The Florida House and Senate both recently approved significant changes to the Florida Statutes that regulation condominiums associations. The bill, which still must be signed by Governor Rick Scott, would take effect on July 1, 2017 and would now impose criminal penalties for certain actions, prohibits specific activity of directors, and includes new requirements for the management and sharing of condominium documents, contract and financial statements.
Florida Statute 718, will be updated to include:
- Criminal penalties including prison terms for fraud in the election of condo association directors, the falsification of signatures on ballots, the manipulation of condo records or the theft or disappearance of ballots.
- Prohibiting an association from hiring an attorney who represents the management company of the association.
- Prohibiting a board member, manager, or management company in the purchasing a unit at a foreclosure sale, if the association forecloses on a unit due to failure to pay assessments or deed in lieu.
- Prohibiting the use of debit cards issued in the name of the association.
- Limits a board member to no more than 8 consecutive years, with some exceptions.
- Prohibits the employ or contract with any service provider owned or operated by a board member or with any person who has a financial relationship with a board member or officer, or a relative within the third degree of consanguinity by blood or marriage of a board member or officer.
- Requires Board members to disclose any conflicts of interests.
- Changes in arbitration certifications requirements and procedures.
- Updates to an associations obligations in suspending voting rights of an owner.
In addition to the above, the largest addition of code into the statute is in relation to the association’s responsibilities and transparency on the management and sharing of condominium documents, financials, and contracts. Condo associations with more than 150 units will be required to have specific documents available on a publicly accessible web site, with a password-protected area specifically for owner documents and financials. Associations will be given one year to comply by July 1, 2018. Associations with fewer than 150 units are exempt from this web site requirement.
The additional code requires the following documents be made available to owners in digital format:
- The recorded Declaration of Condominium document
- The recorded Bylaws of the Association, and all subsequent amendments.
- The recorded Articles of Incorporation, and all subsequent amendments.
- The Rules and Regulations of the association
- Management agreements, contracts and leases
- Summaries of bids for materials, equipment, or services; maintained on the website for 1 year.
- The Annual Budget for the current year
- The Proposed Budget for the following year, for consideration at annual meeting.
- The associations financial reports, as required by subsection 13.
- The certifications required of each director (that they have signed an affidavit stating they’ve read and understand the associations documents as well as Florida condo laws, or that they have successfully complete the Condo Board Member Certification course.)
- Documents regarding conflicts of interest of board members.
- Notices and Agendas of meetings. These documents have specific requirements on how, when and where on the web site they must be placed.
With unanimous approval of bills in both the Florida House and Florida Senate, Governor Rick Scott is expected to sign it into law. Condo associations that do not have web sites should hold a special meeting to discuss how compliance will be handled. This is also a good opportunity to consider offering information for the public on the association itself, its amenities, a photo gallery, or how to get in contact with management for reporting of complaints. Information for future buyers who need information such as applications, insurance documents, estoppel letters and condo questionnaires for lenders can alleviate front office requests and help people get information quickly.
As an owner in a large condo association of over 600 units, I personally manage our web site at Royal Park Condominiums. I recently updated our site to anticipate compliance with the new statutes, although we already have a good portion of the documents that are now requirements. But it wasn’t easy to find information, so the new site’s design makes it easier to find information depending on whether you’re a current owner, a prospective buyer or renter, or a real estate professional.
It’s very likely that most associations have an owner who can assist them in creating and maintaining the web site. Once the web site is created, and a process for updating is put in place, the ongoing maintenance is not time consuming.
However, associations can comply with the new statute without creating a fully designed and hosted web site such as Royal Park. A Google Docs account is free, and an association can create separate folders with documents for owners (that are password protected), and for the general public to obtain information about the condominium, applications packages, etc.
Whatever path an association takes in compliance, the intent of the changes to the Florida Condo Statutes are clearly intended to improve the transparency of operations of a condominium’s board members and their activities, and to hold them personally accountable for violations of the code caused by fraud, concealment, or abuse of power.
For a complete reading of the statute and the changes and additions, read the Senate bill.