The question is…is there anything in the condominium or HOA
Homeowner association
In the United States, a homeowner association is a private association often formed by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision. Typically the developer will transfer control of the association to the homeowners after selling a predetermined number of lots. Generally any person who wants to buy a residence within the area of a homeo…
Do Florida condominium associations need membership approval to borrow funds?
Chapter 718 governing condominium associations does not require membership approval to borrow funds and Chapter 617 of the Florida Statutes provides that all not-for-profit corporations may borrow with Board approval alone.
Can my condominium board borrow money without my approval?
This means that unless your condominium documents specifically require membership approval to borrow money, the board likely had the authority to do so provided the Board is not also granting a mortgage lien in real property.
How much did our condominium association borrow to renovate the common lobby?
Q: Our condominium association just borrowed over $1 million to renovate the common lobby and amenities. This was done without a membership vote. How is this possible and how do we repay the loan?
Who are the best attorneys for Community Association Law in Florida?
Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, PLLC, respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law.
Can Florida condo associations borrow money?
A: The Florida Condominium Act does not specifically address the authority of an association to borrow money, except in the context of the exercise of emergency powers in response to a disaster for which a state of emergency has been declared.
Can HOA borrow from reserves in Florida?
Florida statute provides a slim window of opportunity for associations to borrow from reserves if certain notice requirements and supermajority votes of memberships are met. "Strictly from a numbers standpoint, the board needs to look at whether it can pull the vote off in a reasonable amount of time," says Worrall.
Can a condo corporation borrow money?
Condominium Corporation loans can be a beneficial and workable resource for Condo Boards and owners alike, who are faced with the difficult reality of Special Assessments when their reserve funds do not have the adequate amounts necessary to cover repair costs.
How much can an HOA charge for an application in Florida?
Section 718.112(2)(i) of the Florida Condominium Act authorizes a condominium association or its agent to charge a fee of up to $100.00 per applicant in connection with its approval of a sale, mortgage, lease, sublease, or other transfer of a unit, if the condominium documents require the condominium association to ...
Do Florida condos have reserve funds?
Irrespective, Florida Statutes section 718.112(2)(f) provides a default rule that condominiums must reserve fund balances to repaint, resurface the roads, replace the roof, and perform any deferred maintenance or replacement that costs more than $10,000.
Can you borrow from reserve fund?
“Borrowing from reserves” means using money in the reserve fund for things other than what the reserve fund was set up for in the first place. A typical example is temporarily using reserve funds to pay a large insurance premium due early in a budget year.
What is a borrowing by-law?
This corporate by-law, often referred to as “By-Law No. 2”, is a by-law that is approved by the directors and shareholders of the corporation once the entity has been incorporated. It authorizes the directors of the corporation to incur and issue debt on behalf of the corporation.
Can a condo corporation borrow money Alberta?
They can also borrow money. There is no legal requirement for condominium corporations to pursue owners by placing caveats on their unit for unpaid contributions.
Can a condo corporation borrow money Ontario?
So, borrowing by a condominium corporation must be authorized by by-law, unless the corporation is borrowing for expenditures listed in the current budget. When a condominium corporation borrows, the corporation is then obligated to repay the debt in accordance with the terms of the loan.
What are average HOA fees in Florida?
HOA fees in Florida can cost $100 to $500 or more, but they can vary widely depending on the type of property you're living in. HOA fees cover various costs and services that come with maintaining a building or property.
Can HOA board members be paid in Florida?
Section 720.303(12) of the Florida Homeowners' Association Act generally prohibits directors and officers from directly receiving a salary, compensation, or other financial benefit.
Can HOA restrict felons in Florida?
The interest cannot be hypothetical—a HOA cannot ban renters with a felony background because the board suspects that felons make bad neighbors.
Who has the right of first refusal when a cooperative unit is up for sale?
The building is governed by a set of by-laws that addresses the rights and responsibilities of unit owners wishing to sell their units, and giving amongst other things, a right of first refusal to the contiguous owners of any unit put up for sale (§7.3 of the By-Laws).
Who is responsible for approving the offering plan of a condominium or cooperative conversion?
(c) In the event a conversion to condominiums of a community apartment project or stock cooperative has been approved by the required number of owners, trustees, beneficiaries, and mortgagees pursuant to Section 66452.10 of the Government Code, the certificate need only be signed by those owners, trustees, ...
What chapter of the Florida Not For Profit Corporation Act allows condominium associations to borrow money?
Chapter 617.0302 (7) of the Florida Not For Profit Corporation Act (which also governs most condominium associations) generally empowers not for profit corporations to borrow money.
Can you vote by email in Florida?
While the Florida Condominium Act allows board members to communicate by e-mail, Section 718.112 (2) (c) of the Act specifically says that board members may not cast votes on an association matter by e-mail.
Can a condo association borrow money without owner approval?
In such cases, the Act provides that the association may borrow money without unit owner approval.
Can a board of directors change the president of a condominium association?
As such, a majority of the board of directors can vote to change who the officers are. Therefore, only the board can vote to change who serves as the association’s president. This action must be taken at a board meeting by a board vote and cannot be done by e-mail. While the Florida Condominium Act allows board members to communicate by e-mail, Section 718.112 (2) (c) of the Act specifically says that board members may not cast votes on an association matter by e-mail.
Do you have to vote for a unit owner to take out a loan?
Therefore, if your association is taking out a loan that is secured by association real property, a unit owner vote may be required by the Act. However, most loans to condominium associations are not secured by real estate, but usually some pledge or assignment of assessment rights.
Do condominium documents require owners to vote?
If the condominium documents require unit owners to vote to authorize the association to borrow money (and many do), the requirement is valid (except with the possible exception of disaster situations, discussed above. If the documents were silent on the issue, most attorneys would opine that the association, through the board of directors, ...
Why do homeowners associations need to raise money?
It is commonplace for homeowners associations to find themselves in a position of needing to raise money for various reasons such as making costly unanticipated repairs or for making desired capital improvements. This need can result from unexpected occurrences such as a casualty loss, or in many instances, from the association’s failure ...
How long does it take for a homeowners association to complete a loan?
The length of time that it takes for a homeowners association to complete a loan transaction is in large part dependent on how prepared the association is when the need for funds arises. Because it is common for associations that are in need of funds to not have complete up to date records and to not be in compliance with various requirements such as insurance or good standing with the Secretary of State, these issues should be addressed and corrected by the association before the need to borrow the funds arises. Association directors and/or duly appointed agents should review applicable state statutes and the association’s governing documents for provisions relating to the borrowing of funds by the association. Required insurance and financial statements and all areas where the association is not in compliance with the applicable laws and/or provisions of the association’s governing documents should be addressed and corrected. Additionally, association directors should give thought to such things as the need to increase regular assessments or impose special assessments on members to generate the funds necessary to repay the loan, the ability of members to prepay the amounts that are assessed against them, the requirements for future buyers of separate interests within the association to assume the responsibility of the selling member for payment of the balance of the selling member’s assessment, and the need for membership approval. Associations that are proactive in addressing these issues prior to seeking a necessary loan will be more likely to obtain the loan and will shorten the time period that is required to complete a loan transaction.
What are the requirements for a home loan?
Common lender requirements for making a loan to a homeowners association include: (i) the payment of a loan application fee by the association; (ii) proof that the association is in good standing with the Secretary of State for the state in which the association is located; (iii) proof that the association maintains all of the insurance that is mandated by the applicable state laws and/or the association’s governing documents; (iv) evidence that the association, and the individuals acting on behalf of the association, have the authority to borrow funds; (iv) evidence of compliance with the any requirements for borrowing funds that are specified in the association’s governing documents, such as membership approval ; (v) the association must have up to date financial statements and an acceptable level of delinquencies in the payment of association dues by the members.
What is an opinion letter from a homeowners association?
Additionally, many lenders will require an opinion letter from the homeowners association’s legal counsel that confirms that the association is in good standing and has the authority to borrow the funds.
Who should review applicable state statutes and the association’s governing documents?
Association directors and/or duly appointed agents should review applicable state statutes and the association’s governing documents for provisions relating to the borrowing of funds by the association.
When borrowing money from a bank, will the association be required in the loan documents to pass a special assessment in?
When borrowing money from a bank, the association will be required in the loan documents to pass a special assessment in an amount sufficient to fund the repayment of the loan, or promise to include the debt payments in the annual budget.
Do condo associations have to pay special assessments?
When borrowing money from a bank, the association will be required in the loan documents to pass a special assessment in an amount sufficient to fund the repayment of the loan, or promise to include the debt payments in the annual budget. Several years ago, The Director of the Division of Florida Land Sales, Condominiums and Mobile Homes issued a Declaratory Statement that allows Condominium Associations to permit owners the option of paying the special assessment in full without interest or paying the assessment with interest over time. The decision does not say the association must offer the option, only that it may offer the option.
What is HOA member services?
HOA Member Services has an affiliation with Arch Capital Solutions, a financial services company that specializes in lending for Condominium and Homeowners Associations. Arch Capital Solutions can help condominiums and HOAs assess and prepare financial packages that are needed to obtain financing and also acts in a brokerage capacity, helping condominiums and HOAs find and choose the best proposal from multiple lenders. If your HOA or Condo Association is interested in HOA lending and financing opportunities, please fill out the HOA Loan form below:
Why do HOAs have special assessments?
Traditionally, condominiums and HOAs impose special assessments to raise cash. However, special assessments can be tricky due to bylaw limitations or member discontent. Loans have the benefit of minimizing the impact of large, one-time assessments. Instead, there can be smaller increases spread over a longer time horizon.
Can upside down homeowners default on their mortgage?
Another thing to consider is that depending on economic circumstances, upside down homeowners may default on not only their loans but their dues and special assessments as well.
Is it bad to borrow money from a condominium?
Borrowing for the sake of borrowing in order to build up a reserve or to simply prolong an inevitable assessment are near the top of the bad idea list when it comes to reasons a condominium or homeowners association may choose to borrow money. On the other hand, improvements, taking advantage of low interest rates, or amortizing one-time assessments, are potentially good reasons to take out a condominium or HOA loan. Additionally, when an unforeseen event, like emergency repairs, causes a reserve fund to be depleted, seeking external help may be a smart decision.
