Cameron Miranda
Homeowners' associations (HOAs) are a common feature of community living in Florida, with approximately half of Floridians living under an HOA or a condominium association. While HOAs are governed by federal and state laws, there is no legal requirement for them to hire a management company. However, there are several benefits to hiring a professional HOA management company, including expertise, experience, and improved efficiency in running the association. Additionally, a professional manager can help resolve disputes, improve communication, and enhance accounting practices. The process of changing management companies can be initiated by a vote of the HOA members and Board of Directors, and it is important to follow the steps outlined in Florida laws to ensure a smooth transition.
| Characteristics | Values |
|---|---|
| Is an HOA management company required by law? | No, but a professional manager can provide valuable expertise and experience in running the association. |
| Who can initiate the process of changing management companies? | A vote of the HOA members and Board of Directors. |
| What is the role of a property manager? | To enforce the board's decisions and handle the board's responsibilities, including the creation and modification of the association's CC&Rs, upkeep and maintenance of common areas, and acting as an impartial third party in conflicts between owners and the board. |
| What is the role of the HOA board? | Like any corporation, an HOA board has the power and authority to make decisions and manage the community's affairs, with shielding from liability for those decisions under the business judgment rule (BJR). |
| What is the process for filing a complaint? | Complainants should first attempt to resolve their differences directly with the association and/or management. If this is unsuccessful, a written and signed complaint can be filed with the Division of Florida Condominiums, Timeshares and Mobile Homes. |
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What You'll Learn
Florida law doesn't require HOAs to hire a management company
Florida law does not require HOAs to hire a management company. The Florida Statutes do not mandate that a condominium association or HOA must have a management company. However, there are several benefits to hiring one, and many associations in Florida opt to do so.
A professional manager can provide valuable expertise and experience in running the association, keeping it organized, efficient, and compliant with the law. They can also help resolve disputes within the association and between its members. If a condominium association chooses to hire a community association manager, that person must be properly licensed. In Florida, this means they must have a real estate broker's license, as some duties of property managers are classified as real estate services.
While it is not a requirement, many HOAs find it challenging to self-manage effectively. They often lack the governing experience and legal knowledge needed to navigate the complex world of HOA management, which can lead to costly mistakes. Additionally, they may struggle with infrastructure maintenance, particularly in aging HOA properties that require repairs.
HOAs that self-manage typically rely heavily on volunteers, who may not always have the necessary skills or knowledge to manage the association effectively. This can create a significant burden for the volunteers and the board, who are often simply homeowners volunteering their time. As a result, enlisting the help of a professional property manager or management company can be beneficial, especially as the community grows and the number of day-to-day concerns increases. A property manager's role is to enforce the board's decisions and handle its responsibilities, acting as an impartial third party in conflicts between owners and the board.
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The HOA board has the power to change management companies
The HOA board and the HOA management company are two separate entities. The HOA board is made up of elected volunteers who own property in the community, while the HOA management company is contracted by the homeowners association to bring the community's vision to life. The HOA board has the power to change management companies, and this process can be initiated by a vote of the HOA members and the Board of Directors. Once the decision has been made, the HOA should follow the steps outlined in Florida law to ensure a smooth transition.
The HOA board typically delegates certain responsibilities to the management company through a management contract. These duties often include enforcing the association's governing documents, accounting, financial functions, property maintenance, deed restriction enforcement, general administrative functions, staffing, and other operational needs. The management company acts as an agent of the HOA in its dealings with outside parties, including the owners in the community, and always has the best interests of the HOA in mind. They work to protect and increase property values in the community by ensuring that rules are followed and that common areas, such as pool areas, gym facilities, landscaping, and clubhouses, are well-maintained.
The HOA board retains decision-making authority for matters outside the scope of what has been delegated to management, usually significant or policy-level decisions. However, the management company implements the rules established by the HOA board, such as issuing notices to homeowners for minor infractions or obtaining independent bids for service providers. The management company also provides expert guidance and day-to-day facilitation, ensuring the HOA complies with relevant laws.
To change management companies, the HOA board should first contact the current management company to discuss the situation and begin preparing their appeal. Once all the necessary documentation has been gathered, the HOA will present their case at an appeal meeting and then await the decision of the HOA board. It is important to follow the proper procedures and comply with Florida laws throughout the process.
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A property manager must have a broker's license
In Florida, a property manager must have a broker's license if they are paid by commission and are handling rentals and leases for others. This is considered a real estate activity under existing Florida real estate licensing laws. There is no specific "property management license" in Florida. Instead, a property manager must obtain a real estate broker's license. This requirement is outlined in Chapter 475 of the 2019 Florida Statutes.
To become a licensed real estate broker in Florida, an individual must meet specific requirements set forth by the state. Firstly, they must be at least 18 years of age and have a high school diploma or equivalent. They must also complete an approved pre-license course, consisting of a minimum of 45 to 63 hours of instruction. Once the course is completed, the individual must pass a state examination with a score of 75% or higher. After passing the exam, the individual must apply to the Department of Business and Professional Regulation, which includes submitting fingerprints and paying the required fee.
It is important to note that if a property owner employs someone to manage their property, and that employee is paid a salary instead of a commission, a broker's license is not required. Additionally, there is no Florida Statute that requires a condominium association to have a management company. However, a professional manager can provide valuable expertise and experience in running the association and keeping it organized and efficient. They can also help resolve disputes within the association and between the association and its members.
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The HOA board is protected from liability for bad decisions
HOA board members have a crucial role in managing and maintaining the communities they serve. Their responsibilities include enforcing community rules, managing finances, and making decisions that impact the overall well-being of the neighbourhood. However, the question of personal liability arises with these responsibilities. HOA board members in Florida are generally protected from personal liability for actions taken in good faith while performing their duties. This protection is provided through various legal rules and standards, such as the Business Judgment Rule, which presumes that their decisions are made in good faith.
Additionally, most HOA governing documents include indemnification provisions, requiring the association to cover legal fees and damages incurred by board members acting within the scope of their authority. D&O insurance is another layer of protection, covering legal defence costs and damages arising from lawsuits against board members related to their official actions. These protections allow board members to focus on making decisions in the best interest of their community without fear of personal financial liability.
However, it is important to note that there are situations where HOA board members could still face personal liability. For example, if a board member breaches their fiduciary duty by acting with gross negligence, engaging in self-dealing, or committing fraud, they may be held personally liable for any resulting damages. Board members should also be aware of potential conflicts of interest, such as receiving compensation for HOA activities or putting personal preferences ahead of the community's well-being.
To summarise, while HOA board members in Florida are generally protected from liability for bad decisions made in good faith, they can still face personal liability for certain actions, such as gross negligence or fraud. By understanding and adhering to the legal protections and ethical standards, board members can effectively carry out their duties while minimising potential risks.
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The Office of the Condominium Ombudsman regulates residential communities
The Office of the Condominium Ombudsman is a government agency that regulates residential communities in Florida. The agency was established to address the numerous complaints about condominium living in the state. The ombudsman's mission is to improve the quality of life for Florida condominium owners by providing prompt, professional, and courteous service as a neutral, informative, and accessible resource.
The Office of the Condominium Ombudsman has several responsibilities, including overseeing education, complaint resolution, mediation, arbitration, and developer disclosure. The ombudsman assists unit owners, boards of directors, board members, community association managers, and other affected parties in understanding their rights and responsibilities as outlined in the relevant condominium documents and laws. They also monitor and review procedures and disputes related to condominium elections or meetings and recommend enforcement action in cases of suspected election misconduct.
In addition, the ombudsman provides resources and assistance to boards of directors and officers of associations, encouraging and facilitating voluntary meetings to resolve disputes within community associations before they escalate into formal or administrative remedies. The ombudsman acts as a neutral resource, ensuring that both the rights and responsibilities of unit owners, associations, and board members are upheld.
The Office of the Condominium Ombudsman also has the power to appoint an election monitor to attend the annual meeting of unit owners and conduct the election of directors. This process can be initiated by a petition from 15% of the total voting interests in a condominium association or six unit owners, whichever is greater. The ombudsman then appoints a qualified person to serve as the election monitor, with all associated costs covered by the association.
It is important to note that while the Office of the Condominium Ombudsman provides guidance and answers related to community living, it cannot provide legal advice. The office serves as a resource to improve the condominium living experience and ensure compliance with relevant Florida Statutes, such as Chapters 718 (Condominiums), 719 (Cooperatives), 721 (Timeshares), and 723 (Mobile Homes).
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Frequently asked questions
No, there is no Florida law that requires a condominium association to have a management company. However, a professional manager can provide valuable expertise and experience in running the association, and can help to resolve disputes.
A property manager enforces the board's decisions and handles the board's responsibilities, including the creation and modification of the association's conditions, covenants, and restrictions (CC&Rs), and the upkeep and maintenance of common areas. They also act as an impartial third party in conflicts between owners and the board.
The process can be started by a vote of the HOA members and the Board of Directors. Once the decision has been made, the HOA should follow the steps outlined in Florida law to ensure a smooth transition.
