New Florida laws with criminal penalties for directors

TerriS6 (California)
Posts: 3,284

Posted:

https://independentamericancommunities.com/2024/05/13/many-new-laws-for-florida-hoas-in-2024/

CathyA3 (Ohio)
Posts: 6,299

Posted:

A number of years ago, the legislators in my state got fed up listening to homeowners complain about their boards and hatched a plan to improve board performance by making directors personally liable if they were sued.

The bill died in committee after all of the community association lawyers pointed out that they would indeed eliminate the bad board members, and all of the good ones as well, because every single board member in the state would resign if that bill became law.

As for Florida, there already are criminal penalties for board members who engage in criminal acts. You can't impose criminal penalties for things that aren't crimes. Or does the Florida legislature plan to change the law so that the same act merits different penalties depending on who is committing it and in what context?

Sure hope the consumers enjoy all the protection they're getting when nobody will serve on the board...

SheliaH (Indiana)
Posts: 6,964

Posted:

for the Florida law, I wonder if county prosecutors will make the time to pursue voting violations. At least with the kickbacks, you could set a dollar amount that's worth pursuing, but if the voting violations are misdemeanors, the penalty might be little more than a fine and court costs. Some consider that the equivalent of a large traffic ticket, so does a prosecutor want to spend the time on that case? We shall see.

Meanwhile, the Florida law is said to have six criteria for what would be considered fraudulent voting by members and board members - I don't know what they are, but people can google it and perhaps consider what policies and procedures they can put in place (say that fast three times!) to prevent foolishness. Since electronic voting is becoming a thing in HOAs, I'd also suggest this be addressed.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

LoriM15 (Florida)
Posts: 1,009

Posted:

I discussed this bill weeks ago. The governor has still not signed the bill. You can tell the slant of the website referenced by the first line: Finally some consumer protection for homeowners in HOA planned communities.

We already had plenty of consumer protections in our HOA statutes. Read FS 720 or FS 718 and you will see consumers were already protected. A lot of this law was a kneejerk reaction to the very large HOA near Miami that was basically run by a gang. Now we are all going to pay the price. We already have a website, but they are forcing basically HOAs to have one and to put all their documents on it. It weakens architectural restrictions. It forces mandatory training on directors and increases liability for directors.

All it does is causes problems for most HOAs. What it doesn't do is provide any real ombudsman or consumer protection department that can actually help an owner with issues. It's all window dressing.

LetA (Nevada)
Posts: 2,679

Posted:

NRED is starting to fine HOA boards that do not have a full board. HOA's are supposed to have a minimum of
3 directors, if an HOA has only 2, they get fined by NRED. If a board is supposed to have 5 or 7 they will not
get fined as long as there are 3 on the board over a quorum.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By LetA on 05/13/2024 9:11 PM
NRED is starting to fine HOA boards that do not have a full board. HOA's are supposed to have a minimum of
3 directors, if an HOA has only 2, they get fined by NRED. If a board is supposed to have 5 or 7 they will not
get fined as long as there are 3 on the board over a quorum.

Fabulous. And what happens to boards that *can't* fill the third position? Historically we've had to twist arms to get our third position filled, and homeowners can't be compelled to serve if they don't want to. This sort of thing is common in condo communities, especially ones that have a high number of absentee owners or snow birds.

And penalizing the few board members who have volunteered seems like a stupid way to go about this. You can't get enough volunteers, so you make sure to discourage the few who do step up? Perhaps they should fine the membership who can't be bothered? How about we impose civil or criminal liabilities, too?

I boldly predict an increase in the number of communities needing to go into receivership, which is in no one's best interest.

Grrrr. The stupidity around HOA/COA governance is maddening. And it starts with the notion that large, non-profit corporations can be run successfully by untrained, unpaid volunteers while the rest of the homeowners criticize, gripe, and take potshots at the volunteers (who sometimes, to be be fair, deserve the criticism). Oh, and don't forget the laws that allow homeowners to vote down assessment increases, budgeting needs be damned.

Well, not even 7:00 AM here, and my first rant of the day is already done. I call that efficiency. :-)

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Blame the "they and them" syndrome in HOAs. It is always "They' in a HOA meaning "board". People are so short sighted can not see the problem is most likely them selfs.

I find your always dealing with a "Terri's in a HOA. Which is like a cancer to a HOA culture.

Former HOA President

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By CathyA3 on 05/14/2024 3:58 AM

Posted By LetA on 05/13/2024 9:11 PM
NRED is starting to fine HOA boards that do not have a full board. HOA's are supposed to have a minimum of
3 directors, if an HOA has only 2, they get fined by NRED. If a board is supposed to have 5 or 7 they will not
get fined as long as there are 3 on the board over a quorum.

Fabulous. And what happens to boards that *can't* fill the third position? Historically we've had to twist arms to get our third position filled, and homeowners can't be compelled to serve if they don't want to. This sort of thing is common in condo communities, especially ones that have a high number of absentee owners or snow birds.

And penalizing the few board members who have volunteered seems like a stupid way to go about this. You can't get enough volunteers, so you make sure to discourage the few who do step up? Perhaps they should fine the membership who can't be bothered? How about we impose civil or criminal liabilities, too?

I boldly predict an increase in the number of communities needing to go into receivership, which is in no one's best interest.

Grrrr. The stupidity around HOA/COA governance is maddening. And it starts with the notion that large, non-profit corporations can be run successfully by untrained, unpaid volunteers while the rest of the homeowners criticize, gripe, and take potshots at the volunteers (who sometimes, to be be fair, deserve the criticism). Oh, and don't forget the laws that allow homeowners to vote down assessment increases, budgeting needs be damned.

Well, not even 7:00 AM here, and my first rant of the day is already done. I call that efficiency. :-)

Let me backtrack and say the HOA as a whole is being finned for not having a minimum full board. In Nevada we spell tax, fee.
just another form of theft.

LetA (Nevada)
Posts: 2,679

Posted:

Let me add this too Cathy, Nevada HOA's are billed $5.00 per door annually that goes to the
Ombudsman's office. It's like the Tax collector in the movie Popeye (1980)

CathyA3 (Ohio)
Posts: 6,299

Posted:

Fining the HOA as a whole makes more sense. But that contradicts the whole narrative of *volunteer* boards. And I bet there are plenty of condo owners who would prefer to pay the fine rather than serve on the board themselves.

I've often thought that HOA/COA governance should be handled by paid professionals - sort of receivership lite. At least you'd be more likely to have decisions that are financially sound and that conform the the CC&Rs and state law. But I'm sure homeowners would howl about property rights and whatnot. And laws generally support the notion that adults are allowed to make bad decisions without someone stepping in. The problem in community associations is that a whole lot of people are harmed along with them.

'Tis a conundrum.

DeanJ
Posts: 1,786

Posted:

Perfect. Make the HOA Board members both criminally and civil liable + the financial disclosure the IRS is requiring Jan 1 and no one in their right mind will serve on an HOA board.

CathyA3 (Ohio)
Posts: 6,299

Posted:

As I said, Ohio lawmakers flirted with a similar idea until everybody pointed out that no one would serve on boards and every community in the state would have to go into receivership.

I can see dealing with the issue of kickbacks since they just add to the cost of doing business, raise the cost of housing overall (because the added cost will eventually be passed on to homeowners), and line the pockets of the already well-heeled. Unfortunately I think that kickbacks are a time-honored part of development and construction projects. And sharp operators will simply do a better job of hiding their tracks. I wish I weren't so cynical - but if there's a buck to be made, somebody will figure out how to make it.

I wonder if lawmakers in general are piggybacking on the idea that the Federal government is already collecting data on "beneficial owners" in community associations (*). Now all they need to see are bids and signed contracts to look for evidence that somebody is padding the numbers.

(* I have a bit of an update on that, but it will have to wait until later.)

ChrisS29 (Florida)
Posts: 48

Posted:

Quote:

Posted By TerriS6 on 05/13/2024 9:52 AM
https://independentamericancommunities.com/2024/05/13/many-new-laws-for-florida-hoas-in-2024/

Here I got all excited and then I see they left condos out, again. Why is it protections for HOAs always get stronger, but not condos?

LoriM15 (Florida)
Posts: 1,009

Posted:

Because most of the "protections" in this bill are either already in effect for COAs in Florida or incorporated in the slew of bills they passed regarding FS 718.