Another Reason Why Sand Lake Hills HOA's Amended Covenants Are Invalid - They Dilute The Voting Rights Of Non-Member Parcel Owners

I reread Florida Statutes 720 and 617, as well as the amended and restated covenants and restrictions the Sand Lake Hills Homeowners Association, Inc. (SLHHOA) had written, and I had discovered another interesting tidbit in regards to why the rewritten governing documents violate Florida law and the association's attempt to collect assessments illegal.

According to Florida Statute 720.306, regarding meetings of members, and in particular section 1c regarding quorum and amendments, "unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses."

To also be very clear, Florida Statute 720.301 Section 8 defines "Governing documents" to mean either the recorded declaration of covenants, and in addition, all recorded amendments and supplements, as well as the articles of incorporation and bylaws, and any amendment to those as well.

With that being said, SLHHOA's Article VI of the amended and restated covenants, titled "assessments," states the following:

Each Owner shall be deemed to covenant and agree to pay to the Association an assessment for the operation of said Association which is responsible for the maintenance, management, operation and insurance of the common areas and represents all residents of Sand Lake Hills in matters of common interest. Said assessment can be increased or decreased from time to time pursuant to the terms of the Association’s Bylaws. These assessments, together with such interest therein and costs of collection thereof as are provided in the Bylaws, shall be the personal obligation of the person or persons who is/are the owner of the Lot at the time when the assessment falls due. In the case of joint ownership, all joint owners shall jointly and severely be liable for the payment of such assessment.

This may seem innocuous, but now consider the Article III Sections 1 and 2 regarding membership and voting rights:

Section 1. Membership. Every record owner taking fee simple title to a Lot subsequent to the date of the recording of this Amended and Restated Declaration in the Public Records shall automatically be deemed a member of the Association assuming all rights, obligations and benefits of said membership. Any record owner who has taken fee simple title to a Lot prior to said recording date shall not automatically be deemed a member of the Association unless or until said Owner has agreed to join the Association pursuant to the terms of the Association’s Bylaws as then in effect. Any change in record title ownership of a Lot shall subject the Lot Owner to membership upon the recording of the transfer deed.

Section 2. Allocation of Voting Rights. Each Member shall have one (1) vote for each Lot owned by that Member in the Sand Lake Hills Homeowners Association, Inc. When any Property entitling the Owner to Membership in the Association is owned of record in the name of two or more persons or entities, whether fiduciaries, joint tenants, tenants in common, tenants in partnership, or in any other manner of joint or common ownership, or if two or more persons or entities have the same fiduciary relationship respecting the same Property, then unless the instrument or order appointing them or creating the tenancy otherwise directs and it or a copy thereof is filed with the Secretary of the Association, such Owner shall select one official representative to quality for voting in the Association and shall notify in writing the Secretary of the Association of the name of such individual. The vote of each official representative shall be considered to represent the will of all the Owners of that Property. In the circumstance of such common ownership, if the Owner fails to designate their official representative, then the Association may accept the person asserting the right to vote as the voting Owner until notified to the contrary by the other Owner(s). Upon such notification the Owner may not vote until the Owner(s) appoint their official representative pursuant to this paragraph.

Now take into consideration the SLHHOA's current and constant assertion that all property owners are indebted to the corporation but not all property owners are members. Since only members have voting rights and only members can vote to elect board members or to conduct business at membership meetings, then according to Florida statutes, the voting interest of non-member parcels would be adversely affected because non-members would have no say in any matter. Details regarding the assessments are outlined in the by-laws, but only the membership has the power to change the by-laws.

Also, regarding statute 720.306, the proportion or percentage by which a parcel shares in the common expenses would also be adversely affected. SLHHOA had basically created two membership classes within the neighborhood - voluntary members and automatic members. While there is a clear distinction between the two, the amended governing documents make no attempt to make any distinguishments, insisting that all members are voluntary. Also, considering the SLHHOA's other claims that funds collected are to pay for the maintaining of common property and that every homeowner of the neighboring sections is a resident of their subdivision, by forcing only certain homeowners, especially non-members, to pay while leaving others alone, would constitute a disproportionate share in maintenance costs on the parcels that choose not to be members but are in the "mandated" sections.

Considering that the by-laws also describe the assessment process, detailing that assessments "can be increased or decreased from time to time pursuant to the approval of a majority of Directors of the Board of Directors," this would clearly be a case of taxation without representation, since non-members have no way to defend themselves against the whim of the membership. Consider that the membership had written themselves some pretty cushy provisions in the amended covenants and restrictions, such that the SLHHOA could also collect "its attorney’s fees and costs incurred as a result of the Lot owner’s failure to pay said assessment, whether or not suit is actually filed," in addition to the original cost of the assessment.

To me, it looks like the SLHHOA had some pretty ambitious goals but no way to fund them, but instead of some hard work and some community outreach, the board of directors seemed to have opted for a quick fix, which will probably cost them more in the long run.