“Generally Board Members Cannot be Compensated,” News-Press

“Generally Board Members Cannot be Compensated,” News-Press

Photo of folded 20 dollar bills stuffed under ribbon holding a gift together.Q: Can the members of our board of directors receive a holiday bonus? (G.M, via e-mail)

A: Not to be the “grinch,” but this is generally not a good idea and is usually not legally permissible.

Section 720.303(12) of the Florida Homeowners’ Association Act generally prohibits directors and officers from directly receiving a salary, compensation, or other financial benefit. However, compensation is permissible where it is specifically authorized in the association’s governing documents or where it is approved in advance by a majority vote of the members.

Section 718.112(2)(a)(1) of the Florida Condominium Act similarly provides that the directors and officers are to serve the association without compensation “unless otherwise provided in the bylaws.”

Even if such a payment is authorized as required by law, I do not think it is a good idea. The general theory of the relatively broad immunities in the law for association directors is that they are volunteers. Payment, even if a token, goes against the grain of that theory and could be raised by someone looking to hold a board member liable for some issue. Also, paying directors raises questions about the need for licensure under the statutes governing community association managers.

Individual members are certainly entitled to bestow gifts on whom they choose, including board members during the holidays as a token of appreciation for their service. Also, these limitations and issues do not apply to employees of the association, where holiday bonuses are relatively common.

Q: My homeowners association is going to levy a special assessment to address lake bank erosion. My property is not lakefront and I am wondering why I have to pay. (F.Z., via e-mail)

A: In most cases, all members of an association in a community with lakes are obligated to contribute for shoreline repair costs, assuming the lake is part of the common property. Typically, the lakes serve as part of the stormwater drainage system which benefits the entire community. It is likely that your association is the “operator” of the water management system under the permits issued for the community and would be legally obligated to perform these functions.

Moreover, because the declaration is recorded in the public records of the county where the association is located, purchasers are on “constructive notice” of the membership obligations of the association, including the responsibility to pay a share of the operating costs of the community. Assuming the board is empowered by your governing documents to levy special assessments, the special assessment would have to be properly adopted. The Homeowners’ Association Act, Chapter 720, Florida Statutes, requires fourteen days mailed and posted notice of the board meeting where the assessment will be considered. However, your association’s governing documents may have additional requirements.

Q: My condominium board decided to change the “tone” of the color of our building. Is a “color tone” change a material change since this is not the color of our building? (H.R., via e-mail)

A: The general definition of a “material alteration” comes from a decades old case from a Florida District Court of Appeals, which is still used today. The court defined a material alteration as a change that “palpably or perceptively varies or changes the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance.”

Both Florida courts and arbitrators with the division of condominiums timeshares and mobile homes, have found color changes to be material alterations. While each case needs to be evaluated on its individual facts, a change in the color or “tone” of the color of the condominium building would likely be a material alteration. This is a matter that should be reviewed by the association’s attorney if there is doubt.

Joseph Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions via e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.