This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1033a.RRS
DATE: 1/18/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1033 Homeowners' Associations
SPONSOR(S): Beltran
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee Brackett Anstead
2) Civil Justice & Property Rights Subcommittee
3) State Administration & Technology
Appropriations Subcommittee
4) Commerce Committee
SUMMARY ANALYSIS
The Division of Florida Condominiums, Timeshares, and Mobile Homes, within the Department of Business
and Professional Regulation (DBPR), broadly regulates condominium and cooperative associations and has
limited regulatory authority over homeowner’s associations (HOA).
Within the Division is Office of the Condominium Ombudsman. HOAs do not have an Ombudsman. The
Condominium Ombudsman is an attorney who is a neutral resource for unit owners and associations. The
Ombudsman is authorized to:
Assist with the resolution of disputes between condominiums and unit owners;
Issue reports and recommendations to the Governor, the Division, and the Legislature;
Make recommendations to the Division for changes to its rules and procedures for handling complaints;
Act as a liaison between the Division, unit owners, and associations;
Develop policies and procedures to help affected parties understand their rights and responsibilities;
Monitor and review procedures and disputes concerning elections and meetings;
Provide resources to assist board members and officers to carry out their powers and duties; and
Encourage and facilitate voluntary meetings between unit owners, board members, managers, and
other affected parties to assist in resolving disputes.
The Condominium Act also provides for an arbitration program within the Division for certain disputes between
unit owners and condominium and cooperative associations. An arbitrator’s final decision is not binding, and
any party may further pursue a matter in civil court.
The HOA Act requires certain disputes between a parcel owner and an HOA to go through pre-suit mediation
before a party can file an action in civil court. Condominium and cooperative disputes eligible for arbitration
may go through pre-suit mediation in lieu of arbitration, but HOA disputes required to go through pre-suit
mediation may not go through arbitration unless pre-suit mediation fails and all parties agree to arbitration.
The bill creates an Office of the HOA Ombudsman, which is located in DBPR. The HOA Ombudsman is an
attorney who is a neutral resource for parcel owners and HOAs. The HOA Ombudsman’s authority is similar to
the authority of the Condominium Ombudsman.
The bill also allows certain HOA disputes, which are required to go through pre-suit mediation, to go through
arbitration within the Division in lieu of pre-suit mediation.
The bill may have a fiscal impact on state government. The bill is not expected to have a fiscal impact on local
governments.
The bill provides for an effective date of July 1, 2022. STORAGE NAME: h1033a.RRS PAGE: 2
DATE: 1/18/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Community Associations
Condominiums
A condominium is a form of real property ownership created pursuant to ch. 718, F.S., the
Condominium Act, comprised of units which may be owned by one or more persons along with an
undivided right of access to common elements.
1
A condominium is created by recording a declaration
of condominium in the public records of the county where the condominium is located.
2
A declaration
governs the relationships among condominium unit owners and the condominium association.
Specifically, a declaration of condominium may include covenants and restrictions concerning the use,
occupancy, and transfer of the units permitted by law with reference to real property. All unit owners are
members of the condominium association, an entity responsible for the operation and maintenance of
the common elements owned by the unit owners. The condominium association is overseen by an
elected board of directors, commonly referred to as a “board of administration.” The board enacts
bylaws which govern the association’s administration.
The Florida Division of Condominiums, Timeshares and Mobile Homes (Division), within the
Department of Business and Professional Regulation (DBPR), provides consumer protection for Florida
residents living in regulated condominiums and other communities through education, complaint
resolution, mediation and arbitration, and developer disclosure. The Division has regulatory authority
over the following business entities and individuals:
Condominium Associations;
Cooperative Associations;
Florida Mobile Home Parks and related associations;
Vacation Units and Timeshares;
Yacht and Ship Brokers and related business entities; and
Homeowners' Associations (limited to arbitration of election and recall disputes).
The Division is the agency charged with ensuring that condominium associations comply with the
requirements of the Condominium Act.
3
The Division does this by a variety means including enforcing
the Condominium Act, providing declaratory statements, providing educational programs, providing
dispute resolution, and housing the office of the Condominium Ombudsman.
4
Cooperatives
A cooperative is a form of property ownership created under ch. 719, F.S., in which the real property is
owned by the cooperative association and individual units are leased to the residents, who own shares
in the association.
5
The lease payment amount is the pro-rata share of the cooperative’s operational
expenses. Cooperatives operate similarly to condominiums and the laws regulating cooperatives are
largely identical to those regulating condominiums.
1
S. 718.103(11), F.S.
2
S. 718.104(2), F.S.
3
S. 718.501, F.S.
4
Id.
5
S. 719.103(2) and (26), F.S. STORAGE NAME: h1033a.RRS PAGE: 3
DATE: 1/18/2022
Homeowners’ Associations
A homeowners’ association (HOA) is an association of residential property owners in which voting
membership is made up of parcel owners and membership is a mandatory condition of parcel
ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the
parcel.
6
Only HOAs whose covenants and restrictions include mandatory assessments are regulated by
ch. 720, F.S., the Homeowners’ Association Act (HOA Act). Like a condominium, an HOA is
administered by an elected board of directors. The powers and duties of an HOA include the powers
and duties provided in the HOA Act, and in the association’s governing documents, which include the
recorded covenants and restrictions, together with the bylaws, articles of incorporation, and duly
adopted amendments to those documents.
7
No state agency has direct oversight over HOAs. However, Florida law provides for a mandatory
binding arbitration program, administered by the Division, for certain election and recall disputes.
8
Ombudsman – Current Situation
Within the Division is the Office of the Condominium Ombudsman. The Condominium Ombudsman is
an attorney admitted to practice in Florida who is appointed by the Governor, and is a neutral resource
for unit owners and associations. The Condominium Ombudsman may employ professional and clerical
staff as necessary to efficiently operate the ombudsman’s office.
9
An officer or full-time employee of the Condominium Ombudsman’s office may not:
10
actively engage in any other business or profession that directly or indirectly relates to or
conflicts with his or her work in the ombudsman’s office;
serve as the representative of any political party, executive committee, or other governing body
of a political party;
serve as an executive, officer, or employee of a political party;
receive remuneration for activities on behalf of any candidate for public office; or
engage in soliciting votes or other activities on behalf of a candidate for public office
The Condominium Ombudsman or any employee of his or her office may not become a candidate for
election to public office unless he or she first resigns from his or her office or employment.
11
The Condominium Ombudsman must maintain his or her principal office at a place convenient to the
offices of the Division which will enable the Condominium Ombudsman to expeditiously carry out the
duties and functions of his or her office. The Condominium Ombudsman may establish branch offices
elsewhere in the state with the approval of the Governor. The Office of the Condominium Ombudsman
is funded by the Division’s Trust Fund.
12
The Condominium Ombudsman is authorized to:
13
Have access to and use all of the files and records of the Division.
Assist with the resolution of disputes between associations and unit owners that is not within the
jurisdiction of the Division.
Issue reports and recommendations to the Governor, the Division, the Advisory Council on
Condominiums, and the Legislature on any matter or subject within the jurisdiction of the
Division.
6
S. 720.301(9), F.S.
7
See generally ch. 720, F.S.
8
S. 720.311, F.S.
9
Ss. 718.5011(1), and 718.5012(2), F.S.
10
S. 718.5011(2), F.S.
11
Id.
12
Ss. 718.5011 and 718.5014, F.S.
13
Ss. 718.5011, and 718.5012, F.S. STORAGE NAME: h1033a.RRS PAGE: 4
DATE: 1/18/2022
Make recommendations to the Division for changes in rules and procedures for the filing,
investigation, and resolution of complaints.
Act as a liaison among the Division, unit owners, community association managers (CAMs),
14
and boards of directors, and other affected parties.
o The Condominium Ombudsman must develop policies and procedures to assist unit
owners, boards of directors, CAMs, and other affected parties to understand their rights
and responsibilities under the Condominium Act and their condominium documents.
o The Condominium Ombudsman must coordinate and assist in the preparation and
adoption of educational and reference material, and endeavor to coordinate with private
or volunteer providers of these services, so the materials are widely available.
Develop policies and procedures to help affected parties understand their rights and
responsibilities.
Monitor and review procedures and disputes concerning elections or meetings, including
recommending that the Division pursue enforcement action.
Provide resources to assist board members and officers to carry out their powers and duties
consistent with the Condominium Act, and their governing documents.
Encourage and facilitate voluntary meetings between unit owners, board members, CAMs, and
other affected parties to assist in resolving a dispute before a person submits a dispute for a
formal or administrative remedy.
The Condominium Ombudsman must appoint a board of director election monitor, when fifteen percent
of the total voting interests or six unit owners, whichever is greater, petition the Condominium
Ombudsman to appoint an election monitor to attend the annual meeting and conduct the election of
board members.
15
The Condominium Ombudsman must appoint a division employee, a person or persons specializing in
condominium election monitoring, or an attorney licensed to practice in this state as the election
monitor. The condominium association is responsible for all costs associated with the election
monitoring process.
16
Currently, there is no Ombudsman for HOAs, and the Office of the Condominium Ombudsman has no
jurisdiction or authority over HOAs.
Ombudsman – Effect of the Bill
The bill creates an Office of the HOA Ombudsman within DBPR, which is similar to the Office of the
Condominium Ombudsman.
The HOA Ombudsman must be an attorney admitted to practice in Florida who is appointed by the
Governor, and is a neutral resource for parcel owners and HOAs. The HOA Ombudsman may employ
professional and clerical staff as necessary to efficiently operate the Ombudsman’s office.
An officer or full-time employee of the HOA Ombudsman’s office may not:
actively engage in any other business or profession that directly or indirectly relates to or
conflicts with his or her work in the ombudsman’s office;
serve as the representative of any political party, executive committee, or other governing body
of a political party;
serve as an executive, officer, or employee of a political party;
receive remuneration for activities on behalf of any candidate for public office; or
engage in soliciting votes or other activities on behalf of a candidate for public office
14
Management companies and managers of residential condominiums with more than ten units or having an annual budget in excess
of $100,000 are required to have a community association manager license from DBPR. The Community Association Management
Practice Act (Part VIII of ch. 468, F.S.) governs the licensure and regulation of CAMs.
15
S. 718.5012(10), F.S.
16
Id. STORAGE NAME: h1033a.RRS PAGE: 5
DATE: 1/18/2022
The HOA Ombudsman or any employee of his or her office may not become a candidate for election to
public office unless he or she first resigns from his or her office or employment.
The HOA Ombudsman must maintain his or her principal office at a place convenient to DBPR, which
will enable the HOA Ombudsman to expeditiously carry out the duties and functions of his or her office.
The HOA Ombudsman may establish branch offices elsewhere in the state with the approval of the
Governor. The Office of the HOA Ombudsman is funded by the General Appropriations Act.
The authority of the HOA Ombudsman is similar to the Condominium Ombudsman. The HOA
Ombudsman is authorized to:
Have access to and use of all files and records of an HOA.
Issue reports and recommendations to the Governor, DBPR, and the Legislature on any matter
or subject within the jurisdiction of the HOA Act.
Act as a liaison between DBPR, parcel owners, CAMs, boards of directors, and other affected
parties.
o The HOA Ombudsman must develop policies and procedures to assist parcel owners,
boards of directors, CAMs, and other affected parties to understand their rights and
responsibilities under the HOA Act and their governing documents.
o The HOA Ombudsman must coordinate and assist in the preparation and adoption of
educational and reference material, and endeavor to coordinate with private or volunteer
providers of these services, so the materials are widely available.
Monitor and review procedures and disputes concerning elections or meetings.
Make recommendations to DBPR for changes in rules and procedures for the filing,
investigation, and resolution of complaints filed by parcel owners, associations, and CAMs.
Provide resources to assist board members and officers to carry out their powers and duties
consistent with the HOA Act, and their governing documents;
Encourage and facilitate voluntary meetings between parcel owners, board members, CAMs,
and other affected parties to assist in resolving a dispute before a person submits a dispute for
a formal or administrative remedy.
Assist with the resolution of disputes between parcel owners and the HOA or between parcel
owners when the dispute is not within the jurisdiction of DBPR to resolve.
Alternative Dispute Resolution – Current Situation
Condominiums and Cooperatives
The Condominium Act and Cooperative Act provides for an arbitration program within the Division for
certain disputes between unit owners and associations. The Division employs full time arbitrators and
certifies private attorneys for mandatory nonbinding arbitration. An arbitrator’s final decision is not
binding, and any party may further pursue a matter in civil court. However, the parties may agree to be
bound by the arbitrator’s decision.
17
The Condominium Act and Cooperative Act require a party to petition for arbitration with the Division
before filing a complaint in civil court for the following disputes between an association and a unit
owner:
18
Termination of an association.
Recall of a board member.
Disputes where the board:
o Requires an owner to take an action or refrain from any action involving the owner’s unit.
o Alters or adds to a common element.
17
Ss. 718.1255, and 719.1255, F.S; DBPR Condominium Unit-Owner Rights and Responsibilities,
http://www.myfloridalicense.com/dbpr/lsc/documents/CondominiumUORREnglishMaster4162014.pdf (last visited Jan. 15, 2022).
18
Id. STORAGE NAME: h1033a.RRS PAGE: 6
DATE: 1/18/2022
o Fails to provide proper notice for meetings or other actions.
o Fails to properly conduct elections.
o Fails to properly notice meetings.
o Fails to allow inspection of the association’s records.
The Division does not have jurisdiction for arbitration for the following disputes between a unit owner
and an association:
19
Disagreements regarding the interpretation or enforcement of a warranty;
The charging of a fee or assessment;
The eviction or other removal of a tenant from unit;
Alleged breaches of fiduciary duty by one or more board members; and
Claims for damages to a unit based upon the alleged failure of the association to maintain the
common elements or condominium property.
The cost to petition the Division for arbitration is a $50 filing fee. The petition must include the specific
nature of the dispute, demand for relief, and include proof that the petitioner provided the opposing
party a notice of intent to petition for arbitration. Upon receipt of a petition for arbitration, the Division
must determine if the dispute qualifies for arbitration. If the dispute qualifies for arbitration then the
arbitrator must conduct the arbitration within 30 days.
20
The arbitrator must render his or her decision
within 30 days of the arbitration.
21
At the request of any party to the arbitration, an arbitrator must issue subpoenas for the attendance of
witnesses and the production of books, records, documents, and other evidence and any party on
whose behalf a subpoena is issued may apply to a court for orders compelling such attendance and
production.
22
Either party in an arbitration proceeding may petition the arbitrator to have the proceeding sent to
mediation. Upon the request for mediation, the arbitrator must contact all parties in the proceeding to
determine if mediation is agreeable. An arbitrator may refer a proceeding to mediation even if all parties
do not agree to mediation.
23
If a matter is referred to mediation, the parties must select a mutually agreeable mediator. The
arbitrator must provide a list of available mediators. Mediation is conducted in accordance with the
Florida Rules of Civil Procedure. The parties in a mediation are required to equally share the costs of
mediation.
24
An arbitration decision is not final unless the parties have agreed to be bound by the decision, or if a
civil complaint is not filed within 30 days. The right to file for a trial de novo entitles the parties to file a
complaint in the appropriate trial court for a judicial resolution of the dispute.
25
The prevailing party in an arbitration proceeding must be awarded the costs of the arbitration and
reasonable attorney fees in an amount determined by the arbitrator. This includes the costs and
reasonable attorney fees incurred in the arbitration proceeding as well as the costs and reasonable
attorney fees incurred in preparing for and attending any scheduled mediation.
26
During the 2020 Legislative Session, the Legislature provided that in lieu of nonbinding arbitration,
parties to a dispute may elect to resolve disputes through pre-suit mediation in the same manner of
HOA dispute resolution.
27
19
Id.
20
Id.
21
Id.
22
Id.
23
Id.
24
Id.
25
Id.
26
Id.
27
Ch. 21-99, Laws of Fla. STORAGE NAME: h1033a.RRS PAGE: 7
DATE: 1/18/2022
HOAs
Instead of arbitration, the HOA Act provides for a pre-suit mediation program for certain disputes
between parcel owners and HOAs. The HOA act does not require mandatory arbitration by the Division
unless the dispute involves elections or recalls of board members.
28
The following disputes between parcel owners and HOAs must go to pre-suit mediation before a party
can file suit in civil court:
29
Disputes involving the use of or changes to an owner’s parcel or the common areas;
Covenant disputes;
Disputes regarding meetings of the board or committees of the board;
Disputes involving the meeting of owners that do not involve elections;
Access to the official records disputes; and
Disputes regarding amendments to the governing documents.
The following disputes are not subject to presuit mediation:
30
Disputes involving the collection of assessments, fines, or other financial obligations; and
Actions to enforce a prior mediation agreement.
An aggrieved party initiates the mediation proceedings by serving a written petition for mediation to the
opposing party. The petition must be in the format provided in statute and must identify the specific
nature of the dispute and the basis for the alleged violations. The written offer must include five certified
mediators that the aggrieved party believes to be neutral. If emergency relief is required then a
temporary injunction may be sought in court prior to the mediation.
31
The opposing party has 20 days to respond. If the opposing party fails to respond or refuses to mediate
then the aggrieved party may proceed to civil court. If the parties agree to mediation, the mediator must
hold the mediation within 90 days of the petition being sent to the opposing parties. The parties share
the costs of mediation except for the cost of attorney’s fees. Mediation is confidential and persons who
are not parties to the dispute may not attend the mediation.
32
If mediation is not successful in resolving all the issues between the parties, the parties may proceed to
civil court or may elect to enter into binding or non-binding arbitration by the Division. All parties to the
dispute must agree to enter into arbitration by the Division.
33
According to a 2020 DBPR analysis, arbitration is a more efficient and cost-effective option than
meditation and civil litigation because the filing fee for arbitration is only $50. Since 2006, less than 1
percent of arbitration cases are challenged in civil court and since 2009, 88 percent of the cases filed
with arbitration are concluded by arbitration, with only 12 percent concluded by mediation.
34
According to the analysis, private mediators typically charge $300 to $500 per hour. The cost for pre-
suit mediation for an owner can be $900 for four hours of mediation, with two hours of preparation by
the mediator, in addition to the cost to hire an attorney.
35
28
S. 720.311, F.S.
29
S. 720.311(2)(a), F.S.
30
Id.
31
Id.
32
S. 720.311(2)(a) and (b), F.S.
33
S. 720.311(2)(c), F.S.
34
Department of Business and Professional Regulation, Agency Analysis of 2020 HB 623, p. 6-7 (Feb. 7, 2020).
35
Id. STORAGE NAME: h1033a.RRS PAGE: 8
DATE: 1/18/2022
Alternative Dispute Resolution – Effect of the Bill
The bill provides that disputes between a parcel owner and an HOA, which are subject to pre-suit
mediation, may be resolved through nonbinding arbitration with the Division in lieu of pre-suit
mediation.
B. SECTION DIRECTORY:
Section 1. Amending s. 720.311, F.S., relating to dispute resolution.
Section 2. Creating s. 720.319, F.S., relating to homeowners’ association ombudsman.
Section 3. Providing an effective date of July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
Indeterminate. The bill requires the Office of the HOA Ombudsman to be funded through the
General Appropriations Act. The cost to fund the Office of the HOA Ombudsman is indeterminate.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive economic impact on HOA parcel owners and HOAs by reducing the cost of
resolving certain disputes. In lieu of pre-suit mediation or filing a complaint in civil court, such persons
and HOAs may be able to resolve disputes through the Office of the HOA Ombudsman or arbitration
with the Division.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other: STORAGE NAME: h1033a.RRS PAGE: 9
DATE: 1/18/2022
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES