Potential New FL laws for Condos will likely have unintended consequences

If you read the article referenced in the news page of this forum about criminalizing aspects of FL Condo laws, you may have thought as I did "I'll bet nobody looked at the down side of such a law."

The actual bill being discussed in that article is FL Senate Bill 1682

I'm sure that there are Associations exist that have the issues mentioned in the article. What the FL legislature did (in my opinion) was a knee jerk reaction vs. thinking the issue through.

Some issues (make sure you read the bill text vs. the article):

Persons having criminal charges pending may not hold office (elected or appointed). However, if the charges are dropped or they are found not guilty, the person must be reinstated. Yet the law doesn't specify how to remove the replacement and reinstate the not guilty party. I bet the governing documents don't either.

Associations with 150 or more units (remember, this is just condominiums) must operate a website and post certain records. Guess what condo owners, your assessments will rise to make this happen. BTW, are there volunteers to keep the website current????

Debit Cards - Poor wording. The Association or Officer may not use a debit card as payment for an association expense. I suspect that they mean reimbursement of an association expense. However, that is not the wording.

Board members may not serve more than 4 consecutive 2 year terms. What if the Board member serves 3 two year terms, then a 3 year term followed by another 3 2 year terms. Again Poor wording with legal action waiting to rule on interpretation.

My association would die without the debit card issued to one of our VP's. Not a problem if set up correctly. This means a separate account solely for having a debit card issued. Board deposits $10,000 in the account at the beginning and replenishes funds when the VP presents receipts at board meetings. The VP has no access to funds held in other accounts.

People decry new laws all the time, myself included, thinking it would be better to just enforce the laws already on the books. The criminal penalties that were stripped out last week are exactly that: enforcement of provisions that have been in the law for years without any teeth. It was anything but a knee-jerk reaction. Condo boards have been thumbing their collective noses at unit owners in Florida over access to associations' official records for a long, long time. This legislation came about partly due to a study that was recently done that documented just how bad the situation has become. Paying the $500 civil penalty is seen as a cost of doing business where control of condo associations is concerned. And that's assuming an owner actually goes to small claims court over the access issue.

I find the mandate to have a website far more troubling for the reasons Tim points out. We're an HOA with under 150 homes so not subject to this new legislation, however, we have a project underway to put our records online using several providers to make it happen. Once the current board turns over, if there are no tech-savvy replacements the whole arrangement could go sideways really fast. While it's not a website per se, it will still need to be maintained on a regular basis.

I took a look at the bill – like you, I don’t think the legislators thought all this through. Unfortunately, this seems to be the M.O. of state legislatures, city councils, school boards and especially Congress! No wonder we have HOA boards who don’t apply careful thought to community issues - or pull stuff out of their behinds (that stuff on your hand is not chocolate ice cream!)

I understand and agree with people stepping away while criminal charges are pending, but I would prefer this be addressed in the HOA documents and enforced by the board. If they can’t or won’t do it, I would hope homeowners would rise up and recall that board member if necessary. That said, you’re correct that charges might be dropped or the person acquitted – is any board going to go back and say “ok, you’re back on the board?”

Unfortunately people remember your charges being blasted everywhere, but don’t see or read (let alone care about) the tiny blub on page 8 stating you were acquitted. What do you say to the person who took that board member’s place and is actually doing a better job?

I’d rather this be changed to not allowing people convicted of major felonies to serve, especially for things like embezzlement or wire fraud (I don’t want those people anywhere near a big pot of money like a HOA operating fund, nor do I want them making decisions about how to use it). That said, remember, people can and do change (some of you may not believe it, but I’ve come across people who you’d never expect turn their lives around). Do you disallow someone for a misdemeanor he/she got 10 years ago for being young and stupid, although he/she’s learned from it and hasn’t had any problems since?

I have never liked term limits – homeowners need to get off their ass and vote, especially if it seems someone has served for years and years and is no longer effective. They’d notice at if they bothered to attend a meeting every once in a while instead of staying home and watching crap on TV.

I get tired of hearing about rouge boards of 3 or 5 or whatever number when they’re greatly outnumbered by the rest of the homeowners. Simple math dictates it should be relatively simply to get the bad folk out – sometimes you may have to drag them out, but it’s doable. Instead, people stand around wringing their hands and come to this asking “what should we do?”

Another question no one seems to answer whenever term limits are proposed - what will you do if everyone reaches the end of their terms, but there’s no one willing to take their place? That’s one of the underlying problems behind mayhem in most HOAs – people burn out, new folk come in knowing nothing about what’s happened in the past, not willing to take time to learn or listen to the more experienced ones, and you know what can happen next.

Why don’t we counter term limits with - EVERY homeowner must serve at least 1 full term on a HOA board? I read a blog from a HOA law firm where it was noted everyone is required to report for jury duty when called – it may be a pain in the ass, but it’s vital to our criminal justice system (being judged by your peers and all that stuff too many people didn’t learn about in high school because no one teaches civic anymore!).

Maybe if we required all homeowners to participate in the running of their HOA at least once, we’d have more careful thought into making decisions that will ultimately benefit individual homeowners. Isn’t that part of why we have HOAs in the first place? Imagine how interesting some HOAs would become (oh, wait, maybe not….).

If I look at the statute:

https://www.flsenate.gov/Session/Bill/2017/1682/BillText/Filed/PDF

The major changes are:

(b) An attorney may not represent a board if the attorney represents the management company of the association.

That would be potential conflict of interest and a good change.

However, 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.

That is good as it will prevent a BOD or MGMT company from foreclosing due to some of their members or employees trying to buy a property at reduced rate or foreclosed rate. It essentially eliminates potential "inside trading". I feel this is potentially heading off developers and their mgmt companies who may have in past engaged in this type activity.

718.301(4)(p).

17. Bids for materials, equipment, or services. 

(C) 1. The official records of the association are open to inspection by any association member, or the authorized representative of such member, or the renter of such member’s unit at all reasonable times. The right to inspect the records includes the right to make or obtain copies, at the reasonable expense, if any, of the member, authorized representative of such member, or the renter of such member’s unit.

Here I have an issue ... A "renter" is not the entity who owns a unit and is the ultimate responsible party. If they expect the HOA to track renters then where is the potential damn $500 per day penalty against an Owner for NOT notifying the HOA of a renter or rental status??? HOA's have a difficult time obtaining that information unless provided by an Owner and should not have to fight for the information especially when giving renters excessive rights.

2. Any director or member of the board or association who knowingly, willfully, and repeatedly violates subparagraph 1. commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. For purposes of this subparagraph, the term “repeatedly violates” means more than two violations within a 12-month period.

It gives an HOA one chance "freebie" before each other violation is paid for ... how many chances should someone get to abide by the law??? Sorry ... If your HOA is not abiding by the law and the HOA is paying fines as some point the Owners will stand up and take action. Potentially this may eliminate the rampant "apathy".

4. 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 is personally subject to a civil penalty pursuant to s. 718.501(1)(d).

Same as above ... Follow the law or reap the consequences. While it is potentially sad that it is a few who cause these problems, it unfortunately causes the few violated to scream loudly to their legislators. That makes my other post issue of if you want change it potentially can only take a few hammering many times at their legislators.

(g) 1. An association with 500 or more units that does not manage timeshare units shall post digital copies of the documents specified in subparagraph 2. on its website.
a. The association’s website must be:
(I) An independent website or web portal wholly owned and operated by the association; or
(II) A website or web portal operated by a third-party provider with whom the association owns, leases, rents, or otherwise obtains the right to operate a web page, subpage, web portal, or collection of subpages or web portals dedicated to the association’s activities and on which required notices, records, and documents may be posted by the association.
b. The association’s website 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, employees of the association, and the department.
c. Upon a unit owner’s request, the association must provide the unit owner with a username and password and access to the protected sections of the association’s website that contain any notices, records, or documents that must be electronically provided.
2. A current copy of the following documents must be posted in digital format on the association’s website:
a. The recorded declaration of condominium of each condominium operated by the association and each amendment to each declaration.
b. The recorded bylaws of the association and each amendment to the bylaws.
c. The articles of incorporation of the association, or other documents creating the association, and each amendment thereto. The copy posted pursuant to this sub-subparagraph must be a certified copy.
d. The rules of the association.
e. Any management agreement, lease, or other contract to 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 must be maintained on the website for 1 year.
f. The annual budget required by s. 718.112(2)(f) and any proposed budget to be considered at the annual meeting.
g. The financial report required by subsection (13) and any proposed financial report to be considered at a meeting.
h. The certification of each director required by s.
718.112(2)(d)4.b.
i. 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.
j. Any contract or document regarding a conflict of interest or possible conflict of interest as provided in ss. 468.436(2) and 718.3026(3).
k. The notice of any board meeting and the agenda for the meeting, as required by s. 718.112(2)(d)3., no later than 14 days before the meeting. The notice must be posted in plain view on the front page of the website, or on a separate subpage of the website labeled “Notices” which is conspicuously visible and linked from the front page. The association must also post on its website any documents to be considered during the meeting or listed on the agenda at least 7 days before the meeting at which the document or the information within the document will be considered, including the following documents:
(I) The proposed annual budget required by s. 718.112(2)(f), which must be provided at least 14 days before the meeting. 
 (II) The proposed financial report required by subsection (13). 
 3. The association shall ensure that the information and records described in paragraph (c), which are not permitted to be accessible to unit owners, are not posted on the association’s website. If protected information or information restricted from being accessible to unit owners is included in documents that are required to be posted on the association’s website, the association shall ensure the information is redacted before posting the documents online. 

Potentially if you have 500+ Units in your HOA you should have more than enough money built into your budget to provide a website. Any HOA of that size who does not utilize the WWW is beyond stupid as the costs for mailings to the units for certain information such as Rules & Regulations would far outweigh the cost of a website. If the State Government wants to mandate a website for large HOA's they need to eliminate any mandates for HOA's to mail documents to owners that they require posted to a website, if so mandated. After all ... that is only fair.

(j) Recall of board members.— (Did not post due to strike throughs of information.

I like the fact the old BOD no longer needs to "certify" any recall and instead immediately within 10 days after the vote must turn over all information to the new board and step aside. Potentially in the past the "certify" BS caused a lot of issues when a BOD was recalled. So I say this is a good change.

(p) Service providers; conflicts of interest.—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.

LOL ... This is a question that comes up many times on this website. I and others on this question have stated it is NOT good to hire a BOD member company as a contractor. It potentially is a conflict of interest ... and apparently the State of FL is also considering it a conflict. I personally like this change in the law

LOL ... left off when reached Arbitration as this post is getting very long. Maybe tomorrow will take off from there.