New Laws Apply to Annual Meetings and Elections
As we approach annual meeting season, it is worth repeating a few of the changes made to the laws governing condominiums and homeowners associations in 2010 which may affect the way your community's election must be conducted.
Condominium Candidate Certification
Up until July 1, 2010, candidates for election to a condo board were required to certify that they had read and understood their community's documents and the provisions of the Condominium Act. After July 1, 2010, the requirement to so certify was repealed. The pre-election certification was replaced with a new provision that requires directors to provide a certification only after they are elected. Section 718.112(2)(d)3b. requires that newly elected directors certify in writing to the association secretary that that he or she has read and will uphold the association's governing documents and its written policies and that he or she will faithfully discharge his or her fiduciary duty to the association members. As an alternative to the certification, the newly elected directors may submit a certificate of satisfactory completion of the educational curriculum administered by a State-approved condominium education provider. If a director does not comply with one of these new requirements, he or she is suspended from serving until he or she complies.
Condominium Directors' Terms
The legislature attempted to clarify language contained in the last version of the Condominium Act which limits directors' terms to one year. The amendment to the statute still limits the terms of directors to one year unless the bylaws permit staggered terms of not less than two years and there is an approval by a majority of the total of voting interests. The new language provides that, if the number of board members whose terms have expired exceeds the number of eligible members "showing interest in or demonstrating an intention to run for the vacant positions" each such board member whose term has expired is eligible for reappointment. Since it is not possible for someone to run for a seat on the board without providing a written notice of intention to run, I am not certain what the legislature means by "showing interest in" running for a vacant position. The statute does not indicate how an association is able to determine whether someone has shown an interest in running for the board where they have not provided a written notice of intention to run. In any event, the amended language does very little except to confirm that the one year term limit was not intended to prevent directors whose terms have expired from staying on the board where there are not adequate candidates for the board. The Act was also amended to clarify that co-owners of a condo unit may not serve as members of the board at the same time unless they own more than one unit or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy. Current law provides that a person who has been suspended or removed by the Division from the board of directors or who is delinquent in the payment of any fee or assessment (more than ninety (90) days delinquent) may not serve. The statute has been amended to extend the disqualification of a potential candidate if the candidate is delinquent in the payment of fines or regular or special assessments for more than ninety (90) days.
The Condominium Act has been amended to provide that a director or officer of the association who is more than ninety (90) days delinquent in the payment of any monetary obligation due the association shall be deemed to have abandoned the office, creating a vacancy in the office to be filled according to the law. Previously, the suspension only applied to those directors or officers who failed to pay regular assessments to the association. It is important to note that this section of the Act does not provide that the abandonment of office created by the delinquency may be cured to allow the directors back on the board like the statute does for those who have failed to comply with the certification requirement. It may be reasonably concluded that the legislature did not intend for a director to be able to pay the amounts owed the association in order to reinstate his position on the board.
Homeowners Association Secret Ballots and Nominations
The Homeowners Association Act was amended to provide for election procedures that had previously been absent from the statute. Now, the statute provides that, if the governing documents permit voting by secret ballot by members who are not in attendance at a meeting of the members for the election of directors, those ballots must be placed in an inner envelope which much be delivered to the association in an outer envelope that identifies the name of the member, the lot for which the vote is being cast and the signature of the lot or parcel owner casting the ballot. The Act was also amended to authorize the nomination of a lot owner to serve on the Board prior to the election if the election process allows voting by absentee ballot. The amendment to the statute is silent about how or when a person must nominate himself prior to the election.
Filling of Vacancies on the Board
A new law provides that, unless otherwise provided in the bylaws, any vacancy occurring on an HOA board before the expiration of a term may be filled by an affirmative vote of the majority of the remaining directors even if the remaining directors constitute less than a quorum. Alternatively, the statute authorizes the board to hold an election to fill the vacancy in which case the election procedures must conform to the requirements of the governing documents. The amended statute provides that, unless otherwise provided in the bylaws, a board member appointed or elected to fill a vacancy is appointed for the unexpired term of the seat being filled.
