New Florida condo Bill filed by Senator Garcia includes criminal penalties
Florida Condo HOA Law Blog
By Yeline Goin
03 March 2017

Last month, the State Attorney for Miami-Dade County released a Grand Jury Report titled “Addressing Condo Owners’ Pleas for Help: Recommendations for Legislative Action”. You can read the Miami-Herald Article about the Grand Jury Report here.

criminal penalties for certain violations

Today, Senator Rene Garcia filed SB 1682, Relating to Condominiums, which incorporates some of the recommendations of the Grand Jury Report. As expected, the bill includes criminal penalties for certain violations, including failing to provide access to official records and fraudulent activities related to the election of directors.

In my opinion, the possibility of criminal penalties is going to have a chilling effect on the ability of associations to find candidates willing to serve on the Board. While there no doubt have been egregious cases of board members violating their fiduciary duty, that is an extremely small percentage of cases and I hope that Senator Garcia will re-think criminal penalties.

Notably, the bill does not address the fact that over the past 6 years, the State has “swept” over $20 million from the Condominium and Cooperative Trust Fund for other State programs. Any “reform” by the Legislature must include a provision ensuring that the money that is sent to Tallahassee by condominium and cooperative unit owners is used for the benefit of the State’s condominium and cooperative owners.

The following is a summary of SB 1682:
Attorneys may not represent associations if they also represent management companies.

A board member or management company may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of its lien for unpaid assessments or take title by deed in lieu of foreclosure.

Bids for materials, equipment or services are an official record.

The renter of a unit has the right to inspect the official records.

Any director or member of the board or association who knowingly, willfully, and repeatedly violates provision regarding access to official records commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The term “repeatedly violates” means more than two violations within a 12-month period. Also, anyone who intentionally defaces or destroys official records commits a misdemeanor of the first degree.

Any person who willfully and knowingly refuses to release or otherwise produce association records with the intent of facilitating the commission of a crime or avoiding or escaping detection, arrest, trial, or punishment for a crime commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

An association with 500 or more units that does not manage timeshare units shall post digital copies of the documents specified on its website.

If an association has not mailed or hand delivered to the unit owner a copy of the most recent financial report within 5 business days after receipt of a written request from the unit owner, the unit owner may give notice to the division of the association’s failure to comply. Upon notification, the division shall give notice to the association that the association must mail or hand deliver the copy of the most recent financial report to the unit owner and the division within 5 business days after such notice. Any association that fails to comply with the division’s request may not waive the financial reporting requirement. A financial report received by the division pursuant to this paragraph shall be maintained, and the division shall provide a copy of such report to an association member upon his or her request.

A board member may not serve more than four consecutive two-year terms, unless approved by an affirmative vote of two-thirds of the total voting interests of the association.

Takes away the Board’s right to certify or not certify a recall. Instead, the recall is automatic and it is up to the recalled board members to file a petition for arbitration.

An association may not employ or contract with any service provider that is owned or operated by a board member or any person who has a financial relationship with a board member.

The Division may but is not required to employ arbitrators.

A person may only be certified by the division to act as an arbitrator if he or she has been a member in good standing of The Florida Bar for at least 5 years and has mediated or arbitrated at least 10 disputes involving condominiums in this state during the 3 years immediately preceding the date of application, mediated or arbitrated at least 30 disputes in any subject area in this state during the 3 years immediately preceding the date of application, or attained board certification in real estate law or condominium and planned development law from The Florida Bar. Arbitrator certification is valid for 1 year. An arbitrator who does not maintain the minimum qualifications for initial certification may not have his or her certification renewed. The department may not enter into a legal services contract for an arbitration hearing under this chapter with an attorney who is not a certified arbitrator unless a certified arbitrator is not available within 50 miles of the dispute.

Upon determination by the division that a dispute exists and that the petition substantially meets the requirements of the arbitration statutes, and any other applicable rules, the division shall assign or enter into a contract with an arbitrator and serve a copy of the petition upon all respondents. The arbitrator shall conduct a hearing within 30 days after being assigned or entering into a contract unless the petition is withdrawn or a continuance is granted for good cause shown.

Arbitration decision must be rendered within 30 days of the hearing.

The arbitrator’s failure to render a written decision within 30 days after the hearing may result in the cancellation of his or her arbitration certification.

Includes a list of fraudulent voting activities that can be punishable as a third degree felony.  For example, a person who willfully, knowingly, and fraudulently changes or attempts to change a vote or ballot cast, to be cast, or attempted to be cast by an elector in an association election to prevent such elector from voting or casting a ballot as he or she intended in such election commits a third degree felony.

A party contracting to provide maintenance or management services, or a board member of such party, may not: (a) Own 50 percent or more of the units in the condominium; (b) Purchase a property subject to a lien by the association.

Includes a new conflict of interest provision for directors of the association.

Voting rights can only be suspended if the delinquency is more than $1,000.  Proof of such obligation must be provided to the unit owner or member 30 days before such suspension can take effect.

A receiver may not exercise voting rights of any unit owner whose unit is placed in receivership for the benefit of the association pursuant to this chapter.

Ombudsman may review secret ballots cast at a vote of the association.

Financial reporting: An association shall provide an annual report to the department containing the names of all of the financial institutions with which it maintains accounts, and  a copy of such report may be obtained from the department upon written request of any association member.


Proposed condo reform bill expected to go before Florida legislature for final vote
El Sol
Redacción Agencias
26 April 2017, 7:25

A bill to reform Florida condo law is in its final phase in Tallahassee after it was unanimously approved by the Senate’s Rules Committee on Tuesday.

The bill is scheduled for a vote on Thursday in the House and is expected to go to the full Senate next week.

However, a last-minute change brought protests from condominium owners and their advocates, who for months have been pushing for approval of the reforms.

Through amendments filed this week and last week, lawmakers removed language that could penalize, as a misdemeanor charge, association board members who “knowingly and repeatedly” refuse to provide documents to which the owners are entitled.

Owners and activists who defend condominium owners said that language was the most important part of the proposed reforms. But the issue of potential criminal charges was controversial in Tallahassee, where lobbyists and lawyers — including a representative of the Florida Bar — strongly objected to that part of the bill.

The reforms still include felony charges for those who alter, manipulate or remove records of associations for the purpose of committing fraud. In addition, the reforms still include criminal charges for actions related to electoral fraud, such as falsification of signatures on ballot papers.

But some Florida condo owners said they feel cheated.

“We’re back where we started,” said Maryin Vargas, a Miami condo owner and leader of the Reform Florida group. “Special interests are the only ones who have a voice in Florida. The lawyers know that without records, owners can’t fight their cases and find out if a crime is being committed in their condominiums.”

The bill came one year after el Nuevo Herald and Univision 23 published Condo Nightmares (Condos de Pesadilla), a series of investigative stories on condo abuses in South Florida, like electoral fraud, falsification of signatures, conflicts of interest, embezzlement and cases of fraudulent bidding.

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