Foreclosure Funds, Presidential Powers, Non-Owners at Meetings, and Attorney-Client Privilege NEW NEIGHBORHOODS

Transcription

1 NEW NEIGHBORHOODS Foreclosure Funds, Presidential Powers, Non-Owners at Meetings, and Attorney-Client Privilege BY GARY A. POLIAKOFF, J.D. AND RYAN POLIAKOFF DEAR POLIAKOFFS, In the event that a property goes to a foreclosure auction, and it sells for higher than the amount the bank is owed, and assuming that all other liens are satisfied, is it true that any money left over goes back to the person whose title was foreclosed? C.H. 50 January 2014 FLCAJ

2 DEAR C.H., You are absolutely correct. The situation you describe is extremely rare why would a person whose home is worth more than their mortgage not simply sell the home, or at least negotiate a short sale? But, assuming the fact pattern you ve described (a first-inline mortgagee forecloses a lien and the sale price is greater than the debt owed), all monies left after costs, fees, etc., would go to the original owner. The mortgagee doesn t get a windfall because they foreclosed on the property. DEAR POLIAKOFFS, Our HOA president says he is able to make HOA decisions on his own. I disagree. I contend all decisions must go through and be acted on by the board. What are the responsibilities of the HOA president, and how much individual power does he/she have? S.M. DEAR S.M., The officers of an HOA or condominium only have as many or as few powers as are granted to them in the governing documents, or as are designated by the board. The Florida statutes do not contain specific guidance as to the powers of particular officers the Not for Profit Corporations Act simply states generally that each officer has the authority and shall perform FLCAJ January

3 the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of any officer authorized by the bylaws or the board of directors to prescribe the duties of other officers. So, the simple fact of being a president, or any other officer, does not confer a particular right to make decisions on behalf of the association. It all depends on what is contained in your bylaws and articles of incorporation. But even more, if this is an issue, why not simply remove the president from his office? Officers generally serve at the pleasure of the board and may be removed from office at any time, for any reason. If the majority of your board does not want the president acting on his own authority, simply remove him from power. If the majority of the board does not mind the president making decisions on behalf of the board, than it is essentially (though perhaps not officially) giving him those powers. DEAR POLIAKOFFS, We have a former owner, who sold his condominium unit, and he purchased a new unit in another complex under construction but he is currently renting a unit in our complex until the new one is completed. This former owner, now a renter, continues to attend annual owners meetings, regular board meetings, and 52 January 2014 FLCAJ

4 committee meetings. This individual has neither proxy powers nor a power of attorney. Are board meetings and annual owners meetings open to nonowners or guests to attend? What are the guidelines for non-owner attendance? Is there a particular statute that regulates this policy? Last, since the meetings are held in a common area clubhouse, does this impact the attendance for non-owners? P.R. DEAR P.R., First, keep in mind that a community association is a private corporation, made up of member-owners. It is not a government, and it is not public. So, to ask if a non-member can attend either a board meeting or a membership meeting is like asking if you can simply walk into a board meeting of some private commercial company or taken more broadly whether you can crash a dinner party in someone s home. The answer to both, as you can imagine, is clearly no. The answer is the same in a condominium or HOA. The statutes governing condominiums and HOAs simply state that all meetings are open to unit owners. There is nothing that specifically states that they are not open to other people, but again, these are private meetings of private corporations. The association has no obligation to allow anyone to attend a corporate meeting unless required by the FLCAJ January

5 governing documents or some statute and, pretty universally, that right only extends to owners. So, as soon as this owner sold his unit, he was no longer entitled to attend any meeting of the association, whether a member meeting, a board meeting, or a committee meeting. Now, if he had a power of attorney to specifically attend such meetings in lieu of an owner that would be a different story. Or, the association could certainly choose to allow non-owners to attend meetings, but it s probably not a good idea, as it may waive a privilege that protects defamatory comments made at private corporate meetings. Finally, the fact that a meeting is held in a public clubhouse does not change this analysis. The clubhouse is not really public, it is private property either owned by the owners in concert or by the HOA association. It is certainly not public in the same way as a library or a courthouse. DEAR POLIAKOFFS, I have read your book, and I look forward to your column of advice on solving the problems that both the board and the memberships have. Thank you for your years of advice. Over the last few years, our board and some of our association s members have been at odds over what is and is not protected under the attorney-client confidentiality privilege. What can and cannot be discussed in public? How should the minutes of 54 January 2014 FLCAJ

6 these meetings be handled? What should happen to anyone who breaks these rules? Can you give us an explanation in laymen s terms that will help clarify the matter? Thank you again for your years of trying to make us read, understand, and abide by our documents. N.T. DEAR N.T., A great question! The general answer is actually pretty simple any communication between a lawyer and a client (which would include an association board or its agents, such as a property manager), not intended to be seen by a third party (other than in furtherance of rendering legal services, or needed to transmit the communication for example, a telegraph operator), are protected by the attorneyclient privilege. This means that the client may refuse to turn over those documents, whether in a court of law or, for example, upon an inspection request by a homeowner. It does not, however, mean there is some crime associated with disclosing such documents. Gary A. Poliakoff and Ryan Poliakoff are co-authors of New Neighborhoods The Consumer s Guide to Condominium, Co-Op and HOA Living. Gary Poliakoff is a Founding Principal of Becker & Poliakoff, P.A., and Ryan Poliakoff is a Senior Counsel at Sachs Sax Caplan, P.L. questions to condocolumn@ gmail.com. Please be sure to include your hometown. FLCAJ January