HOAs & Condos: When is a verbal resignation valid?

HOAs & Condos: When is a verbal resignation valid?

In representing condominiums (condos) and homeowners’ associations (HOAs), I am often asked whether the resignation of a board member or officer is valid. Invariably, the person in question has either announced “I quit” at an open meeting, or simply told another officer of the fact. Is a verbal resignation from the board of a non-profit HOA or condo valid?

The answer to is emphatically NO, unless the bylaws or articles of incorporation expressly allow it. In my experience, community association governing documents generally reference resignation, but do not spell out how it should to occur. If that is the case with your association, the issue is governed by the Florida Not For Profit Corporation Act (Chapter 617, Florida Statutes). Two provisions are relevant. The first is Section 617.0807(1), which states that “[a] director may resign at any time by delivering written notice to the board of directors or its chair or to the corporation.” The second is Section 617.0141(1), which requires any “[n]otice under this act to be in writing, unless oral notice is: (a) expressly authorized by the articles of incorporation or the bylaws.”

When read together, these statutes require a resignation to be in writing unless the association’s bylaws or articles of incorporation expressly allow a verbal resignation. Recent arbitration decisions issued by the Florida Department of Business and Professional Regulations arrive at the same conclusion.

• Sanville v. Venetian Mgmt. Assn., Inc., Case No. 16-04-7565, 2016 WL 7667624, at *3 (Fla. D.B.P.R. Summary Final Order, Nov. 17, 2016) (“Since oral resignations are not explicitly authorized by the Association’s governing documents, resignations from the Association’s board of directors must be in writing and properly delivered to the Association to be effective.”)
• Brand v. Sundance Assn., Inc., Case No. 16-00-5242, 2016 WL 4939974, at *2 (Fla. D.B.P.R. Summary Final Order, July 6, 2016) (“Since oral resignations are not explicitly authorized by the Association’s governing documents, resignations from the Association’s board of directors must be in writing and properly delivered to the Association to be effective. Therefore, Petitioners’ verbal resignations at the November 17, 2015 board of directors meeting were ineffective.”)
• WPB Berkshire a Condominium, Inc. v. Unit Owners Voting for Recall, Case No. 05-04-7905, 2005 WL 3966672, at *4 (Fla. D.B.P.R. Summary Final Order, Oct. 11, 2005) (“Mr. Gilbert erroneously believed that Mr. Ostrovsky had resigned because of certain comments that Mr. Ostrovsky made to Mr. Gilbert. Mr. Ostrovsky did not submit a letter of resignation as required by § 617.0807(1), Florida Statutes, and he has continued to serve as a board member.”)

In sum, for HOAs, condos and other non-profit community associations, “I quit” is not generally enough. Make sure the resignation is in writing and specifies the date it is to be effective.  Otherwise, we might not know who is actually on the board!

CONGRATULATIONS TO THE 2020 TEACHER AND SCHOOL EMPLOYEE OF THE YEAR!

Boswell & Dunlap LLP was thrilled to continue its sponsorship of the 2020 Polk County Public Schools Teacher and School-Related Employee of the Year Program.  Congratulations to Dr. Vincent Miller, Kay Llewellyn, and each of this year’s finalists.  The firm is proud to be associated with this annual event honoring those who make the difference in the lives of our children.

Parker Named President of Polk Area Real Estate Council

Boswell & Dunlap LLP is pleased to announce that Sean R. Parker has been appointed president of the Polk Area Real Estate Council. The council connects real estate attorneys and professionals throughout Polk County and beyond to provide education, information and resources to consumers and our real estate community, to enhance the practices of real estate attorneys, and to make each real estate experience a successful, positive and rewarding one. Sean’s appointment continues the firm’s century-long commitment to our local real estate community.

Spangler Appointed as Polk County Special Magistrate

Boswell & Dunlap LLP is pleased to announce that Attorney Jillian T. Spangler has been appointed Alternate Special Magistrate by the Polk County Board of County Commissioners. As Alternate Special Magistrate, Ms. Spangler will preside over Code Enforcement Public Hearings. She will have the authority to determine, based upon the evidence and testimony presented, if a code or ordinance violation has occurred. Ms. Spangler’s appointment as Alternate Special Magistrate continues this firm’s long history of service to Polk County’s local governments, and the citizens they serve.

Chilton to Host Lakeland HOA Seminar

On January 24, 2020, Robert Chilton will host a free HOA seminar at the Lakeland Public Library on Lake Morton. The event, which begins at 3:00 p.m., will focus on legal issues facing Florida homeowners’ associations and include topics such as meeting procedures, estoppel requests, covenant enforcement and statutory updates. Mr. Chilton has been certified to provide HOA board member education courses by Florida’s Department of Business and Professional Regulation.

All are welcome. However, as space is limited, please contact the firm by January 20, 2020 to reserve your place.

Merry Christmas and Happy Holidays from Boswell & Dunlap LLP!

On December 5, 2019, the firm was pleased to join with the Greater Bartow Chamber of Commerce in hosting, once again, a Very Merry Holiday Celebration.  Many thanks to the chamber, the Grove in the Swamp BBQ Team, all of the elves at Terrie Lobb Catering and, of course, to Mr. Clause for making the long trip down from the North Pole.  The event was a great success.

Boswell & Dunlap Sponsors Polk State College’s Wine for Wisdom Fundraiser

September 13, 2019 – Boswell & Dunlap LLP was elated to help sponsor the Polk State College Foundation’s Tenth Annual Wine for Wisdom fundraiser!  The sumptuous California-themed event, which took place on September 12, 2019 at Polk State’s Winter Haven campus, was a smashing, sold-out success.  Since its inception in 2010, Wine for Wisdom has raised more than $425,000 in student scholarships.  Boswell & Dunlap LLP is privileged to be associated with such an important occasion.

From left: Robert Chilton, Annette Chilton, Jillian Spangler, Drew Crawford

Congratulations to the Winners of the 2019 Polk Emerging Leader Awards

Front row from left: Keith Miller, Chris Miller, Annette Chilton; Back row from left: Sean Parker, Melony Bell, Jillian Spangler, Robert Chilton, Mark Delaney

Boswell & Dunlap LLP congratulates the nominees and winners of the 2019 Polk Emerging Leader Awards.  The firm is proud to support the annual event, held in Bartow, and put on by the Winter Haven Chamber of Commerce in coordination with Endeavor Winter Haven, Emerge Lakeland and Engage Bartow.  This event annually recognizes five emerging leaders from across Polk County for their contributions to our community, both personally and professionally.

HOAs! Beware The Marketable Record Title Act (MRTA)

For unwary homeowners’ associations, a danger is lurking beneath the water’s surface.  If one is not careful, it will strike, swallowing whole a community’s restrictive covenants.

I speak, of course, of MRTA, which was enacted to simply real estate transactions.  Before MRTA, a Florida parcel’s title history would theoretically need to be researched back to the initial Spanish land grants.  MRTA streamlines that process, providing that certain interests in land are extinguished after 30 years, with limited exceptions, unless those interests are preserved in the manner provided by law. In essence, MRTA eliminates stale claims against property.  These can include an HOA’s recorded Declaration of Covenants, Conditions and Restrictions (“CCRs”).

The yardstick for MRTA is the “root of title”.  The term “root of title” means “any title transaction purporting to create or transfer the estate claimed by any person which is the last title transaction to have been recorded at least 30 years before the time when marketability is being determined.”   § 712.01(6), Fla. Stat.  Under MRTA, “when a record owner, alone or with its predecessors in title, has been vested with an estate in land of record for 30 years or more, such owner has marketable title free and clear of all claims [and restrictions] except matters preserved by section 712.03.”  Martin v. Town of Palm Beach, 643 So. 2d 112, 114 (Fla 4th DCA 1994).

If MRTA has not already extinguished a community’s CCRs, the HOA has several options to preserve them, including:

1. Formal Notice – By recording a formal notice preserving the CCRs, following written notice to each affected owner, pursuant to §§ 712.05(2)(a) and 712.06.
2. Summary Notice – By recording a summary notice of preservation approved by the board of directors pursuant to §§ 712.05(2)(b) and 720.3032(2); or
3. Valid Amendment – By recording an amendment to the CCRs that is indexed under the association’s legal name and that references the recording information of the CCRs to be preserved pursuant to § 712.05(2)(b).

If MRTA has extinguished the CCRs in a neighborhood, covenant revitalization is possible. §§ 720.403-720.407.

Officers and directors must be wary.  They may not turn a blind eye to MRTA.  The Homeowners’ Association Act now requires that each year, at its first board meeting (excluding an organizational meeting to select officers) following the homeowners’ annual meeting, the board of directors “shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act[.]”  § 720.303(2)(e).  Failure to do so could, in certain circumstances, be construed as a breach of the duties each association, director and officer owes homeowners.

In short, beware of MRTA.  Ask your attorney to conduct a MRTA analysis.  If steps have not been taken to preserve your community’s CCRs, action may be needed.

Firm Sponsors Bartow Kiwanis Cryin’ Towel Event

Boswell & Dunlap LLP was thrilled to sponsor the 5th Annual Bartow Kiwanis Cryin’ Towel, which was held at the Bartow Civic Center on August 1, 2019. The event is the signature fundraiser for the Bartow Kiwanis Club, enabling them to serve the children of Bartow. Firm member Savannah Young Cerullo has served on the Kiwanis’s Cryin’ Towel Committee since the club revived the tradition in 2014. Over 300 were in attendance this year. Congratulations to this year’s winner, Bartow’s own Coach Tate, and to the Bartow Kiwanis Club for a great event!

From Left: Annette Chilton, Robert Chilton, Jillian Spangler, Savannah Young Cerullo