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Legislative Update - Associations. Pay close attention to new requirements for websites

 

The Florida Legislature was very active last year with many changes being made Chapter 718 of the Florida Statutes, which became effective on July 1, 2017.  Below is a summary of many of the changes.

   

Offenses which can Result in Criminal Penalties

  • A Director accepting or soliciting a “kickback” or anything of value for the benefit of him or her or their family;
  • Forgery of a ballot envelope or voting certificate;
  • Theft or embezzlement of funds of the association; and 
  • Destruction or the refusal to allow inspection or copying of official records of a condominium association that is accessible to unit owners within the time periods required by law in furtherance of a crime.

Conflicts of Interest

  • An association may not hire an attorney who represents the management company of the association;
  • A board member, manager, or management company may not purchase a unit at a foreclosure sale resulting from the foreclosure of its lien for unpaid assessments or take title by deed in lieu of foreclosure;
  • An association may not employ or contract with any service provider that is owned or operated by a board member or with any person who has a financial relationship with a board member or officer;
  • Directors and officers of the board must disclose to the board any activity that may reasonably be construed to be a conflict.  The statute now lists activities that are considered to be a conflict subject to a rebuttable presumption.

Official Records

  • Bids for materials, equipment or services are to be kept as part of the Official Records available for inspection;
  • A renter of a unit now has the right to inspect and copy the association’s bylaws and rules.

New Requirements for Websites

  • By July 1, 2018, an association with 150 or more units shall post digital copies of the following documents on its website:
    • The recorded declaration of condominium of each condominium operated by the association and all amendments;
    • The recorded bylaws of the association and each amendment to the bylaws;
    • The articles of incorporation and amendments thereto;
    • The rules of the association;
    • Any management agreement, lease, or other contract which the association is a party or under which the association or the unit owners have an obligation or responsibility;
    • Summaries of bids for materials, equipment, or services for the past year;
    • Annual budget and any proposed budget;
    • Financial report;
    • The certification of each director;
    • All contracts or transactions between the association and any director, officer, corporation, firm, or association that is not an affiliated condominium association or any other entity in which an association director is also a director or officer and financially interested;
    • Any contract or document regarding a conflict of interest or a potential conflict of interest;
    • Notice and agenda for any unit owner meeting no later than 14 days before the meeting.  The notice must be posted in plain view on the front page of the website or a separate subpage of the website labeled “Notices” which is linked from the front page along with any document to be considered and voted upon; and
    • Notices of any board meeting, the agenda, and any other document required for the meeting;
  • The website must be wholly owned and operated by the association or operated by a third party with whom the association owns, leases, rents or otherwise obtains the rights to operate;
  • The site must be accessible through the internet and must contain a subpage, web portal, or other protected electronic location that is inaccessible to the general public and accessible only to unit owners and employees of the association; and
  • Upon a unit owner request, the association must provide the unit owner with username and password and access.

Financial

  • An association that operates fewer than 50 units is no longer permitted to prepare a report of cash receipts and expenditures in lieu of financial statements (this applies in both 718 and 720);
  • Must provide an annual report to the department containing the names of all financial institutions with which association maintains accounts;
  • Unit owner may provide written notice to the division if the association fails to mail or hand deliver a copy of the most receipt report within 5 business days after the request was submitted; and
  • Association and its officers, directors, employees and agents may not use debit cards in the name of the association or billed directly to the association for the payment of any association expense.  The use of a debit card may be prosecuted as credit card fraud.

Board Member Term Limits

  • A board member may not serve more than four consecutive 2-year terms, unless approved by an affirmative vote of 2/3 of the total voting interests of the association or unless there are not enough eligible candidates to fill the vacancies.  (This section does not apply to board members serving 1-year terms); and 
  • The process to recall a board member has changed.

Association’s Right to Suspend Owner Voting

  • The Association may not suspend voting rights unless the owner owes more than $1,000, is 90 days delinquent, and has been given 30 days’ notice.  

Estoppel Certificates (Applies to Chapter 719 and 720 as well)

  • The certificate must be provided within 10 days after receipt of written or electronic request (formerly 15 days).
  • The Association must designate on the Association website the individual responsible for receiving request.
  • The maximum fee that can be charged for a standard estoppel request is $250.  This can be increased by $150 for units that are delinquent.  An additional fee of $100 can be added for rush requests.  
  • The estoppel certificate must list additional information not previously required, including, name of the attorney and contact information if the unit has been turned over for collection and the name and contact information for the insurance agent.

Our firm is experienced in helping individuals, managers, and board members navigate the Association’s documents as well as the Florida statutes.  If you have questions regarding how these new changes may affect you or your Association, please do not hesitate to contact us.

HSMc Partner Attorney Dion Moniz appears on the De...