Q: The board of my association recently passed a new set of rules. Do we have to record these in the county records for them to be enforceable? (G.W., via e-mail)
A: The “recording” of a legal document involves filing it with the Clerk of Court in the relevant Florida county. The law does not require that most documents that are recorded be recorded. For example, there is no legal obligation to record a deed for it to be legally valid. The purpose of recording is to provide the world with “constructive notice” of who the title holder is.
Some documents must be recorded to be legally valid. For condominiums, this includes amendments to declarations of condominium, articles of incorporation, or bylaws. There has never been a legal requirement that condominium associations record rules and regulations, and most do not do so.
The Florida Homeowners’ Association Act, Chapter 720 of the Florida Statutes, states that amendments to “governing documents” for homeowners’ associations are not effective until they are recorded in the public records of the county in which the community is located. Prior to 2015, this statute defined governing documents to include the declaration of covenants, the articles of incorporation, and the bylaws. Rules and regulations were not included in the definition of governing documents; there was no requirement to record rules, and most associations did not do so.
In 2015, the definition of “governing documents” was amended in Chapter 720 to include rules and regulations. Therefore, beginning in 2015, any newly adopted rules or amendments to the rules of a homeowners’ association had to be recorded to be valid. This law was criticized for a number of reasons and was changed again in 2021 when the definition of “governing documents” was amended to remove rules and regulations.
As such, following 2021, the statutory requirement to record amendments to HOA rules and regulations was repealed. In summary, the law has never required recording rules for a condominium association. Homeowners’ associations were required to record rules for a brief period, from 2015 to 2021.
As stated above, most associations do not record their rules, which is not legally required. There is nothing wrong with recording rules, and there are legal benefits in doing so, specifically by providing legal record notice to all parties, which makes it nearly impossible for a person to claim they were not properly notified of the rules. The downside of recording is that once you start recording rules and amendments, you should keep doing so in the future and that sometimes falls through the cracks.
Q: Our condominium association holds bingo games. How can or must the proceeds be legally used? (S.C., via e-mail)
A: Section 849.0931(4) of the Florida Statutes states that immediate proceeds from bingo games can have actual business expenses related to the operation and conduct of the games deducted. The adjusted proceeds must then be returned to the players in the form of prizes.
Proceeds that remain after the payment of prizes and deduction of actual expenses can also be donated to a charitable, nonprofit, or veterans’ organization that is exempt from federal income tax as specified by Section 501(c) of the Internal Revenue Code. The tax-exempt recipient must use the donation for charitable, civic, community, benevolent, religious, or scholastic purposes or similar activities.
Condominium associations are not exempt from federal tax. Therefore, the association would not be eligible to retain net proceeds from holding bingo games and use them to offset the general expenses of the association. Most associations that hold bingo games simply give out all of the proceeds received from card sales as prizes, less the actual costs of conducting the event.
Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.