AND DUTIES OF THE BOARD OF DIRECTORS
is responsible for the operation and management of the community's
affairs pursuant to the Florida Condominium Act. The Association
is governed by the Board of Directors, sometimes known as the Board
of Governors or Board of Administration. The Board operates the
of the Florida Statutes specifies the duties of the Board as does
Chapter 617, the Not-For-Profit Corporation Act. The Articles of
Incorporation and the by-laws set forth additional provisions regarding
Directors such as the number of Directors, residency requirements
and specific limitation of powers, such as expenditure limitations.
Recall is the
ultimate limitation of the Board's power. The Board or an individual
Board member may lose the support of a majority of the membership
and may be recalled at any time. Pursuant to statute and most Association
documents, vacancies on the Board may be filled by the remaining
The Board members
have a fiduciary duty to the membership. The general standards for
discharge of a Director's duties are outlined in Section 617.0830
of the Florida Not-For-Profit Corporation Act. All Directors should
act in good faith with the care an ordinary, prudent person in a
like position would exercise in similar circumstances. A Director
must act in a manner he reasonably believes to be in the best interest
of the Association. The Court held in a recent case that a Director
has no real liability unless there is fraud, self-dealing or unjust
may rely on information, opinions, reports or statements, including
financial statements, that are prepared or presented by officers
or employees of the Association when the Director reasonably believes
such person to be reliable and competent. The opinion of legal counsel,
public accountants or other persons as to matters the Director reasonably
believes to be within that person's professional expertise may be
relied on. The Directors are protected by law if they rely on the
advice rendered by a professional. Therefore, whenever the Board
faces a question as to its operations or procedures, the Board should
request an opinion in writing from a party skilled in the respective
The most important
power and function of the Board is to establish and collect the
assessments. The collection of assessments is essential to the operation
of the Association and should be conducted in a fair manner based
on established policies.
of proper financial records of the Association is part of the budget
and assessment process. Most Boards have the significant authority
to establish budgets and impose assessments as deemed necessary,
however, the Condominium Act creates substantial requirements for
financial reporting, standards for budgets and record keeping in
this area. The service of a professional accounting firm familiar
with condominium budgets and accounting is recommended.
authority to acquire, convey, lease or mortgage Association real
property is limited pursuant to statute unless specifically authorized
in the Declaration. Traditionally, unit owners must approve such
documents convey authority on the Board of Directors to adopt reasonable
rules and regulations. The rule-making authority of the Board allows
the Association to control use of the common elements and use of
the units. Rules can also address inspection of records, reply to
owner inquiries, club house and pool use and parking issues. All
rules must be reasonable and must not contravene a right granted
in the Declaration or reasonably implied from terms of the Declaration.
are parcels of real estate created upon the recording of a Declaration
of Condominium, the law is drafted to protect the status quo. The
Board must operate and maintain the common elements. No material
alteration or substantial additions may be made unless specifically
allowed by the terms of the Declaration, or the if the Declaration
does not so provide, then only with approval of seventy-five percent
(75%) of the total voting interests. The purpose of this provision
is to ensure that a purchaser of a condominium can anticipate that
his property will remain as originally purchased and not subject
to annual revisions by each new Board. Of course, the opposite position
is that a condominium may remain pastel pink forever unless a change
is authorized by the members.
It is well
established that the Board may exercise a wide range of decision-making
authority based upon the Business Judgment Rule. The Business Judgment
Rule has afforded Boards the right to make certain changes in common
elements. For example, arbitration decisions have held that worn
Chatahoochie decking may be replaced with paver bricks and revisions
to the common area landscaping plan may be made by the Board without
a vote of the members.
to which a Board maintains the common elements is clearly within
its discretion. All decisions of the Board regarding such maintenance
are presumed correct, absent the showing of mismanagement, fraud
or a breach of trust. The Business Judgment Rule even prohibits
arbitrators from substituting their judgment as to the appropriate
degree of maintenance.
The Board may
employ and dismiss personnel necessary for the maintenance and operation
of the common elements. Additionally, the Board has the authority
to contract for management. When a manager is retained, the Board
does not eliminate any of its own powers but merely gives the control
of the day-to-day functions to the manager.
The topic for
this issue is roofing problems. The Board of Directors, in maintaining
the condominium, will eventually be involved in roof replacement.
In repairing roofs, as with any other portion of the common elements,
material alterations are not to be undertaken, however, the Board
has the authority to make reasonable decisions under the Business
Judgment Rule. An example of the authority of the Board on a re-roofing
job would be the decision regarding the quality of replacement roofing
and all of the associated specifications of the contract. The Board,
however, would be prohibited from changing the type of roof, such
as from shingles to roll roofing, or to change colors.
Another significant function of the Board is enforcement of the
Declaration. It is within the business-making authority of the Board
to determine when a problem should be addressed by the Association.
A situation which exists only between two neighbors is not an Association
issue. However, if a larger number of members are affected by one
party's conduct, the Board may determine when to act.
power of the Board is to appoint committees. The Board may appoint
committees for any function it deems necessary to carry out Association
business. If the documents allow fining, the Board may appoint a
Fining Committee. The imposition of fines may allow the Association
to control violations of its documents from within without resorting
to litigation or arbitration.
have Directors who are part-time residents. The part-time residency
of Directors may create a problem in establishing a quorum during
the summer months. Unless the Articles of Incorporation or bylaws
provide otherwise, the Board of Directors may, by a majority of
its full membership, designate from its members an Executive Committee.
If given full authority, the Executive Committee may exercise all
authority of the Board with the exception of: filling vacancies
on the Board, revising the bylaws or approving or recommending to
members actions required to be approved by the membership. The Executive
Committee is used by many Associations.
As the Board
is acting on behalf of the membership, it is essential that the
Board keep appropriate records of all of its meetings. In addition
to providing authority for actions to be taken, the meeting minutes
also create a corporate history which future boards will rely on
The power and
authority of the Board of Directors is to make all reasonable decisions
to govern the condominium. The Board members should act as conservative
businessmen burdened with the duty to maintain the status quo. Directors
should rely on the written advice of professionals to limit their
own personal liability.
R. Cianfrone, Esq.
ARTICLE WAS PUBLISHED IN CONDO MANAGEMENT MAGAZINE, TAMPA/ST. PETE,
VOLUME IV, NUMBER 41, FEBRUARY 1998.