Richard DeBoest, Esq.
Q: Our board of directors would like to merge with another association of co-owners. Do all the members of the merging association have to agree to do this merger and, if we have people who are not in favor of the merger, do they have to pay the lawyer’s fees to do this merger even if they are not for? It wouldn’t seem right to pay for something you don’t want. We just had to pay a special membership fee, as well as a fairly significant quarterly increase in association fees. BF Estero
A: First, it is important to understand that there are two types of mergers. The first type is a real estate merger. A real estate merger legally combines individual condominiums or owner’s neighborhoods into a single condominium or owner’s neighborhood. A real estate merger is very complicated and would typically require a super majority or even 100% approval of all homeowners and mortgage holders. For this reason, real estate mergers are not common.
The second, much more common type of merger is a corporate merger, which I believe you are also referring to. A corporate amalgamation merges (combines) one or more corporations (called the merging corporations) into and with a single remaining corporation (called the surviving corporation). A corporate merger does not combine the condominiums or neighborhoods themselves, it only combines the corporate entities that operate them.
In order to pursue a corporate merger, you must first review the relevant governing documents for each association to determine if they set out any particular protocol for a merger. If not, according to Florida Bylaws Chapter 617, the merger must be approved by a majority of each board of directors and a majority of the total voting rights in each association. The cost of pursuing the merger is a common expense and all owners would be obligated to pay it, whether or not they individually favor or oppose the merger.
In my experience, although initially there may be some opposition to the merger due to a perceived “loss of autonomy”, I have never had a client ask me to “decouple ‘ and they all usually say ‘we should have done this sooner’.
Some of the benefits of a business merger are:
- It provides for more efficient functioning of the community. Merging associations streamlines record keeping, eliminates duplicate costs, and allows your board to negotiate with a single vendor for common services, taking advantage of economies of scale. For example, you would only have to negotiate with a landscaper, pest control service, property manager, insurance agent, etc.
- In addition to efficiency gains, there are minor cost savings as the supplier only has to negotiate a contract, issue an invoice and/or charge a commission.
- You will only be required to hold one annual meeting of members per year instead of one for each association.
- Other areas provide cost savings. For example, you’ll only need one directors’ and officers’ insurance policy and you’ll only need to file one corporate annual return with the Corporations Division, saving you the cost several annual filing fees.
- One of the most visible results of a merger is the reduction in the number of board members required to operate associations. It can be difficult to find enough residents willing to provide this voluntary service. After an amalgamation, you will only have to fill the seats on one council.
- You will have better continuity in your community as well as consistency in the application of rules and regulations.
Q: For a condominium where the owners are mainly absent – Is a board responsible for:
- Inform the owners of a posted meeting, other than by posting it on the bulletin board of which these owners do not have a regular view?
- Provide remote access to the board meeting for owners who cannot attend in person?
- Share condominium issues with all council members before acting on resolutions? AC, Fort Myers
A: Condominium, co-op, and homeowner’s association laws all provide that notice of a regular meeting of council requires only one notice posted on the property. However, if a condominium contains 150 or more units, the notice must also be posted on the corporation’s mandatory website. As a courtesy, the Association may send the notice by electronic mail, but it is not required to do so by law.
The board is also not required by law to allow owners to attend board meetings remotely even if all directors attend the meeting remotely. The board may set up a zoom monitor or speakerphone and require owners to attend the meeting at that physical location as long as those owners can hear the discussion and have the right to speak on all matters of the meeting. ‘agenda. In the absence of emergency powers, whether or not the board can hold an exclusively virtual meeting for owners and directors is debatable, but if the meeting is exclusively virtual, all owners must be allowed to log in to the meeting and participate in the same way as if they were physically in the meeting.
Generally, best practices dictate that information regarding an upcoming board meeting topic should be shared with all directors so that directors are all informed and can attend the meeting and make informed decisions. However, there is no law requiring this to be done.
Q: I live in a Florida 720 covered HOA. Our board continues to cut down trees for no good reason other than to say the roots are lifting pavers or undermining foundations. They do not replant trees, but add paving, rock or grass. Can they make material change to the landscape under 720 without an ownership vote? I questioned this practice and was told that we are not governed by 718 as we are an HOA. I argue that we can prune the trees to avoid problems, but our chairman of the council would rather remove the tree than take care of the regular maintenance! Hong Kong, Bonita Springs
A: As an HOA operating under Florida Law 720, there is no legal requirement to obtain the owner’s permission to make a material alteration to the common area. Even if there were such a requirement, landscaping changes generally do not constitute a material alteration. Whether it’s to cut down a tree that’s causing damage or just trim the roots, that’s a decision of Council. However, many plateau counties and subdivisions have tree count requirements and require a permit to remove a tree and also require a tree to be added in its place. However, Section 163.045 of Florida law prohibits a local government from requiring a permit for the removal or replacement of trees if the removal is necessary based on the advice of an arborist or a landscape architect because the tree presents a danger to people or property.
Richard DeBoest, Esq., is a partner/shareholder of the law firm Goede, DeBoest & Cross, PLLC. Visit www.gadclaw.com or to ask questions about your issues for future columns, send your request to: [email protected] The information provided here is for informational purposes only and should not be construed as legal advice. Publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act, or refrain from acting, on the basis of the information in this article without first contacting an attorney, if you have questions about any of the issues raised here. Hiring a lawyer is a decision that should not be based solely on advertisements or this column.