Mgmt.

Association Management

Managing large complex multicondominium associations requires a licensed CAM with comprehensive knowledge of statute requirements and procedures.

Successful Association management and owner interactions require knowledge of:

Community Association Management

As stated in the Roles & Functions page of this website, "A condominium association in Florida that has more than 10 units or a budget of $100,000 or greater is required to have a property manager or management firm licensed by the Florida Department of Business and Professional Regulation."

The property manager (i.e., Community Association Manager) or management firm works at the discretion of the board. The board provides the manager or management firm with the authority to manage, but the board is not transferring responsibility for the affairs of the community.

Normally the management duties are to implement the directives of the board and to provide administrative services for the maintenance and operation of the community. These duties need to be clearly and specifically defined in the contractual agreement between the parties, whether an employment contract or a management company contract. (See examples of both below.) The manager is bound by the contract with the association and also must abide by the authority provided in the governing documents, the relevant laws, and the administrative rules.

In order to be licensed in the state of Florida, a Community Association Manager (CAM) must receive education, pass a state exam, and be competent in the following areas:

  1. Condominium Law,
  2. Procedures,
  3. Budgeting & Financial,
  4. Insurance, and
  5. Management & Maintenance.

The CAM's training and skill-set makes him/her uniquely qualified to address the complex issues associated with condominium property management.  Information on the Roles and Functions page demonstrates the wide range of knowledge and skills required.

Property Manager Employment Agreement

Self-managed associations place additional burden on the board, where board members are required to perform some functions normally performed by a management firm (see chart below). One of the self-management functions is to interview, hire, and manage a property manager (Community Association Manager). As part of the hiring process, very specific employment terms and conditions need to be established so that the manager fully understands his/her responsibilities and authority.

Attached is a sample management employment agreement, provided by Gray Systems, Inc., that spells out typical employment terms. Before using this agreement, it should be reviewed by competent legal counsel for the parties to the agreement.

Please click on the following link: Employment Agreement Contract

Management Company vs Self-Management

As stated above, Florida condominiums can be managed by a Property Management Firm or Self-Managed. In both cases the Board is ultimately responsible for management of the Association. The difference is whether the Property Management Firm or the Association employees report directly to the Board.

Advantages

Disadvantages
1.   Helps assure professional consultation, advice, guidance and management.

2.   Requires less hands-on involvement by association’s Board members.

3.   Provides a larger labor pool to meet association maintenance and administrative needs.

4.   Eliminates Board’s need to deal with staffing issues such as hiring, promotions, performance reviews, disciplinary actions, salary adjustments, bonuses, etc.

5.   Generally, provides more continuity through changes of property managers.

6.   Helps assure maintenance and administrative staff quality through broader interviewing, candidate selection and training.

7.   Takes advantage of economies of scale in payroll processing and vendor negotiations.

8.   Helps assure compliance with governing documents, Florida Statutes and government regulations.

9.   Usually provides systems and tools for managing work orders, processing rent/transfer applications, and providing community websites.

10. Better and more-professional financial and records management, generally through improved systems and controls.

 1.   Adds a monthly property management fee, staffing fees, and extra service fees which increase total cost.

2.   Reduces association income by directly receiving payment for member support/interface transactions such as delinquency notices, estoppels, transfer fees, collection fees and attorney turnover fees.

3.   Reduces Board flexibility to make decisions and control costs.

4.   Is generally more difficult for members to have their problems receive attention and get addressed. (They’re dealing with a large “impersonal” company instead of their fellow association member.)

5.   Management company is not as familiar with the property, local issues and history as a resident board member.

6.   More difficult to change property management vendors or to switch to self-management.

 

 

 

 

 

Property Management Agreement Requirements

Per Florida Statute 718.3025(1), No written contract between a party contracting to provide maintenance or management services and an association which contract provides for operation, maintenance, or management of a condominium association or property serving the unit owners of a condominium shall be valid or enforceable unless the contract:

(a) Specifies the services, obligations, and responsibilities of the party contracting to provide maintenance or management services to the unit owners.

(b) Specifies those costs incurred in the performance of those services, obligations, or responsibilities which are to be reimbursed by the association to the party contracting to provide maintenance or management services.

(c) Provides an indication of how often each service, obligation, or responsibility is to be performed, whether stated for each service, obligation, or responsibility or in categories thereof.

(d) Specifies a minimum number of personnel to be employed by the party contracting to provide maintenance or management services for the purpose of providing service to the association.

(e) Discloses any financial or ownership interest which the developer, if the developer is in control of the association, holds with regard to the party contracting to provide maintenance or management services.

(f) Discloses any financial or ownership interest a board member or any party providing maintenance or management services to the association holds with the contracting party.

Property Management Agreement Terms

  1. If the party contracting to provide maintenance or management services fails to provide such services in accordance with the contract, the association is authorized to procure such services from some other party and shall be entitled to collect any fees or charges paid for service performed by another party from the party contracting to provide maintenance or management services.
  1. Any services or obligations not stated on the face of the contract shall be unenforceable.
  1. A party contracting to provide maintenance or management services to an association, or an officer or board member of such party, may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of association lien for unpaid assessments or take a deed in lieu of foreclosure.
  1. If 50 percent or more of the units in the condominium are owned by a party contracting to provide maintenance or management services to an association or an officer or board member of such party, the contract with the party providing maintenance or management services may be canceled by a majority vote of the unit owners other than the contracting party or an officer or board member of such party.

Property Management Contract

Hiring a property management company requires negotiating and executing a management contract. This contract must adhere to the above requirements, specifically defining the relationship between the association and management firm.  Attached is a sample property management contract, provided by Gray Systems, Inc., that spells out typical contract terms. With modifications, this contract can be used for virtually any type of community association. Before using this agreement, it should be reviewed by competent legal counsel for the parties to the agreement.

Please click on the following link: Property Management Contract

Compliance with Florida Employee-Related Laws

An article in the August 13th, 2012 publication of the Florida Sun Sentinel listed the following laws as applicable for associations that have one or more employees:

  1. Fair Labor Standards Act of 1938.  This law establishes minimum wage, overtime, record-keeping and youth employment standards. This law also prohibits wage discrimination based on sex as well as prohibits retaliation against employees who exercise their rights under this Act.
  1. Occupational Safety and Health Act of 1970.  This law establishes minimum workplace safety standards for private sector employers and prohibits retaliation against whistle-blowers.
  1. Fair Credit Reporting Act of 1970.  This law promotes the accuracy, fairness and privacy of information in the files of consumer reporting agencies. This law prohibits employers from using a third party to obtain a consumer report on an applicant or employee unless the individual gives authorization by signing a separate disclosure and consent form. This law also requires an employer to provide the applicant with a copy of the consumer report and written summary of rights before denying employment or taking any adverse action based in whole or in part on the consumer report.
  1. Employee Retirement Income Security Act of 1974.  This law establishes minimum standards for most voluntarily-established health and welfare benefit and pension plans in the private sector. This law requires employers to provide plan participants with information about plan features and funding. This law also imposes fiduciary responsibilities on those who manage and control plan assets and requires plans to establish a grievance and appeals process.
  1. Immigration Reform and Control Act of 1986. This law prohibits the employment of individuals not authorized to work in the U.S by requiring employers to verify the identity and employment eligibility of all employees.
  1. Employee Polygraph Protection Act of 1988. This law prevents employers from requiring or requesting employees to submit to  lie detector tests either for pre-employment screening or during the course of employment, with certain exceptions. This law also prohibits retaliation against an employee or applicant who refuses to take a lie detector test.
  1. Uniformed Services Employment and Reemployment Rights Act of 1994. This law protects civilian jobs and benefits for veterans and reservists. This law requires employers to re-employ returning service members in the job that they would have attained had they not been absent for military service with the same seniority, status and pay, as well as other rights and benefits determined by seniority. This law also requires employers to make reasonable efforts to accommodate a disability which has been incurred or aggravated during military service. Lastly, this law requires employers to make reasonable efforts (such as training or retraining) to enable returning service members to refresh or upgrade their skills to help them qualify for re-employment.
  1. Florida’s Minimum Wage Act. This law establishes state minimum wage standards for employees.
  1. Florida’s Unemployment Compensation Law. This law provides monetary benefits to individuals who are unemployed through no fault of their own. This law suggests that employers should establish standards of conduct for employees and implement a 90-day probationary period for new hires.
  1. Florida Health Insurance Coverage Continuation Act. This law provides employees and covered family members not covered by COBRA with a temporary extension of group health care coverage under certain circumstances.

The foregoing laws impact associations who have even just one employee. Naturally, the more employees an association has, the more government regulation to which it will be subjected. Associations with two or more employees will be subject to the National Labor Relations Act of 1935, the Immigration and Nationality Act of 1954 and the Florida’s Workers’ Compensation Law. If an association has fifteen or more employees, it will be subject to Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990 as well as the Florida Civil Rights Act of 1992.

Systems & Procedures Requirements

Human Resource Management

Professional management of Condominium Association staff requires at least the following:

  • Employee Handbook, providing information on the association's HR policies & procedures;
  • Position Descriptions listing position objectives, responsibilities, skill requirements, and job dimensions/scope;
  • Employee performance appraisal process/forms measuring quality/quantity of work, teamwork, job knowledge, initiative, interpersonal relations, health & safety compliance, communication abilities, planning & organizing, problem analysis & decision making, and dependability;
  • Merit salary-increase planning;
  • Payroll processing;
  • Time and attendance recording;
  • Staff work assignments;
  • Safety procedures/training;
  • Regular staff meetings (generally weekly); and
  • Employment interviewing/processing procedures and standardized employment application.

The Forms page of this website provides templates for many of the HR and other required forms.

Systems

Various manual or automated systems help assure smooth operation of the Association:

  • Work order processing & aging system,
  • Preventative maintenance programs/schedules,
  • Lease processing systems and tenant check-in procedures,
  • Unit sales/purchases and transfer of responsibility procedures/forms, and
  • Project management & tracking process.

Financial Procedures

Many of the Association's financial procedures are included in the Financial Policies document.  Some of the routine financial processing procedures include:

  • Invoice review, approval and posting,
  • Contract review and approval,
  • Monthly financial reporting,
  • Monthly & annual journal entry,
  • Reserve schedule spreadsheet update,
  • Generation of delinquency notices,
  • Estoppel preparation,
  • Delinquent account turnover to attorney for collection,
  • Check request,
  • Check signing,
  • Coupon book generation & mailing, and
  • Annual budgeting.

Miscellaneous Procedures

Other required standard operating procedures and policies include:

  • Owner inquiry response,
  • Unit alteration approval,
  • Property inspection process,
  • Website Policy and updating procedures,
  • Hurricane Preparedness & Recovery Plan,
  • Bulletin board notices posting procedure, and
  • Newsletter preparation and publication process.

Databases

Besides financial records, the Association is responsible for maintaining several databases including:

  • Unit owner roster, including name, address, phone number and email address;
  • Parking permits issued, including condo unit number, name(s) of occupants, drivers license information, and automobile make, model, color & registration information;
  • Approved Unit alterations (filed by unit);
  • Standard vendor list, including phone number(s), address, contact(s), etc;
  • Vendor master file of correspondence, invoices and contracts;
  • Unit damage reports and insurance claims; and
  • Unit sales and purchases.

Standards

The Association must maintain unit and limited common area alteration standards including:

  • Screen doors,
  • Window replacements,
  • hurricane shutters,
  • sound-absorbent under-laying
  • patio painting
  • patio flooring

Official Records

Association management includes maintenance and preserving of the association's official records. Per Florida statute 718.111(12)(a), "from the inception of the association, the association shall maintain each of the following items, if applicable, which constitutes the official records of the association":

  1. A copy of the plans, permits, warranties, and other items provided by the developer pursuant to s. 718.301(4).
  1. A photocopy of the recorded declaration of condominium of each condominium operated by the association and each amendment to each declaration.
  1. A photocopy of the recorded bylaws of the association and each amendment to the bylaws.
  1. A certified copy of the articles of incorporation of the association, or other documents creating the association, and each amendment thereto.
  1. A copy of the current rules of the association.
  1. A book or books that contain the minutes of all meetings of the association, the board of administration, and the unit owners.
  1. A current roster of all unit owners and their mailing addresses, unit identifications, voting certifications, and, if known, telephone numbers. The association shall also maintain the e-mail addresses and facsimile numbers of unit owners consenting to receive notice by electronic transmission. The e-mail addresses and facsimile numbers are only accessible to unit owners if consent to receive notice by electronic transmission is provided, or if the unit owner has expressly indicated that such personal information can be shared with other unit owners and the unit owner has not provided the association with a request to opt out of such dissemination with other unit owners. An association must ensure that the e-mail addresses and facsimile numbers are only used for the business operation of the association and may not be sold or shared with outside third parties. If such personal information is included in documents that are released to third parties, other than unit owners, the association must redact such personal information before the document is disseminated. However, the association is not liable for an inadvertent disclosure of the e-mail address or facsimile number for receiving electronic transmission of notices unless such disclosure was made with a knowing or intentional disregard of the protected nature of such information.
  1. All current insurance policies of the association and condominiums operated by the association.
  1. A current copy of any management agreement, lease, or other contract to which the association is a party or under which the association or the unit owners have an obligation or responsibility.
  1. Bills of sale or transfer for all property owned by the association.
  1. Accounting records for the association and separate accounting records for each condominium that the association operates. Any person who knowingly or intentionally defaces or destroys such records, or who knowingly or intentionally fails to create or maintain such records, with the intent of causing harm to the association or one or more of its members, is personally subject to a civil penalty pursuant to s. 718.501(1)(d). The accounting records must include, but are not limited to:
    1. Accurate, itemized, and detailed records of all receipts and expenditures.
    2. All invoices, transaction receipts, or deposit slips that substantiate any receipt or expenditure of funds by the association.
    3. A current account and a monthly, bimonthly, or quarterly statement of the account for each unit designating the name of the unit owner, the due date and amount of each assessment, the amount paid on the account, and the balance due.
    4. All audits, reviews, accounting statements, structural integrity reserve studies, and financial reports of the association or condominium. Structural integrity reserve studies must be maintained for at least 15 years after the study is completed.
    5. All contracts for work to be performed. Bids for work to be performed are also considered official records and must be maintained by the association for at least 1 year after receipt of the bid.
  1. Ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to voting by unit owners, which must be maintained for 1 year from the date of the election, vote, or meeting to which the document relates, notwithstanding paragraph (b).
  1. All rental records if the association is acting as agent for the rental of condominium units.
  1. A copy of the current question and answer sheet as described in s. 718.504.
  1. A copy of the inspection reports described in ss. 553.899 and 718.301(4)(p) and any other inspection report relating to a structural or life safety inspection of condominium property. Such record must be maintained by the association for 15 years after receipt of the report.
  1. Bids for materials, equipment, or services.
  1. All affirmative acknowledgments made pursuant to s. 718.121(4)(c).
  1. A copy of all building permits.
  1. A copy of all satisfactorily completed board member educational certificates.
  1. All other written records of the association not specifically included in the foregoing which are related to the operation of the association.

Official Records Retention & Requests

Records Retention Period: The official records specified in subparagraphs 1-6 above (developer-provided documents, governing documents, and meeting minutes) must be permanently maintained from the inception of the association. Bids for work to be performed or for materials, equipment, or services must be maintained for at least 1 year after receipt of the bid. All other official records must be maintained within the state for at least 7 years, unless otherwise provided by general law.

If the official records are lost, destroyed, or otherwise unavailable, the obligation to maintain the official records includes a good faith obligation to obtain and recover those records as is reasonably possible.

Right to Inspect Official Records: The official records of the association are open to inspection by any association member and any person authorized by an association member as a representative of such member at all reasonable times. The right to inspect the records includes the right to make or obtain copies at reasonable expense, if any.

The records of the association shall be made available to a unit owner within 45 miles of the condominium property or within the county in which the condominium property is located within 10 working days after receipt of a written request by the board or its designee. This may be complied with by:

  1. Having a copy of the official records of the association available for inspection or copying on the association property,
  2. Making the records available to a unit owner electronically via the Internet, or
  3. By allowing the records to be viewed in electronic format on a computer screen and printed upon request.

If the requested records are posted on an association’s website or are available for download through an application on a mobile device, the association may fulfill its obligations under this paragraph by directing to the website or the application all persons authorized to request access.

The association may adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying but may not require a member to demonstrate any purpose or state any reason for the inspection.

The association is not responsible for the use or misuse of the information provided to an association member or his or her authorized representative in compliance with this chapter unless the association has an affirmative duty not to disclose such information under this chapter.

The official records must be maintained in an organized manner that facilitates inspection of the records by a unit owner.

A renter of a unit has a right to inspect and copy only the declaration of condominium, the association’s bylaws and rules, and the inspection reports described in ss. 553.899 and 718.301(4)(p).

Maintaining Sufficient Copies: The association shall maintain an adequate number of copies of the declaration, articles of incorporation, bylaws, and rules, and all amendments to each of the foregoing, as well as the question and answer sheet as described in s. 718.504 and year-end financial information required under this section, on the condominium property to ensure their availability to unit owners and prospective purchasers, and may charge its actual costs for preparing and furnishing these documents to those requesting the documents. An association shall allow a member or his or her authorized representative to use a portable device, including a smartphone, tablet, portable scanner, or any other technology capable of scanning or taking photographs, to make an electronic copy of the official records in lieu of the association’s providing the member or his or her authorized representative with a copy of such records. The association may not charge a member or his or her authorized representative for the use of a portable device.

Failure to Comply: The failure of an association to provide the records within 10 working days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with this paragraph. A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply. Minimum damages are $50 per calendar day for up to 10 days, beginning on the 11th working day after receipt of the written request. The failure to permit inspection entitles any person prevailing in an enforcement action to recover reasonable attorney fees from the person in control of the records who, directly or indirectly, knowingly denied access to the records.

Checklist of Records Provided: In response to a written request to inspect records, the association must simultaneously provide the requestor a checklist of all records made available for inspection and copying. The checklist must also identify any of the association’s official records that were not made available to the requestor. An association must maintain a checklist provided under this sub-subparagraph for 7 years. An association delivering a checklist pursuant to this sub-subparagraph creates a rebuttable presumption that the association has complied with this paragraph.

Records Inspection Violations: A director or member of the board or association or a community association manager who knowingly, willfully and intentionally commits the following acts must be removed from office and a vacancy declared:

  1. Repeatedly (two or more times within a 12-month period) violates the records-inspection paragraph above. This is a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083
  2. Defaces or destroys accounting records that are required by this chapter to be maintained during the period for which such records are required to be maintained, or fails to create or maintain accounting records that are required to be created or maintained, with the intent of causing harm to the association or one or more of its members. This is a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083 and subject to a civil penalty pursuant to s. 718.501(1)(d).
  3. Refuses to release or otherwise produce association records with the intent to avoid or escape detection, arrest, trial, or punishment for the commission of a crime, or to assist another person with such avoidance or escape. This is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

Records Provided to Purchaser or Lienholder: The association or its authorized agent is not required to provide a prospective purchaser or lienholder with information about the condominium or the association other than information or documents required by this chapter to be made available or disclosed. The association or its authorized agent may charge a reasonable fee to the prospective purchaser, lienholder, or the current unit owner for providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, if the fee does not exceed $150 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the response.

An association and its authorized agent are not liable for providing such information in good faith pursuant to a written request if the person providing the information includes a written statement in substantially the following form: “The responses herein are made in good faith and to the best of my ability as to their accuracy.”

Relinquishing Official Records: An outgoing board or committee member must relinquish all official records and property of the association in his or her possession or under his or her control to the incoming board within 5 days after the election. The division shall impose a civil penalty as set forth in s. 718.501(1)(d)6. against an outgoing board or committee member who willfully and knowingly fails to relinquish such records and property.

Question & Answer Sheet Requirements

The association shall prepare a question-and-answer sheet as described in s. 718.504 and shall update it annually. The Q&A sheet shall contain the following information:

  1. Role of the board in conducting the day-to-day affairs of the association on behalf of, and in the best interests of, the owners.
  2. Board’s responsibility to provide advance notice of board and membership meetings.
  3. Rights of owners to attend and speak at board and membership meetings.
  4. Responsibility of the board and of owners with respect to maintenance of the condominium property.
  5. Responsibility of the board and owners to abide by the condominium documents,
    rules adopted by the division, and reasonable rules adopted by the board.
  6. Owners’ rights to inspect and copy association records and the limitations on such rights.
  7. Remedies available to owners with respect to actions by the board which may be abusive or beyond the board’s power and authority.
  8. Right of the board to hire a property management firm, subject to its own primary responsibility for such management.
  9. Responsibility of owners with regard to payment of regular or special assessments necessary for the operation of the property and the potential consequences of failure to pay such assessments.
  10. Voting rights of owners.
  11. Rights and obligations of the board in enforcement of rules in the condominium documents and rules adopted by the board.

Non-Accessible Records

The following records are not accessible to unit owners:

  1. Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including a record prepared by an association attorney or prepared at the attorney’s express direction, which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association, and which was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings, or which was prepared in anticipation of such litigation or proceedings until the conclusion of the litigation or proceedings.
  1. Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a unit.
  1. Personnel records of association or management company employees, including, but not limited to, disciplinary, payroll, health, and insurance records. For purposes of this sub-subparagraph, the term “personnel records” does not include written employment agreements with an association employee or management company, or budgetary or financial records that indicate the compensation paid to an association employee.
  1. Medical records of unit owners.
  1. Social security numbers, driver license numbers, credit card numbers, e-mail addresses, telephone numbers, facsimile numbers, emergency contact information, addresses of a unit owner other than as provided to fulfill the association’s notice requirements, and other personal identifying information of any person, excluding the person’s name, unit designation, mailing address, property address, and any address, e-mail address, or facsimile number provided to the association to fulfill the association’s notice requirements. Notwithstanding the restrictions in this sub-subparagraph, an association may print and distribute to unit owners a directory containing the name, unit address, and all telephone numbers of each unit owner. However, an owner may exclude his or her telephone numbers from the directory by requesting in writing to the association. An owner may consent in writing to the disclosure of other contact information described in this sub-subparagraph. The association is not liable for the inadvertent disclosure of information that is protected under this sub-subparagraph if the information is included in an official record of the association and is voluntarily provided by an owner and not requested by the association.
  1. Electronic security measures that are used by the association to safeguard data, including passwords.
  1. The software and operating system used by the association which allow the manipulation of data, even if the owner owns a copy of the same software used by the association. The data is part of the official records of the association.
  1. All affirmative acknowledgments made pursuant to s. 718.121(4)(c).

The association shall ensure that the information and records described above which are not allowed to be accessible to unit owners, are not posted on the association’s website or application. If protected information or information restricted from being accessible to unit owners is included in documents that are required to be posted on the association’s website or application, the association shall ensure the information is redacted before posting the documents. Notwithstanding the foregoing, the association or its agent is not liable for disclosing information that is protected or restricted under this paragraph unless such disclosure was made with a knowing or intentional disregard of the protected or restricted nature of such information.