Article Courtesy of The Real Deal

By Lidia Dinkova

Published  March ?20, 2025

The Florida Legislature is considering bills this session that target two of the thorniest issues at condo and homeowners associations: alleged fraud and structural requirements.

For decades, some communities have been hotbeds for board members’ alleged mismanagement and fraud. In the biggest fraud case in recent years, authorities in 2022 charged four former board members of the Hammocks HOA and the husband of one of the ex-board members with misappropriating association funds to the tune of $2 million. The Hammocks, home to more than 18,000 residents in West Kendall, is South Florida’s biggest HOA.

To combat fraud, this legislative session’s bills seek to introduce an investigations pilot program and expand the powers of state oversight agencies.

Other bills deal with hefty structural safety requirements imposed on condo associations following the deadly Champlain Towers South collapse in Surfside in 2021. Since then, state lawmakers beefed up mandates in hopes of ensuring buildings’ safety. By the end of last year, all Florida condo associations were supposed to complete structural integrity reserve studies (SIRS). Starting this year, they are required to fully fund reserves. Condo associations also face milestone inspections once buildings reach 30 years, and every 10 years afterward.

But these requirements have proven to be a financial burden on unit owners. Many are getting hit with multimillion-dollar special assessments to pay for repairs.

Bills proposed this session aim to give condo associations a reprieve from structural requirements, including giving options to finance repairs.

The legislative session started on March 4 and ends on May 2.

SB 120/HB 137

State lawmakers want to appoint an HOAs ombudsman, after they failed to approve a similar proposal at last year’s session.

Currently, the Florida Department of Business and Professional Regulation (DBPR) has less oversight over HOAs than condo associations. While DBPR’s administrative staff includes a condo ombudsman, the department does not have one for HOAs.

Under the proposed bills, the HOAs ombudsman will serve as a liaison among homeowners, boards of directors, association managers, DBPR and others, as well as develop policies and procedures so residents and boards understand their rights and responsibilities. The ombudsman will be able to mediate between homeowners and association leaders, as well as monitor and review complaints and recommend investigations by DBPR if election tampering is suspected.

The ombudsman also can appoint a board elections monitor if 15 percent of homeowners or six homeowners, whichever is greater, vote for this. The association would pay for the monitor.

The governor would appoint the ombudsman, who will have to be an attorney. The position will be within DBPR’s Division of Florida Condominiums, Timeshares, and Mobile Homes.

Sen. Danny Burgess, a Republican whose district includes parts of Hillsborough and Pasco counties, and Rep. Jervonte “Tae” Edmonds, a Democrat representing a portion of Palm Beach County, introduced the bills.

SB 368

This bill again brings up an initiative Florida lawmakers failed to approve last year: a fraud investigation pilot program.

This year’s version is broader than that of last year, which only sought to create the program for condo associations. Under the latest bill, the state would initiate the Economic Crime, Fraud and Corruption Investigation Pilot Program for both condo and homeowners associations within the Florida Legal Affairs Department.

The bill aims to give HOAs a state ombudsman by expanding the existing condo association ombudsman’s powers to HOAs. The proposal will allow the ombudsman to void an election if voting issues are determined, request a court-appointed receiver for an association, issue subpoenas and conduct association audits.

Under the bill, the ombudsman would review complaints and decide which should be sent to the Economic Crime, Fraud and Corruption Investigation Pilot Program. If the staff of the pilot program determines the alleged wrongdoing is not within their purview, they would forward the complaint to DBPR’s condo, timeshares and mobile homes division.

To aid the pilot program’s investigation, the state will subpoena and audit association records. If sufficient evidence of corruption is found, complaints will be forwarded to state attorney’s offices.

The pilot program, which would sunset on Oct. 2, 2030, unless the legislature renews it, would be based in Miami-Dade County. It would be funded from DBPR’s Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund.

The bill’s other provisions include a requirement on condo associations to establish a searchable, cloud-based database with information about each association in Florida, including the names and contact information of board members; governing documents such as declarations and by-laws; annual budgets, including regular and special assessments, as well as their purpose; and copies of SIRS and other reports on a property’s physical condition.

The bill gives DBPR the right to levy fines on condo associations that fail to maintain insurance or a fidelity bond.

Finally, the bill spells out procedures for HOAs to levy fines on homeowners, including that these fees can’t be more than $1,000, and levy suspensions on homeowners if they violate association declarations or by-laws. If a homeowner fixes a violation before his/her hearing, the association can’t levy the fine or suspension. If a homeowner cures an issue within 30 days after a hearing, the fine is halved and the suspension lifted. Also, fines won’t be due earlier than 30 days after a hearing. If a homeowner fails to pay a fine, the association also will be owed attorney fees.

The bill was introduced by Sen. Ileana Garcia, a Republican who represents part of Miami-Dade.

HB 983/SB 1600

Both bills say that a homeowner’s voting rights cannot be suspended when voting in a board recall. This includes lifting all previous suspensions to allow the homeowner to cast a recall ballot.

The proposals come as residents at some South Florida condo associations and HOAs have filed recall petitions, seeking to replace board members over various allegations, including mismanagement. In some cases, boards reviewing recall petitions deemed some homeowners’ votes invalid due to suspensions over reasons such as overdue assessments.

Under the bills, boards have to hold a meeting within five business days after receiving a recall petition to decide its validity.

The bills’ other proposals include that at least 20 percent of homeowners have to cast ballots in board elections for the elections to be valid.

HB 983 also creates amenity dues at HOAs, which are different from assessments. Homeowners would pay the amenity dues to private owners of recreational facilities at HOAs to use these facilities.

HB 983 was co-introduced by Rep. Juan Carlos Porras, a Republican representing a portion of Miami-Dade County, and Rep. Meg Weinberger, a Republican representing a portion of Palm Beach County. Sen. Kristen Aston Arrington, a Democrat representing Osceola County and a portion of Orange County, introduced SB 1600.

HB 913

In an attempt to enforce compliance with SIRS, a lawmaker proposes withholding coverage by Citizens Property Insurance, the state carrier of last resort, from condo associations that fail to meet structural integrity requirements.

The proposal comes as associations already have been struggling to obtain insurance due to several underwriters exiting the state and increased premiums and deductibles from the insurers still in Florida.

The bill also could be beneficial to developers who purchase a bulk of units at aging condo buildings and seek to dissolve the condo association. Specifically, the proposal eases the undoing of the association governing structure at buildings where repair costs exceed the property’s value.

Rep. Vicki Lopez, a Republican whose district includes Key Biscayne and parts of Miami, introduced the bill.

SB 1742

Under this bill, condo associations can invest reserve funds in depository accounts for community, savings and commercial banks, or in credit unions.

Condo boards are to create investment committees consisting of two board members and two unit owners who aren’t board members. The committee will recommend an investment adviser to be hired to manage reserve fund investment portfolios. Any interest earned on the portfolios that isn’t allocated for specific association uses has to be spent on capital improvements or maintenance.

The bill also aims to give a reprieve to condo associations facing higher expenses to meet structural integrity requirements. For budgets adopted prior to or on Dec. 31, 2028, unit owners can vote for their association to obtain a line of credit to help cover reserve funds required under SIRS.

SB 1742 also proposes that associations with budgets approved prior to or on Dec. 31, 2028, that completed their milestone inspections in the previous two years, can temporarily pause reserve funding in order to finance repairs determined as necessary under the inspections. Associations that completed milestone inspections can delay their SIRS for up to two years to allow them to direct their funds to cover repairs.

The bill also aims to curb conflicts of interest between companies that conduct SIRS and contractors that do the repairs outlined as necessary under SIRS. It mandates that SIRS recommend reserve funding schedules in addition to determining necessary repairs.

Sen. Jennifer Bradley, a Republican representing the northern part of the state, introduced the bill. Her district includes part of Alachua County, as well as Baker, Bradford, Clay, Columbia, Gilchrist and Union counties.

SB 690/HB 1415

The bills mark another attempt by state lawmakers to give condo associations a reprieve from the stricter structural integrity requirements imposed after the Surfside collapse.

Under the proposals, the SIRS requirement will be scaled back to condo buildings that are six stories or taller.

Associations for condo buildings that are five stories or shorter can elect, through a vote of unit owners, to waive funding reserves or to reduce reserve funding.

Sen. Rosalind Osgood, a Democrat representing part of Broward County, introduced SB 690, and Rep. Bruce Hadley Antone, a Democrat representing part of Orange County introduced HB 1415.