Is a Budget Committee Allowed to Meet Privately?
Q: Our condominium association adopted the 2019 budget last week and it was a total shock to everyone in the room. The board claims it was the first time they had seen the proposed budget and there were multiple increases. The board kept saying they were following the committee’s recommendation and adopted the budget. What committee is this? How can this be done in secret?
A: The budget “season” is one of the most important times of the year for a condominium. Every condominium association approaches the budget differently. Some rely on management to prepare the budget. Some have a treasurer that oversees the drafting process. Some have a committee of owners prepare and recommend the budget to the board.
In this last situation, which appears to mirror the operation of your condominium, a committee makes recommendations to the board. This is often referred to as the “budget committee” or the “finance committee” but no such committee is technically required under Florida law. The key point is that this committee may not act in secret. Pursuant to Florida law, certain condominium committees must always follow the same procedural requirements of meetings of the Board of Directors, which (for regular meetings) require at least 48 hours’ posted notice and must be open to the membership.
Specifically, Florida Statutes section 718.112 provides that “meetings of a committee . . . [to] make recommendations to the board regarding the association budget are subject to this paragraph.” This means that committee meetings to make budgetary recommendations must be open to the membership and must be posted at least 48 hours prior to the committee meeting. It also implies that said committee meetings should keep minutes.
In a condominium, owners have a right to be present for these committee meetings and be part of the budgetary process. I should note that this only applies if there is an actual committee that makes recommendations, meaning a sole property manager drafting a proposed budget for the board is not the equivalent of a committee, and I should also note that the law is very different for homeowners’ associations.
Answered by highly-respected Association Attorney, John C. Goede Esq., who is the co-founder and shareholder of the Law firm Goede, Adamczyk, DeBoest & Cross, PLLC. Please visit their website at www.gadclaw.com.
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