By Deborah Goonan, Independent American Communities
Big news in Florida in the fight for justice for condo owners. Representative Javier Fernandez (D) has introduced HB1259, dubbed by its supporters as the #LockThemUp Bill.
HB1259 would put some serious teeth into enforcement of Condominium Act (718).
Proposed amendments would create criminal penalties for certain intentional acts and omissions of condo boards.
Conflicts of interest, kickbacks
Board members subject to criminal penalty for accepting kickbacks:
Any such officer, director, or manager who knowingly so solicits, offers to accept, or accepts any thing or service of value or kickback commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, and is subject to a civil penalty pursuant to s. 718.501(1)
Boards not providing access to official records of the association
If an association board denies a members access to records more than twice in 12 months, the board member would be subject to criminal penalties:
2. Any director or member of the board or association who knowingly, willfully, and repeatedly violates subparagraph 1. [pertaining to access to official records of the association.] commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. For the purposes of this subparagraph, the term “repeatedly” means two or more violations within a 12-month period.
Intentional acts to “deface,” “destroy,” or “fail to create” official records would be considered criminal misdemeanors:
Any person who knowingly or intentionally defaces or destroys accounting records that are required by this chapter 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, commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083
is personally subject to a civil penalty pursuant to s. 718.501(1)(d).
And any intentional act to hide records would be considered a felony offense:
Any person who willfully and knowingly refuses 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, commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
Unauthorized use of a debit card would be classified as theft
Anyone who used the association’s debit card for unauthorized expense faces the possibility of theft charges:
A person who uses
Use of adebit card issued in the name of the association, or billed directly to the association, for any expense that is not a lawful obligation of the association commits theft under s. 812.014. For the purposes of this paragraph, a “lawful obligation of the association” means an obligation that has been properly preapproved by the board and is reflected in the meeting minutes or the written budget
Cracking down on voting fraud in condo associations
In addition, the bill would add an entirely new section, 718.129, entitled Fraudulent voting activities related to association elections; penalties.
The list of fraudulent activities would include falsifying ballots or notarized voter certificates, buying votes, preventing qualified members from voting, or using any voter intimidation tactic, including threats, to obtain a particular vote from a member.
Anyone who engages in voting fraud, directly or indirectly would be deemed to commit “a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.”
$4 per unit revenue dedicated to the Division
Importantly, HB1259 would also prohibit transfer of revenue, fees collected from Florida condo owners at $4 per unit, to the General Fund or the Budget Stabilization Fund. This amendment is critical, since lawmakers have raided the Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund in the past, to pay for other expenses in the state.
Read and track HB1259, introduced by Javier Fernandez (D)
See also, companion Senate bill, introduced by Jason W. B. Pizzo (D)
SB 610 (2019) Condominium Associations SENATE – Introduced
Notably, SB610 does not include provisions preventing Division funds from being raided by the General Fund. Otherwise, the bill is identical to HB1259.
New Administrative Rules
HB1259 continues the regulatory trend of reining in abuse and mismanagement of owner-controlled condominium and cooperative associations in the Sunshine State.
In response to 2018 legislation, and as of December 2018, Florida’s Division of Business and Professional Regulation (DBPR) has enacted a long list rules concerning budget management and reporting, elections, and member access to records of the association.
If condo and co-op association boards violate any of the rules, they will first be provided with a warning, and an opportunity to correct those violations. But if the condo board chooses not to comply, DBPR has the authority to fine the condo association at least $500 per violation. The maximum fine for “minor” violations is $2,500. “Major” violations could result in even higher fines.
See the following article for partial list of violations.
For a complete list of new DBPR rules, follow this link.
The downside of DBPR rule enforcement
Unfortunately for homeowners of planned communities, these rules do not apply to the Homeowners’ Associations Act. Nor are the DBPR rules enforceable upon developer-controlled homeowners or condo associations.
Another glaring flaw with administrative fines imposed upon condo and co-op associations: DBPR will not hold board members personally accountable for their misconduct. Instead, the entire association pays for the board’s willful noncompliance or malfeasance.
Which, of course, explains why HB1259 and SB610 are supported by Florida condo owners and homeowner advocacy group CCFJ.
But watch out, because the Community Association Leadership Lobby (CALL) is putting pressure on Senator Pizzo to encourage condo associations to provide online access to records, and to transition to electronic voting.
While there’s certainly a place for new information technology in association-governed communities, the HOA management and legal indsutry want to be the providers of such tech services.
Unfortunately, many of Florida’s condo owners don’t trust their management companies or attorneys, who they say are aligned with the interests of their hostile or negligent HOA boards.
The whole reason for increased regulation is to hold irresponsible board members accountable. If the condo board is unwilling to share association records now, they are equally unlikely to reveal information in digital format.
And online voting software faces serious security threats, according to Stanford University computer scientist, Ian Chipman and other security experts.
“Community Recall Act” amendment proposed
Several Legislators are backing this amendment to the Homeowners’ Association Act, (Statute 720), which applies to association-governed planned communities. HB155 proposes that only HOA members who “physically reside in the community” would be permitted to vote for a recall of a board member.
Not surprisingly, the bill faces stiff opposition, because it would exclude seasonal homeowners or absentee owners from taking part in a recall vote.
In a state known for its annual influx of “snowbirds” and resort communities with plenty of investor-owned homes, my prediction is that this bill won’t survive.
HB155 (2019) Homeowner Association Recalls HOUSE – Introduced by Cortes (D), Keller (D), and Killebrew (R).
SB1442 – identical bill introduced by Victor M. Torres, Jr. (D)