OF ASSOCIATION CONTROL PART III, PRACTICAL CONSIDERATIONS
This is the third and final part of a three part series concerning the
transition of control of community associations to the non-developer owners.
In the first part, we addressed the technical requirements for
transitions. In the second part, we addressed the technical requirements
for transitions of Homeowners' Associations (HOAs). In this part we will
address many of the practical
While it is important to know and understand the technical requirements
relating to the transition of community associations, those requirements
are only a part of the complete transition process. In this
article we have listed many,
but not all, of the practical steps which must be taken to protect the
community and the association's members.
I. PRE-TRANSITION REQUIREMENTS:
From a purely legal standpoint, there is nothing required of the non-developer
owners prior to transition. That being said, many times official "transition
committees" are created or interested owners create ad hoc committees to
assist in that process. In those instances, some of the matters addressed
in Subsection II below will have already been accomplished prior to the
actual transition election.
One major advantage in conducting pre-transition discussions with the developer
is the possibility of convincing the developer to exercise > > whatever
unilateral power it retained to amend the Governing Documents.
Many times developers will
agree to amend the documents to cure or resolve obvious problems, thereby
avoiding the need to call an immediate members' meeting for that purpose
after transition occurs.
II. POST TRANSITION REQUIREMENTS:
Traditionally, the real "work" begins after the transition is completed.
While many tasks will overlap, the following is a list of many, but not
all, of the steps which should be taken as soon as possible after the new
non-developer controlled board is seated.
A. ELECT OFFICERS AND APPOINT COMMITTEES:
The first order of business should be the election of officers. While elections
are many times based on popularity, the directors must be willing to put
aside their egos and elect those persons who are best
suited for each position
based on qualifications and available time.
The next order of business should be the identification of the various
required and appropriate committees and the filling of those positions.
Examples of such committees are Architectural Review Committees, Nomination
Committees, Neighborhood Committees and Fining/Suspension Committee . In
our view, it is critical at the time of the appointment or creation of
each such committee that the Board prepare a detailed "scope of duties"
which, at a minimum, should require that each committee prepare and submit
periodic written reports to the
B. PRACTICAL AND CORPORATE MATTERS:
A committee should be created to:
1. Check with the Secretary of State:
a. To ensure that the Association is in good standing;
b. To ensure that the correct corporate address is being used; and,
c. To ensure that the proper Registered Agent exists for the Association.
2. Ensure that the post office has the proper address for the Association.
3. For condominiums, ensure that the annual fees have been paid.
4. Ensure that the proper forms have been supplied to the bank to allow
the new officers to access the Association's funds.
C. SELECT AN ATTORNEY, CPA, AND OTHER NECESSARY PROFESSIONALS:
A committee should be created to begin the process of retaining an attorney,
CPA and the other necessary professionals which will be needed for guidance
through the post-transition process and beyond.
D. INVENTORY OF OFFICIAL RECORDS:
A committee should be created to review and inventory all the records which
were delivered to the new Board to ensure that all of the statutory requirements
Because it is imperative that the Board have all of the Governing Documents
which apply to their community, we suggest that the following actions be
1. Have a title search performed to ensure that all Governing Documents,
and all supplements and amendments to those documents, have been delivered
to the Board by the Developer.
2. Assign a committee or request that your legal counsel review the Documents
to determine if they should be amended. One of the most important elements
of this preliminary review is the identification of
reserved rights of the developer
(e.g. Reserved power to control the Architectural Review Committee or to
add additional land to the community in the future).
3. Review all existing Rules and Regulations, including
to determine if they should be supplemented or
F. PROPERTY OWNERSHIP AND/OR MAINTENANCE OBLIGATIONS:
In the vast majority of cases, communities are designed to own and/or maintain
real property. Therefore, we suggest that the association obtain copies
of the tax maps which reflect the totality of the community and also certified
copies of all of the recorded plats which make up your community. A committee
should then be appointed to perform, at least, the following tasks:
1. Inventory all areas which are to be owned by the community. After the
inventory has been completed, the committee must:
a. Confirm that title has been transferred to the association;
b. Confirm that the address for the association on file with the Property
Appraiser and the Tax Collector for each such parcel is correct;
c. Confirm if any limitations on the use of the land are found in the Governing
Documents or the plat or by any governmental agency (e.g. Conservation
d. If governmental agencies have required annual engineering reports, obtain
copies of the same (e. g. Private Roads).
2. Inventory all areas which are to owned by governmental agencies. After
the inventory has been completed, the committee must:
a. Confirm if any limitations exist on the use of the land; and
b. Determine who is responsible for the maintenance of the land (e.g. County
may be responsible for the operation of the pond, but the Association is
required to mow the grass around the pond.)
3. Inventory all easements. After the inventory has been completed, the
a. Determine the uses of the easements; and
b. Determine who is responsible for the maintenance of the easement areas.
4. Review all "Notes" which are found on the face of each plat to determine
if any additional restrictions or obligations exist.
G. CONSTRUCTION DEFECTS:
After the tasks outlined in F above have been completed, a committee >
> should be appointed to search for, and recommend to the Board, a qualified
engineer(s) to inspect the property and improvements for which
the Association will be
To assist the engineer, we recommend that the committee gather data concerning
the areas in question and supply that data to the engineer. For instance,
a survey could be sent to all owners asking if they are
aware of any possible problems.
Please remember that Florida Law establishes a four (4) year statute >
> of limitations period for the filing of any construction defect cases.
H. GOVERNMENTAL AGENCIES:
A committee should contact all relevant governmental agencies and obtain
copies of all governmental documents and permits which apply to
the community. By way of
1. Water Management Districts;
2. County/City; and,
3. Community Development Districts (CDD).
I. CONTRACTS AND OTHER SERVICE
A committee should be created to review all existing contracts and service
provider agreements to determine, at least the following:
1. Expiration Dates;
2. Power to Terminate;
3. Fairness to the Association; and
This analysis should include both those companies which traditionally have
long term contracts (e.g. managers, landscapers, water treatment companies,
etc) and those service providers which can be
changed at the will of the
Association (e.g. banks, attorneys, CPA's).
Please remember that with condominiums, some long term contracts may >
> be terminated by the members notwithstanding the remaining term of the
J. FINANCIAL MATTERS:
The Board should hire a qualified CPA to review all financial records to
determine whether the Association has been properly operated and to determine
if the Developer has properly funded the Association. (e.g. funding of
deficits or reserves)
As stated above, this is a list of many, but not all, of the steps which
should be taken as soon as possible after the new non-developer > > controlled
board is seated. As you might expect, while completing the
above listed tasks, it is
very likely that many other issues will be discovered.
Most importantly, time is not the ally of the Association, therefore, the
sooner that the process is started, the better.
The firm of Taylor &
Carls, P.A., with offices located in Maitland, Melbourne, Tampa and Palm
Coast, Florida, was founded in 1981 and has practiced in the area of community
association law since that date. This edition was prepared by Robert L.
Taylor, Esq. of Taylor & Carls, P.A. The information contained in The
Association e-Lawyer should not be acted upon without professional legal
advice. The opinions expressed herein are as of the date hereof, and this
law firm undertakes no obligation to advise the Association of subsequent
changes in the law.
(c)2007 Taylor & Carls,
P.A. All Rights Reserved. The firm can be reached Toll Free at 1-800-395-6235
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