Voting Requirements After Merger Questioned

Q: In your previous column from 2022, it clearly addresses which documents control in the example of when a sub-association’s documents are stricter than the master. Which documents prevail in the following situation? My community had a master association and also four smaller sub-association. The sub association declarations have a 75 percent approval requirement by the voting members to approve an amendment in their declarations, but a majority specified in their bylaws. The master association declaration and bylaws both require a majority vote to amend those documents.

A merger has taken place naming the master association as the surviving corporation. Finances of the smaller sub associations are not merged and are accounted for separately. The Florida Division of Corporations lists the master association as active but the four sub associations as inactive. Now the need to update the official documents arises. What is the correct threshold needed for approval by the owners? (T.H., via e-mail)

A: It sounds like you have a “multi-condominium association” which now operates 4 legally declared/separate condominiums, plus property that all previously shared, apparently under some kind of “master declaration.”

Since the 4 separate condominium associations (sub associations) no longer exist, the percentage vote required to amend their bylaws is irrelevant. The bylaws of the “surviving corporation,” which you state require a majority vote, would control.

Amendments of the “declarations” is a bit trickier. To the extent the 4 “declarations of condominium” need to be amended to accomplish whatever the goals of the document update are, the amendatory provisions of those documents remain in effect. You state this is a 75 percent requirement.

The extent of the regulation by the master declaration over individual rights and behaviors in the individual condominiums, for example leasing rights, is very relevant and should be reviewed by a qualified attorney familiar with this field of law. There may be requirements that can be enacted for the whole community by amendment of the master declaration. Otherwise, each of the 4 declarations of condominium may need to be amended.

I would also point out that the Florida Condominium Act was amended a few years ago to confirm that a multi-condominium association can use a “consolidated declaration” for governance, which was not an uncommon practice before the law was confirmed. Now that this law has been written, this approach will presumably become more popular in this type of situation and offers benefits in the eyes of many communities. This should also be discussed with the association’s legal counsel.

Q:  There is a dispute over whether our condo president alone has the authority to hire/fire the individual manager the management company has sent us, or is that a board vote? We are talking about removing an individual, not the management company. (C.H., via e-mail)

A: Under most bylaws, hiring and firing employees and entering contracts is a decision of the board of directors, not any individual officer.

However, your inquiry does not appear to technically involve either of those scenarios, but rather implementation of an existing contracts. Most management agreements where the management company provides an onsite manager allow the association to require that a different manager be appointed if it is dissatisfied with the assigned person.

Whether that decision can be made by the president or requires a board vote depends on what the management agreement provides. Most agreements I have reviewed vest this decision in the board, although it would not be contrary to law, in my view, for the agreement to vest this authority in the board president.