Q: My condominium association board recently adopted and collected a special assessment to fund a construction project at the building. However, due to a change in circumstances, the board of directors has now decided to not proceed with the project. A question has come up as to what the association should do with the money from the special assessment. The board would like to keep the money to offset future expenses. What is the law on this? (J.E., via e-mail)
A: Section 718.116(10) of the Florida Condominium Act specifically states that money collected from a special assessment may only be used for the specific purpose or purposes of the special assessment. The statute goes on to state that once the purpose of the special assessment is completed (or, in your case, the purpose of the special assessment abandoned), the funds must either be returned to the unit owners in their proportionate share or credited against future assessments.
The law provides that the unit owners are entitled to the benefit of any surplus from a special assessment and the association is not empowered to use those funds except for the purpose levied or by applying the funds to future assessments which must be paid by the unit owners. Many associations will apply the surplus against future assessment payments, which reduces the monthly or quarterly payment obligations under the regular budget. Alternatively, some associations adopt a new special assessment for another needed project and will apply the previously collected special assessment as a credit for payment of the new special assessment.
However, the association must give the unit owners the benefit of the surplus of the special assessment in one of the manners described above and cannot unilaterally decide to retain the special assessment funds to offset operating expenses or other projects.
Q: At a recent board meeting, my condominium association board discussed installing two electrical vehicle charging stations in two unassigned guest parking spaces at our condominium. The board voted to obtain bids for this work and stated their intention to select a contractor to install the charging stations at their next meeting. I understood that these types of changes to the common elements of the condominium property must be voted on by the membership. Many owners question whether this is something the board can do without an owner vote. (A.E., via e-mail)
A: As you point out, it is not unusual for unit owner approval to be required before the association can make alterations to the condominium property, however there are exceptions.
The requirements for owner approval are generally set forth in Section 718.113(2) of the Florida Condominium Act. While there are some special rules for “multi-condominium” and “master condominium” associations, the law generally states that unless otherwise provided in the law itself, or in the declaration of condominium, there shall be no material alterations or substantial additions to the common elements unless approved by 75 percent of the total voting interest of the association.
Many (probably most) declarations grant the board the authority to approve material alterations up to a specific dollar limit or percentage of annual budget before owner approval is required. When owner approval is required under the declaration, it is often different that the 75 percent default level set forth in the statute. Many declarations base owner approval only on those who vote (in person or by proxy) at a meeting where a quorum is established.
Additionally, the statute itself contains exceptions to when an owner vote is required. Applicable here, Section 718.113(9) regulates the installation of electric vehicle charging stations (and natural gas fuel stations) on the common elements or association property.
This law, enacted on July 1, 2021, provides that the installation of common electrical vehicle charging stations does not constitute a material alteration or substation addition to the common elements or association property. Under this statute, most boards will have the authority to authorize the installation of a common electrical vehicle charging station on the condominium property without an owner vote. The board should confirm with legal counsel that it has this authority as there are some relatively complicated legal issues to consider when applying statutory amendments to established condominiums.
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.