HomeMy WebLinkAboutReso 2024-3630RESOLUTION NO. 2024 - �3 Q
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF SUNNY ISLES BEACH,
FLORIDA, EXPRESSING SUPPORT OF FLORIDA SENATE BILL 1178 RELATING TO
GOVERNANCE OF CONDOMINIUM AND COOPERATIVE ASSOCIATIONS AND THE
PRACTICE OF COMMUNITY ASSOCIATION MANAGEMENT; DIRECTING THE CITY
CLERK TO TRANSMIT COPIES OF THIS RESOLUTION; AUTHORIZING THE CITY
MANAGER TO DO ALL THINGS NECESSARY TO EFFECTUATE THIS RESOLUTION;
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Sunny Isles Beach (the "City") recognizes the critical role that
condominium and homeowners associations play in the governance and operation of community
living spaces, contributing to the overall quality of life for its residents; and
WHEREAS, State Senators Jennifer Bradley and Jason Pizzo have introduced Senate Bill
1178 (the "Bill"), a bipartisan effort aimed at enhancing the oversight and enforcement
capabilities of the Florida Department of Business and Professional Regulation ("DBPR") over
condominium and homeowners associations; and
WHEREAS, the Bill mandates the DBPR to perform random audits of community
associations to ensure compliance with official records management and website/application
processes, thereby increasing transparency and accountability in community governance; and
WHEREAS, the Bill requires all newly elected community association board members to
complete a standardized course in association law and continuing education, ensuring that board
members are well-informed and equipped to govern effectively; and
WHEREAS, the Bill aims to establish stricter conflict of interest disclosures for property
management firms and their employees, along with harsher penalties for fraudulent voting
activities, thereby fostering integrity and fairness in association elections and contract dealings;
and
WHEREAS, the Bill introduces reforms to allow condominium associations to meet their
obligations for records requests through website postings, change reserve requirements for
buildings deemed unsafe/uninhabitable, and permit the creation of investment committees to
invest reserve funds, enabling better financial management and safety compliance; and
WHEREAS, the City Commission finds that it is in the best interest of its residents to
support the Bill.
NOW, THEREFORE, BE RESOLVED BY THE CITY COMMISSION OF THE CITY OF SUNNY
ISLES BEACH, FLORIDA, AS FOLLOWS:
Section 1. Express Support of Senate Bill 1178. The City Commission hereby expresses its
support of Senate Bill 1178.
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Section 2. Direction to the City Clerk. The City Clerk is hereby directed to distribute copies
of this Resolution to the Florida League of Cities, the President of the Florida Senate, and the
Speaker of Florida House of Representatives, and the Governor of the State of Florida.
Section 3. Authorization of the City Manager. The City Manager is hereby authorized to do
all things necessary to effectuate the terms of this Resolution.
Section 4. Effective Date. This Resolution shall become effective upon adoption.
PASSED AND ADOPTED this 15th day of ebruary, 2024.
Larisa vechin, Mayor
1.
ATTEST:APPROVED AS TO FORM
n AAND LEGAL SUFFICIENCY:
MakiciolBetancgr, CMC, City Clerk
446&41AW
ain E. Boileau, P.A., for Nabors, Giblin &
Nickerson, City Attorney
Moved by 5f S1Veconded by:
Vote:
Mayor Svechin Yes) (No)
Vice Mayor Lama (Yes) (No)
Commissioner Joseph —(Yes) (No)
Commissioner Stuyvesant (Yes) (No)
Commissioner Viscarra (Yes) (No)
@BCL@940B617B.docx Page 2 of 2 310
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Regulated Industries
BILL: CS/SB 1178
INTRODUCER: Regulated Industries Committee and Senators Bradley and Pizzo
SUBJECT: Community Associations
DATE: January 22, 2024 REVISED:
ANALYST
1. Oxamendi
►a
STAFF DIRECTOR REFERENCE
Imhof RI
AEG
FP
Fav/CS
ACTION
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
Summary:
CS/SB 1178 relates to the governance of condominium and cooperative associations and the
practice of community association management. Regarding community association managers
(CAMs) and CAM firms, the bill:
• Requires CAMs and CAM firms to return all community association records in their
possession within 20 business days of termination of a services agreement or a written
request whichever occurs first, with license suspension and civil penalties for
noncompliance.
• Provides conflict of interest disclosure requirements and a process for associations to follow
when approving contracts with CAMs and CAM firms, or a relative, that may present a
conflict of interest. The requirements are similar to the conflicts of interest provisions for
condominium associations and their officers and directors.
• Provides grounds to discipline CAMs and CAM firms for failure to disclose a conflict of
interest as required by the bill.
Regarding access to the official records of a condominium association, the bill:
• Requires official records be maintained in a manner that facilitates inspection by unit owners.
• Effective January 1, 2026, decreases from 150 units to 25 units the threshold requirement for
an association to maintain specified records available for download on the association's
website or by an application on a mobile device.
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Page 2
• Requires official records to be provided to the unit owner at no charge if the Division of
Condominium, Timeshares, and Mobile Homes (division) subpoenas records an association
has failed to timely provide in response to a unit owner's written request.
• Requires associations to maintain additional financial records (e.g., invoices and other
documentation that substantiates any receipt or expenditure) to be maintained by a
condominium association for inspection by association members as official records.
• Permits associations to fulfill records requests by directing unit owners to the records that are
posted on the association's website.
• Requires associations to respond to a records request with a checklist of all records provided.
The bill provides the following criminal penalties related to condominium associations:
• Third degree felony for an officer, director, or manager of a condominium association to
knowingly solicit, offer to accept, or accept anything or service of value or kickback;
• First degree misdemeanor for knowingly or intentionally defacing or destroying required
accounting records or knowingly and intentionally failing to create or maintain required
accounting records, with the intent of causing harm to the association or one or more of its
members;
• Second degree misdemeanor for any director or member of the board or association to
knowingly, willfully, and "repeatedly" violate (two or more violations within a 12 -month
period) any specified requirements relating to inspection and copying of official records of an
association; and
• Third degree felony to willfully and knowingly refuse to release or otherwise produce
association records, with the intent to avoid or escape detection, arrest, trial, or punishment
for the commission of a crime, or to assist another person with such avoidance or escape.
In addition, the bill provides that a person commits theft by use of a debit card, if the person uses
a debit card issued in the name of, or billed directly to, an association for any expense that is not
a lawful obligation of the association.
The bill provides that officers and directors charged with a criminal violation created in the bill
are deemed removed from office and a vacancy declared.
Regarding condominium association budgets, financial reporting, and reserves, the bill:
• Revises the term "deferred maintenance" to "planned maintenance."
• Prohibits associations from reducing the required type of financial statement (compiled,
reviewed, or audited financial statements) for consecutive years.
• Provides for the investing of reserve funds by authorizing condominium associations,
including multicondominium associations, to invest reserve funds and provides relevant
procedures and requirements associations must follow when investing reserve funds,
including limits on the types or permissible investments, record keeping requirements, and
requiring the use of an independent investment adviser.
• Revises reserve maintenance requirements to:
o Allows an extension of the deadline for completion of a structural integrity reserve study
(SIRS) if the condominium or cooperative association has entered into a contract for the
performance of the study and the study cannot reasonably be performed or completed by
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December 31, 2024. However, the completion of the SIRS must be performed or
completed by December 31, 2026.
o Require an association to provide unit owners with a notice that the SIRS is available for
inspection and copying within 45 days of completion of the study. The notice may be
provided electronically.
o Clarify that the turnover report required under s. 718.301(4)(p), F.S., consists of a SIRS.
o Allow associations to waive reserves and for the SIRS to recommend a temporary
suspension of reserve funding if the building or units are unsafe and uninhabitable as
determined by the local enforcement agency.
Regarding meetings of the boards of administration for condominium associations, the bill:
• Requires condominium associations of 10 or more units to meet at least once each quarter for
the purpose of responding to inquiries from members and informing members on the status of
the condominium, including the status of any construction or repair projects, the status of the
association's revenue and expenditures during the fiscal year, or other issues affecting the
association.
• Requires associations to include a copy of the proposed contract if the notice for a board
meeting relates to the approval of a contract.
The bill provides education requirements for the officers and directors of condominium
associations to:
• Require newly elected or appointed directors to submit both the written certification that they
have read the association's governing documents, will work to uphold the documents to the
best of their ability and will faithfully discharge their duties, and submit a certificate of
completion of an approved condominium education course;
• Provide that the written certification and educational certificate are valid for 10 years;
• Provide that developer -appointed directors do not have to retake the education course for any
subsequent appointment by a developer, provided that the previously submitted educational
certificate is valid for only 10 years;
• Require the division to provide the required education curriculum to directors at no charge,
including when the education curriculum is provided by a division -approved education
provider;
• Require directors to annually complete continuing education about recent changes to the
condominium laws and rules;
• Extend the time an association must retain a copy of an officer or director's educational
certificate from five years to seven years; and
• Require associations to annually certify that all directors have completed the required written
certification and educational certificate requirements.
Regarding assessments levied by condominium associations, the bill:
• Provides a process for the board to secure a line of credit and assess a contingent special
assessment to fund repairs recommended by a milestone inspection required under
s. 553.899, F.S., or a similar local inspection requirement or a structural integrity reserve
study, or unanticipated repairs.
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Page 4
Provides that, for a budget adopted on or before December 31, 2029, an association may
secure a line of credit and assess a contingent special assessment to meet the reserve funding
schedule recommended by the structural integrity reserve study.
Includes contingent special assessments and any line of credit for which a contingent special
assessment may be imposed in the list of information that must be included in the estoppel
certificate.
Regarding voting in condominium associations, the bill:
• Provides criminal penalties related to fraudulent voting activities that are punishable as first
degree misdemeanors, including preventing members from voting, and menacing,
threatening, or using bribery to directly or indirectly influence or deter a member from
voting.
• Requires associations to send unit owners, whose right to vote has been suspended because
of an unpaid financial obligation, a notice of such obligation within 90 days before an
election.
• Allows condominium and cooperative unit owners to consent to electronic voting in
condominium association elections by using an electronic means of consent. Current law
requires the consent to electronic voting to be made in writing.
The bill revises the requirements for the installation of hurricane protection in a condominium
building to:
• Create a uniform definition for "hurricane protection," to include hurricane shutters, impact
glass, code -compliant windows or doors, and other code -compliant hurricane protection
products used to preserve and protect the condominium property or association property;
• Require condominium declarations to delineate the responsibilities of unit owners and
associations for the costs of maintenance, repair, and replacement of hurricane protections,
exterior doors, windows, and glass apertures;
• Provide when a majority vote of the unit owners is required to install hurricane protection;
• Provide a uniform procedure for approval of hurricane protection by the unit owners,
including requiring the board to record a certificate in the public records evidencing that the
association has voted to install hurricane protection; and
• Provide that unit owners are not responsible for the cost of removal and installation of
hurricane protection if the removal is necessary to repair condominium property.
The bill revises the prohibitions against "strategic lawsuits against public participation" or
"SLAPP suits," which occur when association members are sued by individuals, business
entities, or governmental entities for matters arising out of a unit owner's appearance and
presentation before a governmental entity on matters related to the condominium association.
The bill specifically includes condominium associations in the SLAPP suit prohibition, and
protects unit owners from reporting complaints to government agencies or law enforcement, or
making public statements critical of the operation or management of an association by:
• Prohibiting associations from retaliating against unit owners, such as by increasing
assessments, threatening to bring an action for possession or other civil action, including a
defamation, libel, slander, or tortious interference action; and
• Prohibiting associations from spending association funds in support of defamation, libel, or
tortious interference actions against a unit owner.
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Page 5
Regarding officers and directors of a condominium association, the bill provides that the
attendance of an officer or director at a meeting of the board is sufficient to constitute a quorum
for the meeting and for any vote taken in his or her absence when the director is required to leave
the room during the discussion and the taking of a vote on a contract in which the director, or his
relative, has an interest.
The bill revises the jurisdiction of the division by deleting the limitation on its authority to
enforce ch. 718, F.S., only after turnover. Under the bill, the division may enforce and ensure
compliance with,ch. 718, F.S., and rules relating to the development, construction, sale, lease,
ownership, operation, and management of residential condominium before and after control of
the association is turned over to the nondeveloper members. In addition, the bill:
• Requires that the division must refer to local law enforcement authorities any person whom
the division believes has engaged in fraud, theft, embezzlement, or other criminal activity or
has cause to believe that fraud, theft, embezzlement, or other criminal activity has occurred.
• Authorizes the division to impose a civil penalty for a violation of ch. 617, F.S., relating to
corporations not for profit.
• Provides that the division director or any officer or employee of the division, and the
condominium ombudsman or employee of the office of the condominium ombudsman may
attend and observe any meeting of the board or any unit owner meeting, including any
meeting of a subcommittee or special committee, that is open to members of the association,
for the purpose of performing the duties of the division or the office of the ombudsman under
ch. 718, F.S.
• Requires the division to routinely conduct random audits of condominium associations to
determine compliance with the requirement that certain official records must be available for
download on the association's website.
The bill also requires the division to submit to the Governor, the President of the Senate, the
Speaker of the House of Representatives, and the chairs of the legislative appropriations
committees and appropriate substantive committees, a review of the website or application
requirements for official records under s. 718.111(12)(g), F.S., and make recommendations
regarding any additional official records of a condominium association that should be included in
the record maintenance requirement.
Regarding cooperative associations, the bill:
• Revises the term "deferred maintenance" to "planned maintenance."
• Requires an association to provide unit owners with a notice that the structural integrity
reserve study is available for inspection and copying within 45 days of completion of the
study. The notice may be provided electronically.
Clarifies that the turnover report required under s. 719.301(4)(p), F.S., consists of a structural
reserve study.
Except as otherwise expressly provided, the bill takes effect July 1, 2024.
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BILL: CS/SB 1178
II. Present Situation:
Milestone Inspections
Page 6
Section 553.899, F.S., requires residential condominium and cooperative buildings that are three
stories or more in height, as determined by the Florida Building Code, to have a milestone
inspection by December 31 of the year in which the building reaches 30 years of age. However,
if a building reaches 30 years of age before July 1, 2022, the initial milestone inspection must be
performed before December 31, 2024. If a building reaches 30 years of age on or after July 1,
2022, and before December 31, 2024, the building's milestone inspection must be performed
before December 31, 2025. The local enforcement agency will provide written notice of the
required inspection to the association.]
Local enforcement agencies that are responsible with enforcing the milestone inspection
requirements may set a 25 -year inspection requirement if justified by local environmental
conditions, including proximity to seawater.2 Local enforcement agencies may also extend the
inspection deadline for a building upon a petition showing good cause that the owner or owners
of the buildings have entered into a contract with an architect or engineer to perform the
milestone inspection services and the milestone inspection cannot reasonably be completed
before the deadline.3
The milestone inspection requirement applies to buildings that in whole or in part are subject to
the condominium or cooperative forms of ownership, such as mixed -ownership buildings.
Consequently, all owners of a mixed -ownership building in which portions of the building are
subject to the condominium or cooperative form of ownership are responsible for ensuring
compliance and must share the costs of the inspection. However, condominium and cooperative
buildings that are single-family, two-family, and three-family dwellings with three or fewer
habitable stories above ground are exempt from the milestone inspection requirement.4
The purpose of a milestone inspection is to determine the life safety and adequacy of the
structural components of the building and, to the extent reasonably possible, determine the
general structural condition of the building as it affects the safety of such building, including a
determination of any necessary maintenance, repair, or replacement of any structural component
of the building.' The purpose of such inspection is not to determine if the condition of an existing
building is in compliance with the Florida Building Code or the firesafety code.6 The milestone
inspection services may be provided by a team of professionals with an architect or engineer
acting as a registered design professional in responsible charge with all work and reports signed
and sealed by the appropriate qualified team member.7
In addition, s. 553.899, F.S.:
' Section 553.899(3), F.S.
z Section 553.899(3)(b), F.S.
3 Section 553.899(3)(c), F.S.
a Section 533.899(3), F.S.
s Section 553.899(2)(a), F.S.
6 Id.
Id.
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Page 7
• Requires that a phase one milestone inspection must commence within 180 days after an
association receives a written notice from the local enforcement agency.
• Provides the minimum contents of a milestone inspection report.
• Requires inspection report results to be provided to local building officials and the affected
association.
• Requires that the contract between an association that is subject to the milestone inspection
requirement and a community association manager (CAM) or CAM firm must require
compliance with those requirements as directed by the board.
• Requires the local enforcement agency to review and determine if a building is safe for
human occupancy if an association fails to submit proof that repairs for substantial
deterioration have been scheduled or begun within at least 365 days after the local
enforcement agency receives a phase two inspection report.
Within 45 days after receiving a milestone inspection report, the condominium or cooperative
association must distribute a copy of an inspector -prepared summary of the inspection report to
each condominium unit owner or cooperative unit owner. The inspector -prepared summary must
be provided to unit owners, regardless of the findings or recommendations in the report, by
United States mail or personal delivery at the mailing address, property address, or any other
address of the owner provided to fulfill the association's notice requirements under ch. 718, F.S.,
or ch. 719, F.S., as applicable, and by electronic transmission to the e-mail address or facsimile
number provided to fulfill the association's notice requirements to unit owners who previously
consented to receive notice by electronic transmission. The association must also post a copy of
the inspector -prepared summary in a conspicuous place on the condominium or cooperative
property and must publish the full report and inspector -prepared summary on the association's
website, if the association is required to have a website.
Condominium and Cooperative Associations
Chapters 718 and 719, F.S.
Chapter 718, F.S., relating to condominiums, and ch. 719, F.S., relating to cooperatives, provide
for the governance of these community associations. The chapters delineate requirements for
notices of meetings,8 recordkeeping requirements, including which records are accessible to the
members of the association,9 and financial reporting. 10 Timeshare condominiums are generally
governed by ch. 721, F.S., the "Florida Vacation Plan and Timesharing Act."
The Division of Florida Condominiums, Timeshares, and Mobile Homes (division) within the
Department of Business and Professional Regulation (DBPR) administers the provisions of
chs. 718 and 719, F.S., for condominium and cooperative associations, respectively.
Condominiums
A condominium is a "form of ownership of real property created under ch. 718, F.S,"11 the
"Condominium Act." Condominium unit owners are in a unique legal position because they are
8 See ss. 718.112(2) and 719.106(2)(c), F.S., for condominium and cooperative associations, respectively.
9 See ss. 718.111(12) and 719.104(2), F.S., for condominium and cooperative associations, respectively.
io See ss. 718.111(13) and 719.104(4), F.S., for condominium and cooperative associations, respectively.
" Section 718.103(l 1), F.S.
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exclusive owners of property within a community, joint owners of community common
elements, and members of the condominium association. 12 For unit owners, membership in the
association is an unalienable right and required condition of unit ownership. 13
A condominium association is administered by a board of directors referred to as a "board of
administration." 14 The board of administration is comprised of individual unit owners elected by
the members of a community to manage community affairs and represent the interests of the
association. Association board members must enforce a community's governing documents and
are responsible for maintaining a condominium's common elements which are owned in
undivided shares by unit owners. 15
There are approximately 1,529,764 condominium units in Florida operated by 27,588
associations. 16 Approximately 912,376 of these condominium units in Florida are at least 30
years in age. 17 Further breakdown of the age of condominium units in Florida is as follows:
• 105,404 units — 50 years old or older;
• 479,435 units — 40-50 years old;
• 327,537 units — 30-40 years old;
• 141,773 units — 20-30 years old;
• 428,657 units — 10-20 years old; and
• 46,958 units — 0-10 years old.18
It has been estimated that there are over 2 million residents occupying condominiums 30 years or
older in Florida, based upon census data indicating an average of approximately 2.2 persons
living in a condominium unit.19
Cooperatives
Section 719.103(12), F.S., defines a "cooperative" to mean:
[T]hat form of ownership of real property wherein legal title is vested in a
corporation or other entity and the beneficial use is evidenced by an
ownership interest in the association and a lease or other muniment of title
or possession granted by the association as the owner of all the
cooperative property.
A cooperative differs from a condominium because, in a cooperative, no unit is individually
owned. Instead, a cooperative owner receives an exclusive right to occupy the unit based on their
ownership interest in the cooperative entity as a whole. A cooperative owner is either a
12 See s. 718.103, F.S., for the terms used in the Condominium Act.
13 Id
la Section 718.103(4), F.S.
1s Section 718.103(2), F.S.
16 Report of the Florida Bar RPPTL Condominium Law and Policy Life Safety Advisory Task Force (Task Force Report), p.
4, available at: https://www-media.floridabar.org/uploads/2021/10/Condominium-Law-and-Policy-Life-Safety-Advisor -
Task-Force-Report.pddf (last visited Jan. 9, 2024).
17 Id.
is Id.
19 Id
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stockholder or member of a cooperative apartment corporation who is entitled, solely by reason
of ownership of stock or membership in the corporation, to occupy an apartment in a building
owned by the corporation. 20 The cooperative holds the legal title to the unit and all common
elements. The cooperative association may assess costs for the maintenance of common
expenses. 21 There are 778 cooperative associations in Florida that are registered with the
DBPR.a2
Miami -Dade County Grand Jury Report "Addressing Condo Owners' Pleas for Help:
Recommendations for Legislative Action"
The increasing numbers of condominiums in Florida, the increasing numbers of problems for
people living in them, and the increasing numbers of complaints against the DBPR, motivated a
Miami -Dade County grand jury to conduct an investigation of complaints by condominium
residents and the DBPR's responses to their complaints. 23 The grand jury's report contains
numerous findings and recommendations, but those relevant to the provisions of the bill are
discussed below.
Additional Issues
For ease of reference to each of the topics addressed in the bill, the Present Situation for each
topic will be described in Section III of this analysis, followed immediately by an associated
section detailing the Effect of Proposed Changes.
III. Effect of Proposed Changes:
Community Association Managers
Present Situation
Community Association Manager Regulation
Community association managers (CAMs) are licensed and regulated by the Department of
Business and Professional Regulation (DBPR or department) pursuant to part VIII of ch. 468,
F.S.
Section 468.431(2), F.S., defines "community association management" to mean:
any of the following practices requiring substantial specialized knowledge,
judgment, and managerial skill when done for remuneration and when the
association or associations served contain more than 10 units or have an annual
21 See Walters v. Agency for Health Care Administration, 288 So.3d 1215 (Fla. 3d DCA 2019), review dismissed 2020 WL
3442763 (Fla. 2020).
21 See ss. 719.106(1)(g) and 719.107, F.S.
22 See Task Force Report, pp. 4-5.
2s Final Report of the Miami -Dade County Grand Jury (Addressing Condo Owner's Pleas for Help: Recommendations for
Legislative Action) (Filed Feb. 6, 2017), Eleventh Judicial Circuit, available at https://miamisao.com/wo-
content/uploads/2021/02/2016-Spring-Grand-Jury-Report-Final.pdf (last visited on Jan. 13, 2024). This document is further
cited in this analysis as "Final Report of the Miami -Dade County Grand Jury."
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BILL: CS/SB 1178
budget or budgets in excess of $100,000: controlling or disbursing funds of a
community association, preparing budgets or other financial documents for a
community association, assisting in the noticing or conduct of community
association meetings, and coordinating maintenance for the residential
development and other day-to-day services involved with the operation of a
community association.
Page 10
A license is not required for persons who perform clerical or ministerial functions under the
direct supervision and control of a licensed manager or who only perform the maintenance of a
community association and do not assist in any of the management services. 24
Community association managers are regulated by the seven -member Regulatory Council of
Community Association Managers. Five of the members must be licensed CAMs, one of whom
must be a CAM for a timeshare. The other two must not be CAMs. Members are appointed to 4-
year terms by the Governor and confirmed by the Senate.zs
To become licensed as a CAM, a person must apply to the department to take the licensure
examination and submit to a background check. Upon determination that the applicant is of good
moral character, the applicant must attend a department -approved in-person training prior to
taking the examination. 26 Community association managers must successfully complete an exam
and pay a fee to become licensed. They must also complete continuing education hours as
approved by the council to maintain their licenses. 27
Practice Standards and Conflicts of Interest
Section 468.4334, F.S., delineates the professional practice standards for CAMs and CAM firms,
including the duty to "discharge the duties performed on behalf of the association as authorized
by [ch. 468, F.S.], loyally, skillfully, and diligently; dealing honestly and fairly; in good faith;
with care and full disclosure to the community association; accounting for all funds; and not
charging unreasonable or excessive fees." In addition, if a CAM or CAM firm has a contract
with a community association that has a building on the association's property that is subject to
s. 553.899, F.S., the CAM or firm must comply with that section as directed by the board.
The license of a CAM or CAM firm may be disciplined, including a suspension or revocation of
their license, or denial of a license renewal, for the grounds specified in s. 468.436, F.S.,
including contracting, on behalf of an association, with any entity in which the CAM or CAM
firm has a financial interest that is not disclosed to the association.
Section 718.3027, F.S., provides the process for resolving potential conflict of interest for the
officers and directors of condominium associations. It requires an officer or director of a
condominium association (that is not a timeshare condominium association), to disclose any
financial interest of the officer or director (or such person's relative) in a contract for goods or
services, if such activity may reasonably be construed by the board to be a conflict of interest.
24 Section 468.431(2), F.S.
21 Section 468.4315(1), F.S.
26 Section 468.433, F.S.
27 Sections 468.4336 and 468.4337, F.S.
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The board of a condominium association must approve a contract for services or other
transactions by an affirmative vote of two-thirds of all other directors present. Current law does
not have a comparable process for a CAM's or CAM firm's disclosure of a potential conflict of
interest or the process for an association's affirmative acceptance or approval of such a conflict
of interest.
Effect of Proposed Changes
The bill revises the following requirements for CAM and CAM firms under part VIII of ch. 468,
F.S., which apply to all CAM and CAM firms engaged in community association management in
condominium associations under ch. 718, F.S., cooperative associations under ch. 719, F.S., and
homeowners' associations under ch. 720, F.S.
The bill creates s. 468.4334(3), F.S., to require a CAM or CAM firm to return all community
association records in his or her possession within 20 business days of termination of services
agreement or a written request, whichever occurs first. The bill allows a CAM or CAM firm to
retain records for up to 20 business days after the contract is terminated in order to complete an
ending financial statement or report. If the association fails to provide the CAM or CAM firm
access or retention to the accounting records, the CAM or CAM firm is relieved of any further
responsibility or liability for preparation of the statement or report. If the CAM or CAM firm
fails to timely return all of the official records within its possession to the community
association, the successor CAM firm, the bill creates a rebuttable presumption that the CAM or
CAM firm willfully failed to comply with this subsection.
However, the bill also provides that a CAM or CAM firm that fails to timely return community
association records is subject to suspension of its license under s. 468.436, F.S., and a civil
penalty of $1,000 per day for up to 10 days, assessed beginning on the 21st day after termination
of a contractual agreement to provide community association management services to the
community association or receipt of a written request from the association for return of the
records, whichever occurs first.
The bill creates s. 468.4335, F.S., to provide additional conflict of interest disclosure
requirements for CAMs and CAM firms and a process for associations to follow when approving
contracts with a CAM or CAM firm, or a relative of a CAM, which may present a conflict of
interest. The requirements are similar to those applicable to contracts between condominium
associations and their officers and directors.
The bill requires a CAM or CAM firm, including the directors, officers, persons with a financial
interest in the CAM firm and relatives of such persons, to provide a written disclosure of any
activity which may reasonably be construed by the board to be a conflict of interest. The bill
creates a rebuttable presumption of an existing conflict of interest if a CAM or CAM firm,
including directors, officers, persons with a financial interest in a CAM firm, or the relative of
such persons:
• Enters into a contract for goods or services with the association for other than community
management services.
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• Holds an interest in a corporation, limited liability corporation, partnership, limited liability
partnership, or other business entity that conducts business with the association or proposes
to enter into a contract or other transaction with the association.
Under the bill, if the association receives and considers a bid to provide a good or service, other
than community association management services, from a CAM or CAM firm, including
directors, officers, persons with a financial interest in a CAM firm, or a relative of such persons,
the association must also consider at least three bids from other third -party providers of such
good or service.
The bill requires that the proposed activity that may be a conflict of interest must be listed on,
and all contracts and transactional documents related to the proposed activity must be attached
to, the board's meeting agenda and entered into the written minutes of the meeting. The board
must approve the contract or other transaction by an affirmative vote of two-thirds of all other
directors present. At the next regular or special meeting of the members, the existence of the
contract or other transaction must be disclosed to the members. If the contract is canceled
because the board finds that the CAM or CAM firm has violated the discloser requirements, the
bill provides that the association is liable only for the reasonable value of the goods and services
provided up to the time of cancellation and is not liable for any termination fee, liquidated
damages, or other form of penalty for such cancellation.
Under the bill, if the activity has not been properly disclosed as a conflict of interest or potential
conflict of interest, the contract is voidable and terminates upon the association filing a written
notice terminating the contract with its board of directors.
The bill defines the term "relative" to mean a relative within the third degree of consanguinity28
by blood or marriage of a board member or officer.
The bill provides that the procedures in the bill related to disclosures of financial interests,
including the multiple bid requirements, the requirement for a two-thirds vote of approval by the
board, and the right to cancel a contract do not apply to conflicts of interest disclosed in the
management services contract.
The bill revises the disciplinary grounds for CAMs and CAM firms to provide a disciplinary
grounds on the basis of a CAM or CAM firm's failure to disclose a conflict of interest as
required by s. 468.4335, F.S.
" Relatives of the third degree of consanguinity include great grandparent, aunt/uncle, niece/nephew, and great grandchild.
See:
https://www.uab.edu/humanresources/home/ima eg s/M images/Relations/PDFS/FAMILY%20MEMBER%20CHART.pdf
(last visited Feb. 11, 2021).
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Condominium Officers and Directors
Present Situation
Breaches of a Fiduciary Duty and Prohibited Acts
Page 13
Officers and directors of a condominium association have a fiduciary relationship to the unit
owners, and may be sanctioned for breach of their fiduciary duty. 29 An officer, director, or
manager may not solicit, offer to accept, or accept anything or service of value or a kickback for
which consideration has not been provided for the benefit of such person (or immediate family
members) from any person providing or proposing to provide goods or services to the
association. 30
Any such officer, director, or manager who knowingly solicits, offers to accept, or accepts
anything or service of value or kickback is subject to a civil penalty pursuant to
s. 718.501(1)(d), F.S., and, if applicable, a criminal penalty as provided in s. 718.111(1)(d), F.S.
Section 718.11 l(1)(d), F.S., requires an officer, director, or agent to discharge his or her duties in
good faith, with the care an ordinarily prudent person in a similar position would exercise under
similar circumstances, and in a manner he or she reasonably believes to be in the interests of the
association. An officer, director, or agent is liable for monetary damages as provided in
s. 617.0834, F.S., if such officer, director, or agent breaches or fails to perform his or her duties.
The breach of, or failure to perform, such duties constitutes:
• A violation of criminal law as provided in s. 617.0834, F.S.;
• A transaction from which the officer or director derived an improper personal benefit, either
directly or indirectly; or
• Recklessness or an act or omission that was in bad faith, with malicious purpose, or in a
manner exhibiting wanton and willful disregard of human rights, safety, or property.
Section 617.0834, F.S., relates to the provisions for the civil liability of officers and directors of
not-for-profit corporations and associations. 31 Section 617.0834(l), F.S., provides that officers
and directors of certain not-for-profit corporations and associations are not personally liable for
monetary damages to any person for any statement, vote, decision, or failure to take an action,
regarding organizational management or policy by an officer or director, unless the officer or
director:
• Breached or failed to perform his or her duties as an officer or director; and
• Breached or failed to perform his or her duties, and the breach constitutes:
o A criminal violation, unless he or she had reasonable cause to believe his or her conduct
was lawful or had no reasonable cause to believe his or her conduct was unlawful.32
29 Section 718.111(1)(a), F.S.
31 Section 718.111(1)(a), F.S., does not prohibit an officer, director, or manager from accepting services or items received in
connection with trade fairs or education programs.
31 Corporations that operate residential homeowners' associations are governed by ch. 720, F.S., relating to homeowners'
associations, and are subject to part I of ch. 607, F.S., the Florida Business Corporation Act, or ch. 617, F.S., relating to
corporations not-for-profit.
32 Section 617.0834, F.S., does not provide criminal penalties nor reference the criminal law that is violated by the officer's
or director's breach or failure to perform his or her duties.
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o A transaction from which he or she derived an improper personal benefit, directly or
indirectly; or
o A recklessness or an act or omission committed in bad faith or with malicious purpose, or
in a manner exhibiting wanton and willful disregard of human rights, safety, or property.
The Miami -Dade County grand jury found:
Although the directors have a legally mandated fiduciary obligation toward their unit
owners, it appears that some of them are more involved in self-dealing and looking out
for their own financial interests. The position of board director is not generally a paid
position. Yet, some directors appear to view the ability to get into office as an
opportunity to cash in. This should not be countenanced."
Criminal Prohibitions
Section 718.111(1)(d), F.S., also criminalizes the following acts:
• Forgery of a ballot envelope or voting certificate used in a condominium association election
is punishable as provided in s. 831.01, F.S.;
• Theft or embezzlement of funds of a condominium association is punishable as provided in
s. 812.014, F.S.; and
Destruction of or refusal to allow inspection or copying of an official record of a
condominium association that is accessible to unit owners within the time periods required
by general law in furtherance of any crime is punishable as tampering with physical evidence
as provided in s. 918.13, F.S., or as obstruction of justice as provided in ch. 843, F.S.
Removal from Office
Section 718.112(2)(q), F.S., requires a board to immediately remove from office any officer or
director who is charged with felony theft or embezzlement involving association funds. If the
charges are resolved without a finding of guilt or without acceptance of a plea of guilt or nolo
contendere, the director or officer must be reinstated for any remainder of his or her term of
office.
Section 718.111(1)(d), F.S., also provides that an officer or director charged by information or
indictment with any crime referenced in this paragraph 34 must be removed from office, and the
vacancy must be filled as provided in s. 718.112(2)(4)2., F.S., until the end of the officer's or
director's period of suspension or the end of his or her term of office, whichever occurs first. If a
33 Final Report of the Miami -Dade County Grand Jury, supra note 15, at page 10 (citation omitted).
34 The only crimes specifically referenced in s. 718.111(1)(d), F.S., are the previously -described offenses relating to forgery
of a ballot envelope or voting certificate, theft or embezzlement of association funds, and destruction of or refusal to allow
inspection or copying of association records. Additionally, s. 718.111(1)(d), F.S., states that an officer, director, or agent shall
be liable for monetary damages as provided in s. 617.0834, F.S., if such officer, director, or agent breached or failed to
perform his or her duties and the breach of, or failure to perform, his or her duties constitutes a violation of criminal law as
provided in s. 617.0834, F.S. The reference to criminal violations in s. 718.111(1)(d), F.S., is slightly different than the
reference to criminal violations in s. 718.112(2)(0), F.S., which provides that a director or officer charged by information or
indictment with a felony theft or embezzlement offense involving the association's funds or property must be removed from
office. The latter provision appears to be more limited than the former provision.
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criminal charge is pending against the officer or director, he or she may not be appointed or
elected to a position as an officer or a director of any association and may not have access to the
official records of any association, except pursuant to a court order. However, if the charges are
resolved without a finding of guilt, the officer or director must be reinstated for the remainder of
his or her term of office, if any.
Defacing or Destroying Records
Section 718.111(12)(c)2., F.S., provides that any person who knowingly or intentionally defaces
or destroys accounting records that are required to be maintained during the period for which
such records are required to be maintained, or who knowingly or intentionally fails to create or
maintain accounting records that are required to be created or maintained, with the intent of
causing harm to the association or one or more of its members, is personally subject to a civil
penalty pursuant to s. 718.501(1)(d), F.S."
Effect of Proposed Changes
Additional Criminal Prohibitions
The bill amends s. 718.111, F.S., to provide the following additional criminal prohibitions
relating to the management of a condominium association, and provides penalties for violations:
• Third degree felony 36 for an officer, director, or manager of a condominium association to
knowingly solicit, offer to accept, or accept anything or service of value or kickback for
which consideration has not been provided for his or her own benefit or that of his or her
immediate family, from any person providing or proposing to provide goods or services to
the association;
• First degree misdemeanor 37 to knowingly or intentionally deface or destroy required
accounting records or knowingly and intentionally fail to create or maintain required
accounting records, with the intent of causing harm to the association or one or more of its
members (and deletes the provision that such an offense is punishable by a civil penalty); 38
• Second degree misdemeanor 39 for any director or member of the board or association to
knowingly, willfully, and "repeatedly" violate (two or more violations within a 12 -month
31 Section 718.501(1), F.S., authorizes the division to enforce and ensure compliance with the provisions of the
Condominium Act, and rules relating to the development, construction, sale, lease, ownership, operation, and management of
residential condominium units. The division may impose a civil penalty individually against an officer or board member who
willfully and knowingly violates a provision of the Condominium Act, an adopted rule, or a final order of the division.
36 Section 775.082, F.S., provides that a felony of the third degree is punishable by a term of imprisonment not to exceed five
years. Section 775.083, F.S., provides that a felony of the third degree is punishable by a fine not to exceed $5,000.
37 Section 775.082, F.S., provides that a misdemeanor of the first degree is punishable by a term of imprisonment not to
exceed one year. Section 775.083, F.S., provides that a misdemeanor of the first degree is punishable by a fine not to exceed
$1,000.
38 This provision is similar to the Miami -Dade County grand jury's recommendation to criminally punish directors and
members of the board or association who knowingly or intentionally deface or destroy accounting records or fail to create or
maintain such records. The grand jury recommended a second degree misdemeanor for a first offense, and a first degree
misdemeanor for any subsequent offenses. Final Report of the Miami -Dade County Grand Jury, supra note 15, at pages 8-9.
39 Section 775.082, F.S., provides that a misdemeanor of the second degree is punishable by a term of imprisonment not to
exceed 60 days. Section 775.083, F.S., provides that a misdemeanor of the second degree is punishable by a fine not to
exceed $500.
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period) any specified requirements relating to the inspection and copying of official records
of an association; and
• Third degree felony40 to willfully and knowingly refuse to release or otherwise produce
association records, with the intent to avoid or escape detection, arrest, trial, or punishment
for the commission of a crime, or to assist another person with such avoidance or escape. 41
The bill provides that officers and directors charged with a criminal violation created in the bill
are deemed removed from office and a vacancy declared.
Use of Credit Cards
The bill amends s. 718.111(15), F.S., to revise the prohibitions related to use of an association's
credit card. Under the bill, a person commits theft42 by use of a debit card, if the person uses a
debit card issued in the name of, or billed directly to, an association for any expense that is not a
lawful obligation of the association. The bill defines a "lawful obligation of the association" as
an obligation that has been properly preapproved by the board and is reflected in the meeting
minutes or the written budget. The bill deletes the provision in current law that the unlawful use
of an association's credit card constitutes credit card fraud pursuant to s. 817.61, F.S.
Removal from Office
The bill amends s. 718.112(2)(q), F.S., to expand the number of crimes for which an officer or
director charged by information or indictment must be removed from office to include:
• Forgery of a ballot envelope or voting certificate used in a condominium association election
punishable as a felony crime as provided in s. 831.01, F.S.;43 and
• Destruction of or refusal to allow inspection or copying of an official record of a
condominium association that is accessible to unit owners within the time periods required
by general law in furtherance of any crime which is punishable as tampering with physical
evidence as provided in s. 918.13, F.S., or as obstruction of justice as provided in ch. 843,
F.S.
41 Section 775.082, F.S., provides that a felony of the third degree is punishable by a term of imprisonment not to exceed five
years. Section 775.083, F.S., provides that a felony of the third degree is punishable by a fine not to exceed $5,000.
41 This provision is similar to the Miami -Dade County grand jury's recommendation to make it a third degree felony for any
association, board director, management company, or management company employee to willfully, knowingly, or
intentionally refuse to release or otherwise produce official association records, if such refusal is done to facilitate or cover-
up the commission of a crime. Final Report of the Miami -Dade County Grand Jury, supra note 15, at pages 8-9.
41 Theft is generally punishable based upon the value of the property stolen. Petit theft is generally a second degree
misdemeanor or first degree misdemeanor. Section 812.014(3)(a) and (b), F.S. Grand theft is generally a third degree felony,
second degree felony, or first degree felony. Section 812.014(1)(a) -(c), F.S. A second degree felony is punishable by up to 15
years in state prison and a fine of up to $10,000. Sections 775.082 and 775.083, F.S. A first degree felony is generally
punishable by up to 30 years in state prison and a fine of up to $10,000. Id.
41 Section 83 1.01, F.S., relates to the crime of forgery. A forgery violation is a felony of the third degree. Section 775.082,
F.S., provides that a felony of the third degree is punishable by a term of imprisonment not to exceed five years.
Section 775.083, F.S., provides that a felony of the third degree is punishable by a fine not to exceed $5,000.
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Under the bill, a vacancy must be filled as provided by s. 718.112(2)(d), F.S., until the end of the
officer's or director's period of suspension or the end of his or her term of office, whichever
occurs first."
Under the bill, if a criminal charge is pending against an officer or director, he or she may not
have access to the official records of any association, except pursuant to a court order.
Fraudulent Voting Activities
The bill creates s. 718.112(2)(r), F.S, to provide that each of the following actions relating to
condominium association elections is a fraudulent voting activity and constitutes a misdemeanor
of the first degree: 45
• Willfully and falsely swearing to or affirming an oath or affirmation, or willfully procuring
another person to falsely swear to or affirm an oath or affirmation, in connection with or
arising out of voting activities.
• Perpetrating or attempting to perpetrate, or aiding in the perpetration of, fraud in connection
with a vote cast, to be cast, or attempted to be cast.
• Preventing a member from voting, or preventing a member from voting as he or she
intended, by fraudulently changing or attempting to change a ballot, ballot envelope, vote, or
voting certificate of the member.
• Menacing, threatening, or using bribery or any other corruption to attempt, directly or
indirectly, to influence, deceive, or deter a member when voting.
• Giving or promising, directly or indirectly, anything of value to another member with the
intent to buy the vote of that member or another member or to corruptly influence that
member or another member in casting his or her vote. This provision does not apply to any
food served which is to be consumed at an election rally or a meeting or to any item of
nominal value which is used as an election advertisement, including a campaign message
designed to be worn by a member.
• Using or threatening to use, either directly or indirectly, force, violence, or intimidation or
any tactic of coercion or intimidation to induce or compel a member to vote or refrain from
voting in an election or on any particular ballot measure.
In addition, the bill provides that the following actions relating to condominium association
elections are fraudulent voting activities and constitute a misdemeanor of the first degree: 46
• Knowingly aiding, abetting, or advising a person in the commission of a fraudulent voting
activity related to association elections.
• Agreeing, conspiring, combining, or confederating with at least one other person to commit a
fraudulent voting activity related to association elections.
44 Section 720.306(9), F.S., relates to elections and vacancies on a board. It also prohibits convicted felons, including persons
who've been convicted in another jurisdiction which would be considered a felony crime in Florida, of serving on a board for
at least five years as of the date the person seeks election to the board, unless their civil rights have been restored.
as Section 775.082, F.S., provides that a misdemeanor of the first degree is punishable by a term of imprisonment not to
exceed one year. Section 775.083, F.S., provides that a misdemeanor of the first degree is punishable by a fine not to exceed
$1,000.
46 Id.
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• Having knowledge of a fraudulent voting activity related to association elections and giving
any aid to the offender with intent that the offender avoid or escape detection, arrest, trial, or
punishment.
The criminal prohibitions in s. 718.112(2)(r), F.S., do not apply to a licensed attorney giving
legal advice to a client.
Official Records — Condominiums
Present Situation
Section 718.111(12)(a), F.S., requires a condominium association to maintain various records,
including but not limited to, the association's recorded bylaws and amendments to those bylaws,
articles of incorporation and amendments to those articles, bills of sale or transfer for
association -owned property, accounting records, voting ballots, contracts for work to be
performed, and bids.
Section 718.111(12)(b), F.S., requires that some of these records (e.g., bylaws and articles of
incorporation) be permanently maintained from the inception of the association. All other official
records must be maintained within the state for at least seven years, unless otherwise provided by
general law. 4' The records must be made available to a unit owner within 45 miles of the
condominium property or within the county in which the condominium property is located
within 10 working days after receipt of a written request by the board or its designee. An
association must make a copy of the records available for inspection or copying by a unit owner
on the condominium property or association property or offer the option of making the records
available electronically via the Internet or allow the records to be viewed in electronic format on
a computer screen and printed upon request.
Section 718.111(12)(c)l., F.S., provides that official records of the association are open to
inspection by any association member or the authorized representative of such member at all
reasonable times. 48 A renter of a unit has a right to inspect and copy the association's bylaws and
rules. The failure of an association to provide the records within 10 working days after receipt of
a written request creates a rebuttable presumption that the association willfully failed to comply
with these requirements. A unit owner who is denied access to official records is entitled to the
actual damages or minimum damages for the association's willful failure to comply. The failure
to permit inspection entitles any person prevailing in an enforcement action to recover
reasonable attorney fees from the person in control of the records who, directly or indirectly,
knowingly denied access to the records.
Section 718.111(12)(g), F.S., provides that by January 1, 2019, an association managing a
condominium with 150 or more units which does not contain timeshare units must post digital
copies of specified records on its website. These documents include, but are not limited to: the
recorded declaration of condominium of each condominium operated by the association and each
47 Section 718.111(12)(b), F.S.
as The right to inspect the records includes the right to make or obtain copies, at the reasonable expense, if any, of the
member or authorized representative of such member. The association may adopt reasonable rules regarding the frequency,
time, location, notice, and manner of record inspections and copying.
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amendment to each declaration, the recorded association bylaws and amendments to those
bylaws, articles of incorporation of the association and amendments to those articles, the annual
and proposed budget, and various contracts, including any contract or document regarding a
conflict of interest or possible conflict of interest. The failure of the association to post required
information is not in and of itself sufficient to invalidate any action or decision of the
association's board or its committees.
Effect of Proposed Changes
The bill amends the official records requirements for condominium associations in
s. 718.111(12), F.S., to require official records be kept in a manner that facilitates inspection of
the records by unit owners. In addition, if records are lost, destroyed, or otherwise made
unavailable, the bill provides that the obligation to maintain official records includes the
obligation to recover those records as may reasonably be possible to the fullest extent possible.
Effective January 1, 2026, the bill amends the requirements for condominium associations to
maintain specified records available for download on the association's website or by an
application on a mobile device to decrease from 150 units to 25 units the threshold for that
requirement.
The bill also amends s. 718.111(12), F.S., to:
• Require additional financial records (all invoices, transaction receipts, or deposit slips that
substantiate any receipt or expenditure of funds by the association) be maintained by a
condominium association and made available for inspection by association members;
• Permit associations to comply with its obligations related to a member's right of access to
certain official records and right to copies of such records by posting the records on the
association's website and directing an authorized requester to such website;
• Require associations to respond to a statutorily compliant written request to inspect records
with a checklist of all records made available, and not made available, for inspection and
copying;
• Require associations to maintain the checklist provided in response to a written request for
seven years; and
• Require an association to maintain, and have available for download on the association's
website or by an application on a mobile device, building permits related to ongoing or
planned construction.
The bill amends s. 718.501(1)(d)7., F.S., to require the division to provide the official records to
the unit owner at no charge when the division subpoenas the records the association failed to
timely provide in response to a unit owner's written request.
Financial Reporting — Condominiums
Present Situation
Section 718.11(13), F.S., provides the financial reporting requirements for condominium
associations. Within 90 days following the end of the fiscal or calendar year, or annually on such
date as provided in the association's bylaws, the governing board of the association must
complete, or contract with a third party to complete, the financial report. Within 21 days after the
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financial report is completed by the board or received from the third party, but no later than 120
days after the end of the fiscal year, the board must provide each member of the, association a
copy of the financial report or a notice that it is available at no charge upon a written request.
The association must deliver the financial report, by mail or hand delivery to each unit owner at
the address last furnished to the association by the unit owner, a copy of the most recent financial
report or a notice that a copy of the most recent financial report will be mailed or hand delivered
to the unit owner, without charge, within 5 business days after receipt of a written request from
the unit owner.
The type of financial reporting that an association must perform differs based on the
association's total annual revenue. From the least stringent to the most stringent, an association
that has a total annual revenue of:
• Less than $150,000 must prepare a report of cash receipts and expenditures.
• At least $150,000 but less than $300,000 must prepare compiled financial statements.49
• At least $300,000 but less than $500,000 must prepare reviewed financial statements.so
• $500,000 or more must prepare audited financial statements. 51
An association may prepare a more or less stringent type financial report if approved by vote of
the majority of the voting interest of the association. 52 An approval to provide a less stringent
type of financial report is effective only for the year in which the vote is taken and for the
following fiscal year. 53
Effect of Proposed Changes
The bill amends the financial reporting requirements in s. 718.111(13), F.S., to:
• Revise the requirements for delivery of the financial statement to:
o Require that the delivery be by hand delivery or mailed to each unit owner, by United
States mail or personal delivery at the mailing address, property address, e-mail address,
or facsimile number provided to fulfill the association's notice requirements;
o Require associations to deliver a copy of the management letter or opinion letter, 54 as
applicable, for the most recent financial report; and
av A compiled financial statement is an accounting service based on information provided by the entity that is the subject of
the financial statement. A compiled financial statement is made without a Certified Public Accountant's (CPA) assurance as
to conformity with GAAP. Compiled financial statements must conform to the American Institute of Certified Public
Accountants (AICPA) Statements on Standards for Accounting and Review Services. J.G. Siegel and J.K. Shim, Barron's
Business Guides, Dictionary of Accounting Terms, 3rd ed. (Barron's 2000).
so A reviewed financial statement is an accounting service that provides a board of directors and interested parties some
assurance as to the reliability of financial data without the CPA conducting an examination in accordance with GAAP.
Reviewed financial statements must comply with AICPA auditing and review standards for public companies or the AICPA
review standards for non-public businesses. Id.
si An audited financial statement by a CPA verifies the accuracy and completeness of the audited entities records in
accordance with GAAP. Id.
12 See s. 718.111(13)(c) and (d), F.S.
ss See s. 718.111(13)(d), F.S.
sa An opinion letter states whether the accounts accord with accounting principles. A management letter explains whether
there are any problems identified with the company's internal controls. These letters are required by accounting
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o Require associations to give unit owners a notice that a copy of the most recent financial
report will be mailed or hand delivered to the unit owner, without charge, within 5
business days after receipt of a written request from the unit owner;
Prohibit associations from reducing the required type of financial statement for consecutive
years;
Prohibit associations that invest funds pursuant to s. 718.111(16)(b), F.S., from reducing the
required type of financial statement; and
Require associations that invest funds pursuant to s. 718.111(16)(b), F.S., to prepare the
required type of financial statement.
Investing Reserves — Condominiums
Present Situation
Reserve Funds
In addition to annual operating expenses, the budget must include reserve accounts for capital
expenditures and deferred maintenance. 55
Commingling of Funds and Investing
Section 718.111(14), F.S., requires all funds collected by an association to be maintained
separately in the association's name. Operating funds and reserve funds must be accounted for
separately, and a commingled account cannot, at any time, be less than the amount identified as
reserve funds. However, reserve funds may be commingled with operating funds of the
association for investment purposes only.
Investment Advisers
Investment advisers are defined as "any person who receives compensation, directly or
indirectly, and engages for all or part of her or his time, directly or indirectly, or through
publications or writings, in the business of advising others as to the value of securities or as to
the advisability of investments in, purchasing of, or selling of securities, except a dealer whose
performance of these services is solely incidental to the conduct of her or his business as a dealer
and who receives no special compensation for such services."56 The term does not include:
• Any licensed practicing attorney whose performance of such services is solely incidental to
the practice of her or his profession;
• Any licensed certified public accountant whose performance of such services is solely
incidental to the practice of her or his profession;
• Any bank authorized to do business in this state;
• Any bank holding company as defined in the Bank Holding Company Act of 1956, as
amended, authorized to do business in this state;
standards and are intended to help provide investors with an overall picture of the operations of an organization. See
Chron.com, Opinion Letters Vs. Management Letters in the Accounting Field, Sept. 21, 2020, available at:
https://smallbusiness.chron.com/types-audit-opinion-letters-3787.htmi (last visited Jan. 13, 2024).
ss Section 718. 112(2)(02., F.S.
s6 Section 517.021(14)(a), F.S.
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• Any trust company having trust powers which it is authorized to exercise in the state, which
trust company renders or performs services in a fiduciary capacity incidental to the exercise
of its trust powers;
• Any person who renders investment advice exclusively to insurance or investment
companies;
• Any person who does not hold herself or himself out to the general public as an investment
adviser and has no more than 15 clients within 12 consecutive months in this state;
• Any person whose transactions in this state are limited to those transactions described in s.
222(d) of the Investment Advisers Act of 1940; or
• A federal covered adviser.57
An investment adviser must be registered with the Office of Financial Regulation (OFR) within
the Financial Services Commission58 to "sell or offer for sale any securities in or from offices in
this state, or sell securities to persons in this state from offices outside this state, by mail or
otherwise, unless the person has been registered with the [OFR] pursuant to the provisions of this
section. The [OFR] shall not register any person as an associated person of a dealer unless the
dealer with which the applicant seeks registration is lawfully registered with the [OFR] pursuant
to [ch. 517, F. S.],,59
Effect of Proposed Changes
The bill creates s. 718.111(16), F.S., to authorize condominium associations, including
multicondominium associations, to invest reserve funds. The bill provides procedures and
requirements an association must follow when investing reserve funds, including limits on the
types of permissible investments, recording keeping requirements, and requiring the use of an
independent investment adviser. The bill:
• Requires the board to use its best efforts to make prudent investment decisions that carefully
consider risk and return in an effort to maximize returns on invested funds;
• Permits reserve funds to be invested in one or any combination of depository accounts at a
community bank, savings bank, commercial bank, savings and loan association, or credit
union if the respective account balance at any institution does not exceed the amount of
deposit insurance per account provided by any agency of the Federal Government or as
otherwise available. Permits only reserve funds identified as reserve funds may be invested
even if the declaration permits operating funds to be invested;
• Requires the board to create an investment committee composed of at least two board
members and two -unit non -board member unit owners, adopt rules for invested funds,
including, but not limited to, rules requiring periodic reviews of any investment manager's
performance, the development of an investment policy statement, and that all meetings of the
investment committee be recorded and made part of the official records of the association;
• Specifies the issues that must be addressed in the investment policy, including the
requirement that it project reserve expenditures within, at minimum, the next 24 months to be
held in cash or cash equivalents and projected expenditures relating to the milestone
inspection, and prove protocols for proxy response;
57 Section 517.021(14)(b), F.S.
58 Section 517.021(8), F.S.
s9 Section 517.12(1), F.S.
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• Requires the investment committee to recommend investment advisers to the board.
• Requires such investment advisers to be registered or have a notice filed under s. 517.12, F.S,
which requires investment advisers to file a notice required under s. 517.120 1, F.S., with the
OFR, and to not be related by affinity or consanguinity to, or under common ownership with,
any board member, community management company, reserve study provider, or unit owner;
• Requires the investment adviser to comply with the prudent'investor rule in s. 518.11, F.S.,"
to act as a fiduciary to the association in compliance with the standards set forth in the
Employee Retirement Income Security Act of 1974;
• Requires that the association, at least once each calendar year, or sooner if a substantial
financial obligation of the association becomes known to the board, to provide the investment
adviser with the association's investment policy statement, the most recent reserve study
report, the association's structural integrity report, if available, and the financial reports
prepared pursuant to subsection s. 718.111(13), F.S.;
• Requires the investment adviser to:
o Annually review these documents and provide the association with a portfolio allocation
model that is suitably structured and prudently designed to match projected annual
reserve fund requirements and liability, assets, and liquidity requirements;
o Prepare a funding projection for each reserve component, including any of the
component's redundancies;
o Annually provide the association with a written certification of compliance with this
section and a list of stocks, securities, and other obligations that are prohibited from being
in association portfolio; and
o Submit monthly, quarterly, and annual reports to the association which are prepared in
accordance with established financial industry standards and in accordance with ch. 517,
F.S, relating to the regulation of investment advisers.
• Require that there be a minimum of 24 months of projected reserves in cash or cash
equivalents available to the association at all times;
• Prohibit investment in stocks, securities, or other obligations that the State Board of
Administration or state agencies are prohibited from investing in under ss. 215.471,
215.4725, 215.472, and 215.473, F.S., as determined by the investment adviser; 61
• Permit the investment adviser to withdraw investment fees, expenses, and commissions from
invested funds;
• Require that any principal, earnings, or interest must be available at no cost or charge to the
association within 15 business days after delivery of the association's written or electronic
request; and
• Require unallocated income earned on reserve fund investments to be spent only on capital
expenditures, planned maintenance, structural repairs, or other items for which the reserve
accounts have been established.
61 Section 518.11, F.S., sets forth the prudent investor rule. Generally, a fiduciary has a duty to invest and manage investment
assets as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the
trust.
61 These provisions deal with investments in stocks, securities, or other obligations of companies doing business with Cuba or
Venezuela, that boycott Israel or engage in a boycott of Israel, or that conduct certain business operations with [North] Sudan
and Iran.
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Meetings of the Board of Administration — Condominiums
Present Situation
Page 24
Section 718.112(2)(c), F.S., requires that all meetings of the board in which a quorum is present
to be open to all unit owners. Chapter 718, F.S., provides notice requirements for meetings of the
board,62 but does not mandate the frequency of such meetings.
If the board considers any special or regular assessment against unit owners, the notice for the
meeting must specifically state that the assessments will be considered and provide the estimated
cost and description of the purposes for such assessments.
Effect of Proposed Changes
The bill amends s. 718.112(2)(c), F.S., to:
• Require condominium associations of 10 or more units to meet at least once each quarter for
the purpose of responding to inquiries from members and informing members on the state of
the condominium, including the status of any construction or repair projects, the status of the
association's revenue and expenditures during the fiscal year, or other issues affecting the
association; and
Require associations to include a copy of the proposed contract in the notice of a board
meeting, or provide electronic access to the contract on the association's website or through
an application on a mobile device, if the notice for a board meeting relates to the approval of
a contract.
Director and Officer Education — Condominiums
Present Situation
Section 718.112(2)(d)4.b., F.S., provides education or certification requirements for newly
elected or appointed members of the board.63 Within 90 days after being elected or appointed, a
new board member for a condominium, cooperative, and homeowners' association must certify
that he or she:
• Has read the declaration of condominium for all condominiums operated by the association
and the declaration of condominium, articles of incorporation, bylaws, and current written
policies;
• Will work to uphold such documents and policies to the best of his or her ability; and
• Will faithfully discharge his or her fiduciary responsibility to the association's members.
As an alternative to a written certification, the newly elected or appointed director may submit a
certificate of satisfactory completion of the educational curriculum within one year before the
election or 90 days after the election or appointment.64 The curriculum must be administered by a
bz Section 718.112(2)(c), F.S.
63 Sections 719.106(1)(d)b. and 720.720.303(1)(a), F.S., provide comparable post-election certification requirements for
newly elected cooperative and homeowners' association board members, respectively.
6' The division's Internet site provides a listing of approved educational providers for the certification of board members. See
Department of Business and Professional Regulation, Condominium & Cooperatives — Education, available at:
http://www.mvfloridalicense.com/DBPR/condominiums-and-cooperatives/education/ (last visited Jan. 13, 2024).
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condominium education provider approved by the division. 6' A certification is valid and does not
have to be resubmitted as long as the director continuously serves on the board.
A board member is suspended from service on the board until he or she files the written
certification or submits a certificate of completion of the educational curriculum. 66 If a
suspension occurs, the board may temporarily fill the vacancy during the period of suspension.
The secretary of the association must keep the written certification or educational certificate for
inspection by the members for five years after a board director's election or the duration of the
director's uninterrupted tenure, whichever is longer. 67 The validity of any action by the
condominium board is not affected by the association's failure to have the certification on file. 68
Effect of Proposed Changes
The bill amends the post-election certification requirements in s. 718.112(2)(d)4.b., F.S., to:
• Require newly elected or appointed directors to submit both the written certification that they
have read the association's governing documents, will work to uphold the governing
documents of the association to the best of their ability and will faithfully discharge their
duties, and submit a certificate of completion of an education course and submit certification
that they have completed an approved condominium education course;
• Provide that the written certification and educational certificate are valid for 10 years;
• Provide that developer -appointed directors do not have to retake the education course for any
subsequent appointment by a developer, but the previously submitted educational certificate
is valid for only 10 years; and
Require directors to annually complete continuing education on recent changes to the
condominium laws and rules.
The bill also amends s. 718.501(1)(c), F.S., to:
• Require the division to provide the required educational curriculum to directors at no charge,
including when the required educational curriculum is provided by a division -approved
condominium education provider; and
• Require associations to annually certify that all directors have completed the required written
certification and educational certificate requirements.
Reserves and Structural Integrity Reserve Studies — Condominiums and Cooperatives
Present Situation
In addition to annual operating expenses, the budget must include reserve accounts for capital
expenditures and deferred maintenance. Reserve accounts must include, but are not limited to,
roof replacement, building painting, and pavement resurfacing, regardless of the amount of
deferred maintenance expense or replacement cost, and any other item that has a deferred
maintenance expense or replacement cost that exceeds $10,000.69
bs Sections 718.112(2)(d)4.b., F.S.
66 Id.
67 Id.
68 Id.
69 See s. 718.112(2)(0 and 719.106(1)0), F.S., relating to reserves requirements for condominium and cooperative
associations, respectively.
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The amount to be reserved must be computed using a formula based upon the estimated
remaining useful life and estimated replacement cost or deferred maintenance expense of each
reserve item. Replacement reserve assessments may be adjusted annually to take into account
any changes in estimates or extension of the useful life of a reserve item caused by deferred
maintenance. 70
A "structural integrity reserve study" (SIRS) is a study of the reserve funds required for future
major repairs and replacement of the common elements based on a visual inspection. A SIRS is
required for condominium buildings that are three or more stories in height-"
Regarding the funding of reserves for the continued maintenance and repair of condominium and
cooperative buildings, ss. 718.112(2)(f) and 719.106(l)(j), F.S., relating to condominium and
cooperative associations, respectively, associations that are required to have a SIRS may not
waive reserves for the SIRS items or use such reserves for other purposes.
Regarding the SIRS, ss. 718.112(2)(g) and 719.106(1)(k), F.S., relating to condominium and
cooperative associations, respectively:
• Require condominium associations and cooperative associations to complete a structural
integrity reserve study every 10 years for each building in an association that is three stories
or higher in height, as determined by the Florida building code.
• Require associations existing on or before July 1, 2022, that are controlled by non -developer
unit owners, to have a structural integrity reserve study completed by December 31, 2024.
• Require that the study include a visual inspection, and state the estimated remaining useful
life and the estimated replacement cost of the following items (structural integrity items):
roof, structure, fireproofing and fire protection systems, plumbing, electrical systems,
waterproofing, windows and exterior doors, and any item with a deferred maintenance or
replacement cost that exceeds $10,000.
Require the visual inspection be performed or verified by a person licensed as an engineer, an
architect, reserve specialist, or professional reserve analyst certified by the Community
Associations Institute or the Association of Professional Reserve Analysts. However, any
qualified person or entity may perform the other components of a SIRS.
Provide that the SIRS may recommend that reserves do not need to be maintained for any
item for which an estimate of useful life and an estimate of replacement cost or deferred
maintenance expense cannot be determined or for which the estimate of useful life is greater
than 25 years, but the study may recommend a deferred maintenance amount for such items;
Exempt from the SIRS requirement:
o Buildings less than three stories in height;
o Single-family, two-family, or three-family dwellings with three or fewer habitable stories
above ground; and
o Any portion or component of a building that has not been submitted to the condominium
or cooperative form of ownership; or any portion or component of a building that is
maintained by a party other than the condominium or cooperative association.
70 Id.
71 See s. 718.112(2)(g) and 719.106(1)(k), F.S., relating to SIRS requirements for condominium and cooperative associations,
respectively
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Members of unit -owner -controlled associations may waive reserves upon a majority vote of the
total voting interests of the association. However, after December 31, 2024, unit -owner -
controlled condominium and cooperative associations that must obtain a SIRS may not waive
reserves. Associations that are required to obtain a SIRS also may not opt to provide less
reserves or no reserves than are required for the structural integrity items. Nor may those
reserves be used for any other purpose than their intended purpose. 72
Before turnover of control to the unit owners, ss. 718.301(4)(p) and 719.301(4)(p), F.S., require
the developer to perform a turnover inspection performed by a licensed professional engineer or
architect, or a reserve specialist or professional reserve analyst certified by the Community
Associations Institute or the Association of Professional Reserve Analysts. However, this
provision does not require that the inspection comply with the SIRS requirements in
ss. 718.112(2)(g) and 719.106(1)(k), F.S., relating to condominium and cooperative associations,
respectively.
Effect of Proposed Changes
The bill revises the term "deferred maintenance" to "planned maintenance" in chs. 718 and 719,
F.S.
In addition, the bill amends s. 718.112(2), F.S., to:
• Allow condominium associations to waive reserves and for the structural integrity reserve
study to recommend a temporary suspension of reserve funding if the building or units are
unsafe and uninhabitable as determined by the local enforcement agency, but the association
may not waive or reduce reserve funding requirements after a building or units have been
declared safe for occupancy by the local enforcement agency; 73 and
• Permit the SIRS to recommend a temporary pause in the funding of reserves or a reduction in
reserve funding if the condominium building or units are unsafe and uninhabitable due to
substantial damage or loss as determined by the local enforcement agency and it is in the best
interests of the association to use revenues and existing reserve funds to perform necessary
repairs to make the building safe and habitable, but the reserve funding schedule may not
pause reserve funding after the building has been declared safe for occupancy by the local
enforcement agency.
Relating to the SIRS requirements for condominium and cooperative associations, the bill
amends ss. 718.112(2)(f) and 719.106(1)(j), F.S., respectively, to:
• Require these associations to provide unit owners with a notice that the structural integrity
reserve study is available for inspection and copying within 45 days of completion of the
study. The notice may be provided electronically. 74
• Allow an extension of the deadline for completion of a SIRS if the condominium or
cooperative association has entered into a contract for the performance of the study and the
study cannot reasonably be performed or completed by December 31, 2024. However, the
completion of the SIRS must be performed or completed by December 31, 2026.
72 Sections 718.112(2)(0 and 719.106(1)0), F.S., relating to condominium and cooperative associations, respectively.
73 See s. 533.71(5), F.S., defining "local enforcement agency."
74 This notice delivery requirement is identical to the requirement for delivery of the inspector -prepared summary of the
milestone inspection report required under. s. 553.899, F.S.
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The bill also clarifies that the turnover report required under ss. 718.301(4)(p) and 719.301(4)(p),
F.S., consists of a structural integrity reserve study.
Assessments — Condominiums
Present Situation
Section 718.112(2)(i), F.S., provides for the manner of collecting assessments from unit owners,
which may be done not less than quarterly. Current law does not provide guidelines or
requirements for condominium associations to obtain a line of credit in lieu of a special
assessment for the funding of reserves or other expenditures. A special assessment is any
assessment levied against a unit owner other than the assessment required by a budget adopted
annually. 75
Section 718.116(10), F.S., requires that the specific purpose or purposes of any special
assessment, including any contingent special assessment levied in conjunction with the purchase
of an insurance policy authorized by s. 718.111 (11), F.S., approved in accordance with the
condominium documents must be set forth in a written notice of assessment sent or delivered to
each unit owner. Current law does not specify that a special assessment must be recorded in the
public records.
Effect of Proposed Changes
In lieu of a special assessment, the bill amends the assessment provisions in
s. 718.112(2)(i), F.S., to provide a process for the board to secure a line of credit and assess a
contingent special assessment to fund repairs recommended by a milestone inspection required
under s. 553.899, F.S., or a similar local inspection requirement or structural integrity reserve
study, or unanticipated repairs.
Under the bill, the board must have immediate access to the funding in the line of credit to fund
required repairs, maintenance, or replacement expenses without further approval by the members
of the association. A unit owner may opt to pay the contingent special assessment in full at the
time it becomes due, or may be allowed to make amortized payments over a term of years as
provided for by the line of credit. However, a unit owner may pay the remaining balance of the
special assessment at any time during the amortization period.
A line of credit may not be used as an alternative to an association's reserve funding obligation.
However, for a budget adopted on or before December 31, 2029, the bill permits an association
to secure a line of credit and assess a contingent special assessment to meet the reserve funding
schedule recommended by the structural integrity reserve study.
The bill amends s. 718.116, F.S., to include contingent special assessments and any line of credit
for which a contingent special assessment may be imposed in the list of information that must be
included in the estoppel certificate. 76
75 Section 718.103(25), F.S.
76 When an ownership interest in a condominium unit is transferred, the new owner is jointly and severally liable with the
previous owner for unpaid assessments owed to a condominium, cooperative, or homeowners' association. Unpaid
assessments may also become a lien on the property. Under s. 718.116(8), F.S., a unit owner may request that the association
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Hurricane Protection — Condominiums
Present Situation
Chapter 718, F.S., does not define the term "hurricane protection."
Page 29
Section 718.113(5)(b), F.S., provides that a condominium association is responsible for the
maintenance, repair, and replacement of the hurricane shutters, impact glass, code -compliant
windows or doors, or other types of code -compliant hurricane protection authorized by this
subsection if such property is the responsibility of the association pursuant to the declaration of
condominium. If the hurricane shutters, impact glass, code -compliant windows or doors, or other
types of code -compliant hurricane protection are the responsibility of the unit owners pursuant to
the declaration of condominium, the maintenance, repair, and replacement of such items are the
responsibility of the unit owner.
Section 718.113(5)(c), F.S., authorizes the board to operate shutters, impact glass, code -
compliant windows or doors, or other types of code -compliant hurricane protection installed
pursuant to this subsection without the permission of the unit owners only if such operation is
necessary to preserve and protect the condominium property or and association property. The
installation, replacement, operation, repair, and maintenance of such shutters, impact glass, code -
compliant windows or doors, or other types of code -compliant hurricane protection in
accordance with the procedures set forth in s. 718.113(5)(c), F.S., are not a material alteration to
the common elements or association property.77
Section 718.113(5)(d), F.S., provides that, notwithstanding any other provision in the residential
condominium documents, if approval is required by the documents, a board may not refuse to
approve the installation or replacement of hurricane protection by a unit owner conforming to the
specifications adopted by the board.
Section 718.115(1)(e), F.S., requires that the expense of installation, replacement, operation,
repair, and maintenance of hurricane shutters, impact glass, code -compliant windows or doors, or
other types of code -compliant hurricane protection by the board pursuant to s. 718.113(5), F.S.,
constitutes a common expense and shall be collected as provided in this section if the association
is responsible for the maintenance, repair, and replacement of the hurricane shutters, impact
glass, code -compliant windows or doors, or other types of code -compliant hurricane protection
pursuant to the declaration of condominium. Section 718.115(1)(e)1., F.S., does not indicate that
provide an estoppel certificate to provide to the prospective purchaser of the unit. The estoppel certificate protects the new
owner against undisclosed financial obligations and transfers title to the property free of any lien or encumbrance in favor of
the association. An estoppel certificate certifies the amount of any total debt owed to the association for unpaid monetary
obligations by a unit or parcel owner as of a specified date, and provides additional information regarding the association,
such as the amount of any regular periodic assessments or special assessments.
11 Section 718.110, F.S., provides the procedure for amending the declaration of condominium. It provides that, "unless
otherwise provided in the declaration as originally recorded, no amendment may change the configuration or size of any unit
in any material fashion, materially alter or modify the appurtenances to the unit, or change the proportion or percentage by
which the unit owner shares the common expenses of the condominium and owns the common surplus of the condominium
unless the record owner of the unit and all record owners of liens on the unit join in the execution of the amendment and
unless all the record owners of all other units in the same condominium approve the amendment."
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the costs of installation of hurricane protection are enforceable as an assessment and may be
collected in the manner provided under s. 718.116, F.S.
Further, s. 718.115(1)(e), F.S., states that a unit owner who has previously installed code -
compliant shutters, impact glass, windows, or doors, must receive a credit when code -compliant
shutters, impact glass, windows, or doors are installed. A unit owner who has previously
installed impact glass or code -compliant windows or doors that comply with the current
applicable building code, must receive a credit when the impact glass or code -compliant
windows or doors are installed. A unit owner who has installed other types of code -compliant
hurricane protection that comply with the currently applicable building code is entitled to receive
a credit when the same type of other code -compliant hurricane protection is installed, and the
credit must be equal to the pro rata portion of the assessed installation cost assigned to each unit.
Effect of Proposed Changes
The bill substantially revises the existing hurricane protection provisions in ch. 718, F.S.
The bill creates s. 718.103(19), F.S., to define "hurricane protection" to mean "hurricane
shutters, impact glass, code -compliant windows or doors, and other code -compliant hurricane
protection products used to preserve and protect the condominium property or association
property."
The bill clarifies the responsibilities of unit owners and associations for the costs of maintenance,
repair, and replacement of hurricane protections exterior doors, windows, and glass apertures.
The bill amends s. 718.104(4)(p), F.S., relating to the creation of condominiums, to require the
declarations of residential condominiums and mixed-use condominiums specify whether the unit
owner or the association is responsible for the installation, maintenance, repair, or replacement of
hurricane protection that is for the preservation and protection of the condominium property and
association property.
The bill amends s. 718.113(5), F.S., to provide that, to protect the health, safety, and welfare of
the people of this state and to ensure uniformity and consistency in the hurricane protections
installed by condominium associations and unit owners, the hurricane protection provisions
apply to all residential and mixed-use condominiums in Florida, regardless of when the
condominium is created pursuant to the declaration. The bill provides that the installation,
maintenance, repair, replacement, and operation of hurricane protection in accordance with the
hurricane protection requirements is not considered a material alteration or substantial addition to
the common elements or association property.
Under the bill, a vote of the unit owners to require the installation of hurricane protection must
be set forth in a certificate attesting to such vote and include the date that the hurricane
protection must be installed. The board must record the certificate in the public records of the
county where the condominium is located. The certificate must include the recording data
identifying the declaration of the condominium and must be executed in the form required for the
execution of a deed. Once the certificate is recorded, the board must mail or hand -deliver a copy
of the recorded certificate to the unit owners at the owners' address as reflected in the records of
the association. The board may provide a copy of the recorded certificate by electronic
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transmission to unit owners who previously consented to receive notice by electronic
transmission. The board's failure to record the certificate or to send a copy of the recorded
certificate to the unit owners does not affect the validity or enforceability of the vote of the unit
owners.
The bill allows the board to require that unit owners adhere to an existing unified building
scheme regarding the external appearance of the condominium.
Regarding a unit owner's responsibility for the costs of installation or removal of hurricane
protection, the bill provides that the unit owner is not responsible for the cost of any removal or
reinstallation of hurricane protection if the unit owner installed the hurricane protection and its
removal is necessary for the maintenance, repair, or replacement of the condominium property or
association property for which the association is responsible. If such removal or installation is
completed by the association, the association may not charge that cost to the unit owner. If such
installation of removal is completed by the unit owner, the association must reimburse the unit
owner for the cost or apply the cost as a credit toward future assessments.
Under the bill, the board must determine if the removal or reinstallation of hurricane protection is
the responsibility of the unit owner, including costs, and if such removal or reinstallation is
completed by the association, then the costs incurred by the association may be charged to the
unit owner. If the association charges a unit owner for the removal or installation of hurricane
protection, such charges are enforceable as an assessment and may be collected in the manner
provided under s. 718.116, F.S, for the collection of assessments.
The bill amends s. 718.115(1)(e)l., F.S., to delete the requirement that the expense of
installation, replacement, operation, repair, and maintenance of hurricane shutters, impact glass,
code -compliant windows or doors, or other types of code -compliant hurricane protection by the
board pursuant to s. 718.113(5), F.S., constitutes a common expense and must be collected as a
common expense if the association is responsible for the maintenance, repair, and replacement of
the hurricane shutters, impact glass, code -compliant windows or doors, or other types of code -
compliant hurricane protection pursuant to the declaration of condominium. Additionally,
s. 718.115(1)(e)l., F.S., is also amended to provide that the costs of installation of hurricane
protection are enforceable as an assessment and may be collected in the manner provided under
s. 718.116, F.S.
The bill amends s. 718.115(1)(e)2., F.S., to delete the requirement that a unit owner who
previously installed hurricane shutters in accordance with s. 718.113(5), F.S., that comply with
the current applicable building codes receive a credit when the shutters are installed. A unit
owner who has previously installed such items must receive a credit when the impact glass or
code -compliant windows or doors are installed.
The provision is revised to provide that a credit is applicable if the installation of hurricane
protection is for all other units that do not have hurricane protection and the cost of such
installation is funded by the association's budget, including the use of reserve funds. The bill
adds that the credit must be equal to the amount that the unit owner would have been assessed to
install the hurricane protection and that expenses for the installation, replacement, operation,
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repair, or maintenance of hurricane protection on common elements and association property are
common expenses.
SLAPP Defamation Law Suits — Condominiums
Present Situation
Section 718.1224, F.S., prohibits "strategic lawsuits against public participation" or "SLAPP
suits," and provides legislative findings that such lawsuits are against the public interest. A
SLAPP lawsuit occurs when association members are sued by individuals, business entities, or
governmental entities for matters arising out of a unit owner's appearance and presentation
before a governmental entity on matters related to the condominium association. 78
Under s. 718.1224, F.S., governmental entities, business organizations, and individuals are
prohibited from filing or causing to be filed any lawsuit, cause of action, claim, cross-claim, or
counterclaim against a condominium unit owner without merit and solely because such
condominium unit owner has exercised the right to instruct his or her representatives or the right
to petition for redress of grievances before the various governmental entities of this state, as
protected by the First Amendment to the United States Constitution and s. 5, Art. I of the State
Constitution. Current law does not specifically prohibit condominium associations from
engaging in SLAPP suits, instead the prohibition generally applies to governmental entities,
business organizations, and individuals.
Section 718.1224, F.S., provides that unit owners have a right to an expeditious resolution of
such an action, including the right to petition for a motion to dismiss or for a summary judgment.
The court may award the unit owner actual damages for a violation of this prohibition and may
also award treble damages. However, the court must state a basis for an award of treble damages.
The court is further required to award the prevailing party reasonable attorney's fees and costs.
Governmental entities, business organizations, and individuals are barred from expending funds
in prosecuting a SLAPP suit against a unit owner. 79
Effect of Proposed Changes
The bill amends s. 718.1224, F.S., to revise the SLAPP suits prohibition to protect condominium
unit owners' exercise of their free speech rights before their association. The bill specifically
prohibits condominium associations from engaging in a SLAPP suit.
The bill also amends s. 718.1224, F.S., to prohibit condominium associations from:
• Retaliating against a unit owner, such as by increasing a unit's assessments, threatening to
bring an action for possession or other civil action, including a defamation, libel, slander, or
tortious interference action; and
• Spending association funds in support of defamation, libel, or tortious interference actions
against a unit owner.
76 See s. 718.1224(1), F.S., providing legislative intent.
79 A similar prohibition against SLAPP suits by homeowners' associations is contained in s. 720.3 04(4), F.S.
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The unit owner must have acted in good faith and not for any improper purposes, such as to
harass or cause unnecessary delay, for frivolous purposes, or needless increase in the cost of
litigation in order for the unit owner to raise the defense of retaliatory conduct. The bill provides
examples of conduct for which a condominium association, officer, director, or agent of an
association may not retaliate include, but are not limited to, situations where:
• The unit owner has in good faith complained to a governmental agency charged with
responsibility for enforcement of a building, housing, or health code of a suspected violation
applicable to the condominium;
• The unit owner has organized, encouraged, or participated in a unit owners organization;
• The unit owner submitted information or filed a complaint alleging criminal violations or
violations of this chapter or the rules of the division with the division, the Office of the
Condominium Ombudsman, a law enforcement agency, a state attorney, the Attorney
General, or any other governmental agency;
• The unit owner has exercised his or her rights under ch. 718, F.S.;
• The unit owner has complained to the association or any of its representatives for their failure
to comply with ch. 718, F.S., or ch. 617, F.S.; or
• The unit owner has made public statements critical of the operation or management of the
association.
The bill allows the unit owner to present evidence of retaliatory conduct as a defense in any
action brought against him or her for possession.
In addition, the bill prohibits associations from expending association funds in support of a
defamation, libel, slander, or tortious interference action against a unit owner or any other claim
against a unit owner based on conduct described in the bill.
Electronic Voting — Condominiums
Present Situation
Sections 718.128 and 719.129, F.S., relating to electronic voting in condominium and
cooperative associations, respectively, allow these associations to conduct elections and other
unit owner votes through an Internet -based online voting system if a unit owner consents, in
writing, to online voting and the specified requirements are met, including:
• The association provides each unit owner with:
o A method to authenticate the unit owner's identity to the online voting system.
o For elections of the board, a method to transmit an electronic ballot to the online voting
system that ensures the secrecy and integrity of each ballot.
o A method to confirm, at least 14 days before the voting deadline, that the unit owner's
electronic device can successfully communicate with the online voting system.
The association uses an online voting system that is:
o Able to authenticate the unit owner's identity.
o Able to authenticate the validity of each electronic vote to ensure that the vote is not
altered in transit.
o Able to transmit a receipt from the online voting system to each unit owner who casts an
electronic vote.
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Page 34
o For elections of the board of administration, able to permanently separate any
authentication or identifying information from the electronic election ballot, rendering it
impossible to tie an election ballot to a specific unit owner.
o Able to store and keep electronic votes accessible to election officials for recount,
inspection, and review purposes.
Unit owners who vote electronically may be counted as attending the meeting for the purpose of
determining a quorum.80 A unit owner may opt -out of his or her consent to vote electronically. 81
Effect of Proposed Changes
The bill amends ss. 718.128 and 719.129, F.S., relating to electronic voting in condominium and
cooperative associations, respectively, to allow condominium and cooperative unit owners to
consent to electronic voting in condominium and cooperative association elections by using an
electronic means of consent.
Conflicts of Interests — Condominiums
Present Situation
Section 718.3027, F.S., provides the process for resolving potential conflict of interest for the
officers and directors of condominium associations. It requires an officer or director of a
condominium association (that is not a timeshare condominium association), to disclose any
financial interest of the officer or director (or such person's relative) in a contract for goods or
services, if such activity may reasonably be construed by the board to be a conflict of interest.
The board of a condominium association must approve a contract for services or other
transactions by an affirmative vote of two-thirds of all other directors present. A director or
officer who is a party to, or has an interest in, the activity that may be a potential conflict of
interest must leave the board meeting during the discussion and vote, and must recuse himself or
herself from the vote.
Effect of Proposed Changes
The bill amends s. 718.3027, F.S., to provide that the attendance of an officer or director at the
meeting of the board is sufficient to constitute a quorum for the meeting and for the vote taken in
his or her absence when the director is required to leave the room during the discussion and vote
on a contract in which the director, or his relative, has an interest.
Nonpayment of Monetary Obligations
Present Situation
Section 718.303(5), F.S., allows an association to suspend the voting rights of a unit owner or
member due to nonpayment of any fee, fine, or other monetary obligation due to the association
which is more than $1,000 and more than 90 days delinquent. The association must send the unit
80 Sections 718.128(3) and 719.129(3), F.S., relating to electronic voting in condominium and cooperative associations,
respectively.
81 Section 718.128(5) and 719.129(5), F.S., relating to electronic voting in condominium and cooperative associations,
respectively.
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owner proof of such obligation 30 days before such suspension takes effect. The suspension ends
when the full payment of all past due obligations currently due the association are paid.
Effect of Proposed Changes
The bill amends s. 718.303(5), F.S., to require an association to send unit owners, whose right to
vote has been suspended because of an unpaid financial obligation, a notice of such obligation
within 90 days of an election.
Division of Condominiums, Cooperatives, and Mobile Homes
Present Situation
Section 718.501, F.S., provides the investigative and enforcement authority of the Division of
Condominium, Timeshares, and Mobile Homes (division). The division may enforce and ensure
compliance with ch. 718, F.S., and rules relating to the development, construction, sale, lease,
ownership, operation, and management of residential condominium units and complaints related
to the procedural completion of milestone inspections under s. 553.899, F.S. The division may
investigate complaints and enforce compliance with ch. 718, F.S., for associations that are still
under developer control, including investigating complaints against developers involving
improper turnover or failure to transfer control to the association. 82 After control of the
condominium is transferred from the developer to the unit owners, the division only has
jurisdiction to investigate complaints related to financial issues, elections, and maintenance of
and unit owner access to association records. 83
As part of the division's authority to investigate complaints, the division may subpoena
witnesses, take sworn statements from witnesses, issue cease and desist orders, and impose civil
penalties against developers, associations, and association board members. 84
If the division has reasonable cause to believe that a violation of any provision of ch. 718, F.S.,
or a related rule has occurred, the division may institute enforcement proceedings in its name
against any developer, bulk assignee, bulk buyer, association, officer, or member of the board of
administration, or its assignees or agents. The division may conduct an investigation and issue an
order to cease and desist from unlawful practices and to take affirmative action to carry out the
purpose of the applicable chapter. Also, Florida law authorizes the division to petition a court to
appoint a receiver or conservator to implement a court order or to enforce an injunction or
temporary restraining order. The division may also impose civil penalties. 85
Effect of Proposed Changes
The bill amends s. 718.501 (1), F.S., to delete the limitation on the division's authority to enforce
ch. 718, F.S., after turnover. Under the bill, the division may enforce and ensure compliance with
ch. 718, F.S., and rules relating to the development, construction, sale, lease, ownership,
82 Id.
83 Section 718.50 1(1), F.S.
84 Sections 718.501(1), F.S.
85 Id
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operation, and management of a residential condominium before and after control of the
association is turned over to the nondeveloper members.
Page 36
In addition, the bill:
• Authorizes the division to impose a civil penalty for a violation of ch. 617, F.S., relating to
corporations not for profit.
• Requires the division refer to local law enforcement authorities any person whom the
division believes has engaged in fraud, theft, embezzlement, or other criminal activity or has
cause to believe that fraud, theft, embezzlement, or other criminal activity has occurred.
• Provides that the division director or any officer or employee of the division, and the
condominium ombudsman or employee of the office of the condominium ombudsman, 86 may
attend and observe any meeting of the board of administration or unit owner meeting,
including any meeting of a subcommittee or special committee, that is open to members of
the association for the purpose of performing the duties of the division or the office of the
ombudsman under ch. 718, F.S.
• Requires the division routinely conduct random audits of condominium associations to
determine compliance with the website or application requirements for official records.
Report to the Legislature
The bill requires the division submit to the Governor, the President of the Senate, the Speaker of
the House of Representatives, and the chairs of the legislative appropriations committees and
appropriate substantive committees, a review of the website or application requirements for
official records under s. 718.111(12)(g), F.S., and make recommendations regarding any
additional official records of a condominium association that should be included in the record
maintenance requirement in the provision.
Effective Date
Except as otherwise provide, the bill takes effect July 1, 2024.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
86 Sections 718.5011-50152, F.S., relate to the Office of the Ombudsman within the division. The ombudsman is an attorney
appointed by the Governor to be a neutral resource for unit owners and condominium associations. The ombudsman is
authorized to prepare and issue reports and recommendations to the Governor, the division, and the Legislature on any matter
or subject within the jurisdiction of the division. In addition, the ombudsman may make recommendations to the division for
changes in rules and procedures for the filing, investigation, and resolution of complaints. The ombudsman also acts as a
liaison among the division, unit owners, and condominium associations and is responsible for developing policies and
procedures to help affected parties understand their rights and responsibilities.
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C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Indeterminate.
C. Government Sector Impact:
The Division of Florida Condominiums, Timeshares, and Mobile Homes has not
provided a fiscal analysis for this bill.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
Page 37
This bill substantially amends the following sections of the Florida Statutes: 468.4334,
468.4335, 468.436, 718.103, 718.104, 718.111, 718.112, 718.113, 718.115, 718.116, 718.121,
718.1224, 718.301, 718.3026, 718.3027, 718.303, 718.501, 718.618, 719.106, 719.301, and
719.618.
IX. Additional Information:
A. Committee Substitute — Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Regulated Industries on January 22, 2024:
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The committee substitute makes several technical and clarifying changes to the bill and
following substantive revisions to the bill (unless otherwise stated all revisions relate to
condominium associations):
• Changes the title from an act relating to condominium and cooperative association to
an act relating to community associations.
• Revises for clarity the requirements that condominium association managers (CAMs)
and firms return documents to the association to provide that the CAM may retain
records for up to 20 days after their contract is terminated in order to complete an
ending financial statement or report.
• Revises the requirements for CAMs to disclose a conflict of interest to:
o Require the board to solicit multiple bids (instead of at least three bids) if the
association considers a bid for goods or services for which a CAM has a conflict
of interest;
o Delete the provision allowing association members to void a contract; and
o Provide that the procedures for resolving conflicts of interest in the bill do not
apply to activities or the provision of goods and services that are disclosed in the
management services contract.
• Regarding the requirement in the bill related to the maintenance of official records:
o Deletes the requirement for associations to maintain "other substantiating
documentation" which is not necessary;
o Deletes the requirement in the bill that official records be maintained in an
organized manner;
o Provides that the obligation to maintain official records includes a good faith
obligation to recover records as may be reasonably possible in the event records
are lost, destroyed, or otherwise unavailable;
o Provides that associations may satisfy a request for access to records by making
the records available for download on the association website or through an
application on a mobile device; and
o Deletes the requirement that the checklist made in response to a records request
be accompanied by a sworn affidavit.
• Provides a first degree misdemeanor criminal offense for a person to knowingly or
intentionally deface or destroy required accounting records or knowingly and
intentionally fail to create or maintain required accounting records, with the intent of
causing harm to the association or one or more of its members.
• Provides that officers and directors charged with the criminal violation created in the
bill are deemed removed from office and a vacancy declared.
• Requires that meetings of the board must meet at least once each quarter instead of
four times a year.
• Revises the requirement in the bill that copies of contracts being considered by the
board must be provided to the unit owner with the meeting notice, to allow the copies
to be made available for download on the association website or through an
application on a mobile device.
• Extends the period associations must retain a copy of an officer or director's
educational certificate from 5 years to 7 years.
• Provides an extension of the deadline for completion of a structural integrity reserve
study if the condominium or cooperative association has entered into a contract for
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the performance of the study and the study cannot reasonably be performed or
completed by December 31, 2024. The study still must be completed by December
31, 2026.
• Includes contingent special assessments and any line of credit for which a contingent
special assessment may be imposed in the list of information that must be included in
the estoppel certificate.
• Deletes the requirement in the bill for the recording of special assessments in the
public record.
• Deletes the requirement that a notice of such obligation must also be provided to the
unit owner at least 90 days before a vote of the members (instead of before an
election or vote of the members).
• Allows unit owners to consent to electronic voting in condominium and cooperative
association elections by using an electronic means of consent.
• Authorizes the Division of Condominium, Timeshares, and Mobile Homes to impose
a civil penalty for a violation of ch. 617, F.S., relating to corporations not for profit.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill's introducer or the Florida Senate.
349
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, Florida 33160
(305) 947-0606 City Hall
(305) 949-3113 Fax
MEMORANDUM
TO: Honorable Mayor and City Commissioners
FROM: Jeniffer Viscarra, Commissioner
DATE: February 15, 2024
RE: Expressing Support for Florida Senate Bill 1178, Enhancing the Oversight an(
Governance of Condominium Associations
RECOMMENDATION:
This Resolution is presented for you consideration.
REASONS:
State Senators Jennifer Bradley and Jason Pizzo have introduced Senate Bill 1178, a bipartisan effor
aimed at enhancing the oversight and enforcement capabilities of the Florida Department of Business
and Professional Regulation (DBPR) over condominium and homeowners associations.
The Bill mandates the DBPR to perform random audits of community associations to ensure
compliance with official records management and website/application processes, thereby increasing
transparency and accountability in community governance. It also requires all newly elected
community association board members to complete a standardized course in association law and
continuing education, ensuring that board members are well-informed and equipped to govern
effectively, and aims to establish stricter conflict of interest disclosures for property management
firms and their employees, along with harsher penalties for fraudulent voting activities, thereby
fostering integrity and fairness in association elections and contract dealings
Regarding records requests, the bill introduces reforms to allow condominium associations to meet
their obligations through website postings, change reserve requirements for buildings deemed
unsafe/uninhabitable, and permit the creation of investment committees to invest reserve funds,
enabling better financial management and safety compliance.
Item Number: 10.0
307
ATTACHMENTS:
Resolution
Senate Bill 1178 Summary and Analysis
Item Number: 10.0
308