John C. Goede: Is it possible to consolidate or merge three small associations into one?

Editor's note: Responding to questions about Florida community law, this is a series of columns by attorneys at Goede & Adamczyk, PLLC a full-service law firm with a focus on condominium and homeowner association law, real estate law, litigation, estate planning and business law. With offices in Naples and Miami, the firm represents community associations throughout Florida.

Q. I am the president of a minor association within a larger master association. Our community in Naples has 560 doors and 15 separate associations, each governing themselves, but under a "Master" umbrella. My concern is with the duplication of individual services and the cost of these services i.e. separate property managers, insurance, painting and maintenance. Our block alone has three separate associations and 116 doors. We would like to know if it is possible to consolidate these three associations into one.— C.L.

NaplesA. It is possible to consolidate or merge these associations. The result is a single corporate entity that operates the affairs of the multiple associations. First, the three boards need to decide which association is going to be the surviving association that operates their affairs. Second, approval of the membership from each association will be required. The approval that is needed is the same approval that is needed to amend the articles of incorporation and declaration of condominium. The merger is complete when a plan of merger is approved by each membership and the articles of merger are filed with the Florida Division of Corporations and the local county land records. For practical purposes, the merger of the three associations creates an economy of scale for efficiency, costs and further streamlines the administrative process for these three similarly situated communities. Additionally, although the three communities will maintain separate accounting records, all decisions regarding the operation and management of the community will be made by a single board of directors. That single board can make decisions on vendors that will hopefully eliminate some of inefficiencies you are concerned about.

Q. I live in a large community in Naples with a master association comprised of more than 90 condominium associations and HOAs. One of your previous columns stated that such master associations are subject to the condominium laws and not the HOA laws. Our master association operates under the HOA laws. Is that permissible?— T.R.

NaplesA. Yes, this is permissible. The reader's question in our previous column involved a community made up entirely of condominium associations and a master association that operated the common elements. In a condominium, each unit owner actually owns an equal share in the common elements, and thus any master association in such a community should operate as a condominium association as defined in Florida Statutes section 718.103(2). In your community, there is a mix of condo and homeowners associations. First, members of a homeowners association do not actually own equal shares of the common areas. Thus, it is not proper for the HOA residents to be members of a master association that operates as a condominium. Second, we are assuming in our response here that the members of the associations in your community are also required to be members of your master association and have voting rights therein. If that is the case, your master association properly operates as a homeowners association as defined in Florida Statutes section 720.301(9). We represent other master associations that operate in a similar fashion.

Q. A few attorneys who are not licensed in Florida have served on our master board now or in the past and have advised the board on matters that appear to be legal. Most of the time this advice is rendered behind closed doors using the lawyer-client privilege. Is this permissible? If not, what can be done about it?— R.T.

NaplesA. Your association and these unlicensed attorneys should exercise caution. It is proper for a board to meet with its counsel in closed meetings, but only for the purpose of discussing threatened or pending litigation. All other board meetings should be open to members. Second, to the extent that these unlicensed board members are providing legal advice on Florida law, that could be considered unauthorized practice of law which is a criminal offense in the State of Florida. That being said, it is a good thing to have board members with business and legal experience. Board members are running a corporation as a fiduciary for the members, and they need good advice. However, when a board wants privileged legal advice on Florida law and further seeks to obtain that advice in a closed meeting, you should insist that these meetings involve a licensed attorney who is experienced in community association litigation.

Q. Our condominium property has an unused parcel of land next door. Since there is nothing in the bylaws about the purchase of an adjoining piece of property, what would be required to purchase this adjoining land? Could the board approve the purchase of the land or would it take a majority of the ownership?— A.B.

New Smyrna BeachA. Your association does have the authority to acquire this parcel, although the decision should be made by the membership in accordance with the condominium documents. Section 718.111(7) of the Florida Statutes specifically provides that the association "has the power to acquire title to property or otherwise hold, convey, lease, and mortgage association property for the use and benefit of its members." If your documents do not specify the vote and procedure that is necessary to acquire this parcel, the purchase should be made only after the board obtains approval from 75 percent of the association members. Recently, a board asked us whether it was proper for their association to acquire an adjacent piece of land for a golf driving range. They have 36 holes of golf but no driving range. Further, they wanted to make the range open to the public for a fee. We told them that the purchase was fine provided that they obtained the necessary vote from the membership and that the primary function of the new facility was to benefit the association members.

Q. I maintain a 29½-gallon aquarium for three small tropical fish. The board found out about my aquarium. The Declaration of Condominium states "The keeping of pets of any kind in the condominium is prohibited." The board is attempting to secure an amendment to the documents that would permit a reasonably sized aquarium for the purpose of keeping fish. However, if the members do not approve this amendment, I am afraid that I will face an enforcement action by the board because the association attorney has advised that a fish is a pet. Do you share this opinion?— L.A.

NaplesA. The purpose of pet restrictions in condominium documents is to protect residents from the nuisance that pets can create when living units are close in proximity. Therefore, pet restrictions in the documents should expressly recognize the restraints of this close proximity and address issues related to the noise, mess, type of food and the size and number of pets that are appropriate for each living unit. Properly drafted, pet restrictions will address the typical abuses with pets and balance them against the enjoyment of pet ownership. In your case, the restriction is broad and not drafted in your favor. The drafters likely intended to prohibit dogs, birds, cats, exotic pets and other animals that create noise or mess in the common areas. Small tropical fish create none of these issues. As a result, I have seen other condo documents that prohibit all pets and animals except birds and fish. While it is difficult to argue that the definition of a "pet" does not include your fish, I would suggest that you voice your opinion that it is unreasonable to prohibit small pet fish and that the drafters of your documents did not likely intend to prohibit fish. To bolster your opinion, you should also attempt to locate other condominium documents that prohibit pets with the exception of birds and fish. As a unit owner, you have the legal right to present your opinion at the membership meeting where the amendment will be considered.

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Comments » 2

Sick writes:

Our forefathers combined 50 states. You can't figure out a street?

These days I swear.

mattmaki writes:

Well, more like 13 umm, colonies...

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