Issues for legal review and opinion (revised per
1/19/06 Board Meeting). The attorney, Dennis Beyer’s responses are
shown in BOLD LETTERING>
I have
reviewed the questions the Board raised and the relevant documents and state
statutes. The following are my responses. 1. Board’s authority and
approach for imposing an assessment to build a pavilion At the Associations 2005 Annual Meeting, the Board conducted an advisory vote to determine if the membership supported the Board’s plan to build a pavilion next to the pool as a recreation facility betterment. Members were informed that building a pavilion would require a special additional assessment of about $250 on each lot owner. (current annual dues are $175.) (See Background on Pavilion Vote). The measure passed by a vote of 36-35. The Board believes it has the authority to proceed with this initiative, but wants to be certain that there is no legal barrier and that it follows the appropriate process for implementation. ·
Is the Board correct in treating the pavilion as a “betterment” as
described in the By-Laws (Section 7.2) I do not think
that section 7.2 by itself
gives the Board the authority to make the improvements. This
section relates to the Board’s authority to manage the various bank accounts
that have been set up or that can be set up by the HOA. The pavilion
is definitely a betterment, the question is how can a
“betterment” be constructed on the recreational parcel. The by-laws do not give express authority to
either the Board or the HOA to construct improvements, therefore the
state law must be examined. Section 720 of
the Florida Statutes (you can go to OnLine Siunshine to see all of the state laws) provides a general
scope of powers to the HOA but again there is no clear direction on who has
final say on adding improvements to an existing recreational parcel. Typically
if this were seen as an amendment to the original C&R’s,
a super majority vote would be required. It appears that the original scheme of
development called for amenities on the recreational parcel. Under these
circumstances, it is my opinion that the Board’s decision is defensible- it has
a majority vote and should be able to proceed with the pavilion. Does the Board have the authority to implement the pavilion initiative given the process it has followed? ·
What process steps are required? See above. The Board may have followed the proper procedure,
although it the C&R’s are rather vague. ·
Is it permissible for the Board to obtain a bank loan in the
Association’s name to allow members to pay the special assessment in
installments? Are there any legal issues
with such an approach? I would recommend avoiding loans if at all
possible. 2.
Approach and process for enforcing C&Rs—ARC and Fining Committee The C&Rs provide for the enforcement of
property maintenance standards by the Board issuing a letter noting the
violation and then, if the problem is not corrected, hiring someone to perform
the work and billing the lot owner. (See
C&Rs Article IV, Section 1) In 2002, the C&Rs
were supplemented to create a Fining Committee and a process for the Board to
levy a penalty that the lot owner can then appeal to the Fining Committee. (See “Fines and Suspension
of Use Rights Power and Statutory Provisions and Rules for Imposition of
Same.”) The Board has recently
encountered a homeowner whose roof continues to be in poor repair and would
like to force the homeowner to take action however it is not clear what
procedures should be followed. Moreover,
the homeowner has refused to receive any mail from the association. ·
What process should the Board follow in
enforcing the C&Rs? The Board’s authority is
spelled out explicitly in the memorandum attached to the documents that you
gave to me. The Board can vote to suspend the offending Homeowner’s right to
vote and to use the common areas. The
Board can also vote to fine the offending Homeowner. ·
Are there legal issues with
the Board going uninvited onto a homeowner’s property to correct a
deficiency? I do not see any authority
for the Board to go uninvited on a Homeowner’s property to perform repairs.
Under state law, the Board could only go uninvited if the Board were attempting
to correct a condition that posed a direct safety threat to all of the
homeowners. ·
What are your recommendations for revising the C&Rs to clarify the
enforcement process? At this time, I think
that the C&R’s are in compliance with state law. You are in a position to enforce the violations
acting through your Board. I suggest going after the existing roof violation in
accordance with the hearing process outlined in Bob Taylor’s memorandum and see
how the process works.
·
What are the action options for the Board when the homeowner refuses to
receive or acknowledge any communication or correspondence? If the Board has sent
notice by way of certified mail, then the Board may proceed with the hearing,
regardless of whether the Homeowner participates. The hearing should be
recorded so that a record exists to establish compliance with the hearing process. 3. Interpretation questions
pertaining to pet limitations Our C&Rs currently contain a pet limitation provision: “A maximum of two (2) dogs, cats, or other household pets may be kept, provided that they are not kept, bred or maintained for any commercial purpose” (C&Rs Article III, Section E.) The Board has enforced this provision when it has been aware of a homeowner with more than two dogs. It has also recently issued an interpretation allowing a homeowner whose house occupies two lots to have up to 4 dogs. (See minutes of December 5, 2005 Special Board Meeting.) The Board is concerned that the ambiguity of this provision may make any enforcement challengeable because household pets can also be defined to include fish, birds, hamsters, guinea pigs, and reptiles. The Board is reluctant to get into the business of counting fish and it is not clear how the provision applies to someone with two cats and a dog or any other combination of more than two pets. ·
Is the wording of this C&R provision enforceable? The language is somewhat vague. A Homeowner with more than 2 dogs or cats is
certainly on notice that this is not allowed. Fish and other small animals obviously are
the problem area. · Can the Board limit the number of animals that a homeowner can have? What are the necessary elements of any pet
limitation C&R so that such provisions can be enforced? The necessary provisions
are that the language be explicit enough to put a homeowner on notice of what
the limitations are going to be. The
restrictions must also be directed at a perceived problem caused by the pets-
like noise, waste, attacks on people, etc. ·
What recommendations do you have for C&R
language regarding pet limitations or should be consider eliminating the
provision. I would suggest that the
Board consider what the goal is with regulation of pets. If it is noise, I
suggest looking at language that restricts dogs being left outside while an
owner is at work. Parrots may also be a noise problem. If the problem is with
animal waste, place provisions requiring owners to clean up after their pets. You may also want to have a
leash requirement. If there is not a problem, the eliminate the requirement completely. I was surprised that the restrictions are in
the C&R’s. This restriction is more appropriate
in condos and patio home developments. ·
Was the Board within its authority to issue
the interpretation of the C&R with respect to this first homeowner who
built one house on two lots? The Board has a fair amount of discretion in
interpreting its C&R’s. I disagree that the Board
made the right decision on this one, but the question is whether the Board
abused its discretion. I do not think that the Board abused its discretion. 4.
Options for site-maintenance agreements with
builders during construction process Some Association members have complained about how builders are
maintaining their construction sites. We
currently have dealt with this by contacting the builder and asking that they
address the problem, which has usually worked although not necessarily very
quickly. It has been suggested that the
association require builders put money on deposit that could be tapped to
correct deficiencies. Alternatively, it
has been suggested that the Board create a Memo of Understanding (MOU)
specifying site management expectations and a process for complaints to be made
and the timing for corrective action. ·
Does the Board have the authority in the C&Rs
to require builders to deposit funds and then to tap such funds to correct
problems? No.
The Board can either invoke the fine process and go
after the Homeowner or the Board can contact the county code officers and
request that the County take action against the Builder involved. ·
What would the Board have to do if it wanted to implement such an
approach? The Board could establish a
written enforcement policy that would be provided to Homeowners and the
Builders to put them on notice of the potential for enforcement action if they
do not control the litter from job sites. ·
If the Board were to implement an
MOU approach, what would be your
recommendations for wording or implementation? I
would need additional time to draft such an MOU. Basically the MOU would need to track the
county’s land development regulations and also put the homeowner on notice of
the potential for enforcement of the C&R’s. ·
Do the provisions of County Ordinances Article II. Palm Coast Service
District Sec11-33 and 11-34 regarding Construction and Protection of Swales and
Adjoining Properties apply to builders in Hammock Beach Estates? ·
Could/should the Board impose fines on lot owners (rather than the
builder) if the builder does not maintain the site properly? Overall what approach would you recommend? I think that the Board should provide the Homeowner
with a letter before construction starts to let them know of the potential for
enforcement if this becomes a problem during construction. 5. Appropriateness of including
County ordinances in C&Rs Our C&Rs now include the same specific
language regarding noise and vehicle parking restrictions
(Article III, Section C&D) that is spelled out in Flagler County
Ordinances for the Palm Coast Service District.
(See Division 2. Noise, sec.20-301-308 and Sec
29-36-39) Our
concern is that including them explicitly in the C&Rs
rather than by reference makes the Board the enforcement authority rather than
the County. The Board can not usurp the County’s enforcement
ability. ·
What is your recommendation as to whether such provisions should be
included in the C&Rs? I would try to
determine if the provisions are needed to protect the property rights of the
members. I would also examine the language to see if the same concerns can be
better served through
some other mechanism- in other words is there a more feasible way to solve the same
problem. ·
Do the cited My position would be as long
as the ordinances are cited in your C&R’s, then the ordinances are applicable to the HOA. ·
Do we have the authority to take action on noise and vehicle violations
based on our C&Rs? If so, what process should we follow with
regards to involving If you intend on requesting
that the county enforce the violations, then there should be a uniform
mechanism utilized so that no one can claim unequal enforcement exists. Perhaps
the fining committee would be the proper entity to get involved. 6. Action needed if property
insurance required by C&Rs cannot be obtained The C&Rs states that the Association,
without prior written approval of at least 2/3rds of the lot owners, shall not
be entitled to fail to maintain fire and extended coverage on the Recreation
Facility on a current replacement cost basis in an amount not less than one
hundred (100%) percent of the insurable value (based on current replacement
cost). (See C&Rs
Article XI, Section 3 d.) Currently the
Recreational Facility has a bathroom building but may in the future have a
pavilion. Although we have liability
coverage on the bathroom building, our insurance provider says that for 2006 no
insurance companies are writing fire and extended coverage policies for such
low valued structures. Moreover, if a
pavilion is built, it is unlikely that we would be able to get windstorm
coverage. ·
What action does the Board need to take now because we cannot get
insurance? The Board should
consider placing the matter to a vote of the HOA. You may want to give the
members a choice- they can either establish a reserve fund for storm damages or obtain the 2/3rds vote to discontinue with
the insurance. ·
Can we self insure? I do not
know how a HOA would go about being self insured unless it was to simply create
a reserve for the replacement value of any identified structures. ·
Does extended coverage mean “wind insurance”
and if so, what can we do if no one will write such a policy? See the answers above. Typically extended coverage does not
include wind. ·
What would you recommend as a way to reword
this provision of the C&Rs given the situation of
the insurance marketplace? I would first determine what the
HOA wants to proceed. 7.
Need/approach to revising C&Rs
now that Board has taken over from developer The developer has sold his last lot and legal papers were filed that
turned the association and its responsibilities over to the Board. (See Assignment of Developer Rights, dated
11/17/2004) ·
Would you recommend that the Board revise the C&Rs
to eliminate the references to the developer’s authorities and responsibilities
and to substitute the Board or Association where appropriate? I would
suggest that a Committee be created to review all of the C&Rs
and to determine appropriate changes. Once the Committee has completed its
review, then the changes should be voted on the membership. ·
If we revise the language, do we issue a new document or prepare
another amendment? What process should
we follow? Your documents are very
difficult to follow due to all of the amendments. I suggest new documents. 8.
What to do about fees specified in C&Rs that were not collected The C&Rs call for each original lot owner
to pay a $100 fee to the association (C&Rs
Article VII, Section 4) and for applicants for Architectural Review to pay a
$50 fee (C&Rs Article VIII, Section 2). The developer and previous Boards have never
collected such fees. ·
Is the current Board under any obligation to collect back fees? I
think it would very difficult to recoup these sums after the fact. ·
Does previous non-collection limit the Board from collecting the
Architectural Review fee in the future? No. ·
What wording changes to the C&Rs would
you suggest regarding the $100 fee or to make the collection of fees more
enforceable? I think the language is fine, the Board needs to follow the established policy. |