An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc.

Published July 2, 2013 

You know the old saying about the word ASS-U-ME! Should this word be used when it comes to using association funds to reimburse directors for vandalism to their cars?

I don't agree -- but the association board members and the association attorney sure think so.

Here is the basic story:

At various occasions the cars of board members were vandalized. Board members had the damages to their automobiles repaired and were reimbursed with association funds -- for the full amount of the repairs. The car owners obviously didn't even make the attempt to contact their own insurance.

The reasoning: They "assumed" that some "disgruntled" unit owner was responsible for the vandalism. They really "assumed" -- there was no proof whatsoever who really vandalized their cars. But who cares if you are in charge of the association funds and can easily reimburse yourself without having to go through the process of filing an insurance claim?

Especially if you pay an association attorney who is willing to fill four pages of a letter written to a unit owner who dared to complain about using association funds for car repairs.

I really got a kick out of this letter (SEE BELOW), desperately trying to explain the reasoning for allowing these board members to help themselves to association funds.

From "business judgment" to "damages being directly related to activities as a director of the association" -- he sure pulled out all the "stops" in an attempt to explain that this wasn't embezzlement, but a rightful payment to these directors. But, as usual, the less good reasons the longer the explanation. And I have to admit, even after reading the four pages of the letter I wasn't even remotely convinced that these directors had the right to reimburse themselves.

The letter talks about "indemnification", "legally and properly exercised business decision", "good faith" and "contract approval" -- the letter says it all, but fails in my opinion to make one valid point giving these directors the right to vote on reimbursing themselves.

The letter even quotes Article VII -- Indemnification: The magic word in this provision is the word  "PROCEEDING." Calling damages to a director's car a "proceeding" would be pretty far fetched!

But in my opinion the letter gets just ludicrous in the last paragraph, when the attorney is trying to scare the owner, who claimed this "reimbursement" was actually a misappropriation of association funds,  from taking further action: "While you are certainly free to challenge the Board's action by filing a Petition for Arbitration with the Bureau of Condominiums, you should recall from past experience that the Association will aggressively defend the propriety of its actions and, should it prevail, it will seek to recover all attorneys' fees and costs incurred in such proceedings as would be its right under the governing documents and statutes."

Now, after quoting all kinds of statutes -- right or wrong -- in his letter, I think the attorney missed one very important provision in FS 718.501(1): However, after turnover has occurred, the division has jurisdiction to investigate complaints related only to financial issues, elections, and unit owner access to association records pursuant to s. 718.111(12).

And since this is clearly a financial issue (association funds) a simple complaint to the Bureau of Compliance in Tampa should be sufficient to get the official take of the Division of Condominiums on this issue -- without any financial risk to the owner. 

And if the Division agrees that the directors were right about reimbursing themselves for vandalism to their cars, it opens the door to all kinds of financial liabilities for condo associations.