March 22, 2023|Condominiums, HOAs, Real Estate
Running a residential Owners Association in Florida is a business, not a social function. COAs and HOAs are corporations that are structured similarly to other corporations, public and private. An Association’s Board of Directors has specific responsibilities and obligations, functioning like any other corporate Board or an Executive Branch of government. It is an elected group that makes decisions which protect the interests of others.
Holding such a position of trust and responsibility requires specialized education in order to competently fulfill the duties attached to being a Director of the Association.
Administrative, financial, and governance problems within Owners Associations always end up costing owners more money, while decreasing their enjoyment of owning in the building or community. And these problems are always preventable through effective Board administration.
For background on Board function and responsibility, take a look at this previous article: Fiduciary Duty – Mandatory For Florida Association Board Members (thefloridarealestateblog.com)
Owners volunteering to run for a Board seat (or accepting the position when a seat opens up mid-term) bring all their previous experience, training, education, and opinions to the table. When running for the Board, candidates should compose a 1-page outline of their qualifications, previous experience, skills, and motivation for being part of Association leadership. Management sends these to all voting owners so they can get to know the candidates.
The best-functioning, most effective Boards are usually made up of people with different backgrounds and experiences. When everyone has the very same interpretation and viewpoint, you can be sure that something important is going to fall through the cracks.
Being part of a Florida Owners Association’s governing body is different from just about everything a candidate may have previously undertaken. Many potential Directors will be unfamiliar with the required fiduciary duty to all owners, then there’s the knowledge needed to oversee building / grounds maintenance while administering the finances of an Association (corporation) with a substantial annual budget and high-balance bank accounts.
It is NOT an easy job…and Directors do NOT get paid for their time or effort.
Directors should take their responsibilities seriously, seeking the education needed to perform their duties in a way that benefits the entire Association at all times.
Don’t be shy or feel intimidated. If you have the motivation to consider running for a Board seat, learn all you can and do it right. And keep reading this article…
Florida’s Condominium Act (Florida Statutes Chapter 718) and Homeowners Association Act (Chapter 720) both require that each newly-elected or appointed Director (Board members are called Directors) “shall certify in writing to the secretary of the association that he or she has read the association’s declaration of (condominium or covenants), articles of incorporation, bylaws, and current written policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members” within 90 days of being elected or appointed.
Both Acts go on to say: “In lieu of this written certification, within 90 days after being elected or appointed to the board, the newly elected or appointed director may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved condominium education provider within 1 year before or 90 days after the date of election or appointment.”.
Here are a few observations and discussion points on the previous 2 paragraphs:
- Under the “self-certification” method, it is unlikely that many incoming Board members are comfortable interpreting and applying on their own what is written in COA or HOA Governing Documents. They can be notoriously confusing, even after reading them multiple times, especially to those unfamiliar with legal language.
- I find it fascinating and disturbing that neither the Condominium Act nor the Homeowners Association Act require new Board members who “self-certify” to read any parts of either the Condo Act or the Homeowners Association Act, which are the highest levels of jurisdiction and regulation over Florida residential Owners Associations. Both Acts (State laws) only require new Directors to say they have read their own Association’s Governing Docs. (I am NOT making this up.)
- Directors’ self-certification statements and class attendance certificates become part of the Association’s Official Records, though it is very rare for anyone to ever follow up on whether they were received within the specified 90 days. The “penalty” for non-compliance (only determined after 90 days has elapsed) is limited to suspension from the Board, only until a self-certification statement is submitted to the Board Secretary.
- What missteps affecting all owners could new Directors make in those first 90 days? New Board members cannot just “wing it” from the start without first having at least a basic understanding of Association governance.
- Any self-certification or class completion certificate is good for as long as the Board member continues to be re-elected and wants to remain on the Board. Since 2018, the term limit for Condominium Association Directors stands at 8 years. There is no term limit for Homeowners Association Board members.
- There is also NO requirement for re-certification or Continuing Education at any time during a Director’s term in office for either a Condo or HOA. Requiring just 2 hours of approved (and free) CE every year for Directors would go a long way toward better Association governance.
- Florida Statutes give the option of taking an approved class within a year before or 90 days after taking office. In my opinion taking a class should be the rule, not the option. The State-approved 2-hour classes are presented by Florida-licensed attorneys and law firms who discuss important points of Board responsibility, authority, and behavior within the context of the Condo or Homeowners Act and the Association’s Governing Docs.
- Florida’s statutory Board “education” requirements are embarrassingly insufficient. Association Directors administer financial accounts containing hundreds of thousands of dollars in owners’ money, are responsible for maintaining the Association’s common elements and areas, and must adhere to State laws and the Association’s Governing Docs at all times. Sitting through a 2-hour class (or just signing a paper saying they read something) doesn’t even come close to preparing new Board members to make decisions that significantly affect all owners in the building or community.
Without properly guided initial education, newly-elected Board members don’t know what they don’t know.
How can an interested owner prepare herself / himself to be a competent, effective Association Director?
- Do NOT even think about “self-certification” because without professional guidance, trying to read through your Association’s Governing Docs on your own will raise countless unanswered questions, frustrating you more than you can imagine. After reading the docs, who will answer your questions? Current Board members, Property Managers, real estate agents, your retired attorney neighbor from Cleveland, pickleball partners, or other owners CANNOT explain Governing Docs to you. Only Florida-licensed attorneys can interpret and explain legal documents for you.
- Before running for a Board seat, take a Director certification class offered for free by quite a few excellent law firms throughout Florida. They are offered in person and via Zoom. You must attend a live presentation (no recorded webinars). The attorneys teaching these classes are specialists in Condominium and Planned Development (HOA) Law. The classes last about 2 hours, and there is always time for questions at the end. Board Certification classes actually DO discuss Florida’s Condominium and Homeowners Association Acts, which are not required reading when self-certifying. (Be sure to list the class completion on your pre-election qualifications sheet mentioned toward the top of this article.)
- Wherever you are in Florida, if you would like a referral to a local law firm’s Board certification class, send me an email. I am not affiliated with any law firms, though do communicate regularly with many of them. I have attended quite a few of these classes via Zoom over the past year or so in order to see what new Board members are being taught. How do you think I got the idea for this article?
- After you take the initial class and are elected to the Board, pursue your own Continuing Education even though it is not required. There is always new information about Florida COA and HOA governance, so keep learning in order to do the best job possible and make a noticeable contribution to your Association.
- For your own self-directed Continuing Education, stay in touch with the law firm who presented your initial certification class. The same attorneys do many informational webinars throughout the year that will keep you engaged in current topics affecting residential Owners Associations. Some of the most important ones are their Legal Updates which are extremely valuable for all Directors to attend. Sign up for their newsletters on topics affecting COAs and HOAs.
When you know what you are doing, this Director job gets MUCH easier!
Regrettably, ongoing education for Association Directors is NOT required by Florida Statute. In my opinion, this is one of the more disturbing omissions in our State’s Condo and HOA laws. There is the potential for Directors to remain in office for 8 years (in a COA) or even longer (in an HOA) without ever attending a refresher class or being aware of new legislation. This circumstance inevitably leads to “stale” and inefficient administration.
Remember – Continuing Education for Board members is FREE, just like the initial certification classes. There is no excuse for Directors not to continue learning while they serve on the Board.
Many of us involved with Association governance topics in Florida are trying to have State Representatives and Senators address some of the weaker spots in the Condominium and Homeowners Acts, one of which is Mandatory Board Member Education. Time will tell whether they are listening to our suggestions.
We would like to see mandatory initial and continuing Board education classes be made part of the Florida Statutes, and “self-certification” removed completely as an option. As stated at the top of this article, the huge majority of problems that occur within COAs and HOAs are preventable through competent, informed administration.
Today’s article has been a collection of discussion points, designed to urge owners and Directors to discuss the business of running their Associations and be more aware of the need for proper Board member education, both initial and continuing. Feel free to forward this one to anyone you would like – your Board, other owners, Management Company, State legislators, anyone involved with Florida COA and HOA governance issues.
Check out all the other Association-related articles on the all-posts page. Here is a direct link: https://thefloridarealestateblog.com/?blog=y
Until next time –
Christopher Carter, Real Estate Broker Associate
Licensed Community Association Manager
Mortgage Financing Advisor NMLS861361
Waterfront Realty Group, Inc. – Naples, FL 34103
(239) 898-5455 direct