Q. I live in an HOA that is part of a master association. This master association has operated under 720 (HOA) rules for the 25-plus years I have lived here. We thought we must do a revitalization, so our management company and lawyer at the time had the association spend $10,000-plus to accomplish this. The association started the process in January 2016, and six months later, the lawyer still hadn’t submitted the paperwork to the state. When he finally did submit it, the state denied the revitalization because it said all the association documents say this was a condo association. And indeed they were originally; apparently no one changed the docs after HOAs were admitted. Neither the board nor the management company is apparently doing anything about changing the docs (although the notification for the annual meeting referred to the Florida Condominium Act).

The questions I have are: 

1. Is there a requirement that the docs be changed to reflect that the master association has HOAs as well as condos?

2. Should the management company and lawyer be held liable to reimburse the association, since had either one read the association documents, they would have known that the docs referred to the association as a condo?

3. I was formerly on the board, but I am not now. The board doesn’t seem to want to resolve the situation, nor do they seem to have any help from the management company.

4. I would like to know for certain that the master association is legally operating correctly. Is there any advice you can give me to assure that will be the case?

— Confused and Irritated Shareholder

A.  “Based on the question presented, I am inclined to opine that this must be a master association or recreation association,” says attorney Nicki Fernandez Asmer of FL Legal Group in Tampa. “Many of these types of associations claim to be homeowners’ associations, but are condominium associations based on its organization to provide an entity of ownership. Florida Statute 718.103(2) defines an ‘association’ as … ‘in addition to any entity responsible for the operation of common elements owned in undivided shares by unit owners, any entity which operates or maintains other real property in which unit owners have use rights, where  membership in the entity is composed exclusively of unit owners or their elected or appointed representatives and is a required condition of unit ownership.’

“The leading case on this issue is from 1988 in Volusia County, Downey v. Jungle Den Villas Recreation Association, Inc. 525 So. 2d 438 (5th DCA 1988). In this case, condominium unit owners filed an action for declaratory and injunctive relief, seeking a determination of whether a recreation association had the authority to build a swimming pool and assess the unit owners for the cost without securing unanimous approval. The District Court of Appeals held that the recreation association that was organized to provide an entity for ownership, operation, and management of recreational facilities for the use of all present and future condominium unit owners was acting as a condominium association. Therefore under a function test, even though the recreation association held title to property in its own name, its right to construct a swimming pool and assess unit owners for cost required a unanimous vote of unit owners. Basically, if membership in such an association is mandatory, and it is composed exclusively of condominium unit owners, and operates real property where such owners have use rights, it is considered to be a condo association—regardless of what the governing documents call it.

“Your association needs to comply with Florida Statute Chapter 718, and is probably not doing so, especially as to the way it handled previous elections. Remember, homeowners’ associations have different rules relating to elections. This has been the law for many years (since the ‘80s). The attorney who did this arguably committed malpractice, and the client association should be entitled to a refund. I personally believe the law firm should have done its due diligence prior to incurring these legal fees, as the structure of the association would have been apparent in the governing document of the ‘sub-associations.’ I would recommend speaking with the attorney or senior partner of the law firm and request a refund of the amounts paid due to the alleged malpractice committed. The Florida Bar also has an arbitration program to handle all fee disputes between clients and their lawyers. The fee arbitration program is an informal free service provided by the Florida Bar to resolve fee disputes between attorneys and clients. The arbitration process may be initiated by either the client or the attorney, and may be used instead of a lawsuit to settle a fee dispute. For more information, contact the program administrator at the Florida Bar: (850) 561-5719.

“To briefly touch on Marketable Record Title Act, unlike condominium associations, homeowners’ associations are subject to Chapter 712 of the Florida Statutes, also known as ‘MRTA.’ Only residential homeowners’ associations are required to preserve the integrity of the declaration (of covenants and restrictions) for the entire community to retain the status of the declaration as the source of marketable title with regard to the transfer of a member’s residence. Florida law requires this process at least once every 30 years. Failure to take such action before the expiration of the 30-year period will result in the expiration of the covenants. If that occurs, your association basically has no power or governing documents due to its expiration. Homeowners can and may refuse to pay assessment or maintenance fees, or comply with restrictions set forth in the governing documents. It can be reinstated only by a vote of the homeowners. It is important to know that even if a homeowners’ association amends its declaration during the 30 years following the initial recording, this does not extend the life of the declaration. You must act to preserve the declaration within that 30 years period before the declaration expires. 

“Next, we address the question of whether an association is legally obligated to amend its governing documents to accurately reflect its governing structure. It is of course always better to amend your governing documents in order to clarify and correct error, but even without an amendment, the master association must follow condominium law under 718. To my knowledge, it is not required, but strongly recommended.

“Remember that when a community, such as a homeowners’ association, is created, the governing documents are drafted by the developers’ attorney. Many associations go several years without amending their documents, which may hurt its community, as the laws have changed multiple times over the years. It’s in the best interest of the association to have their governing documents reviewed by an experienced community association attorney for accuracy, not just to correct the correct association structure, but also to ensure that the documents are in accordance with the current statute. Sometimes this effort may be difficult due to the percentage required to amend the governing documents, and lack of participation by homeowners. Developers usually draft amendment procedure to require a high percentage of participation from the membership in order to amend the declaration or bylaws (i.e. 75 percent of the entire membership). It can be very difficult, sometimes impossible, to get that many homeowners to participate in voting. In this situation, it is critical for the board to be proactive and get the community involved, which may involve knocking on doors and sending out multiple notices to get the members informed and involved to actively vote. If you don’t obtain the sufficient number of votes to pass an amendment, you can always continue the meeting, though it cannot go beyond 90 days, in order to obtain the required number of votes (You’ll also need to announce at the meeting when they continued meeting will be held).

“In the event you feel your board or management company is not being proactive or complying with its duties under Florida law – both Chapters 718 and 720, Florida Statutes – allow association members to petition the board to address a particular matter. If the association receives a petition signed by at least 20 percent of the total voting interests in the association, the board is required to place the subject of the petition on the agenda of the next regularly scheduled board meeting or a special board meeting for that purpose. The meeting at which the board will consider the agenda item must be held no later than 60 days after the receipt of the petition.

“I would suggest getting a petition together and signed by homeowners who are interested in amending the governing documents for amendment purposes. However, the fact that the association may receive a petition does not require the board to take any specific action or change its previous decision. The only obligation is that the board place the item on the agenda for a board meeting and address the item. Members must be given the opportunity to speak on the agenda item, but the members have no authority to change the decision of the board.”