No so easy to get tough on HOA scofflaws

Ryan Poliakoff

QUESTION: I live in an HOA. We have a number of residents who are delinquent in paying their quarterly maintenance. They have already been restricted from entering our clubhouse and must enter the community via the visitor’s gate. My question is, can the community cut off access to their internet and TV, which services are paid for in our quarterly maintenance as part of a bulk contract?

Poliakoff: Your question is a common one, given that the majority of condominiums and HOAs are parties to bulk cable TV and Internet contracts. Both the Condominium and HOA Acts provide that, if an owner is more than 90 days delinquent in paying a fee, fine or other monetary obligation due to the association, the association may suspend the right of the owner to use the common elements, common areas and common facilities, or any other association property, until the obligation is paid in full.

There are two potential barriers to using this law to suspend cable and Internet service. First, the laws provide that the suspension may not apply to “utility services” provided to the unit or lot. The law doesn’t define what constitutes a “utility service,” and it is likely this language was intended to apply to water, sewer and electric (which are essential to living), and not cable or Internet (which, despite our collective addition to television and the Internet, are not reasonably considered essential). The conventional legal wisdom is that cable television and Internet are not considered utilities, but I am not aware of a court ever considering this issue.

The second and more practical barrier is that not all cable companies are willing to deactivate an owner’s cable and Internet services because they are delinquent, given that the cable company is still getting paid. Consider, also, that these companies often get additional fees from the owners through add-on services (additional boxes, premium channels and periodic movie and pay-per-view purchases). Why would the cable company cut off its own nose by turning off these additional services?

Further, if the cable company won’t cooperate, most associations don’t have the physical capacity to turn off an individual owner’s services. So, while it’s an attractive tool in theory, it may be impractical to implement. I do know, however, that at least one of the newer television providers is willing to turn off an owner’s cable and internet if instructed to do so by the association, so perhaps this is a collections tool that will be more commonly used in the future.

Q: Our board of directors recently entered into a complex insurance contract in accordance with a resolution apparently adopted by the board with no notice of any meeting. We were told that such action by resolution or written consent is consistent with the Florida Condominium Act and is permitted by the not-for-profit statute. No mention of action by such resolution or written consent appears in our bylaws, which otherwise appear to require any action by the board to be taken at an open meeting with a quorum and proper notice. Is it so easy to avoid the general Florida policy on open meetings?

Poliakoff: Condominium Associations are governed by multiple laws, including both the Condominium Act (Chapter 718) and the Not For Profit Corporation Act (Chapter 617). Chapter 718 takes precedence over Chapter 617, but if the Condominium Act is silent, then the corporate law controls.

The Condominium Act does not expressly state that all decisions must be made at board meetings. It does say that meetings of the board at which a quorum of directors is present must be noticed and open to all unit owners. It further states that the directors may not vote on an association matter via email.

The Not For Profit Corporation Act, at Section 617.0821, Fla. Stat., states that, unless the articles of incorporation or the bylaws provide otherwise, actions required or permitted to be taken at a board meeting may be taken without a meeting if the action is taken by all members of the board by signed written consents. We describe this process as “unanimous” written consent.

You say that your bylaws appear to require board actions to be taken at a meeting. The exact language used is very important. If the documents do not actually require every decision to be made at a board meeting, then it is likely that the unanimous written consent procedure is legal and valid. Obviously, it is somewhat self-limiting, as, if there is any disagreement among board members, they are not going to get a unanimous result. I have had clients use the written consent procedure to approve board decisions, but only rarely, and typically only when those decisions are uncontroversial.

Ryan Poliakoff is a partner at Backer Aboud Poliakoff & Foelster, LLP. Email your questions to condocolumn@gmail.com. Please be sure to include your location.