Condo Q&A: Is It Legal for HOAs to Have 50/50 Raffles?
Also: A condo owner lives in a 125-unit community, and was told they need a website and must post certain official records. Must they? And: An independent contractor/handyman doesn’t legally need workman’s comp insurance. Is it okay to use him?
NAPLES, Fla. – Question: My homeowner’s association is considering hosting a social event where there will be a 50/50 raffle. Basically, everyone who comes to the event will be asked to donate a specific amount and a drawing is held for a winner. Half of the collected funds go to the winner and the other half goes to the association to fund future social events. Is this legal? – S.R., Delray Beach
Answer: Unless your homeowner’s association qualifies as an “organization” under the applicable Florida law, it is illegal for your homeowner’s association to conduct a 50/50 raffle. The applicable Florida law can be found in Section 849.0935, Florida Statutes.
This law allows certain organizations to conduct raffles such as 50/50 raffles. However, the word “organization” is specifically defined as an organization which is exempt from federal income taxation such as a 501(c)(3), (4), (7), (8), (10), and (19) organization and which has a current determination letter from the IRS.
For organizations that qualify, any brochures, advertisements, notices, tickets or entry blanks used in connection with the raffle must conspicuously disclose:
- The rules for the drawing
- The full name of the charitable organization and its principal place of business
- The source of the funds used to award the cash prize
- The date, hour, and place where the winner will be chosen, and the prize awarded
- That no purchase or contribution is necessary
Item e. above can be tricky. While you cannot mandate that to enter the raffle you “must” pay an entry fee, you may “suggest” a minimum donation. However, legally, if someone wanted to enter for free or for less than the suggested minimum donation you must allow it.
I do not believe that your homeowner’s association would qualify under the definition of “organization” under Section 849.0935, Florida Statutes. However, in order to make sure, you should consult your legal counsel or accounting professional. If it does not qualify, your homeowner’s association cannot legally conduct a 50/50 raffle.
Question: Our homeowner’s association has an Architectural Review Board, ARB. The ARB’s responsibilities include reviewing and approving or disapproving proposed architectural changes within our community. The ARB does not provide notice to the community when they meet and they do not keep any minutes of their meeting. Is this proper? – J.K., Hollywood
Answer: Chapter 720 is the Florida law that governs homeowner’s associations. Section 720.303, Florida Statutes requires board of directors’ meetings to be noticed at least 48 hours prior to the meeting, open to all members, except for limited circumstances, and that minutes must be kept of all the board actions at the meeting.
These same requirements apply to any committee or other similar body vested with the power to approve or disapprove architectural decisions with respect to a specific lot in a community. This means that your community’s ARB is required to notice its meetings, keep it open to all members of the community and to keep minutes of its decisions.
Question: Our condominium has 125 units. We are being told that we must have an association website and are required to post certain official records on it. Is this true? – S.S, Plantation
Answer: No that is not true. Florida Statute 718.111(12)(g) provides that an association managing a condominium with 150 or more units must have a website and post certain documents on it.
Since your condominium is less that 150 units you are not required by law to maintain a website. Note that there is no website requirement for cooperatives of homeowners associations.
Question: Our association has a handyman that we regularly use as an independent contractor. It is only him and sometimes a helper. He does not have workers compensation insurance as he is legally exempt from being required to carry it.
Our management company is telling us we should not use this person if he is not insured. Our association has its own workers compensation insurance and general liability so I am not sure I understand the problem. What is your opinion on this topic? – A.C., Fort Lauderdale
Answer: Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. So, workers compensations protect the employer not the association directly.
If an accident occurs you have general liability insurance to cover the association, and if the person somehow could prove he was an employee of the association, that is what the association’s workers compensation is for.
The downside of the employer not having worker’s compensation is that if the employee gets hurt and the employer is not well financed, the injured person will only have one entity to sue, the association.
If the employer has workers compensation, then some of the liability can be laid off on the employer and presumably less on the association. But another real problem is that if the handyman causes damage to the association property or injures someone, he has no general liability insurance to pay for it.
For those reasons, we do not recommend the association hire persons without worker’s comp., even if not legally required, and certainly not without general liability coverage.
The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.
© 2021 Journal Media Group. John C. Goede, Esq., is partner of the law firm Goede, Adamczyk, DeBoest & Cross.