Today’s topic was discussed briefly in my post on condo association collections policies; however, we have received more than one question on this issue so I am dedicating a post to it exclusively.
Along with the traditional remedies for unit owners past due in paying their maintenance fees (e.g., late fees, interest, rent garnishment, foreclosure), Florida Statutes 718.303(4) and 718.303(5) allow associations to suspend the common elements use rights and voting rights, respectively, of unit owners (and their tenants/ guests) who are more than 90 days in arrears.
What is important to note here is that this suspension doesn’t happen automatically at the 90-day mark. According to FL Statute 718.303(6), the board must vote to suspend a unit owner’s voting and common elements use rights at a board meeting and must notify the unit owner of the suspension via mail or hand delivery. These rights are automatically reinstated once a unit owner is again less than 90 days delinquent.
If your association is going to take advantage of these remedies, it is very important to do so consistently. The board should be careful not to suspend the rights of one delinquent unit owner but not another. My recommendation is to keep a permanent item on the association’s Board meeting agendas specifically for this purpose. At each meeting, as the Board reviews the accounts receivable, the property manager should provide a list of all unit owners more than 90 days delinquent that have not yet had their rights suspended. At that time, the Board may vote to suspend them. During meetings when no new unit owners have become 90+ days in arrears, the Board should simply skip this agenda item.
NOTE: As a vote to suspend rights is required per Florida Statutes, the board should be sure to list in the meeting minutes the specific units they have voted to suspend.
Regarding the common elements restriction, when possible, associations should restrict the unit owner’s access to the pool, gym, clubhouse, car wash, laundry facilities or any other amenities the property offers. For occupied units (and particularly for rented units where the tenant is restricted from using the amenities), this inconvenience can often be enough to encourage unit owners to pay their past due balance.
NOTE: The common elements suspension does not apply to limited common elements, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators.
Regarding the suspension of voting rights, this particular restriction does not tend to do much to encourage unit owners to pay past due balances as those in arrears tend not to care enough to vote. However, it is still worthwhile as the association may reduce the total number of votes necessary to constitute a quorum of the membership by the number of voting rights suspended. This can be a difference maker if the association is struggling to obtain enough votes for their annual meeting, for amendments to the association’s documents, or for any other vote.
Let me know if you have any questions on this topic.
Ryan Koski is a condominium homeowner in Tampa, Florida and a CPA and Attorney with Accounting Clinic, Inc. He is also a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations.