Live in a home governed by a condominium, co-op or homeowner’s association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers.
First this week, and as I’ve discussed in prior columns, the Corporate Transparency Act is a federal law that was passed to fight illegal activity such as tax fraud and money laundering. The law requires most corporations (including community associations) to register beneficial ownership information — personal information about the directors and officers of the corporation, or anyone else that has substantial control over the company.
A few weeks ago, a court in Texas put the law on hold, and now the Court of Appeals has affirmed the injunction prohibiting the enforcement of the law. Pending a final ruling, companies are no longer required to file beneficial ownership information with the government. I suspect this injunction will continue for some time, and that the Court of Appeals is very likely to affirm the lower court’s ruling that the law is unconstitutional. Now to some reader questions!
Question: I am a director for a small residential community governed by an HOA in search of direction for making changes to association common areas. Chapter 720 [the HOA Act] does not mention requirements for common area changes. Our covenants are also silent on this matter.
The Condominium Act calls for approval of 75% of members for changes, but we understand that Chapter 718 does not apply to residential HOAs. All references I can find online imply that 75% approval is the commonly accepted practice, but we anticipate a challenge from a member in favor of a simple majority. The issue at hand is an effort to remove existing community streetlights to save the expense. Our documents include the streetlights as common elements. Signed, H.H.
Dear H.H.,
The concept of a material alteration requiring membership approval is limited to condominiums and cooperatives —not HOAs. Whether or not your board has the authority to remove the streetlights is going to depend on the board’s powers under the governing documents.
You say that your documents are silent with respect to material alterations, but you need to look at how they describe the board’s general authority and responsibility with respect to the common areas. Usually, boards have very broad authority to improve and alter the common properties, subject to alteration approval provisions or sometimes limitations on spending. You may need an attorney to evaluate your governing documents for you and to advise the board on whether they would have such authority.
As an attorney, I would have two additional concerns.
First, if you remove the streetlights, any accident or crime that occurs in the future and that arguably could have been prevented if the streets were lit is going to come right back on the board as either a negligence claim or even as a breach of fiduciary duty claim, arguing that the board’s actions were reckless as to the health and safety of owners (I don’t know what other lighting exists in your community and how lit the roads would be without these lights).
Second, you very well may have city or county requirements to have your streets lit, and removal of the lights could either violate language in the plat when the community was created, or instead violates your local codes. These are important issues to investigate as well.
Question: As with many HOAs, maintaining good resident communications has become complicated. Email is far and away the most efficient, timely, and cost-effective means of communicating. HOA law requires an opt-in for financial, legal, voting, meeting notifications, and other communications sent by email. But what about everyday communications such as road closures, severe weather warnings, gate closures, newsletters, or security bulletins?
Can an HOA automatically place member-resident email addresses on that file as long as they give the resident the right to opt out at a later date? This assumes that there will be two different email options — one for Chapter 720-compliant messaging, and a second option for non-covered transactions such as listed above. Signed, E.E.
Dear E.E.,
You have exactly described how this works. The various acts do not care about any communications other than the legally required communications described in the statutes. Everyday communications, such as you describe, are entirely outside of the statutory governance. You can send your owners these kinds of messages, and that does not make their email addresses an inspectable association record.
In contrast, if owners opt-in to receiving formal statutory notices (or other notices that must be mailed pursuant to your governing documents) by email in lieu of mail, those email addresses become inspectable association records. So, they are really two separate issues, and you can’t mail someone a formal notice by email in lieu of mail just because you happen to have their email address.
Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living.” Email your questions to condocolumn@gmail.com. Please be sure to include your location.
This article originally appeared on Palm Beach Post: HOA wants to remove streetlights to save cash. Can they do that?