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What happens if nobody will serve on association’s board of directors?
by: Rob Samouce
A few months ago we wrote about how many unpaid condominium and homeowners’ association directors get no respect from some owners for the endless time they put in on the board to properly run their associations.

What happens in a particular association if all the directors say (as a result of owners’ attitudes) that they quit. If this happens, who is going to pay the association bills, collect the assessments, etc? The property could soon fall into ruins.

To help prevent such a downfall, Section 718.1124 of the Condominium Act provides that “if an association fails to fill vacancies on the board of administration sufficient to constitute a quorum in accordance with the bylaws, any unit owner may give notice of his or her intent to apply to the circuit court within whose jurisdiction the condominium lies for the appointment of a receiver to manage the affairs of the association.”

There is a particular form for the notice that states that the petition to the court will not be filed if the necessary vacancies to establish a quorum are filled within 30 days after the notice was sent to the owners or posted.

The purpose of providing the notice is to try to get “warm bodies” willing to serve on the board to avoid the adverse results. If a quorum of volunteer board members does not come forward to serve, the owner can then petition the court for a receiver to run the association.

Unlike the unpaid directors, the statute specifically provides that “the receiver shall have all of the powers of the board and shall be entitled to receive a salary and reimbursement of all costs and attorney’s fees payable from association funds.” It also goes on to say that the “association shall be responsible for the salary of the receiver, court costs and attorney’s fees.”

The difference between “free” directors and paid receivers with their accompanying fees can be a large number. As you can see, it could end up becoming very expensive for an association to run its business if not enough owners’ step up to the plate to sit on the board.

For Homeowners’ Associations (HOA’s), there is similar type receiver appoint procedures as is used for condominium associations. The particular language controlling such appointment for HOA’s is contained in Section 720.305(4), Florida Statutes.

It is important to point out that in order for a receiver to be appointed, some owner or some member must first initiate the 30 day notice to petition the court. That will cost time and money by such a person, so it could be a while before an owner or member decides to take the initiative to send out the petition notice. All the while, the property will continue to deteriorate because contractors and vendors will stop working on the property if they are not getting paid.

The last thing an association needs in a down real estate market is run down common areas, common elements or association property. Curb appeal is necessary to get new “assessment paying” owners in foreclosed and delinquent units or homes.

Therefore, if your board ever gets to the point that they don’t want to take it anymore, talk them out of it. Better yet, praise the board for the good things it does rather than badger it for the insignificant things or things they have really no control over. In just about every case, even a dysfunctional board is better than no board at all.
Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners' associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.