IGNORANT BOARD MEMBERS CAN BE VERY COSTLY

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

Published July 20, 2013

 

We all know that there are always some people who do not like new laws implemented by the Florida legislature. That's just the way life works. 

 

And despite the fact that H7119 found the consensus of most all interested parties, there are obviously a few board members that are unhappy about this law. Obviously they don't like consumer protections and are part of a group of board members who rather want association boards to be equipped with dictatorial powers without transparency. 

 

Well founded criticism is always welcome, but when the arguments in opposition of such a bill lacks common sense, the folks voicing these reasons just make a laughing stock out of themselves. 

 

That's exactly the case in a recently published article in the local section of the Sun Sentinel. Reporter Ben Wolford published an article under the headline "New rules irk HOA boards." In his article Wolford quotes Patti Lynn, President of the Broward Coalition, and Myrna Rosoff, president of the Coalition of West Boynton Residential Associations. According to members of these associations these board members never asked the membership if they should oppose this legislation in the name of these organizations they preside over. One of the other board members even publicly admonished them for deciding to oppose this bill without prior approval of the membership.

 

I guess that explains as well why these "presidents" are against transparency and why they are so determined to keep dictatorial powers for HOA board intact. 

 

I really had to laugh about their arguments, especially the ones Patti Lynn used. It's really interesting to know that contractors and service providers down South base their bids on the budget, not on the size of lawns or lakes or the difficulty of the job. And just remember: The wording in H7119  regarding the registering requirements just asks for: " 5. Total amount of revenues and expenses from the associationís annual budget." According to Patti Lynn HOAs now lose their "competitive edge" if contractors know the total amount of revenues and expenses of the association. 

 

And Myrna Rosoff thinks that "they [the legislature] are getting ready to milk a cash cow." Considering that lowering the annual fees for all owners (including condo owners) involved to $2 annually was always part of the debate, this argument doesn't really make sense, especially since the provisions in this year's bill don't ask for a dime from associations. Registering the HOA is FREE OF CHARGE.

 

In his article Wolford writes: "Such cases fuel a trope among disgruntled residents: that condo and homeowners association board members are corrupt and undemocratic. The large majority of homeowners associations, however, are not felons or aspiring felons.

 

I don't think anybody ever claimed that a large majority of homeowners associations (I guess he meant to say board members) are felons or aspiring felons.

 

We all know that the majority of our population aren't bank robbers. Nevertheless, we have laws in place against bank robbers and laws that punish them if they are caught! Transparency and the threat of punishment will deter quite a few "amateur thieves" in my opinion.

 

I guess these arguments explain even more why the Florida legislature was so willing to add "education of board members" to the list of much needed HOA reforms. Incompetent and uneducated board members can get very costly for homeowners who are a part of a mandatory homeowners' association. Board members should have a basic knowledge of what's required to do to efficiently run an association. Volunteers are always needed, but they shouldn't be dictators who fight the request for transparency.

  

New rules irk HOA boards

Article Courtesy of The Sun Sentinel

By Ben Wolford

Published July 20, 2013

Homeowners associations are used to making rules, but many are displeased by a new set of regulations being imposed on them.

"As the Broward Coalition president, I think this is abominable," said Patti Lynn, who heads a roundtable of homeowners and condominium association boards in Broward County.

A new law took effect this month, formerly known as H7119, that adds transparency and accountability to homeowners associations, those little-regulated, quasi governmental boards that assess fees and set regulations for communities of single-family homes.

When the law was moving through the state legislature earlier this year, it was controversial. And some of the most controversial aspects survived into the Florida statutes, including one that requires association boards to submit financial information to the state.

For the most part, the law makes regulations for homeowners associations more like those already in place for condominium associations.

"The disputes that arise in HOAs are often very similar to the disputes that arise in condominiums," said Kenneth S. Direktor, a community association lawyer at Becker & Poliakoff.

But boards in South Florida said this week they're worried about the cost to comply. And they fear eventual fees like the $4-per-unit fee the state charges condo boards. Ostensibly, the fee is to pay for oversight, but in 2008, the state Legislature raided $10 million from that condo trust fund to plug a budget shortfall.

"I think they are getting ready to milk a cash cow," said Myrna Rosoff, president of the Coalition of West Boynton Residential Associations.

Meanwhile, the requirement to submit financial documents to the state has associations worried about losing their competitive edge when hiring contractors for landscaping or lake cleaning.

"People do not need to know the wealth of any community or the lack of wealth," Lynn said.

Community members, however, deserve full transparency about how their money is spent, she said. In her Tamarac community, where she is a board member, "we post our budget in the clubhouse." The law strengthens transparency requirements.

Another portion of the law boots board members charged with felony theft or embezzlement of association funds or property. These people are suspended until they are acquitted or the charges are dropped.

Only one homeowners association president has lost his job over the law. David Meadows was running the accounts at a small community in Davenport, southwest of Orlando, even though he had been arrested twice and charged with fraud, grand larceny and theft.

Meadows resigned just before the new law took effect July 1.

Restrictions on convicted felons already existed for condominium associations. The condo law also establishes a state ombudsman and requirements that associations disclose their financial documents to residents.

That law, however, has not been a complete deterrent. 

In 2007, Hallandale Beach police charged four people with orchestrating a kickback scheme that fleeced condo owners out of $3 million. The association president took a plea that year, but the trial persists for three others.

And just last month police arrested a condo president named Nancy Marquez, alleging she mixed monthly dues with her own savings and gambled it at the Seminole Hard Rock Hotel & Casino in Hollywood. Marquez lost her job and faces charges she stole $148,012 from her neighbors.

Such cases fuel a trope among disgruntled residents: that condo and homeowners association board members are corrupt and undemocratic.

The large majority of homeowners associations, however, are not felons or aspiring felons.

But most are amateurs. That's why part of te law also provides for training seminars to teach board members how to properly provide meeting notice, adopt a budget and put out a competitive bid.


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LEGISLATIVE SESSION 2013