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.
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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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