“The times…they are a-changin'…”
Condo Association Board Members may now face recall without the ability to arbitrate the recall process conducted by owners.
In early September, the Florida Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares and Mobile Homes, issued a Final Order of Dismissal in the recall arbitration case of Sunbrook Condominium Association, Inc. v. Unit Owners Voting For Recall. This particular case was the first test of the new changes to Section 718.112(2)(j), which severely limited the right of condominium association Board members to challenge recall efforts by unit owners. In summary, the arbitrator found that the division lacked jurisdiction to hear an arbitration case under the new law where it appeared that a new statute created a conflict with administrative rules. In effect, and under the current law, the decision means that the arbitration section will be unable to hear most recall arbitration petitions filed by a condominium association. The laws governing recall in homeowners associations and other types of associations were not changed, and would not seemingly be subject to this decision.
As we have mentioned in prior articles, and in our legislative update seminars, now, for Condos, recall at the Board meeting held after the members’ vote is AUTOMATIC, seemingly provided that the majority vote/written agreement of the members to recall is achieved. In other words, there is now no choice for the Board other than to certify the recall if it appears that a majority of the unit owners approved the recall. The changes leave it to individual recalled Board members to challenge the recall by an arbitration petition, or for the Association’s now former Board members to seek action in the courts to challenge the recall.
It will be interesting to see how this will play out for condominium associations (and potentially for other types of associations) in the weeks and months to come. In some cases, we expect that the new law may encourage owners to engage in unscrupulous and potentially fraudulent tactics in collecting the majority approval needed for a recall effort. Regardless, we will keep you informed.