Q: One of the townhouses in our building went into foreclosure last year. Ever since then it has remained abandoned. Beyond the fact that the lack of maintenance makes our building look like a slum, neighbors are concerned about mold, mildew and mice entering neighboring units due to neglect. Our condominium board members say there is nothing they can do, that the bank that owns the property is ultimately responsible. They do not know or will not tell us who the bank contact is, so what can we as owners do to protect our property’s structure and value? Is there any recourse available?
Answer: As with any unit that appears to be abandoned or have rules violations, the board has an obligation to enforce the rules. In this situation, the bank is the owner if it has completed foreclosure. Therefore, the board should send rule violation letters to the bank. If the bank has not taken title to the unit under foreclosure, the previous owner would be responsible.
Any action taken by the board should be reviewed by an attorney. Just because a unit is under foreclosure does not stop the board from enforcing the rules. In some cases the board must enter the unit to make repairs or, in your case, close the windows. Such action would require that the board notify all parties, the present owner or bank, that entry to the unit is necessary for repairs. It may be necessary to have the attorney send such a letter or the board may send the letters. The board must take action to have the unit secured.
Q: I am a unit owner in a condo complex with six buildings. Each has operated under its own documents and board of directors. We have a general manager and a master board for the complex, and we follow Florida condominium statutes.
I am treasurer of our building. Dues of $10 per unit are collected yearly for social events or any other needs for the building. For years, the monies collected have been put into our bank account and monies not spent were rolled over to the next year. Now some residents are saying that we must spend all the monies in the account because it is not legal to roll funds over since we are nonprofit.
Just what is nonprofit since we are just using funds for the building? Can our monies be used to subsidize nonpaying members and requests from outside, or can we subsidize only those that have paid their yearly dues? Our residents also have decided they would like to be able to rent our card room for personal use. If this is passed, will we be obligated to have a special account for renting, or can we co-mingle our monies with our social and personal account?
E.V., Pembroke Pines
Answer: A common error many associations and their boards make is to assume that this is a nonprofit organization. Most likely you are a corporation not-for-profit and fall under FS 617. There is a big difference between nonprofit and not-for-profit. The budget line item considered as social events probably is not a valid budget item. The statutes say all budget items are for building operations. There is no reference to social events that are paid by all.
It appears from your question that you are not properly conducting the financial obligations of the condominium because of the misconception of being a nonprofit organization. I hope that you have been filing IRS tax forms each year and as such pay the proper taxes. All corporations, whether they are profit, not-for-profit or nonprofit must file a tax report each year. I suggest that your board seek help to better understand the financial obligations and operations of your condominium. Such information may be gained from talking to a condominium CPA and/or attorney.
Richard White is a licensed community association manager. He does not offer legal opinions; any other questions and comments concerning association operations can be sent to Richard White, 6039 Cypress Gardens Blvd., No. 201, Winter Haven FL 33884-4115; or email [email protected]