Q: The developer of our HOA is getting ready to turn over control to the homeowners. One of the first things the homeowners would like to do is cancel the long-term bulk cable television contract. Can we do this?
A: The membership’s ability to cancel this long-term contract will depend on several factors and will probably be an uphill battle. First, Chapter 720 of the Florida Statutes governing HOA’s provides that any agreement entered into by the association before developer turnover that has a term greater than 10 years must be “fair and reasonable”. Assuming the contract is longer than 10 years, the HOA members would need to prove that the fees or other provisions of the contract are so unfair to the HOA that they should not be enforced in court. That is a very tough legal standard for the HOA to meet. To have a chance in court, the fees or other terms of bulk cable agreement would need to significantly deviate from market standards.
Second, the HOA statute allows for the cancellation of a contract for “communications services” by a majority vote of the members at the first annual or special meeting of the association that occurs after the contract was signed. It is likely that the bulk cable agreement was executed several years before developer turnover and that several annual meetings have taken place with no attempt by the members to cancel the contract. However, if the contract was signed within the past year, the members should act quickly and address this at the next HOA meeting.
At the end of the day, your HOA’s attorney needs to review the terms of the agreement and know when it was executed by the association. While it is not always possible to cancel these long-term communications agreements, there may be room for your attorney to negotiate some new terms with the provider.