Florida Community Association Board Basics: A Practical Guide for New Directors, Part IV
Welcome to Part IV of this continuing series of articles designed to assist new directors serving managed communities in Florida. Parts I through III discussed what an association is and does, the role the governing documents play in a managed community, and the current educational requirements for future or new directors. In this Part IV, we take a look at the role a licensed community association manager (“CAM” or, sometimes, “LCAM”) can play in association management, and how a director should be prepared to utilize them.
What is a CAM and how can they help?
A CAM can be one of the board’s most useful day-to-day resources. CAMs may assist with meeting notices, elections, agendas, board meetings and minutes, budget preparation, enforcement of the governing documents, assessment collection activities, and many other administrative tasks. In an ideal arrangement, the board makes the decisions, and the CAM helps carry them out. A CAM cannot make most decisions for the association, but a CAM can help gather information, coordinate with vendors and professionals, and support the board’s efforts to act consistently with its fiduciary duties. (There are also additional certifications that a CAM can obtain, such as CMCA, AMS, LSM, and PCAM; each of which has certain additional certification requirements and specific benefits).
A board should ensure its CAM is properly licensed (this can be verified easily with Florida’s Department of Business and Professional Regulation). It is also important to note that there is a vast difference between a “property manager” and a licensed community association manager. Directors should never instruct a CAM to bypass board votes, nor to carry out any directive that may conflict with the governing documents or state law. CAMs are specifically empowered to refuse any illegal directives. CAMs provide a great service, but they must be used properly and within an appropriate framework.
A qualified and effective CAM can make a director’s life a lot easier. CAMs, by nature of their education, training, and experience, have a base of knowledge that most part-time, volunteer directors simply do not. While a CAM cannot provide legal advice, and should not be considered a satisfactory replacement for qualified legal counsel, they can guide and assist boards with a wealth of common problems and duties. In situations where an association has a qualified and long-serving CAM, the board may not even have to consider meeting notice requirements, election deadlines, or some of the other detailed governance issues that the board would have to refer to the governing documents to find.
Not every individual CAM or CAM firm is the right fit for every community, and any board should be encouraged to interview and consult with multiple options before agreeing to hire anyone. Further, an association’s board is ultimately responsible for the operation of the association, and failure to properly instruct and supervise a CAM can result in problems. CAMs can be an association’s best friend, but only if the CAM is licensed, understands the community, and is properly supervised and instructed.
Helpful tips for new directors.
Directors have specific duties, and from those duties, a lot of operational responsibility. The most effective director is a well-informed, interested, and functional one; to that end, here are some helpful tips for new directors:
Above all else, remember that you are not alone. Boards can and should rely on attorneys, CAMs, accountants, engineers, and other professionals whenever the board does not have enough information to make an informed decision on its own. A quick call to the right professional is almost always cheaper than unwinding a mistake that could have been avoided. When in doubt, ask for help early.
Next, remember that board meetings can accidentally happen, and all decisions need to be made at properly noticed meetings. Any time a quorum of the board of directors meets and discusses association business, a meeting happens. A board can meet and have dinner, so long as the directors do not discuss association business. Similarly, fewer directors than constitute a quorum can get together and talk about association business (though this is still not recommended). But once a quorum is assembled and business is discussed, you are having a meeting. A meeting that isn’t properly noticed and open to the membership may result in association and individual director liability. This is easily avoided; don’t do it.
Another thing to remember is that, no matter how silly or minute a specific requirement may seem, it may end up being incredibly important down the road. For example, if the association has to provide 14 days’ notice before a specific meeting, and only gives 13 days’ notice, that one day can result in the entire meeting, and any decisions made at that meeting, being invalidated and redone. Familiarize yourself with the governing documents, and be detail-oriented. An association’s CAM or attorney can be your best friend regarding issues such as these.
It should go without saying, but also ensure you avoid conflicts of interest. If someone is about to receive an incentive as a result of an association agreement or action, that incentive needs to be discussed and considered by the board. There is a statutory process for reviewing, and even approving, conflicts of interest. It is the act of concealment that leads to problems. Every year, the legislature pushes associations to be more transparent in their operations, and specifically in accounting. Openness and honesty in governance will protect the board and its directors from being sued. Put most simply, don’t try to hide anything from the board or membership.
Please also remember that, even though your association may be small or informally run, it is a corporation. By law, every document pertaining to the operation of an association is an official record, which can be accessed by the owners. To be safe, imagine that every owner in your community is reading every email and text message you send. If you’re writing something you wouldn’t want every single other owner to read, go back and fix it before hitting the “send” button.
Finally, and because it is worth saying again, rely on professional advisors. A director who acts in good faith, stays informed, and relies appropriately on qualified professionals is in a much better position to satisfy fiduciary obligations and reduce personal risk. By contrast, decisions made without adequate information or appropriate professional guidance can create problems for the association and, in some circumstances, for individual directors. The better practice is simple: get informed before you vote.
Serving on a Florida community association board can feel overwhelming at first, but the role becomes more manageable when directors understand the corporate nature of the association, their fiduciary duties, the governing-document hierarchy, and the importance of relying on qualified professionals. This guide is only a starting point, but it should give new directors a practical framework for asking better questions, finding the right documents, and making more informed decisions on behalf of the community.
Coming next in Part V of this series, we will discuss an association’s official records, a board’s responsibilities in relation thereto, and how a CAM can be effective throughout that process.
