increasingly difficult to deny requests based solely on the subjective opinion of the association as to the aesthetics of the proposed change. It is imperative for associations to review their Declaration to confirm whether it contains explicit, objective architectural specifications or, alternatively, grants the Board clear authority to adopt and enforce detailed architectural guidelines and standards. Furthermore, ensuring the documents mandate a clear process for homeowners to submit plans and obtain formal approval before commencing any exterior modifications is critical. Robust architectural control provisions are essential for preventing unauthorized alterations, avoiding costly litigation, and consistently upholding the community’s desired visual character.
These are just four amendments you should consider. Depending on the needs of your association and the state of your governing documents, you may wish to consider more, particularly if your documents were written decades ago before the digital reality we live in today. Proactive engagement to evaluate your governing documents, in collaboration with experienced legal counsel, is a strategic imperative for community associations committed to effective and resilient community management.
To read the original CAI Central Florida Times article, please click here.
