“Understanding Receiverships” – News-Press
Q: I live in a small condominium association and no one wants to serve on the board. Since we have trouble establishing a board, is having a receiver appointed to run the condominium association an option? (K.F., via e-mail)
A: Chapter 718, Florida Statutes, the Florida Condominium Act, provides a process for the appointment of a receiver by the courts. However, a receiver is not a long-term solution for the operation of an association.
Section 718.1124 of the Act discusses the process where any owner can petition the circuit court in the jurisdiction where the condominium is located to have a receiver appointed when the association fails to fill vacancies on the board of directors sufficient to constitute a quorum as provided in the bylaws.
Prior to filing the petition with the court, the owner must first give notice that they intend to file the petition. Such notice must be provided to the association stating that, unless within 30 days of the date of the notice, the owner will seek to have the court appoint the receiver. The owner must provide the notice to the association by certified mail or personal delivery, it must be posted on the condominium property, and it must be provided to every other owner in the association again, either by certified mail or personal delivery. If the association fails to fill the vacancies within the 30-day notice period, the owner may proceed with filing the petition and the court may appoint a receiver.
If the court appoints the receiver, the Florida Condominium Act provides that the association is responsible for the salary of the receiver, court costs and attorneys’ fees. The receiver has all powers of the board of directors and serves until the association fills the vacancies on the board sufficient to constitute a quorum and the court relieves the receiver of the appointment.
While the Florida Condominium Act provides the process for having a receiver appointed, it is not a practical long-term solution. The receiver is intended to be a stop-gap measure until a quorum of the board of directors can be constituted. Any association that has a receiver appointed will incur significant costs in both the salary of the receiver as well as court costs and attorneys’ fees. Typically, the threat of having the receiver appointed will incentivize members of the association to serve on the board sufficient for the board to constitute a quorum and avoid the appointment of a receiver.
Depending on your association-specific situation, it may be appropriate to look at other options to help relieve some of the burden of serving on the board. Such options may include appointing appropriate committees to assist the board members concerning certain functions. For example, many associations have finance committees, or other committees that handle specific topics. The association may also look at retaining appropriate professionals to assist the board of directors.
Ultimately, the unit owners within a condominium association are responsible for the governance of the condominium and serving on the board is one of those responsibilities.
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.
