In spite of a reserve study, a condo board increased the useful life of its tile roof to 50 years to keep reserves lower and “make it more palatable to members.”
WEST PALM BEACH, Fla. – Question: I live in a condo and in November, when there was a regular budget approval meeting, the board approved the budget but said that the owners could not vote on the reserves because they board voted for full funding. The board said in that case, the owners had no say in the matter. Is that correct?
In addition, even though we had a reserve study in 2022, the board changed the useful life of our tile roofs to 50 years to make the amount of the fully funded reserves lower and more palatable to the owners. Nobody has a tile roof for 50 years in Florida. I think that was just the way to get around having the owners vote on the reserves. Did the board cross a line with this? – A.S.
Dear A.S.: As to your first question, the Condominium Act obligates every board to pass an annual budget with full statutory reserves. After that, whether the board allows owners to vote to collect less than full reserves (or no reserves at all) is typically up to the board.
Procedurally speaking, I can see an argument that, where a set of bylaws allows a percentage of members to petition to raise an issue for membership vote, the owners could force the board to conduct a reserve waiver vote – but I am not aware of this ever being used or tested in court. Usually, the board either allows owners to vote to waive reserves (or sometimes even encourages owners to waive reserves), or not, and that’s the end of the matter (as you have described).
On the roof, and if I were advising your board, I would be somewhat concerned that they were risking a breach of fiduciary duty claim. Section 718.112 expressly says that the amount to be reserved must be based on the most recent structural integrity reserve study (the one that must now be completed by Dec. 31, 2024).
Essentially, your board hired an expert to tell them how much money they needed to collect toward repairing their roofs based on a specific estimated life, yet they have supplanted their expert’s opinion with their own lay opinion about the roofs’ lifetime.
Now, Section 718.112 does say that “the association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance expense of the reserve item.” But that’s not what happened here. Instead, an expert told them how much to collect, and by your description, they simply decided to take a lot longer to collect that amount.
The fact that they are expressly ignoring their expert may give rise to a claim that they were willfully reckless, in which event they could be held personally liable for damages due to this breach of their fiduciary duty. If I were on a board that made a decision like you describe, it would make me uncomfortable. Now, it could be that the full facts of your situation are a bit different, and the board had good reason to adjust the roof life – but, like you, I have also never heard of a regular tile roof that is rated to last for 50 years.
Question: I live in a 55+ condominium association. Is it possible for the association to establish an age restriction of 55 years or older to be eligible to be on the board of directors? The U.S. Constitution has a minimum age of 35 for an individual to be president. So, why can’t a condo association have an age restriction for an association board seat? – D.C.
Dear D.C.: There are a lot of different types of 55+ communities, and I am assuming that your community does not require 100% of owners to be older than 55.
The Condominium Act, at Section 718.112, provides that all unit owners are eligible to serve on condominium boards, other than as expressly provided in the statute (such as delinquent owners or owners who have been suspended by the Division of Condominiums).
As a result, your governing documents could not further restrict owners from serving on the board, for example on the basis of their age. Assuming that you have some owners younger than 55, those owners have a statutory right to be candidates.
© Copyright 2023 The Palm Beach Post. Ryan Poliakoff, a partner at Backer Aboud Poliakoff & Foelster, LLP, is a board certified specialist in condominium and planned development law.