Use of Surplus Money Questioned

Jul 12, 2023 | Associations, Community, Prepare, Safety

Q: My condominium association recently approved a special assessment to pay for a construction project. The project is now completed and there is money left over. The board has now called a meeting where they are going to consider the applying those funds to a different project. Isn’t the association required to return this money to the owners? (G.F., via e-mail)

A: Not necessarily. The adoption and use of special assessments is governed by a number of provisions of the Florida Condominium Act. Section 718.112(2)(c)1, Florida Statutes contains notice requirements for board meetings where a special assessment is to be considered. The notice must state that a special assessment will be considered, specifically state the purpose of the assessment, and the estimated cost of the assessment. This notice must be given to each unit owner by U.S. Mail, hand delivery, or electronic mail (for owners who have given written consent to receive official notices by e-mail) at least 14 days in advance of the board’s meeting. The notice must also be posted 48 hours in advance.

Section 718.116(10), Florida Statutes provides that notice of special assessments must be sent out and the notice must state the purpose, amount, and due date for the special assessment. The law goes on to say that “upon completion of such specific purpose or purposes, any excess funds would be considered common surplus, and may, at the discretion of the board, either be returned to the unit owners or applied as a credit towards future assessments.”

If there is a surplus of special assessment funds related to a completed project, the board has some discretion on how to use the money. The association can either return the money or credit the money toward future assessments. Therefore, the board can levy a special assessment for the different project you mention and apply the surplus funds from the first assessment as a credit toward the bottom line amount the owners will have to pay for the second assessment, if any.

Of course, this outcome is predicated on other assumptions, including that the condominium documents grant the board special assessment authority and that the new project is not a material alteration requiring an owner vote.

Q: I recently signed a lease for a rental in a homeowners’ association. The landlord is denying me access to the common area recreational amenities. Do I have a right to use the common areas under Chapter 720, Florida Statutes? (M.C., via e-mail)

A: That’s a new one on me.

The Florida Condominium Act, in general, provides that when a unit is leased, the tenant has all use rights in common elements generally available to owners, unless the owner has carved those rights out in the lease There is no equivalent provision in the Florida Homeowners’ Association Act.

The issue is likely controlled by the governing documents in the community, perhaps in an esoteric provision like the section on easements. You may want to have your attorney review your lease and the governing documents to advise you.

Your landlord would have no authority to prevent you from using the common areas, that authority, if it exists, would be exercised through the association. You may wish to take this issue up with the association through its board or manager.

Q: Since Hurricane Ian, several of our condominium association’s board members resigned. What happens if we can’t find enough people for a quorum? (R.K., via e-mail)

A: Nothing good.

Section 718.1124 of the Florida Condominium Act states that any unit owner may apply to the local circuit court for the appointment of a receiver to manage the affairs of the condominium association.

A receiver, once appointed, will have the same powers and duties as the board of directors and will serve until the vacancies are filled sufficient to achieve a quorum. Receiverships are costly and usually only helpful in severely distressed projects.


Originally posted on Written by Joe Adams of Becker & Poliakoff, P.A.,