As of July 1, 2013, many new laws concerning community associations went into effect. If you serve on a homeowners’ association board, there is a new law on the books you might want to discuss at the dinner table. Well, that may not be the best place because, if you are not careful, it might be your last meal as a homeowners’ association board member. Florida Statute, section 720.3033, now provides, in part that,
“an officer, director, or manager may not solicit, offer to accept, or accept any good or service of value for which consideration has not been provided for his or her benefit or for the benefit of a member of his or her immediate family from any person providing or proposing to provide goods or services to the association…
However, an officer, director, or manager may accept food to be consumed at a business meeting with a value of less than $25 per individual or a service or good received in connection with trade fairs or education programs.”
As punishment for eating a meal costing $25.00 or more, the new law takes an odd twist. The remaining board members now have the legislative authority to “kick” the accused board member off the board for enjoying a business meal costing $25.00 or more. (It’s ok, your eyes are not playing tricks. It is true.) Read it for yourselves…. section 720.303 also provides,
“If the board finds that an officer or director has violated this subsection, the board shall immediately remove the officer or director from office. The vacancy shall be filled according to law until the end of the director’s term of office.”
In an even odder twist of fate, the law does not provide any guidance whatsoever as to how the remaining board members are to decide the guilt or innocence of the accused violator. Should the standard be “beyond a reasonable doubt” (meaning without a doubt.. 100% guilty), “by a preponderance of the evidence” (meaning greater than 50% chance the accused is guilty or maybe the standard should be “clear and convincing evidence” (meaning that the burden of proof is somewhere in between the former two categories). Come to think about it, is the accused board member even entitled to any type of notice of the accusations, hearing, and trial? Is the accused board member entitled to defense?
An interesting question is whether the $25.00 limitation also applies to a “service or good received in connection with trade fairs or education programs”? A plain reading of the new legislation could be interpreted to mean that there is no limit on the value of the good or service received in connection with a trade show or fair. It’s not too likely that was the intent of the legislation, but…
On a related note, if the association enters into a contract or other transaction with any of its directors, or a company in which any of its directors are financially interested, the new legislation provides that the board must enter certain disclosures required by law into the written minutes of the meeting. In addition, the board must approve the contract by an affirmative vote of two-thirds of the directors present, compared to the typical majority otherwise required.
Then, at the next regular or special meeting of the members, the board must disclose the existence of the contract to the members. Upon motion of any member, the contract must be brought up for a vote and may be canceled by a majority vote of the members present. If the members cancel the contract, the association is only liable for the reasonable value of goods and services provided up to the time of cancellation, and is not liable for any termination fee, liquidated damages, or other penalty for such cancellation.
With all of this in mind, homeowners’ association board members would be wise to bring a box lunch and eat dinner at home.