Florida community associations typically have the right under their governing documents to regulate and approve leases and tenants. However, some association boards of directors are under the misconception that they can easily develop and implement new leasing restrictions via a board vote, and that they have the authority to approve or reject prospective tenants as they please without facing any scrutiny of their decisions.
As my colleague Laura Manning-Hudson wrote in this blog in her June 9 post titled “Suit Against Boca Condo Association Spotlights Importance of Governing Document Amendments, Filings,” a lawsuit filed earlier this year against Boca Pointe Condominium Association highlights the importance of properly adopting leasing restrictions to an association’s governing documents and recording them in the local court registry where the association is located.
According to the suit, the association’s new leasing restriction, which it apparently adopted via a simple vote of the board the directors, was never approved by all the unit-owner association members via a formal vote. The only leasing restriction in the association’s recorded declaration states that owners are only restricted from renting units for terms of less than thirty days, contradicting the new restriction that the board tried to implement. If the allegations in the lawsuit hold up in court, the association could be forced to pay the plaintiff unit-owners’ lost rental income and legal bills.
This case illustrates just one of the many reasons why it is essential for community associations considering new lease restrictions to work in close consultation with extremely well qualified association attorneys. Highly experienced community association counselors can quickly ascertain if any proposed changes require amendments to the governing documents or whether they may be enacted by a simple board vote. We can also develop the exact language that should be used for their implementation and any amendments to the governing documents, and many of us are also familiar with new online tools that help to facilitate votes of the entire membership as required for such amendments.
Some declarations and bylaws for Florida communities provide associations with a right of first refusal, enabling them to accept the same terms and conditions for any good-faith lease offer that a unit-owner receives and is willing to accept. This is different from approvals and rejections of prospective tenants, which should always be conducted under the careful guidance of qualified professionals to help avoid any potential legal and financial liabilities.
Firstly, associations need to ensure that they meet the deadlines and procedures set for tenant reviews under their own governing documents. They also need to take precautions to keep secure the personal data and records obtained in all tenant applications, and they should be mindful to maintain any application fees consistent with the limit set under Florida law.
In addition, it is imperative for associations to base their decisions on legitimate factors as provided within the policies set forth in their governing documents, including but not limited to matters such as credit worthiness, evictions, criminal records, interviews with past landlords, and others.
In today’s age of short-term rentals and eviction moratoriums, there are many reasons for associations to wish to update their restrictions for lease terms and tenant reviews. By doing so under close consultation with highly qualified legal counsel, associations can move confidently to develop and implement the policies and protocols that make the most sense for their community.