If your association is looking at doing a maintenance or alteration project, here are 3 Tips for consideration by the Board of Directors and the Unit Owners BEFORE the first square of carpet is removed or the first shovel of dirt dug.
- First, determine whether the anticipated project is required “maintenance”, or whether it is a “material alteration” or “substantial addition”. This will determine whether the project can go forward with a vote of the Board of Directors or whether there is going to be a requirement for a vote of the unit owners.
Boards of Directors are required to do what is reasonably necessary to maintain and protect association property. Maintenance of common elements and property is the responsibility of the association and subject to any limitation set out in the condominium documents. However, when you go beyond maintenance to include a material alteration or substantial additions, there are substantial additional requirements that are set out in the condominium documents and or Chapter 718 of the Florida Statutes which provide that “no material alternation or substantial addition to common elements or real property may be made” unless approved by the Unit Owners as specified in the documents or absent such provision, by 75% of the total voting interests.
In determining whether or not the Board of Directors of the Association has authority to approve the project as a required maintenance item, there are a number of questions to ask and things to keep in mind. Is anything broken? Is it being repaired or replaced as is or is there a plan to “spruce it up” with the repair? Keep in mind that almost NO aesthetic change is considered maintenance. If a change is required in the repair of an existing maintenance requirement to bring it “up to code” or in limited situations involving health and safety issues, it may be subject only to the approval of the Board of Directors without a vote of the Unit Owners.
It is natural to think about improvements, especially when the requirement for larger maintenance items or projects present themselves. However, you have to keep in mind that any material change or substantial improvement will generally invoke provisions in the condominium documents or Florida Statutes that require a vote of the unit owners. Here a few examples of projects or changes that have been held to be material alterations or substantial additions requiring unit owner votes: a) replacement of asphalt tennis courts with clay tennis courts; b) remodeling of the clubhouse with paint and new windows; c) replacement of wood burning fireplace with a gas burning fireplace; d) the addition of a pool heater; e) placement of patio stones at an entrance; and the examples go on.
- If there is any question as to whether the proposed project constitutes maintenance only requiring a Board of Directors vote or whether it constitutes a material alteration or substantial improvement requiring Unit Owner vote, keep in mind that the penalty for a wrong decision can be substantial: THERE IS NO PROVISION IN THE LAW FOR UNIT OWNER RATIFICATION OF PROJECTS ALREADY STARTED and any project which is determined to require unit owner vote after it has already started will be required to stopped and the property put back into its condition prior to the beginning of the project regardless of unit owner approval.
- When larger maintenance projects are proposed, there is generally a substantial part of the planning that involves discussions about the upgraded look and design of the project. Many times when a project is priced out that merely completes required maintenance items resulting in the property looking the same, the costs turn out to be substantially similar to the cost of a makeover proposed. (one color paint versus another-same cost etc.). There are two reasons to price the two separately and present them to the unit owners. First, it lets the owners know that a “no” vote doesn’t mean that there will be no assessment since one would be required for the maintenance items which the Board of Directors would be required to undertake under any circumstances and secondly that the cost of combining improvements with maintenance work might be less than expected but certainly less than having to do both separately.
The longer that this article goes on, the more things that there would be listed to consider…. In any capital improvement or maintenance project for your condominium; in addition to your engineer, contractor and project manager, please include the association attorney on your team to not only review the contracts but to review the required Board or Unit Owner approval.
Perry Douglas West Chartered
www.perrydouglaswest.com
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