Florida's New House Bill 1021

The 2024 legislative session introduced significant reforms for community associations in Florida with the enactment of House Bill (HB) 1021. This comprehensive bill enhances transparency, governance, and accountability concerning Licensed Community Association Managers (LCAMs), recordkeeping, and condominium management. Below are some of the key takeaways from this critical legislation.

Community association managers

The bill mandates that CAMs and CAM firms return all community association records in their possession within 20 business days of the termination of a service agreement or upon a written request, whichever occurs first.

Additionally, the bill establishes stricter conflict of interest disclosure requirements for CAMs and CAM firms. If an association is considering a bid for services or goods exceeding $2,500 from a CAM or related party, it must also solicit bids from multiple third-party providers. To ensure transparency, any potential conflicts of interest must be fully disclosed, with all relevant contracts and documents attached to the board's meeting agenda and entered into the meeting minutes. These contracts require approval by a two-thirds majority of directors present at the meeting to proceed.

Official records for condominiums

HB 1021 introduces several updates regarding access to condominium association records, aimed at increasing transparency and compliance:

• Record recovery. If official records are lost or destroyed, the bill imposes a good faith obligation on the association to recover those records reasonably.
• Access to personal information. Unit owners will have access to other owners' email addresses and fax numbers, provided there is consent to receive notices electronically. Notably, the bill prohibits selling or sharing this personal information with third parties.
• Threshold for digital record access. Starting January 1, 2026, associations with 25 or more units (down from 150) must make specified records available on a website or mobile app.
• Website complaints. The bill authorizes the division to request access to an association's website to investigate any complaints regarding unit owner access to official records.
• No-charge records for subpoenas. If the Division of Condominiums, Timeshares, and Mobile Homes subpoenas records due to an association's failure to provide them upon a unit owner's request, the records must be delivered at no charge to the owner.
• Expanded financial recordkeeping. Associations must maintain additional financial documentation, such as invoices and other documentation that substantiates any receipt or expenditure.
• Checklist for record requests. Associations must provide a checklist of all available records in response to a request.

Criminal violations

HB 1021 introduces significant criminal penalties for misconduct within condominium associations, particularly concerning the handling of official records and unethical activities. The bill aims to hold officers, directors, and managers accountable, ensuring higher standards of integrity in condominium governance. Key provisions include:

• Second-degree misdemeanor. Directors or board members who knowingly, willfully, and repeatedly (two or more violations within 12 months) violate requirements related to the inspection and copying of official association records.
• First-degree misdemeanor. Any intentional defacing or destruction of required accounting records, or failing to maintain such records with the intent to harm the association or its members. Engaging in or assisting with fraudulent voting activities during association elections also qualifies.
• Third-degree felony. Officers, directors, or managers who willfully refuse to release or produce association records to evade detection, arrest, or prosecution, or to assist someone else in doing so. This also applies to accepting or soliciting kickbacks.
• Removal. Officers or directors charged with any criminal violation under Chapter 718 will be immediately removed, and a vacancy will be declared.

Finances for condominiums and cooperatives

The bill introduced several changes to financial management and reporting requirements. Key provisions include:

• Prohibition on financial downgrades. Associations are prohibited from reducing the type of financial statement (compiled, reviewed, or audited) for consecutive years.
• Structural Integrity Reserve Study notice. Associations must notify unit owners that the SIRS is available for inspection and copying within 45 days of completing the study, and must notify the Division of Condominiums within 45 days as well.
• Reserve funding flexibility in emergencies. Associations can temporarily pause or reduce reserve funding if a condominium building is deemed uninhabitable due to a natural emergency, as determined by the local enforcement agency. This decision requires majority member approval, allowing associations to prioritize recovery and repair efforts during crises.

Meetings of condominium associations

Associations with 10 or more units must meet quarterly. Four times each year, the agenda must allow members to ask questions concerning the status of construction or repair projects, revenues and expenditures, and other condominium issues. The notice for meetings on assessments must include the cost and purpose of the assessments and a copy of any proposed contract.

Director education

The bill introduces specific education requirements for condominium officers and directors:

• New director certification. Newly elected or appointed directors must submit a written certification confirming that they have read the association's governing documents, will uphold them to the best of their ability, and faithfully discharge their duties, along with a certificate of completion from an approved condominium education course.
• Training requirements. Directors must complete four hours of training covering topics such as milestone inspections, SIRS, elections, recordkeeping, financial literacy, transparency, levying fines, and meeting procedures.
• Annual continuing education. Directors must complete at least one hour of continuing education annually, focusing on updates to condominium laws and rules from the previous year.

Directors, excluding those for timeshare condominiums, must certify, on a form provided by the division, that they have completed the necessary written certification and educational requirements.

Voting

• Notification of suspended voting rights. Associations must notify unit owners at least 90 days before an election if their voting rights may be suspended due to non-payment of fees or other monetary obligations.
• Electronic voting consent. Cooperative and condominium owners can now use electronic means to consent to electronic voting for elections.
• Online voting requests. If a board authorizes online voting, it must honor any unit owner's request to vote electronically in all subsequent elections unless the owner opts out.

Hurricane protections

• Uniform definition. The bill establishes a consistent definition of hurricane protection across all condominium associations.
• Cost responsibilities. Declarations must now clearly outline whether unit owners or the association are responsible for the maintenance, repair, and replacement of hurricane protection, as well as exterior doors, windows, and glass apertures.
• Approval process. A standardized procedure is now required to approve hurricane protection installations, streamlining the process and avoiding ambiguity.
• Removal and reinstallation. Unit owners are not responsible for the cost of removing and reinstalling hurricane protection if such removal is necessary to repair the condominium property.

SLAPP and defamation suits

The bill expands protections against strategic lawsuits against public participation (SLAPP suits) to include condominium associations. These suits are intended to intimidate or silence unit owners for participating in matters related to association management. Key provisions include:

• Inclusion in SLAPP prohibitions. Associations are explicitly prohibited from filing SLAPP suits against unit owners who make public statements, file complaints with government agencies, or speak out on association management.
• Protection from retaliation. Associations are barred from retaliating against owners who exercise their rights by increasing assessments or threatening civil actions.
• Prohibition on using association funds. Associations cannot use community funds to pursue defamation, libel, or tortious interference actions against unit owners.

Condominium officers and directors

The attendance of a board officer or director at a meeting is enough to establish a quorum. This holds even if the director must leave the room for a vote on a contract in which they or a relative have a vested interest, ensuring a quorum can be met for essential votes while preventing conflicts of interest from affecting decisions.

Expanded division oversight

The bill expands the jurisdiction of the Division of Condominiums, Timeshares, and Mobile Homes to oversee additional post-turnover matters, including:

• Financial issues, including annual financial reporting, assessments, fines, and commingling of funds
• Elections, voting requirements, and recall of board members
• The maintenance of, and unit owner access to, association records
• Meeting procedures, including quorums, voting, proxies, and budget meetings
• Disclosure of conflicts of interest and removal of a director or officer under Chapter 718
• The procedural completion of structural integrity reserve studies and written owner inquiries

The division must refer any suspected criminal activity to local law enforcement, and the division and the office of the condominium ombudsman may attend and observe board or unit owner meetings.

Other provisions

• Condominium ombudsman. Appointment shifts from the Governor to the Secretary of the DBPR, and the ombudsman is no longer required to be an attorney.
• Limitations on actions. The statute of limitations and statute of repose for certain association actions will not begin to run until unit owners have elected a majority of the board.
• Pre-sale disclosures. Buyers must receive the most recent annual financial statement and budget, with new escrow options for developers of nonresidential condominiums, effective October 1, 2024.
• Multiple-parcel buildings. The definition of condominium property is revised, with enhanced disclosure and inspection rights for condominiums created within part of a building or across multiple parcels, effective October 1, 2024.
• Water intrusion study. The Florida Building Commission was tasked with studying the prevention of water intrusion through sliding glass door tracks, with findings due December 1, 2024.
• Appropriation. The bill allocates over $7.4 million to the DBPR, along with funding for 65 new positions, to support enforcement of the new regulations.

Conclusion

House Bill 1021 represents a comprehensive overhaul of Florida's community association governance and operational practices. It introduces important reforms to enhance transparency, improve financial accountability, and provide greater protections for unit owners, while emphasizing ethical management and clarifying procedural responsibilities for boards and managers.

It is essential to note that this summary is provided by experienced property managers and LCAMs as an overview of significant legislative updates. It does not constitute legal advice. Board members and association leaders should consult a qualified attorney for detailed guidance regarding their obligations under the new law.

This article is general information for Florida community associations and reflects House Bill 1021 as understood at the time of writing. It is not legal advice and is not a substitute for guidance from your association’s licensed Florida attorney. Statutes, deadlines, and agency guidance change. Confirm specifics with counsel before acting.