Poliakoff: HOA sports alterations may not require membership vote

Dear Poliakoffs,

We are an HOA with 195 homes. Our amenities are a pool and a tennis court. Our board has decided that they want to get rid of the tennis court and replace it with two bocce courts and a shuffleboard court. Can this be done by the board exclusively, or would the homeowners need to vote on this? 

Signed, P.P.

Dear P.P.,

In an HOA, the answer entirely depends on your governing documents.  Some HOA documents state that the board cannot alter the common areas without membership approval.  Sometimes the board has the authority to make alterations under a certain dollar amount, and sometimes the board can do essentially whatever it likes.  The only way to know for sure is to check your declaration of covenants.

For comparison, in a condominium this would certainly be a material alteration requiring membership approval, as it is a change to the use or function of a common element.  The change would either need to be approved as described in the declaration of condominium or, if the declaration is silent, by 75% of the voting interests.

Dear Poliakoffs,

We are part of a dysfunctional nine-unit HOA in Key West. We rent our home part of the year in accordance with local ordinances. For malicious reasons, we anticipate the newly elected board may try to restrict our ability to rent, or may otherwise require us to provide lease agreements with pricing and personal details that we would not want to be shared. Is there an action we could take against the membership to have our rental arrangements at least grandfathered, similar to condominium statutes? It seems a bit unfair to restrict rights of HOA members more so than condo members. 

Signed, T.R.

Dear T.R.,

As you point out, the Condominium Act expressly provides that certain types of leasing amendments do not apply to existing owners unless they consent to the amendment.  This includes amendments that prohibit unit owners from renting their units or altering the duration of the rental term, or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period (such as stating that you may rent no more than two times every two years). 

The HOA Act, in contract, has no such restriction, and leasing amendments are applied to all owners equally (they may not be retroactively applied, and so an amendment prohibiting leasing would not serve to evict an existing tenant, but they can be applied prospectively whether or not the owner consented to the amendment).

You are correct that this is neither equal nor fair, but that is in fact how the law works.  The HOA laws are far more liberal than the condo laws and they contain fewer protections for owners.

It’s worth pointing out, however, that even in a condominium the association could easily pass an amendment that would impose limitations on your ability to lease, without running afoul of the statutory limitation.  For example, a condominium amendment could state that all leases must be provided to the management office. 

All condominium, HOA and cooperative owners take title to their homes knowing that the covenants and restrictions are subject to amendment, and that they will generally be governed by those amendments.  Your only real option is to find a way to convince a majority of your neighbors not to support a leasing restriction. 

Dear Poliakoffs,

Our question involves our condominium budget, and who is responsible to pass a budget.   

Some argue that the Condominium Act requires management and the board to establish the yearly budget. Others think that the statute isn’t an issue, and that the community can set up a qualified financial committee to draft the budget and ensure that the Association adheres to the budget.  What does the Condo Act say? 

Signed, M.O.

Dear M.O.,

The Condominium Act does not prohibit condominium associations from using finance or budget committees to draft a budget or to recommend a budget to the board.  Whether or not the final budget must be voted on by the board would depend on the governing documents, but the vast majority do state that the board promulgates the annual budget.  Still, budget committees and finance committees are extremely common.  It would typically be up to the board to establish such a committee and to define its role.

Ryan Poliakoff is a partner at Backer Aboud Poliakoff & Foelster, LLP.  This column is dedicated to the memory of Gary Poliakoff, pioneer of the community association legal industry, tireless advocate, and author of treatises, books and hundreds of articles.   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.