What are Common Expenses of an Association According to Florida’s Condominium Act?
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Florida’s Condominium Act provides that associations have the power to make and collect assessments from unit owners, so long as such power is designated in the association’s declaration. Fla. Stat. § 718.112(2)(g). The board also has the authority to meet each year to discuss the association’s budget and to increase the assessment amount charged to each unit owner if the budget so requires in order for the association to remain solvent. Fla. Stat. § 718.112(2)(e). These assessments are levied to cover the common expenses incurred by the association, which are ultimately the responsibility of each unit owner pursuant to Florida Statutes and most association declarations. See Fla. Stat. § 715.118(2). The phrase “common expenses,” as used in this context, is a legal term defined by the Condominium Act. This blog post explores that definition of common expenses, including what falls under the definition as it relates to condominium associations and unit owner assessments.
Section 718.115(1)(a), Florida Statutes, defines the term common expenses for the purposes of Florida’s Condominium Act. Common expenses include the costs incurred for the operation, maintenance, repair, replacement, and protection of the common elements and other association property. Id. Association governing documents will usually specify what each association considers a common element. However, Section 718.108, Florida Statutes, also provides a broad definition of common elements, which include the following items:
- condominium property, which is not included within the units (such as a pool, recreational facilities, elevators, etc.);
- conduits, ducts, plumbing, wiring, and other facilities for the furnishing of utility services to units;
- easements of support in every portion of a unit, which contributes to the support of a building;
- the property and installations required for the furnishing of utilities and other services to the units.
In addition to the costs incurred for operating the common elements as described above, common expenses can also include the costs of carrying out the powers and duties of the association. Fla. Stat. § 718.115(1)(a). That can include the cost of operating and running the association’s main office, the cost of operating the security features that protect the property and its unit owners, and the cost of the association’s legal expenses. Common expenses can also include the cost for reasonable transportation services, insurance for the association’s directors and officers, in-house communications such as letters and notices, and maintenance on the roads and parking lots within the community. Id.
Because the Florida Statutes consider the above-mentioned items to be common expenses, their costs go toward calculating an association’s yearly budget and for determining the assessment amount charged to each unit owner. However, associations cannot rely on the Florida Statutes alone for the ability to recover these costs through unit owner assessments. The Condominium Act makes clear that for associations to charge unit owners for such common expenses, each association’s governing documents must provide for such services and designate them as common expenses to be recouped via assessments. Fla. Stat. § 718.115(1)(a). Stated another way, while the Florida Statutes provide broad categories for what can be considered a common expense, what is ultimately considered a common expense for each respective association will be governed by that association’s declaration. For example, cable or internet services provided by the association to the entire community can be a common expense if the declaration declares it as such. See Fla. Stat. § 718.115(1)(d).
Unit owners may question why their assessments increase from year to year when it appears the association’s liabilities remained the same and there has not been a large unexpected expense incurred by the association. The increase could be the result of some unit owners not paying their assessments and going through foreclosure, which is often a reality in a down economy. Those unpaid assessments affect association budgets and must be recouped somehow. Florida’s Condominium Act specifically states that if any unpaid share of the common expenses or assessments is extinguished by foreclosure, then that unpaid share can be added to future common expenses and are collectible from all other unit owners. Fla. Stat. § 718.115(1)(g).