Eady: When is board's unusual expense justified?



Q: It has become the practice of our condominium association board to support an annual breast health charity golf tournament in our community by sponsoring a hole. The cost of the sponsorship is $100.


Is a condominium board permitted to use condominium funds for such a purpose?


– W.E., Sarasota


A: The answer depends on whether the condominium documents specifically authorize such an expenditure. In most cases, the documents would not authorize spending association funds to support a charity, no matter how good the cause.


Condominium associations are considered “creatures of statute,” meaning that their rights and duties are generally derived from authority found in the law. In other words, a condominium association’s powers are those set forth in the statute (primarily Chapter 718) or which can be reasonably inferred from the statute. Actions taken by a condominium association that do not fit those categories are considered ultra vires, or beyond the legal powers or authority of the association.


Section 718.103(9) of the Condominium Act defines “common expenses” as all expenses properly incurred by a condominium association in the performance of its duties. Common expenses are further delineated in Section 718.115 of the Act.


That section is too long to reproduce here, but general common expenses for which a condominium association can properly expend association funds are the expenses of the operation; the maintenance, repairs, replacement or protection of the condominium property; the costs of operating the association and any other expense that is designated as a common expense by Chapter 718 or by the condominium documents for a particular condominium.


An association board is given the task of making sure that all association expenditures are for a proper purpose. While there is an argument to be made that sponsoring a golf hole for a local charity is harmless and unlikely to spark controversy, imagine the same issue taken to an extreme. What if every director had a personal charity to which the association made donations? What if $100 was increased 10 fold or more? What if the board decided to start contributing to political campaigns?


If you were an owner and your association started spending your money for causes you did not support, wouldn’t you object?


The bottom line is that associations manage the business operations of the condominium. Unless the condominium documents specifically authorize charitable donations (and that would be exceedingly rare), they should not be made with association funds.


That being said, I did once represent an association that owned a Rolls Royce and had condominium documents that provided that the costs associated with the car, including having a chauffeur to ferry members to and from the airport and around town, were common expenses. The association ended up amending the documents to delete references to the Rolls and sold the car because of the expense and the fact that no one actually used the service.


Just goes to show that “belt tightening” means different things to different people.


Hard lesson


What is a “reasonable accommodation?”


The federal and Florida Fair Housing Acts prohibit discrimination in many forms of multifamily housing which, among other infractions, make it illegal to refuse to make reasonable accommodations in rules, policies, practices or services when such accommodations may be necessary to afford a resident of the equal opportunity to use and enjoy housing.


A Las Vegas HOA learned the definition of a “reasonable accommodation” the hard way.


The U.S. Department of Housing and Urban Development recently issued a press release regarding its settlement of a discrimination complaint with the HOA that included a payment of $65,000 by the HOA to the family that HUD determined had been unlawfully discriminated against by the HOA.


The HOA had rejected the request by the family to park in the driveway of the family home an ambulance that it had purchased. The family alleged that the vehicle was purchased for the purpose of transporting their son to and from medical appointments because he was unable to be moved without being in a prone position.


The HOA considered the ambulance to be a “commercial vehicle” prohibited by its rules. Let’s just say that the HOA’s rules were trumped by the family’s claim of discrimination.


A HUD spokesperson was quoted in the news release as saying that “homeowners associations have the same responsibility as housing providers to follow fair housing laws.”


Any community association, be it a condo, cooperative, mobile home or HOA, needs to take heed when dealing with requests for “reasonable” accommodations for a disability.


Not all such requests need to be granted. An association does not have to pay for any modification to the property necessary to accommodate a resident’s disability. The costs are the responsibility of the disabled person requesting the modification. Any such modification cannot block or prevent others from safe access to the property. (For instance, a ramp does not have to be approved if it impedes ingress and egress to the common property).


Also, a board cannot be penalized for not exercising a power it does not have, such as converting one unit’s limited common element parking space to the use of a handicapped resident.


In contrast, a board may have to designate a “guest space” to the exclusive use of a handicapped resident if so requested.


The bottom line here is that the HOA in question paid a heavy cost for taking action that was ultimately deemed to constitute a failure to provide a reasonable accommodation.


Any association that has a request for an accommodation or has any indication that it might be the subject of a discrimination complaint needs to immediately contact legal counsel for guidance.


Tamela Eady is a Florida Bar board-certified real estate attorney with 25 years’ experience. She is an attorney with the the Law Offices of Kevin T. Wells PA in Sarasota, concentrating her practice on community association and real estate. The subjects discussed in her columns are not intended as specific legal advice to anyone and are subject to principles that may change. Questions may be modified for clarity or for brevity. Email questions for possible inclusion in a future column to teady@kevinwellspa.com.




Tamela Eady

Tamela Eady is a Florida Bar board-certified real estate attorney with more than 25 years experience, concentrating her practice on community association and real estate legal matters. The subjects discussed in her columns are not intended as specific legal advice to anyone and are subject to principles that may change from time to time. Questions may be modified for clarity or for brevity. Email questions for possible inclusion in a future column to tke@eadylaw.com.
Last modified: November 9, 2013
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