Pending Changes To Florida’s Condominium Statute

Article Courtesy of The Daily Business Review

Commentary by Ruben Conitzer

Published May 16, 2017


Assuming Florida Gov. Rick Scott doesn’t veto the bill, we may be seeing some changes to the law central to condominiums in the near future. That’s because the state House approved a bill that would bring a wide range of changes into law. The Senate gave its support last week. Notably, both houses support the bill unanimously — adding to the likelihood Scott will throw his support behind the measure as well. The bill adopted large portions of a Miami-Dade County grand jury outline that made recommendations on oversight and operational issues facing condominiums earlier this year.

The bill makes long-awaited changes to rules concerning recordkeeping and record requests, kickbacks, attorney representation, the provision of financial statements and voting procedures. But for some, most remarkable is that the proposed changes may subject condominium board members to criminal liability.

Board oversight.

The bill expands the list of prohibited acts by board members and adds criminal penalties to the range of enforcement mechanisms. In addition, the bill would prevent board members or certain others to purchase units at foreclosure sale if the sale is due to the foreclosure of an association lien. Also, a variety of rebuttable presumptions regarding the existence of conflicts of interest are created that would apply to board members. Any contract entered into absent full disclosure of such a presumed conflict would be voidable by the association. If the bill is signed into law, activities that would be subject to criminal penalty would include theft or embezzlement, forgery of ballot envelopes and other election fraud, the destruction of official records in the furtherance of a crime and the acceptance of kickbacks.

Management Company Oversight.

Portions of the bill that will likely see the most positive reactions include provisions requiring management companies to disclose financial interests in any vendor recommended by the management company and provisions requiring management companies to turn over all association records if and when their contracts come to an end.

Attorney Conflicts.

The proposed bill would also impact attorneys that represent condominium boards and management companies. The bill forbids attorneys from representing the board if that same attorney also represents the association's management company.


In addition, the bill would authorize the condominium ombudsman to review secret ballots when looking for misconduct, require the Department of Business & Professional Regulation to certify arbitrators, creates board term limits, require larger condo associations to create online records databases, compels associations to report to the state all financial institutions where they maintain accounts, and forbids officers from using association debit cards. Furthermore, the proposed bill would require the retention of bids for materials, equipment and services and subject them to inspection by unit owners.

Continuing Issues.

Many see the proposed legislation as offering much needed oversight and director liability in the most egregious circumstances. But nonetheless, a main issue is and will likely continue to be the underfunded Division of Condominiums within the DBPR—the state's arm for enforcing large portions of the state's condominium statutes. Assuming these new rules are enacted, how to fund state enforcement agencies will continue to be a matter of great importance.

While some of the proposals are expected to be widely accepted, issues like subjecting directors to criminal and personal liability and increased election monitoring will likely remain controversial for some time.