Law Does Not Require Recording Rules

Refund Rights Run with Title

Q: My condominium association board assessed seven thousand dollars per unit right after the Hurricane Ian in 2022, which I paid. The board has now decided they do not need the funds and have voted to return them to the owners. I sold my condo unit after the refund decision was made, but before the money was given to the owners. The board now says the refund should go to the new owner. I disagree. What do you say? (C.A., via e-mail)

A: Absent unusual circumstances, I agree with your board.

Looking at it from a different angle, if it was an additional assessment that had been levied (rather than a refund) and it was approved before you sold, but not due until after closing, the new owner would also be responsible for payment of the assessment. The Florida Condominium Act defines certain “appurtenances” to condominium units, which are legal rights and obligations that run with the title to the unit, and which cannot be separated from the unit.

The obligation to pay assessments is one of those appurtenances, which is why your buyer would have been liable for payment of the assessment even if it were levied before he or she closed. Likewise, ownership of the “common surplus” is an appurtenance to the unit, meaning that the right to receive any remittance of common surplus to the owners would be the right of the title holder on the day the money is paid.

It is standard practice to prorate assessments on the closing statement when a condominium unit is sold. If you had knowledge of a pending refund when your purchase and sale agreement was signed, or even though one might be possible, that would have been the time to address the issue. While the association would likely still have paid the then-owner of the property, the new owner would then have owed you that money.

Q: The president of our homeowners’ association, whose term is nearing its end, lives out of state and plans to go on a transcontinental cruise soon. Our association recently experienced several director resignations, leaving her as the only director. In response, she convened a special board meeting before her cruise and appointed replacements to fill the vacant positions until the next election, and these appointees have accepted their roles. Given these developments, is this approach appropriate under the circumstances? (J.L., via e-mail)

A: Probably so. Section 720.302(5) of the Florida Homeowners’ Association Act provides that corporations operating residential homeowners’ associations are governed by Chapter 617 of the Florida Statutes, the Florida Not For Profit Corporation Act, if the association is set up as a corporation not for profit. I have never seen a homeowners’ association set up as anything other than a Florida not for profit corporation, though I am sure a few exceptions exist.

Section 617.0809 of the corporation not for profit law states that board vacancies may be filled by a majority vote of the remaining directors unless the articles of incorporation state otherwise. I have seen very few articles of incorporation that state otherwise, and the vast majority simply follow the statute.

It is important your board be fully staffed, or at least have enough members to constitute a quorum. Section 720.3053 of the Florida Homeowners’ Association Act states when there are not enough directors sufficient to constitute a quorum, a “receiver” can be appointed to operate as the board.

A receiver is usually a specialized financial fiduciary, such as a certified public accountant, who will basically act instead of the board. They will hire counsel to advise the association as well as counsel to advise the receiver. They will likely retain other independent financial experts to assist in operating the association, and will be paid for their time, at professional hourly rates, for acting as the board and periodically reporting to the court.

Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.

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