Term Limits for Condominium Directors

FDR was certainly not a fan of term limits.  What about Obama and Romney?  One thing that is clear is that since 2008, the State of Florida has been a fan of term limits, at least for directors of condominiums.

In 2007 and prior, Florida Statute 718.112(2)(d) read:  “If there is no provision in the bylaws for terms of the members of the board, the terms of all members of the board shall expire upon the election of their successors at the annual meeting.”  This essentially meant that so long as your bylaws outlined some sort of term limits, whether they be 12 months or 12 years, those would be the limits imposed on the directors of your condominium association.

However, an amendment to this statute was passed in 2008 which changed it to read:  “Except in a timeshare condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members’ terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws.”  Notice that the key language from the first sentence of the 2007 version that allowed a condominium association to defer to the term limits in its own bylaws was removed.  The effect is that now, unless your association has staggered terms, directors’ board membership always expires at the annual meeting, effectively limiting all terms to 1 year regardless of what your bylaws might otherwise say!

Some people may love this change.  Some people may hate it.  If a dispute does develop as to whether your association is subject to the amended 2008 version of this statute, an analysis of your governing documents may be helpful.  For example, and as further discussed in the post titled “The Magic Words”, many condominium associations’ governing documents contain language stating that they are governed by the Condominium Act “as amended from time to time”.  Although such documents may predate 2008, and could be 20, 30 or even 40 years old, the fact that they contain these “magic words” means that they are subject to the most current version of the Condominium Act.

Alternatively, for condominium association documents that state that they are simply governed by the Condominium Act or governed by the Condominium Act as it exists at the time the documents were recorded, it may be argued that only those amendments to the Condominium Act that predate the recording of the governing documents are applicable to that particular association.  So, if your condominium association has bylaws permitting say 4 year terms for directors and those bylaws were originally recorded in 2007 or prior and your governing documents nowhere state the magic “as amended from time to time” language, you could argue that the 4 year term for directors still apply.

Daniel Wasserstein

E-mail: danw@wassersteinpa.com

561-288-3999

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The Magic Words

Photo: The Grand Condominium

“As amended from time to time”

These words may not have quite the same ring as “abra cadabra,” but for condominium associations in Florida their impact might as well be “open sesame.”  In March of 2011, the Supreme Court of Florida issued a ruling in the case of Cohn v. The Grand Condominium Association, Inc., 62 So. 3d 1120 (Fla. 2011) regarding the application of amendments to the Florida Statute 718, more commonly known as the Condominium Act.  The Supreme Court determined that a condominium association is subject to amendments to the Condominium Act that came into existence after the condominium’s inception only if the declaration of condominium states that it is subject to provisions of the Condominium Act/Florida Statue 718, as amended from time to time.  If this specific “as amended from time to time” language is not found in the declaration of condominium, then the provisions of the Condominium Act/Florida Statute 718, as they existed at the time the declaration was recorded, are the statutory authority that govern the association.

In practice, this can have significant ramifications.  For example, say an association is tendered an offer by a developer that would net each owner well in excess of the market value of their units if they agree to terminate the condominium.  Lets assume that this particular association came into existence in the 1970s or 1980s and has a declaration of condominium which lacks the requisite “from time to time” language.  Lets also assume that this declaration, like others from that era, has a provision for termination stating that in order to terminate the condominium, 100% of the owners must consent.  Well, in recent years Florida Statute 718.117 was amended to allow for such an optional termination if only 80% of the owners approve the plan (provided that no more than 10% reject the plan).  While this statutory change serves to significantly lower the voting hurdle for a voluntary termination, our hypothetical association would not be able to rely on it because this amendment came well after the declaration was recorded and the declaration does not have the magic “as amended from time to time” words.

Lesson: Check to make sure your declaration of condominium has the “as amended from time to time” language; it is preferable that your Association be able to change with the times, unless of course you have a particular affinity for bell bottoms, big hair or grunge rock.

Daniel Wasserstein

E-mail: danw@wassersteinpa.com

561-288-3999