There are a few basic principles to understand as a new homeowner association board member.
Florida HOA Laws: Governance
There are two types of Florida homeowners' associations: mandatory and voluntary. Voluntary associations operate much like a club, and Florida HOA laws do not govern operations. If you are required to be a member of your HOA, your association must be run and managed according to Chapter 720, Florida Statutes. In addition, your association is a Florida non-profit corporation and must comply with Florida corporate statutes. There are also certain regulatory requirements imposed by the Department of Business and Professional Regulation (DBPR). Finally, your association must comply with its own governing documents, which includes the Covenants and Restrictions (C&Rs) recorded against the properties within the Association, its Articles of Incorporation, Bylaws, and any policies or rules it has adopted.
Board of Directors: Eligibility and Obigations
The HOA is operated by an appointed or elected board of directors. Directors must be members in good standing (pay their membership dues and have no felony record), and owe a fiduciary duty to the membership to act in good faith and exercise good business judgment. The Directors elect officers to carry out the Board's duties.
Within 90 days of appointment, every Director is required to provide written certification that he or she has read and understands the laws, rules, and governing documents and will work to uphold the HOA's policies to the best of ability, and will honor the fiduciary duty to members. This obligation be fulfilled by attending and completing an DBPR approved certification class.
Florida law prohibits anyone from receiving payment for being on the HOA Board.
Membership: Duties and Benefits
Lot owners and occupants of homes within the association are legally bound to comply with the C&Rs. In most cases, that includes the requirement to pay dues and maintain the exterior homes in a certain aesthetic condition. In exchange, nobody has to live next to an eyesore and common areas and parks are well-kept. Most associations address nuisance and noxious activities, some prohibit commercial uses, and others dictate size and location of structures within a lot. This constant attention maintenance and contributes to stable property values.
Another benefit is the power of numbers. With an Association, members of a louder voice as a group when dealing with local government.
Finances: Budgets and Audits
HOAs are funded by membership dues. The HOA must prepare a yearly budget estimating anticipated expenses and revenue and identify any reserve accounts or funds set aside for deferred expenses. The HOA must follow rules for entering into contracts over a specific dollar amount, and it should have in place internal audit processes to protect the memberships funds. Certain HOAs are required to have an outside audit done every year.
Disputes: Resolution, Mediation, Litigation
Disagreements are inevitable, whether they be among neighbors alone, or with the HOA's Board. The HOA is legally bound to enforce the association's governing documents. This can be upsetting to members who are in violation of the governing documents. There are several ways disputes can be resolved: either cordially and informally, by utilizing the Board as a mediator if the dispute is among members, submitting to formal statutory pre-suit mediation, petitioning for arbitration at DBPR, or asking the court to hear and resolve a matter. The nature of the dispute will often determine which route is best.