Betsy Barbieux explains how the community association is structured like a municipality. However, the board of directors doesn't function as a representative form of government. While a city council represents the citizens, a community association board's sole responsibility is to follow the statutes and bylaws of the community.

TRANSCRIPT

Betsy - Hi, I'm Betsy, and in today's episode of CAM Matters, we are going to finish our history lesson of how we got here, how we ended up with all of these condos, co-ops and HOAs, and we'll end with an analogy to a municipality. Ooh, that rhymes.

Betsy - Stay tuned.

Announcer - Welcome to CAM Matters, Condos, Co-ops, HOAs and Beyond. Betsy Barbieux is an information leader in Florida on community association living, rights and obligations. She is an expert on the rights and obligations of owners, as well as the association. If you live or are planning to live in the state of Florida, there's a good chance you'll be part of a community association. And by the end of this show, you'll know a little bit more about community associations and why they matter.

Suzanne - Well, welcome. We're glad that you're joining us for another episode of CAM Matters. I'm Suzanne Lynn, the host, and Betsy Barbieux. We are glad that you're here. You're the expert. So we're gonna just dive right in. And we kinda left off on the first episode of how did we even come to having community associations. And I think that we left off in the first episode on, we were in Miami and we were talking about corporations and boards.

Betsy - Yes, we were. We were having a history lesson--

Suzanne - That's right.

Betsy - That went all the way back to the 1960s.

Suzanne - This is why we need to do it in two segments, 'cause as far as a student goes, I need a little more time to digest. So let's go ahead and pick that up.

Betsy - Where we were with our last episode was talking about the developers in Miami creating community associations, corporations, and selling stacked air.

Suzanne - Right, right, that's what it is, yeah.

Betsy - It is, stacked air, and it was a little odd. The legislators told the developers that they could not create those kinds of communities anymore until they first created a Florida corporation. And we talked last time about corporations having board of directors, and that the board of directors and the documents, and I brought some with me today, I brought props.

Suzanne - There ya go.

Betsy - The board of directors has a threefold mandate from the legislature, and that is to protect the property and its value, maintain the things that are used in common, like swimming pools or exteriors of buildings, and enforce the restrictions on the owner's use rights.

Suzanne - Okay, so protect, maintain and enforce.

Betsy - Enforce, that's the purpose of the corporation, which means that's the purpose of the board of directors. That's their mission statement. And I call it the presumed statutory mission statement. And just as a little tease, that will be the purpose of the board meetings. And in another episode, we'll talk about board meetings.

Suzanne - Oh, boy, I bet that's gonna be very interesting 'cause I've been to some and I know--

Betsy - At a board meeting. We'll talk about those. We'll talk about those. But the purpose of the board meeting and the purpose of the board is to fulfill the mandate of the statutes and of the documents. Now when I say documents, I wanna just show you what I'm talking about.

Suzanne - Okay.

Betsy - Because when I say condominium, I think most people see a building.

Suzanne - Definitely, yep. Tall.

Betsy - Tall building. And I think when I say homeowner associations--

Suzanne - I see a house and a yard.

Betsy - A house and a yard, garage. If I say co-op, you probably have no clue.

Suzanne - I have, no, no.

Betsy - Most people--

Suzanne - I think of, like, a farmers market or something.

Betsy - My dad was a citrus broker, and he had citrus farmer, growers, co-ops, but that is not this. That is not this.

Suzanne - So what do you see when you say these words?

Betsy - Well, when I say these words, I see that this is a condo.

Suzanne - Okay.

Betsy - It's paper. This is a co-op.

Suzanne - Hm.

Betsy - And this is your homeowner association.

Suzanne - Wow.

Suzanne - So when I'm saying--Where's the bathroom? I can't see that. Where's my coffee pot?

Betsy - Where's my grass?

Suzanne - Yeah.

Betsy - This is a homeowner's association, this is a co-op, and this is a condominium. All these papers are recorded in the public records, those that relate to your community, you have a set of these, and they are in the public records at the county courthouse. So you do have access to these, and you likely have a copy of these and you need a copy of these.

Suzanne - Okay.

Betsy - But the point is, is that this community is a legal structure.

Suzanne - Okay.

Betsy - And it has rules and laws and paper to follow. And that's the goal

Betsy - Lots of paper. of the board of directors, is to serve the papers.

Suzanne - Okay.

Betsy - But in those early days, as the developers were building, what the legislator said to themselves was, "You know what? We've made them have a corporation. "It has a board of directors, "has a threefold mission statement, "but every corporation needs people."

Betsy - Right So from now on, anyone who buys into one of these communities, whether it's a condo, co-op or HOA, when they buy into this community, you have become a mandatory member of the corporation. And that means that you have just become contractually obligated to everything that's in here.

Suzanne - Okay.

Betsy - You have now just agreed that you will abide by everything that's in here. I don't think that it's quite put that way to buyers when they move in.

Suzanne - It's never been to me as we moved in, no.

Betsy - But this is a contract. It's a legally binding contract. When you moved here, you agreed to everything in it, which again, and maybe I'll just give a little tease for that, but another episode, we can talk about violations and enforcement.

Suzanne - Okay.

Betsy - Because if you violate something here, it's gonna be the board's duty to enforce compliance. We always hope for voluntary compliance.

Suzanne - Sure.

Betsy - but if not, you will have violated the contractual provisions here. So let's keep goin'.

Suzanne - Okay.

Betsy - We've got a corporation, has a mandate. We know it's got a board of directors, and the corporation now has people.

Suzanne - Okay.

Betsy - All of the owners belong to the corporation. But think about in those early days, another huge issue would have been money.

Suzanne - Sure.

Betsy - Where's the money to pay to fix stuff?

Suzanne - Right. To protect, to maintain and enforce.

Betsy - To protect, maintain and enforce. You're learnin' something!

Suzanne - I know! I'm getting it! Look at you! You're doin' so good! So where does the money come from? The legislators gave the corporation the ability to, and I'm gonna use the word very loosely.

Suzanne - Okay.

Betsy - Okay, to 'tax.'

Betsy - Okay. It's people. And the statute and your documents will call that 'tax' the assessment. The assessment is the regular amount of money that an owner pays for their share of protecting, and maintaining, and enforcing.

Betsy - And enforcing! Yes! It's what they pay for their share of that. You likely in your community call that fee, that assessment, a condo fee, HOA fee, dues, amenities fees, maintenance fee. You might call it somethin' else, but the statute and your documents likely call it assessment. So that's the word I'm gonna use.

Suzanne - Okay.

Betsy - And that is just the regular amount of money that an owner pays for their share of the protection, maintenance, and enforcemnt.

Suzanne - And enforcement. We've gotta do it in that order, or else I'm gonna mess it up.

Betsy - I'm gonna mess it up too. But can you imagine that there had to be at least one person in South Florida who just kinds folded their arms and said, "Make me pay."

Suzanne - Ooh.

Betsy - Yeah.

Suzanne - Yeah.

Betsy - So the legislators said, "Okay!"

Suzanne - We can do that!

Betsy - Okay! Okay! We can do that! So the legislators gave the corporation, whether it's a condo, co-op, or HOA, gave the corporation the lien right, the L-I-E-N right.

Betsy - Okay.

Betsy - Which is the ability to take your home from you.

Suzanne- So this is serious?

Betsy - This is serious.

Suzanne - This is a foundation of you buying your home

Betsy - This is serious. or property--

Betsy - Now I don't know how much more plainly to say it, but if you don't comply, and we go through a legal procedure, we will take your home. I don't know how else to say that. It was the original intent, I believe, of the legislature, that the corporation would always be made whole, for every penny that's due to it. So every penny. Because we need the money to maintain things.

Suzanne - Right, right.

Betsy - So the--

Betsy - Honestly it just takes one crack and the whole thing falls apart, right? I mean, everybody's gotta--

Betsy - Stucco falls off buildings--

Suzanne - Right! Exactly.

Betsy - And if you're on the coast, you're gonna be in constant need of concrete restoration, rebar, all those kinds of things, all the balcony railing, all those things are gonna rust and rot and they're gonna need to be replaced, so, yes. If you're interior, in the interior part of Florida, you don't have those--

Suzanne - Right. kinds of maintenance issues

Betsy - But there's always stuff. Yeah.

Betsy - Yeah. It doesn't take much. If you look at at what we have just described, we have actually described something that is similar to a municipality.

Suzanne - In the way of paying taxes.

Betsy - Well, think about this. The whole setup. The board of directors would be similar to the city council.

Betsy - Okay. The city manager would be me, the CAM. The city so to speak, the community, serves a geographic area for which the residents pay. And if you don't pay, we cut you off, so to speak.

Suzanne - Right, right.

Betsy - So it's similar to a municipality, except for one thing.

Suzanne - Okay.

Betsy - And this is really big, because this is where it is so totally misunderstood. This is not a representative form of government. Where your city councilman may represent your district, your part of the town, or the county commissioner may represent your part of the county, the board of directors does not represent the people.

Suzanne - It sounds like the board of directors, or the board, is to enforce. To make sure the rules, no matter. They're not to coddle to the--

Suzanne - No. the residents.

Betsy - And cannot.

Betsy - Right, okay.

Betsy - And this is where boards stall in making decisions. Because they think they're supposed to bow to the wishes of the people, and this group over here wants this, and this group over here wants that, and all I wanna know is, what are your documents say and what are the statutes?

Suzanne - That's the North Star.

Betsy - This, it's kinda like we're boxed in with the decisions.

Suzanne - Okay.

Betsy - We're boxed in by statues, Florida administrative code, and documents.

Suzanne - Okay.

Betsy - And the board can only act in that box.

Suzanne - So there's really no opinion. It's right there.

Betsy - No, and, you know, and it's not that we don't wanna hear from the people.

Suzanne - Right.

Betsy - We do wanna hear from the people, but we can't do everything that you want done. The board is restricted. So it's not a representative form of government. It's not really, in a sense, like a true democracy, that if a majority of the owners all vote to do something, it doesn't mean it can be done.

Suzanne - Right, right.

Betsy - You go back--

Suzanne - You have to go back to this, and go back to the statutes.

Suzanne - So one thing as we're kinda wrapping up this show, you had said that this is almost under under every one of your homes, in a way. Can you explain what you mean by that?

Betsy - Each of these sets, in every community in Florida, that is a community association, has one of these. They're recorded in the public records. And I'm kinda visual, so the way I see that, is that when they're recorded, they're buried in the ground.

Suzanne - Okay.

Betsy - Underneath the community. And so these run with the land. It's the term that we use, 'runs with the land,' and as the homes, or the units in the condominiums sell and buy, sell and buy, sell and buy, the deeds sit on top, and they change from owner to owner, to owner. But these run with the land. They never leave. They run with the land. And because they are recorded in the public records, you know what?

Suzanne - What?

Betsy - That makes 'em public.

Suzanne - Well that's a good title for it then.

Betsy - They're not hidden. They're not hidden. These can be easily found by anyone who wishes to search for them.

Suzanne - So they say, "No excuse. "It was available to you, "you could see it."

Betsy - And you know what

Suzanne - that's like?

Betsy - Mmm mmm.

Betsy - It's like the publicly posted speed limit sign. There is a presumption of knowledge of these. Because they are publicly posted.

Suzanne - Okay.

Betsy - Similarly, there is a public, there is an acknowledgement, presumption, of the publicly posted speed limit sign.

Suzanne - Okay.

Betsy - If you pass a speed limit sign back there ten miles ago out on the back road, and the deputy sheriff stops you and says, "Ma'am, do you know how fast you were goin'?" Is ignorance an excuse?

Suzanne - No.

Betsy - Likely not.

Suzanne - No, no. Same thing.

Betsy - Likely not. When you get behind the seat, in the driver's seat of a car, you're presumed to know all the Florida driver's handbook rules.

Suzanne - Right.

Betsy - The same is true here. The presumption of knowledge is that you know about these because they are publicly posted.

Suzanne - Wow.

Betsy - And when an owner is approached and asked to voluntarily comply to something in here, their first excuse is, "Well, I don't know anything about those."

Suzanne - Well, it's--

Betsy - Well, yes you do. Yes you do. Because you became contractually obligated to everything in here, and acknowledged them, whether you know it or not, acknowledged them as soon as you signed on the dotted line.

Suzanne - Whew. That was a lot. We covered a lot.

Betsy - That's a lot. And you know, I love the comparison to a municipality. That all makes a lot of sense. And what I'm taking away from this show is no excuses. It's public and your bound--

Betsy - And it's the board's duty. And if the board doesn't make one person comply, then it's--

Betsy - It all falls apart.

Betsy - We're supposed to be equitable in enforcing the compliance and we can't let one go around it, and then enforce on another.

Suzanne - Right.

Betsy - That really makes for bad neighbors.

Suzanne - It sure does. That was great, awesome. Thank you Betsy, I enjoyed that one, yeah.

Betsy - You're welcome. And that's why CAM matters.

Announcer - Thank you for listening to CAM matters. Be sure to subscribe so you don't miss any future episodes. For more information, feel free to email Betsy at [email protected] or visit the Florida CAM Schools website at www.floridacamschools.com. Information provided on this show is general in nature and does not constitute legal advice. Please contact a licensed attorney for your specific situation.