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December 2000
MEMORANDUM TO CLIENTS
CORPORATE PROCEDURE: ANNUAL MEETINGS
With the Aseason@
upon us, so are annual members= meetings. Nearly all community associations hold their annual members= meetings between December
and April. Even if your meeting is not until the end of season, avoid personal and meeting
space scheduling conflicts. It is not too early to begin preparations. The firm generally
recommends that associations begin preparations 180 days before the scheduled annual
meeting date.
Advance planning allows communities to do it right the first time.
Regardless of recent and continuing headlines it bears repeating: technical voting
requirements must be followed! All too often an officer, director or manager will ask Awhy do we have to follow the
technicalities?@
If voting requirements are not followed, then the election results are subject to
challenge. This is especially so in condominium and cooperative associations regulated by
the Division of Land Sales.
There are practical reasons to follow Atechnical@ laws. If directors are
perceived as being the product of an unfair election, then owners do not extend the
respect that is necessary to govern. Of course, if there are challenges, then valuable
resources are expended on association-infighting. To avoid challenges, these pointers may
avoid problems:
Condominium and Cooperative Associations. Notices of initial
meetings should be provided 60 days before an annual members = meeting. With the second
notice, the actual notice of meeting should be with an agenda and a ballot. Names must be
listed in alphabetical order by the last name. The first order of business at the annual
members meeting at which there is a contested election is the gathering and counting of
ballots.
Homeowners = Associations. If an absentee ballot is utilized, then a proxy must accompany
the returned ballot, unless the association=s Agoverning documents@ provide otherwise. Any member is entitled to nominate themselves from the floor
of the meeting. Unlike condominium and cooperative associations, a quorum must be present
for a meeting to occur and an election to be held.
Ballots, proxies and tally sheets are to be kept as association
official records.
Let us not read about your association election in the newspapers.
CONTRACTS: SEVERANCE PAY
A Just sign it!@ How many times have you been told, ADon=t worry, it=s just words.@ You sign the paper. Later you sheepishly wonder what did you sign. You do not
dare say anything because you know it is so embarrassing. You signed a contract without
even reading it, not to say understanding it.
A recent decision from the Florida Fourth District Court of Appeals
reaffirms what we should know. Contracts are very important. Papers should not be signed
without due care and consideration.
In Barakat v. Broward County Housing Authority, 25 Fla. L.
Weekly D2474 (Fla. 4th DCA October 18, 2000) the appellate court reviewed a
contract that may have not been provided due consideration. Mr. Barakat sued his former
employer, the Broward County Housing Authority. The contract between Barakat and the
Housing Authority provided in part Ashould Barakat be terminated, then he would be given severance pay in the amount
due, as if said contracts had run its full length.@ Apparently there was no
provision providing for severance not to be paid if termination by the Housing Authority Afor cause.@
Unforeseen problems began after Mr. Barakat was convicted of filing a
false tax return. Fifteen days after the conviction the United States Department of
Housing and Urban Development advised the Housing Authority that Mr. Barakat was suspended
from participating directly or indirectly in HUD programs. The Housing Authority asserted,
and the trial court agreed, that as a result of the suspension, Mr. Barakat could not
perform his duties for the Housing Authority, was terminated Afor cause@ and thus was not entitled to
severance pay.
The appellate court reversed, noting that while contracts are to be
given the effect of the parties = intent, if the contract terms are unambiguous then the contract=s meaning is to be defined
from the contract language itself. If the Housing Authority and Mr. Barakat desired to
provide exceptions to severance pay, then those should have been stated. In other words,
unless there is an ambiguity or a conflict in contract testimony, the parties cannot
explain what they meant.
The proverbial moral to this story is that associations need to
carefully review their contracts. The courts will not protect an association from a bad
deal. As the appellate court here ruled AA fundamental tenant of contract law is that the parties are free to contract,
even when one side negotiates a harsh bargain.@ Another way to put this is Awhat you see is what you get.@
Frequently associations desire to terminate contracts. Unfortunately,
some termination provisions do not anticipate that a contractor will not perform
adequately. In those situations severance pay has to be paid albeit it does not appear
fair.
OFFICE NOTES
Happy holidays to all. In observance of national holidays, the firm =s offices will be closed on
December 25, 2000 and January 1, 2001. Please note that the firm=s offices will also be closed
on the afternoon of Friday, December 15, 2000.
Please welcome Rena Uzzi. Rena became a litigation secretary in the
beginning of November assisting Tanique Lee. She has an extensive background in the legal
and real estate fields, owning and operating a real estate brokerage company from 1992
until 1999. Rena is an avid cyclist and reader and the mother of two boys.
This information is provided for public information
purposes only and is provided without obligation or fee. It is distributed to the firm's
association clients to provide a general notice of recent legal changes. This information
is not to be considered as legal advice. The changes in the law may not have been reviewed
by Florida courts and may be subject to further challenge. Before taking any action you
are urged to consult with counsel to ensure that your legal rights are protected.
8 2000 by Gelfand & Arpe, P.A. |
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