Technology | Rembaum's Association Roundup

June 9, 2021October 14, 2022

Should Emails Between Board Members & Managers Be Considered Official Records Subject to Members Inspection?

Disclaimer: In January 2022 the The Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation issued an opinion which drastically alters the information provided herein. Please consult with an attorney of your choosing to obtain the latest guidance in this ever evolving area.

In today’s instant world, email allows us to express our thoughts anytime, anywhere. So often, emails serve as a substitute for making phone calls. If a phone call is made from a board member to a manager, absent a deposition of either party or a contemporaneous note documenting the conversation, the content of the communication remains private. But, if the board member sends an email rather than calling the manager, that email is considered a written record of the association and is required to be produced as a part of a member’s official record request, with limited exception as discussed below.

With the sheer volume of emails received by a manager from owners, board members, purchasers, contractors, and lawyers, etc., there is no practical method of separating the emails which must remain confidential. This includes emails with respect to attorney-client privileged matters, personnel matters, information obtained in connection with a sale or lease, social security numbers, and medical information, etc., and separating these emails cannot occur without the manager or hired professional spending hours and hours and hours preparing such records for a member’s requested official record inspection primarily at the association’s expense. Moreover, if an outside professional is needed to prepare the emails for inspection, then the association will not be able to recoup the expenditure. While a condominium association cannot charge any amount to prepare for the inspection, a homeowners’ association is limited to $20.00 per hour for administrative time expended to retrieve requested records. Clearly, this needs a legislative remedy!

Generally speaking, for an association’s needs to be met, there must be solid communication between the board and the manager. However, requiring all but privileged and confidential emails to be official records subject to membership inspection stifles that free flow of communication. That said, it is understandable that some emails should be subject to a member’s inspection request, such as with regards to a bid package or contract.

More often than not, the emails to and from the manager are actually the property of the management company by whom the manager is employed. Absent discovery that takes place during litigation, typically a company’s emails are the private property of the company. A shareholder of General Mills’ stock cannot demand to see the president’s emails to its manager, so why should the community association president’s email to the manager be required to be produced? After all, overwhelmingly, community associations are “not-for-profit” corporations. At the end of the day, the need for transparency needs to be balanced against the practicality and costs of producing the emails.

There is limited guidance from the State of Florida Office of the Attorney General and the Division of Florida Condominiums, Timeshares, and Mobile Homes regarding the production of such emails. Let us take a look at the limited guidance we do have.

On March 6, 2002, the then-Chief Assistant General Counsel of the Department of Business and Professional Regulation (“DBPR”) issued an opinion that “[c]ondominium owners do have the right to inspect e-mail correspondences between the board of directors and the property manager as long as the correspondence is related to the operation of the association and does not fall within the… statutorily protected exceptions… [The DBPR does not have] regulations expressly requiring archiving e-mails, but… if the e-mail correspondence relates to the operation of the association property, it is required to be maintained by the association, whether on paper or electronically, under Chapter 718, Florida Statutes.”

In Humphrey v. Carriage Park Condominium Association, Inc., Arb. Case No. 2008-04-0230 (Final Order / Campbell / March 30, 2009), an arbitrator of the Division of Florida Condominiums, Timeshares, and Mobile Homes held that “…e-mails… existing… on the personal computers of individual directors… are not official records of the association… Even if directors communicate among themselves by e-mail strings or chains about the operation of the association, the status of the electronic communication on their personal computer would not change. Similarly, an e-mail to an individual director or to all directors as a group, addressed only to their personal computers, is not written communication to the association.” The arbitrator reasoned that “[t]his must be so because there is no obligation to turn on [the] personal computer with any regularity, or to open and read emails before deleting them.”

In Harbage v. Covered Bridge Condominium Association, Inc., Arb. Case No. 19-03-6413 (Emails Are Written Records of Association Order Re-Framing Affirmative Defenses / Simms / January 2, 2020), an owner challenged an association’s failure to provide records requested pursuant to §718.111(12), Florida Statutes. The owner requested to inspect emails between the association and its property manager from 2017–2019. The association refused to provide the records, arguing that the emails were not written records subject to disclosure nor were they written records that are printed in the ordinary course of business. The arbitrator in the case dismissed the association’s argument that the emails were not written records, citing Black’s Law Dictionary, 11th Edition (2019), which explicitly includes emails in the definition of a “writing.” Additionally, the arbitrator pointed to the fact that emails are accepted in litigation as records of regularly conducted business activity pursuant to §90.803(6)(a), Florida Statutes, to dismiss the association’s claim that the emails are not subject to inspection because they are not printed in the ordinary course of business. The arbitrator held that the association’s position was “untenable on both counts,” finding that “emails are a written record subject to disclosure to unit owners.”

Simply stated, if one were to rely on the guidance cited herein, then emails solely between board members, even a board majority, are not part of the official records, but emails between a board member(s) and the manager are part of the official records and subject to member inspection unless containing information that is otherwise privileged or confidential. All other emails not protected by privilege or other duty of confidentiality are also subject to member inspection.

Where does it end? What about text messages and WhatsApp? Will they, too, one day be subject to inspection? Why one without the other? Better still, if text messages are not subject to member inspection, why should emails be subject to inspection? If emails remain subject to inspection, should not phone calls between board members and managers be statutorily required to be recorded? Why not? Because such a requirement is absurd.

In addition, what is missing from today’s legislation are laws protecting the free flow of communication between board members and the manager. Also patently missing from today’s legislation is the ability of the association to require the member requesting the record inspection to prepay for the actual time and cost necessary to prepare the records for inspection.

So, while it may make sense for certain vendor emails to remain as records of the association subject to member inspection, it is this author’s opinion that emails between the board and the association’s manager should remain private property of the sender and recipient, most especially if the manager’s computer is provided by the management company and not the association. However, if emails between board members and managers are going to remain as records which must be produced, absent privilege and confidentiality requirements, then at a minimum the association should at least be allowed to fully recover its expenses incurred in the record inspection. Perhaps a present or future Florida legislator will sponsor a long overdue bill to provide the association the lawful right to do so.

(Reprinted with permission from the May 2021 edition of the Florida Community Association Journal)

January 7, 2021October 13, 2021

Hosting Virtual Meetings via Zoom | What You Need to Know

The most asked question of 2020 is this: Can our association host our board and annual meetings using Zoom or another similar virtual/electronic platform? There is no doubt that technology will always advance faster than legislation. In fact, advances in technology seem to take place in light speed where as advances in legislation seem to travel at the speed of your average turtle.

As to board meetings, §718.112(2)(b)5 of the Condominium Act provides, “A board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members attending in person as well as by any unit owners present at a meeting.” Note that similar provisions are provided for cooperative associations in §719.106(1)(b)5 and in §617.0820 for homeowners’ associations.

As to virtual membership meetings, Chapter 617 Florida Statutes, applicable to all of Florida’s not-for-profit community associations, provides in §617.0721(3) that if authorized by the board of directors, and subject to such guidelines and procedures as the board of directors may adopt, members and proxy holders who are not physically present at a meeting may, by means of remote communication participate in the meeting and be deemed to be present in person and vote at the meeting if the corporation implements reasonable means to verify that each person deemed present and authorized to vote by means of remote communication is a member or proxy holder; and the corporation implements reasonable measures to provide such members or proxy holders with a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrent with the proceedings. If any member or proxy holder votes or takes other action by means of remote communication, a record of that member’s participation in the meeting must be maintained by the corporation in accordance with §617.1601. [emphasis added]

In addition, the Condominium, Homeowners Association, and Cooperative Acts (Chapters 718, 720, and 719, Florida Statutes, respectively), provide that members have a right to speak during board and membership meetings (more on that below). In fact, each of the Acts also provide that board members can even communicate, but not make decisions, via email. Rule 61B23.001(2) of the Florida Administrative Code provides, in relevant part, that “all unit owners have the right to attend and observe all meetings of the board…” With this limited guidance as our backdrop, let’s ask the question slightly differently.

Can our association host our board and annual meetings via Zoom or another electronic platform so long as all members have their opportunity to speak at the relevant times and all other statutory requirements are followed, such as a speakerphone in the designated meeting location for condominium association board meetings? The answer, simply put, is “yes,” you can.

It is extremely important when planning on hosting the meeting through a Zoom-type platform that you think ahead about the implications. The type of vote that will occur at any membership meeting must be carefully considered. For example, what if there is an election and members have not yet opted to vote electronically? Provisions must be made to gather ballots up to the closing of the balloting at the membership meeting and for write-in candidates, too, as applicable (in a homeowners association type setting). Instructions must also be clearly provided to the members letting them know how the votes will be counted and ensuring the membership that they can observe the entire tabulation of the voting process. For example;

Dear Members, In accordance with s. 720.316, Florida Statutes, in order to protect the health, safety, and welfare of the Association’s members, except for the members who volunteer to assist with the tally of the ballots (along with the management team and the Association’s legal counsel), there will be NO in-person attendance at the annual meeting. Although there will be no in-person attendance, the annual meeting will be broadcast through Zoom (online video conferencing) for those who wish to remotely attend and observe the annual meeting, including the tallying of ballots. You may join the Zoom meeting at the appointed time by using the following link in your web browser: ___________ or through the Zoom application on your smart phone or tablet with Meet- ing ID: __________ and entering the following Password: ___________.

Since we are on the subject of board and membership meetings and we are in “election season,” as it is affectionally referred to, let’s take a quick look at meeting notice requirements, eligibility, and terms for board of directors, vacancies, election disputes, and a members’ right to speak.

BOARD MEETING NOTICE REQUIREMENTS

Pursuant to §718.112(2)(c)1, 719.106(1)(c), and 720.303(2)(c), Florida Statutes, notice of a meeting of the board must be posted in a conspicuous place on the property at least 48 continuous hours preceding the meeting, unless the governing documents of the association require additional notice. However, notice of meetings of the board at which regular or special assessments against unit owners or at which amendment to the rules regarding unit use will be considered must be mailed, delivered, or electronically transmitted to the owners and posted conspicuously on the property not less than 14 days before the meeting. Remember, too, electronic transmission is only permitted if the owner provides prior written consent.

As discussed in more detail below, for annual meetings of the membership where an election will be held, the notice requirements for condominium and cooperative associations differ from the requirements for homeowners associations. However, for other meetings of the members, unless a homeowners association’s bylaws provide differently, the notice requirements are the same. Pursuant to §718.112(2)(d)3 and 719.106(1)(d), Florida Statutes, notice of a meeting of the membership must be given to each owner and posted in a conspicuous place on the property at least 14 days before the meeting. For homeowners associations, pursuant to 720.306(5), Florida Statutes, notice of meetings of the members must be given 14 days prior to the meeting, unless the bylaws provide differently. For meetings of the members where an election will be held, pursuant to §718.112(2)(d)4 and 719.106(1)(d)1, Florida Statutes, the first notice of the annual meeting of the membership must be sent to the members at least 60 days prior to the meeting, and the second notice must be provided at least 14 days to the members and posted conspicuously on the property at least 14 days in advance before the meeting. For homeowners associations’ annual meetings, notice must be provided at least 14 days before the meeting unless the bylaws provide differently pursuant to §720.306(5), Florida Statutes.

ELIGIBILITY AND TERMS FOR BOARD OF DIRECTORS

The eligibility requirements for board members are set out in §718.112(2)(d)2, 719.106(1)(a), and 720.306(9)(b). Pursuant to the foregoing, a person who is delinquent in the payment of any fine, fee, or other monetary obligation to the association is not eligible to be a candidate for the board. Additionally, any person who has been convicted of a felony is not eligible to serve on the board unless the person’s civil rights have been restored for at least five years. With the passage of Amendment 4, voting rights were restored to people convicted of a felony. It is unclear what impact Amendment 4 will have on the restrictions to eligibility for board members.

Additionally, condominium associations should be aware that §718.112(2)(d)2 was amended to provide that a board member may not serve more than eight consecutive years unless approved by two-thirds of all votes cast in an election or if there are not enough eligible candidates to fill vacancies on the board. However, this provision applies prospectively, which means the clock did not start until the law went into effect on July 1, 2018. Additionally, this only prohibits eight consecutive years of service. If a board member has a break in service, then the clock would begin again.

For condominium and cooperative associations with 10 or more units, co-owners of units are not eligible to serve on a condominium board unless they own more than one unit or unless there are not enough eligible candidates. This is not applicable to homeowners associations.

Governing documents may provide that you must be an owner to serve on the board, but generally they cannot establish other eligibility requirements, such as residency requirements.

VACANCIES

In the event of a vacancy on the board, pursuant to §718.112(2)(d)9, 719.106(1)(d)6, and 720.306(9)(c), unless the bylaws provide otherwise, the vacancy may be filled by the affirmative vote of a majority of the remaining directors, even if the remaining directors constitute less than a quorum, or if there is only one director remaining. In the event there is only one director remaining on the board, that director can choose to appoint people to fill all of the vacancies.

ELECTION DISPUTES

Election disputes for condominium, cooperative, and homeowners associations are handled by the Florida Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares, and Mobile Homes (the “DBPR”) through mandatory arbitration in accordance with §718.1255(1), 719.1255, and 720.311(1), Florida Statutes. Pursuant to §718.112(2)(d)4.c, 719.106(1)(d)1.a, and 720.306(9)(a), any challenge to an election must be brought within 60 days after the election results are announced. Additionally, a board member cannot be subject to a recall when there are 60 or fewer days until a scheduled election, or when 60 or fewer days have not elapsed since the election of the board member sought to be recalled.

MEMBER PARTICIPATION

Members have a right to speak at meetings of the membership. Pursuant to §718.112(2)(c) and 719.106(1)(d)4, Florida Statutes, members of condominium and cooperative associations have the right to participate in meetings of the unit owners with reference to all designated agenda items. Pursuant to §720.306(6), members of a homeowners association have the right to speak with reference to all items opened for discussion and all items included on the agenda. In other words, in a homeowners association, members can speak on any matter that was opened for discussion, even if the matter was not listed on the agenda for the meeting. Additionally, §720.306(6), Florida Statutes, provides that a member must be allowed at least three minutes to speak on any item.

Members also have a right to speak at meetings of the board of directors. [Pursuant to §718.112(2) (d)7 and 719.106(1)(c), Florida Statutes, members of condominium and cooperative associations have a right to speak at board meetings with reference to all designated agenda items. Pursuant to §720.303(2)(b), members have a right to speak at a board meeting with reference to all designated items.]

In all instances condominium, cooperative, and homeowners association boards are authorized to adopt reasonable rules governing frequency, duration, and other manner of member comments for the board and membership meetings. To make the member comments more meaningful, consider permitting them after the board fully discusses each item, prior to voting, and prior to moving on to the next item.

It is recommended you consult with your association legal counsel on the adoption of reasonable rules to ensure your virtual/electronic meetings run smoothly while also ensuring that they are in compliance with the association’s governing documents, Florida Statutes, and Florida Administrative Code.

(Reprinted with permission from the January 2021 edition of the Florida Community Association Journal)

June 2, 2020January 25, 2021

Stay Ahead of the Curve: Lessons in Technology Learned from Covid-19

The statutory emergency powers granted to community associations as a result of the Covid-19 State of Emergency proved to be a valuable resource for the orderly operations of Florida’s community associations. Many associations had to make significant changes to how they conducted the business of their association. For example, holding board meetings via “Zoom” and “GotoWebinar” became invaluable. But, when the State of Emergency is over can annual meetings and board meetings continue to take place on the internet? Sure they can, subject to the important considerations explained below. In addition, what other technologies can be utilized by the board?

In fact, at the present time there are three statutory grants of technology that an association can utilize to make conducting the business of the association easier on a regular basis. They include, holding meetings electronically, voting electronically, and using email as an official means of communication to the members rather than the U.S. Postal Service. Electronic board meetings allow the board to continue conducting the business of the association without putting themselves or others in harm’s way. But even more than that, by attending electronically think of all of the gas that is saved since no one has to drive to the meeting. More than that, think of the extra time spent not driving or walking to the meeting and how it could be used as family quality time or just to relax.

However, if the board chooses to use video conferencing, it is important to remember that the board must comply with the statutory provisions regarding board meetings. The members must receive notice of the meeting pursuant to the bylaws of the association, and in any event, at least 48 hours in advance of the meeting. Additionally, condominium association members must have the right to speak to all designated agenda items and HOA members also get the additional right to speak on any item discussed by the board (this is because from a strict statutory interpretation condominium association boards are only supposed to address what is set out on the agenda, while such restriction does not apply to HOA boards). Remember, there is no exception to the meeting notice requirements and the need to provide opportunity for member comment. Therefore, any video conferencing software the board utilizes must allow members to virtually attend the meeting and have the opportunity to speak.

The second technology that associations can utilize to make life easier is electronic voting. Florida law allows condominiums, homeowners associations, and cooperatives to conduct elections and other owner votes electronically. When an association board adopts electronic voting, each member of the association must opt in, in writing, and can then vote safely from the comfort of their own home. Imagine all of the time saved by punching a computer button to get the tally, rather than counting by hand, in some instances over 1,000 votes!

To adopt electronic voting, the Board must first adopt a resolution authorizing an online voting system. The board resolution must provide that members will receive notice of the opportunity to vote online and must establish reasonable procedures and deadlines for members to consent, in writing, to online voting, and procedures for members to opt out of online voting. Once the board has approved electronic voting, the board must select an online voting system that complies with the requirements of Florida law. The online voting system must be able to do the following: (1) authenticate the owner’s identity, (2) authenticate the validity of each electronic vote to ensure that the vote is not changed during transmission, (3) transmit a receipt to each owner who casts an electronic vote, (4) be able to separate any authentication or identifying information from the ballot when voting must be done by secret ballot, and (5) be able to store and keep electronic votes accessible for recount, inspection, and review purposes.

Please take note that the board cannot force owners to vote electronically. Thus, a necessary step is to obtain each member’s written consent to participate in electronic voting. If an owner does not consent or opts out of electronic voting, then the board must allow that owner to paper vote.

The third technology an association can utilize which saves money, paper and time, is using electronic notices for official association communications. In other words, give up postage stamps in favor of using e-mail. Generally, associations are required to send official notices via mail or hand delivery. However, the association may choose to send notice via e-mail but only if an owner has provided their written consent to receive their notices electronically.

E-mails used for official association communications can only be sent to those owners who consent, in writing, to receive their official notices by electronic transmission. The written consent must specifically authorize the association to transmit notice electronically. An owner who has consented to electronic notice may opt out at any time. The association must retain a roster of the e-mail addresses and the written consents of owners as an official record of the association. The member is responsible to ensure the association’s emails are not blocked or categorized as spam. Failure to receive an email due to a member’s inability to receive the email will not be a valid reason for objecting. Budget adoption notices, annual meeting notices, election notices, board meeting notices and so much more can be provided via email.

Over the last several months, many associations have had to learn how to utilize technology to conduct the business of their association during the Covid-19 pandemic. Some have done so correctly and likely others have not. Thus, in utilizing any of the technology discussed in this article, an important step is to consult with your association’s attorney to ensure proper compliance with all the statutory requirements. Let us also turn a negative into a positive by continuing to use technology to assist the association with smooth operation. Who knows, perhaps one day, there will be a way for members to virtually enjoy the amenities, too. Until then, you’ll find me at the pool deck.

(Reprinted with permission from the June 2020 edition of the Florida Community Association Journal and as written by attorney Jeffrey Rembaum)