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Jane Doe Deer
Jane Doe Deer, Lawyer
Category: Real Estate Law
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Experience:  Attorney since 1986; Plain English explanations of Landlord/Tenant & Purchase/Sale
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My issue Can the Board (containing 7 members) of our condo

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My issue: Can the Board (containing 7 members) of our condo association devaluate the an insurance premium of a common element entity (car port) by 75% without notifying all the parties whom own homes on the site (28 homes in total). It was done without notification of other home owners – special unannounced meeting. Their were six board members that attended this meeting. The vote was in favor to decreased the premium to save monies - 5 to 1 in favor. A few months later, a fire destroyed one of the two carports – we will received $25,000 to rebuild a carport that will cost approximately $115,000 to rebuild +/-$15,000. In the meantime, they have created a special assesment of $2,250 per townhouse in two payments to help create the difference between the insurance and the balance of the cost to rebuild. Is our Board guilty of neglience in not informing us of the changes in the insurance coverage? What are my options? We have been notified if we should not pay this assesment a lein will be placed against our property. My belief is that we, the body of the association was not notified of the Board decreasing the insurance value of the carport that the Board members should be responsible of the difference in monies. I reside in Largo Florida, my name isXXXXX; email address:[email protected] and my cell phone number is XXXXX Thank you.

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Answer: The answer will come from two places. The first place to look is your own CCR's, Articles of Incorporation, Bylaws, and any other rules in which your association has given powers to the Board.


The second is to look at Florida Condo Laws, but usually Boards have much more power, and detailed power (and duties) than that contained in the law:


However, there is another question, one that would come up should this matter end up in a courtroom. Let's assume for the moment that the Board had the authority to make this change, without a membership vote. Even if they had the authority, there is a big question regarding whether or not they fulfilled their fiduciary duties as Board members. (In certain states, Board members can be sued individually and as a Board, and some Boards buy insurance in case of failure to perform, etc).


So, let's go through it step by step.


First - look at all of your association's documents, especially under Board Powers. See if you can find where they had the power to do this. If you can't find this under Board Powers, check the statutes.


(Another approach: Ask the Board to give you the number of the Bylaw in which it states that they had the power to do this).


Next - you will need to get an expert to analyze the Board's action and provide a written opinion regarding whether the Board acted in accordance with their fiduciary duties to do what is best for your association. You should also write to the Board by certified,return receipt mail and ask them to retain all paperwork (such as estimates, board minutes, etc) and not destroy the paperwork, because a lawsuit is being considered. Keep copies of the letter, of course. If you can afford it (as a group) get written opinions from more than one type of expert.


Several of you can now meet for a consultation with a real estate attorney with at least five years experience, to discuss how juries in your area are likely to come out, whether or not the law is on your side. (Some juries are more disposed to come out in favor of businesses than homeowners, etc).


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Jane Doe Deer


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