Association Developments

Third Quarter Volume XIII

1998

a service provided by Clayton & McCulloh

CONTROLLING LEASING IN YOUR COMMUNITY

Many association documents today provide the association with the right to approve leases. Unfortunately, all too often, this general right is not very explicit. As an example, often the documents neither delineate nor recite exactly what the approval entails or requires. Similarly, documents often fail to recite if the association can condition its approval on:

(1) Certain representations and commitments of the owners;

(2) Certain representations and commitments of the tenants;

(3) Certain remedies by the association;

• The owner and tenant signing a lease form prepared by or agreed to by the association;

• The lease being a written lease;

• The written lease containing certain provisions (e.g., the tenant having received, reviewed and agreed to abide by the governing documents;

see LEASING, pg 2

LIGHTS! CAMERA! ACTION!

IT'S SHOWTIME!

One of the ways to ensure success at your Annual Meeting is to think of it as a Stage Production

It's Showtime! Your annual meeting is the most important meeting of the year and it is your time to shine. Think of your annual meeting as a theater production and your owners are the audience. If the production is appealing, they will attend.

If your community does not have a clubhouse, consider holding your annual meeting somewhere else within the community rather than at an off-site location. For example, if your association has a dry retention pond (and it's not in the middle of the rainy season) you could hold the annual meeting at the retention pond. You can rent an open gazebo type tent (to shield the owners from the sun) and plastic folding chairs at a minimal cost. Don't have a retention pond? Another idea would be to hold the meeting at the end of a cul de sac. By having your meeting within the community, you counter one of the common excuses ("I didn't have a means of transportation to get there") for not attending. The more comfortable the surroundings and easily accessible the location, the more likely the owners will attend the meeting.

see ANNUAL MEETING, pg 3

Volume XIII                               Page Two                         Clayton & McCulloh

GET YOUR FREE LEGAL ADVICE

Seminars now available in five locations

We are proud to announce our 1999 Community Association Law Seminar schedule. Due to popular demand, we are adding two more locations to the 1999 schedule. The following are the dates and locations:

Saturday, January 30 - Daytona Beach -

Adam's Mark Resort

Saturday, February 6 - Melbourne -

Comfort Inn & Conference Center

Saturday, February 20 - Winter Haven -

Admiral's Inn Best Western

Saturday, March 6 - Orlando -

Church Street Station

Saturday, March 20 - Leesburg -

Silver Lakes Golf & Country Club

These seminars will feature our most popular program: "So, You're on the Board! Congratulations & Condolences (How to be a Director)." This marquee program will be the main "attraction." The last time we presented this program, there wasn't even standing room available for the attendees. Also scheduled as "shorts" are Clayton & McCulloh's "Short Term Rentals: Heaven or Hell?" and "Is Your Association About to Expire?" The short term rental portion will cover the pros and cons of having short term rentals in your community and your rights to either have or stop them. This program will be an abbreviated version of our Fall 1998 Seminar. The final topic deals with the Market Record Title Act which could make your Association's governing documents unenforceable. Also, covered in this portion of the program will be the consequences of failing to file your Annual Corporate Report with the State.

Registration begins at 8:30 a.m. The program is 9:30 a.m. - 12:30 p.m. Flyers with more details on these seminars will be mailed out in mid December. As these seminars are always very popular, you are encouraged to make reservations early. Please call Arlene Ring at any of our phone numbers on the first page of this newsletter.

LEASING (from pg 1)

the association being appointed the owners' agent with the right to terminate the lease and evict the tenant for any breach of the governing documents; the owner holding the association harmless from and indemnifying the association for any violation of the governing documents or damages caused by the tenant, including attorney fees and costs for suits against the tenant and/or the owner.

The above constitutes a few of the types of provisions which potentially should be considered in drafting covenants and restrictions.

While associations may not have the clear authority (especially under their documents) to condition approval upon the tenants and the owners committing to specified courses of action and specified remedies in the event of a breach of those actions, this does not necessarily preclude the association from endeavoring to obtain such commitments, obligations and remedies from the owners and tenants. One way to accomplish this is to have your attorney draft a lease application form for the association. Lease application forms often times only have the "bare-bones" information regarding the owners and the tenants. For example, the form may only contain the name, address and telephone number of the prospective tenant and the owner. However, the association may be able to require additional information including such items as where the prospective tenants currently reside, where they previously resided, if they were leasing, who was the landlord, etc. Perhaps more important than obtaining such information, however, is a recitation and understanding that the tenants know about the governing documents for the association and agree to abide by them. Of course, significant additional rights and remedies potentially can be set forth within the lease application form to help insure compliance with the governing documents by the tenant. (See Items 1 through 6 above).

Generally, while we have to customize a lease application form for each particular association and its governing documents, Clayton & McCulloh has endeavored to basically transform the lease application form into a contract between the tenant and the association, as well as a contract between the owner and the association which said contract may afford the association massive rights and remedies in the

see LEASING, pg 3

Volume XIII                                Page Three                       Clayton & McCulloh

LEASING (from pg 2)

event of any breach of the governing documents by the tenant. Arguably, the lease application form can even impose significant responsibilities on the owners to take action to compel compliance with the governing documents by the tenants. This can be accomplished in several ways. However, the objective is the same - to obtain compliance and in the event of any breach, to transfer the cost of correcting the problem to the owner.

Please understand this article does not suggest that the rights and remedies put into a lease application form are totally enforceable. Nevertheless, when viewing a a pre-printed form that is entitled "Standard Lease Application Form of the Association" many individuals in today's world would sign it without question, (i.e., the owner and/or the tenant may not question whether they could challenge having to execute the form and thereby agree to all the conditions and parameters set forth therein). Thus, having a strong rental application with strong remedies and rights for the Association, often may be in the Association's best interest and potentially may curtail your attorneys' fees in the future. As such, if you are having problems with respect to leasing and your documents provide for approval of leases by the Association, you may want to consult with your attorney to determine what type of rental application may help to deal with the problems you are experiencing.

Door Prizes and Refreshments are two keys to having a great turnout

To generate more interest among the owners to attend the meeting, offer door prizes. These may be gifts that are donated either by individuals within the associations or local merchants. For example, if there is a Mary Kay lady or Amway dealer in your community, perhaps they would be willing to donate merchandise as a door prize. And don't forget to tap the sometimes overlooked business segment of the neighborhood - the teenager who mows lawns on the weekend. Not only does the Association obtain door prizes to boost attendance, but these businesses obtain valuable exposure at minimal cost. Another way to entice a business person to donate a door prize is to provide him one month's free advertising in your newsletter (all about newsletters in our next edition). The possibilities are endless. Review your membership directory (see "Creating A Membership Director," Association Developments, 2nd Quarter '98) for owners whose professions or hobbies could be a source for door prizes. Once you've obtained the door prizes, don't forget to recognize the businesses in your mailings and at the meeting. This way it is a win-win situation for both the members and the business owner.

Another great "attendance getter" is to have refreshments available. There are two ways to approach serving refreshments. A committee could donate baked goods or perhaps, depending on the value of the refreshments, a local merchant could donate refreshments in exchange for mentioning their business and providing them free advertising in your newsletter or membership directory. However, do not use association funds to purchase door prizes or pay for refreshments. This could expose you and your Board to criticism as to the propriety and possibly the legality of, by some, for expending association funds for improper social purposes.

A lot of associations feature a guest speaker at their meetings. The following are a few suggested speakers to appear at your annual meeting:

• landscape professionals giving tips on maintaining your property.
• the principal from one of the schools in your district speaking on what direction the school is taking with its students.
• if there is a "hot" issue, consider asking your attorney to speak to the membership.
• realtors providing tips on how to showcase your home to get the best possible price.
• elected officials speaking on topics of interest to the association.

• candidates for public office who will explain their position on the issues. This gives them some valuable and free exposure.

See ANNUAL MEETING, pg 4

Volume XIII                               Page Four                  Clayton & McCulloh

ANNUAL MEETINGS (from pg 3)

• an attorney to speak on such day to day issues such as the importance of having a will or consumer law issues.

The possibilities are unlimited. Try to think of topics which interest your membership. A little bit of imagination goes a long way.

You will also want to provide professional and eye-catching notices for your annual meetings. Preparing the correct and legal notices (among other documents) for your annual meeting can be very tricky. Inquire if your attorney offers an annual meeting package. Many firms will prepare all the documents and notices you need for an annual meeting at a special reduced fee. (Special Note: please see accompanying articles for information on C&M's special rate Annual Meeting Package). By distributing professional and legal annual meeting notices and documents, you appear more knowledgeable and competent and avoid possible risk to your association.

Don't forget to give your residents plenty of notice. Your Association's governing documents may only require a fifteen-day notice. However, consider giving additional notices such as thirty days, seven days, and three-day . You might even want to call your membership the night before the meeting to remind them. Yes, it is extra work, but many people have a short memory, and they forget. Try appointing a committee to assist you in this endeavor if you have a large association.

In order to ensure a quorum, encourage owners to provide the board (or a trusted neighbor) with their proxy, and if they can make the meeting, then the proxy can be returned to the owner. At least this way, you will have a quorum at your annual meeting.

As a board member, you want to make your meeting as interesting and appealing as possible. By providing comfortable accommodations, refreshments, door prizes, plenty of notice, and eye catching notices, you should attract a significantly larger number of owners than normal. In fact, you may never face the dreaded problem of having to re-notice the meeting again due to lack of interest. Just remember - "It's Showtime!"

The hiring of a lawyer is an important decision that

should not be based solely upon advertisements.

Before you decide, ask us to send you free written

information about our qualifications and experience.

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Maitland, FL 32751

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