Serving on a Board of Directors for the Association can be a thankless job. It is an unpaid volunteer position that comes with fiduciary responsibilities and countless obligations. There are some individuals who are up to the task, volunteering time and again for the betterment of their community, simply for the love of service to their community, or, in many cases, because no one else is up for the challenge. In many instances, we find that Associations have Board Members who have served year after year, without interruption. However, recent statutory amendments have caused a stir amongst Association Boards statewide.
The Florida legislature recently enacted an amendment to Fla. Stat. §718.111(2)(d)(2), which imposes an eight (8) consecutive year term limitation upon board members. As a result, many Associations are finding that one or more of their current long-standing members may no longer be eligible to run for re-election. The recent statutory amendment is a hotly debated topic amongst practitioners, particularly because the statutory amendment appears to have a retroactive application. As of the date of this article, the issue has only been addressed by the Florida Department of Business and Professional Regulation (DBPR), and has not yet been reviewed by the Courts to determine whether retroactive application is lawful. Based on the debate we have seen amongst practitioners statewide, we anticipate that the legislature will be making further amendments to this provision in the future. But in the meantime, the provisions of Fla. Stat. §718.111(2)(d)(2) and the DBPR’s interpretation is the law that must be followed.
Prior to July 1, 2017, there were no term limits within the Condominium Act, and any term limits would necessarily need to be expressed in the Association’s governing documents. Thereafter, in 2017, and most recently in 2018, the legislature amended the Statute to include term limitations. Specifically, as of July 1, 2018, Fla. Stat. §718.112(2)(d)(2), provides, in pertinent part:
- Unless the bylaws provide otherwise, a vacancy on the board caused by the expiration of a director’s term must be filled by electing a new board member, and the election must be by secret ballot. An election is not required if the number of vacancies equals or exceeds the number of candidates. For purposes of this paragraph, the term “candidate” means an eligible person who has timely submitted the written notice . . . of his or her intention to become a candidate. Except in a timeshare or nonresidential condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members’ terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws. Board members may serve terms longer than 1 year if permitted by the bylaws or articles of incorporation. A board member may not serve more than 8 consecutive years unless approved by an affirmative vote of unit owners representing two-thirds of all votes cast in the election or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy. If the number of board members whose terms expire at the annual meeting equals or exceeds the number of candidates, the candidates become members of the board effective upon the adjournment of the annual meeting. Unless the bylaws provide otherwise, any remaining vacancies shall be filled by the affirmative vote of the majority of the directors making up the newly constituted board even if the directors constitute less than a quorum or there is only one director.
On September 12, 2018, the Division of Florida Condominiums, Timeshares and Mobile Homes issued a Declaratory Statement in In re: The Apollo Condominium Association, Inc., Case No.: 2018023783, addressing whether the statutory limit of eight consecutive years includes years of service prior to the effective date of the amendment to section 718.112(2)(d)(2), Florida Statutes. Specifically, in Apollo, the Association was scheduled to hold an election after July 1, 2018, the effective date of the statute. One of its board members had served on the board for more than eight consecutive years and was planning to run for re-election. The Division’s Declaration Statement takes the position that “if at the next scheduled election the current board member has served on the board for eight consecutive years, that board member would be ineligible to serve as a board member unless there are fewer eligible candidates than vacant seats on the board or unless that candidate is approved by an affirmative vote of the unit owners representing two-thirds of all votes cast in the election.” As such, the Division deems the statutory eight-year term limitation to apply retroactively.
Based on the foregoing, a board member may not serve more than eight (8) consecutive years unless approved by an affirmative vote of the unit owners representing two-thirds of all votes cast in the election or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy. This applies retroactively to current board members who have been serving on the board for more than eight (8) consecutive years and who wish to run for re-election.
With regard to any board member that is currently serving a two-year term, having been elected prior to the enactment of the statutory amendment, he/she may serve out the remainder of the two-year term, although it would exceed the eight-year limit, because the election for which the current term is being served took place prior to the enactment of the statutory amendment. However, upon the expiration of the two-year term, this board member would not be eligible to run for re-election unless his/her candidacy is approved by an affirmative vote of the unit owners as set forth in the statute, or, unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.
As to any board member who has served on a board for more than eight (8) consecutive years, within the purview of the statutory amendment, and is considering running for re-election, there is nothing in the statute that precludes him/her from submitting an initial candidacy intent and running for re-election, however, he/she can only serve if he/she receives an affirmative vote of 2/3 of all votes cast in the election or there are not enough eligible candidates to fill the vacancies on the Board. Likewise, there would be nothing to preclude a board member who has served on the board for more than eight (8) consecutive years, from being appointed by a new board should there be a subsequent vacancy during the term.
Lastly, careful consideration of an Association’s governing documents should be given to determine, whether, if at all, the statutory amendment applies to that particular Association. Specifically, an Association should determine whether its governing documents contain “Kauffman” language – a provision that allows for the incorporation of subsequent statutory amendments. This language typically found in the definitional sections of the Declaration, indicating that the governing documents are subject to the provisions of the Florida Condominium Act, Chapter 718 and “all statutory amendments adopted from time to time” – or language of similar import. If an Association’s governing documents do not contain “Kauffman” language, it is possible that the statutory amendment may not be applicable, and the recently enacted term limitations be of no consequence to the Association.
In determining a long-standing Board member’s eligibility for candidacy, it is prudent to consult with your community association attorney as eligibility may turn on a thorough review of the Association’s governing documents and applicable statute.