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An
Opinion By Jan Bergemann
President, Cyber Citizens For Justice, Inc.
Published
November 25, 2009
Once
upon a time there was a group of condo board members who called themselves
the COUNCIL OF PRESIDENTS. Board members of single condo
associations belonging to this COUNCIL "donated" more than
$120,000 of association funds to this Council in order to campaign for a
SPECIAL RECREATION TAX DISTRICT. These presidents were not only using the
association fees to burden the owners with higher taxes, these fees were
actually used to fund the campaign -- against the will of a lot of condo
owners. By the way, these same condo board members removed signs to VOTE
NO on the tax district, paid for by other condo owners, before the
election: DEMOCRACY AT WORK!
You
may have guessed it already: I am talking about the Palm Aire Condominiums
in Pompano Beach. As you can imagine, people protested that their money
was used to campaign for a tax district that will increase their tax
obligations -- without their consent -- and that this money went to an
organization that existed by name only -- an organization not even
incorporated. This all was organized by some board "presidents"
and George Brummer, the Vice Mayor of Pompano Beach. In my opinion
these people clearly "laundered" money from association accounts
and used it for their own private agenda. Minimum Vice Mayor George
Brummer should have known better; he isn't one of these volunteers who
always use the excuse that they didn't know better, even if common sense
alone should have told them that what they are doing is wrong. Why do so
many board members always think that they can use association funds to
further their own private agendas?
According
to my information, more than $120,000 was collected for that purpose. In
the end some of the money was returned to the associations, but some of
the condo associations still had to levy
special assessments because of budget deficits. This added insult
to injury!
But
not all of the unused money was returned. The smart council members kept
some of the money to pay for the cost of creating a not-for-profit
corporation named PALM AIRE UNITED, INC. This organization is
regulated by FS 617 and doesn't have the stricter financial regulations of
FS 718 -- the CONDO ACT. Money in the coffers of this organization can be
used for anything the board likes to use it -- even if it pays for fancy
dinners and/or a cruise.
The
system is very easy: The condo board members of the Palm Aire condos can
"donate" unlimited funds to this organization under the cover of
serving the betterment of the community: SO SAYS THE DBPR! These
association funds are no longer in the hands of the association, meaning
the owners no longer have the ability to check financial statements to see
what happened with their money.
In
other words: The money is moved from the association accounts to an
account that is no longer regulated by FS 718.
And
when owners complained that their money was used for purposes not allowed
by their CC&Rs, the DBPR folks -- in their infinite wisdom -- found an
excuse to cover up for these smart board members. Just read the great
explanation by Financial Analyst II Maria Vidal
in her letter dated October 28, 2009:
(The important paragraph of the letter is copied below.)
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COPY
OF DBPR
LETTER OCTOBER 28, 2009
Signed
by
Maria T.Vidal
Financial Examiner/Analyst II
Bureau of Compliance -- South Florida Section
3. Finally, you alleged that the Board improperly voted at a board meeting held on June 30 , 2009,
to fund non-budgeted money into a group called "Palm Aire United" when it decided to join the organization.
As discussed, the board is empowered to run the affairs of the Association; this includes the Association has the right to make a business judgment to join organizations it deems to be for the betterment of the community. As such, the payment made to join the
"Palm Aire United", an organization established for the betterment of the Palm Aire community, as detailed in the meeting
minutes you supplied with your complaint, is a legitimate common expense
under sections 718.111(3) and
718.115(1)(a), Florida Statutes. Additionally, any services obtained through such an organizational allegiance shall be treated as any other expense incurred by the Association if the services were obtained independent of the alliance. |
I'm
not sure what this financial analyst read between the lines of 718.111(3) and
718.115(1)(a), but I surely
don't read in these provisions anything that allows some board members to
shift money from an association account regulated by FS 718 to an
organization that has very limited supervision. But we all know the great
ability of DBPR employees to invent favorable interpretations to show that
board members really did nothing wrong -- even if the statutes and the
governing documents of the community association say so!
Why do we have statutes if the DBPR as the regulatory agency is allowed to
circumvent these laws and come up with their own interpretation of these
laws -- interpretations that only too often contradict the legislative
intent of these same statutes!
| FS
718.111(3) POWER TO MANAGE CONDOMINIUM PROPERTY
AND TO CONTRACT, SUE, AND BE SUED.--The association may contract,
sue, or be sued with respect to the exercise or nonexercise of its
powers. For these purposes, the powers of the association include,
but are not limited to, the maintenance, management, and operation
of the condominium property. After control of the association is
obtained by unit owners other than the developer, the association
may institute, maintain, settle, or appeal actions or hearings in
its name on behalf of all unit owners concerning matters of common
interest to most or all unit owners, including, but not limited
to, the common elements; the roof and structural components of a
building or other improvements; mechanical, electrical, and
plumbing elements serving an improvement or a building;
representations of the developer pertaining to any existing or
proposed commonly used facilities; and protesting ad valorem taxes
on commonly used facilities and on units; and may defend actions
in eminent domain or bring inverse condemnation actions. If the
association has the authority to maintain a class action, the
association may be joined in an action as representative of that
class with reference to litigation and disputes involving the
matters for which the association could bring a class action.
Nothing herein limits any statutory or common-law right of any
individual unit owner or class of unit owners to bring any action
without participation by the association which may otherwise be
available. |
| FS
718.115(1)(a) Common expenses include the
expenses of the operation, maintenance, repair, replacement, or
protection of the common elements and association property, costs
of carrying out the powers and duties of the association, and any
other expense, whether or not included in the foregoing,
designated as common expense by this chapter, the declaration, the
documents creating the association, or the bylaws. Common expenses
also include reasonable transportation services, insurance for
directors and officers, road maintenance and operation expenses,
in-house communications, and security services, which are
reasonably related to the general benefit of the unit owners even
if such expenses do not attach to the common elements or property
of the condominium. However, such common expenses must either have
been services or items provided on or after the date control of
the association is transferred from the developer to the unit
owners or must be services or items provided for in the
condominium documents or bylaws. Unless the manner of payment or
allocation of expenses is otherwise addressed in the declaration
of condominium, the expenses of any items or services required by
any federal, state, or local governmental entity to be installed,
maintained, or supplied to the condominium property by the
association, including, but not limited to, firesafety equipment
or water and sewer service where a master meter serves the
condominium, shall be common expenses whether or not such items or
services are specifically identified as common expenses in the
declaration of condominium, articles of incorporation, or bylaws
of the association. |
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