Are Condominium Association Term Limits Permitted? YES THEY ARE
Question: I have been reviewing the online condominium election materials from the State of Florida. There is nothing in the materials that specifically addresses term limits. What is your opinion regarding whether term limits in condominium association bylaws are permitted? E. N. (via e-mail)
Answer: The issue of whether terms limits, sometimes called “sit out clauses”, are permitted in a condominium association is not definitively settled. Watching the development of the law in this arena is somewhat akin to watching a slow moving ping-pong match.
The issue of term limits was initially considered by the Division of Condominiums Timeshares and Mobile Homes (“the “Division”) in an arbitration decision in 1994 which held that term limits were valid. Visoly v. Buckley Towers Condominium Association, Inc., Arb. Case No. 94-0224. There was a subsequent arbitration decision in 2002 which reached the same result. Katz v. Thirty-Three Sixty Condominium Association, Inc., Arb. Case No. 02-4683. In the Katz case, the bylaw provision which was upheld provided that no director could serve more than three consecutive terms and required the board member to sit out for one year before being eligible to run again.
However, in 2007, the Division reversed course and issued a “Declaratory Statement” which held that because the statute states that “any unit owner” is eligible to run for election to the board, that a term limit provision in the bylaws was inconsistent with the Condominium Act, and thus invalid. Gulf and Bay Condominium Association, Inc., DS 2007-0228049. In this case, the association had adopted a bylaw restricting unit owners from serving on the board for more than two consecutive terms.
During the 2008 Legislative Session, the Florida Condominium Act was amended to state that the “terms of all members of the board shall expire at the annual meeting and such board members may stand for reelection unless otherwise permitted by the bylaws.” The word “permitted” did not really make sense. In 2011, the statute was again amended and now provides as follows: “[T]he terms of all board members expire at the annual meeting, and such members may stand for re-election unless prohibited by the bylaws.”
It has been suggested that these changes to the condominium statute permit term limits, since the language in the statute indicates that the bylaws can “prohibit” an owner from seeking reelection to the board. The Division, in a 2010 arbitration decision called Fiddlers Green Condominium II Association, Inc., DS 2010-029, agreed with these interpretations and found that the 2008 amendment to the statute legalized term limits. Accordingly, the bylaw amendment imposing term limits was upheld.
Interestingly, there was a recent Declaratory Statement from the Division which held that term limits are not permissible in cooperative associations. Oser/Galt Mile Apartments, Inc., D.S. 2012-073. The association’s bylaws contained a one year “sit out” provision. The Division found that because the cooperative statutes provides that “any unit owner desiring to be a candidate for board membership must timely submit notice of his or her candidacy”, that cooperative bylaws could not impose limitations on eligibility for board membership.
Another Declaratory Statement, also issued after the changes to the condominium statute, is also of interest. In this case, the bylaws prohibited a person from serving on the board of the condominium association and simultaneously serving on any other association board within the development. Rawson/Osprey at Destin West Beach and Bay Resort Condominium Association, Inc., DS 2011-081. Similar to the Division’s ruling in the cooperative case, the agency concluded that the provision in the statute that allows “any unit owner desiring to be a candidate” to run for the board rendered the bylaw provision invalid. The Division further ruled that the only limits on board eligibility are those specifically contained in the statute.
Thus, it appears that the state of the law is that term limits are valid (if contained in the bylaws), while other restrictions on board eligibility (such as a residency requirement) would likely not be.