This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1243c.JDC
DATE: 2/14/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1243 Homeowners' Associations
SPONSOR(S): Judiciary Committee, Regulatory Reform & Economic Development Subcommittee, Porras
and others
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development
Subcommittee
13 Y, 0 N, As CS Larkin Anstead
2) Judiciary Committee 21 Y, 0 N, As CS Mawn Kramer
3) Commerce Committee
SUMMARY ANALYSIS
A homeowners’ association (HOA) is an association of residential property owners in which voting membership
is made up of parcel owners, membership is a mandatory condition of parcel ownership, and the association is
authorized to impose assessments that, if unpaid, may become a lien on the parcel. HOAs, regulated under
Chapter 720, F.S., may levy fines against or suspend certain access rights of a parcel owner for failing to
comply with the HOA’s governing documents. Additionally, Florida law requires the officers and directors of an
HOA to comply with certain requirements.
The bill:
Provides educational requirements for community association managers (CAMs) and HOA directors.
Requires a CAM meeting specified conditions to take specified actions, including attending at least one
member or board meeting annually and providing the members with specified information.
Requires an HOA with 1,000 parcels or more to prepare audited financial statements, and prohibits an
HOA from preparing a financial statement for consecutive fiscal years.
Defines “kickback” and provides that an HOA officer, director, or manager who knowingly solicits, offers
to accept, or accepts a kickback commits a third-degree felony and is subject to monetary damages.
Prohibits an HOA, and the officers, directors, employees, and agents thereof, from using a debit card
issued in the HOA’s name, or billed directly to the HOA, for the payment of any association expenses,
and provides that any person who uses a debit card issued in the HOA’s name, or billed directly to the
HOA, for any expense that is not a lawful HOA obligation commits theft.
Provides that, where a director or officer is charged with any specified crime and therefore must be
removed from office under current law, a vacancy must also be declared, and adds to the list of crimes
triggering such a removal and declaration any criminal violation under chapter 720, F.S.
Requires an HOA or its specified committees to uniformly apply and enforce on all parcel owners the
architectural and construction improvement standards set forth in the governing documents, and to
provide specified written notice to a parcel owner whose improvement request was denied.
Requires HOAs with 100 or more parcels to, by January 1, 2025, post a current digital copy of specified
records on its website or make such records available through an application, under specified
conditions.
Provides that, if an HOA receives a subpoena for records from a law enforcement agency, the HOA
must provide a copy of such records or otherwise make the records available to the agency for
inspection and copying within 5 business days unless otherwise directed by the agency or subpoena.
Creates new criminal penalties for specified records offenses, which penalties range from a second-
degree misdemeanor to a third-degree felony.
The bill may have an indeterminate fiscal impact on state and local governments.
The bill provides an effective date of July 1, 2024. STORAGE NAME: h1243c.JDC PAGE: 2
DATE: 2/14/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Community Association Managers- Current Situation
Community association managers (CAMs) are licensed and regulated by the Department of Business
and Professional Regulation (DBPR) pursuant to part VIII of ch. 468, F.S., and the seven-member
Regulatory Council of Community Association Managers (council) housed within DBPR.
1
Section 468.431(2), F.S., defines “community association management” to mean any of the following
practices requiring substantial specialized knowledge, judgment, and managerial skill when done for
remuneration and when the association or associations served contain more than 10 units or have an
annual budget or budgets in excess of $100,000:
Controlling or disbursing funds of a community association;
Preparing budgets or other financial documents for a community association;
Assisting in the noticing or conduct of community association meetings; and
Coordinating maintenance for the residential development and other day-to-day services
involved with the operation of a community association.
A CAM license is not required for a person who:
Performs clerical or ministerial functions under the direct supervision and control of a licensed
CAM, or
Performs only the maintenance of a community association and does not assist in any of the
management services.
2
To become licensed as a CAM, a license applicant must:
Submit to a background check for a good moral character determination by DBPR,
Attend a DBPR-approved in-person training prior to taking the licensure examination, and
Pass the licensure examination.
3
CAMs must also complete not more than 10 hours of continuing education hours as approved by the
council to renew and maintain their licenses.
4
Section 468.4334, F.S., outlines the professional practice standards for CAMs and CAM firms, including
the duty to “discharge the duties performed on behalf of the association as authorized by [ch. 468,
F.S.], loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full
disclosure to the community association; accounting for all funds; and not charging unreasonable or
excessive fees.”
The license of a CAM or CAM firm may be disciplined, including a suspension or revocation of their
license, or denial of a license renewal, for the grounds specified in s. 468.436, F.S., including:
Committing acts of gross misconduct or gross negligence in connection with the profession.
Contracting, on behalf of an association, with any entity in which the CAM has a financial
interest that is not disclosed.
Violating any provision of chapter 718 (relating to condominiums), chapter 719 (relating to
cooperatives), or chapter 720 (relating to homeowners’ associations) during the course of
performing community association management services pursuant to a contract with a
community association.
5
1
S. 468.4315(1), F.S.
2
S. 468.431(2), F.S.
3
S. 468.433, F.S.
4
S. 468.4336 and 468.4337, F.S.
5
S. 468.436(2)(b)5.-7., F.S. STORAGE NAME: h1243c.JDC PAGE: 3
DATE: 2/14/2024
Community Association Managers- Effect of the Bill
The bill requires CAMs and CAM firms authorized by a contract to provide community association
management to a homeowners’ association (HOA) to:
Attend in person at least one HOA member meeting or board meeting annually;
Provide HOA members:
o The name and contact information for each CAM or representative of the CAM firm
assigned to the HOA.
o The CAM’s or representative’s hours of availability.
o A summary of the duties for which the CAM or representative is responsible.
The bill requires that the HOA post this information on the HOA website or application. The bill requires
that a CAM or CAM firm must update the HOA and its members within 14 business days after any
change to such information.
A CAM or CAM firm is required to provide to any HOA member the contract between the HOA and the
CAM or CAM firm upon the member’s request, and include such contract with the HOA’s governing
documents.
The bill mandates that, every two years, a CAM that provides services to an HOA must complete at
least 5 hours of continuing education that pertains specifically to HOAs, 3 hours of which must relate to
recordkeeping.
Homeowners’ Associations
A homeowners’ association (HOA) is an association of residential property owners in which voting
membership is made up of parcel owners, membership is a mandatory condition of parcel ownership,
and the association is authorized to impose assessments that, if unpaid, may become a lien on the
parcel.
6
In Florida, approximately 45 percent of homes are part of an HOA.
7
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 HOA’s governing documents, which include the recorded
covenants and restrictions, together with the bylaws, articles of incorporation, and duly adopted
amendments to those documents.
8
An HOA must be a Florida corporation and the initial governing documents must be recorded in the
official records of the county in which the community is located.
After control of the HOA is obtained by members other than the developer, the HOA may institute,
maintain, settle, or appeal actions or hearings in its name on behalf of all members concerning matters
of common interest to the members. The HOA may defend actions in eminent domain or bring inverse
condemnation actions. Any individual member or class of members may bring any action without
participation by the HOA, but a member does not have authority to act for the HOA by virtue of being a
member.
9
No state agency has direct oversight over HOAs. However, Florida law provides for a limited mandatory
binding arbitration program, administered by the Division of Condominiums, Timeshares and Mobile
Homes (division), within DBPR, for certain election and recall disputes.
10
6
S. 720.301(9), F.S.
7
Patrick Regan, “45% of Florida Homes Are Part of an HOA, the Highest Percentage in the Nation.” South Florida Agent
Magazine, Apr. 21, 2023, https://southfloridaagentmagazine.com/2023/04/20/45-of-florida-homes-are-part-of-an-hoa-the-
highest-percentage-in-the-nation/ (last visited Feb. 14, 2024).
8
See generally ch. 720, F.S.
9
S. 720.303(1), F.S.
10
S. 720.311, F.S. STORAGE NAME: h1243c.JDC PAGE: 4
DATE: 2/14/2024
HOA Governing Documents
An HOA’s governing documents include the:
Recorded declaration of covenants for a community and all duly adopted amendments thereto;
HOA’s articles of incorporation and bylaws and any duly adopted amendments thereto; and
Rules and regulations adopted under the authority of the recorded declaration, articles of
incorporation, or bylaws and any duly adopted amendments thereto.
11
The declaration of covenants, much like a constitution, establishes the community’s basic covenants
and restrictions.
12
The articles of incorporation establish the HOA’s existence, basic structure, and
governance.
13
The bylaws govern the HOA’s operation and administration, while the rules and
regulations typically supplement the other documents, addressing matters of everyday policy.
14
Unless otherwise provided in the governing documents or required by law, an HOA’s governing
documents may be amended by the affirmative vote of two-thirds of the HOA’s voting interests.
15
Within
30 days after recording a governing document amendment, the HOA must give its members copies
thereof unless a copy was provided to the members before the vote on the amendment, in which case
the HOA must only provide the members with notice of the amendment’s adoption.
16
Official Records- Current Situation
An HOA must maintain each of the following items, when applicable, which constitute the official
records of the HOA:
17
A copy of the HOA’s governing documents, as follows:
o the declaration of covenants and each amendment,
o bylaws and each amendment,
o articles of incorporation and each amendment, and
o current rules.
Copies of any plans, specifications, permits, and warranties related to improvements
constructed on the common areas or other property that the HOA is obligated to maintain,
repair, or replace.
The minutes of all meetings of the board of directors and of the members, which minutes must
be retained for at least 7 years.
A current roster of all members and their designated mailing addresses and parcel
identifications. A member's designated mailing address is the member's property address,
unless the member has sent written notice to the HOA requesting that a different mailing
address be used for all required notices.
o The HOA shall also maintain the e-mail addresses and the facsimile numbers
designated by members for receiving notice sent by electronic transmission of those
members consenting to receive notice by electronic transmission. A member's e-mail
address is the e-mail address the member provided when consenting in writing to
receiving notice by electronic transmission, unless the member has sent written notice to
the HOA requesting that a different e-mail address be used for all required notices. The
e-mail addresses and facsimile numbers provided by members to receive notice by
electronic transmission must be removed from HOA records when the member revokes
consent to receive notice by electronic transmission.
All of the HOA’s insurance policies, which must be retained for at least 7 years.
11
S. 720.301(8), F.S.
12
Joseph Adams, HOA Governing Documents Explained (July 1, 2018),
https://www.floridacondohoalawblog.com/2018/07/01/hoa-governing-documents-explained/ (last visited Feb. 14, 2024).
13
Id.
14
Id.
15
S. 720.306(1), F.S.
16
Id.
17
S. 720.303(4), F.S. STORAGE NAME: h1243c.JDC PAGE: 5
DATE: 2/14/2024
A current copy of all contracts to which the HOA is a party, including, without limitation, any
management agreement, lease, or other contract under which the HOA has any obligation or
responsibility.
o Bids received by the HOA for work to be performed must also be considered official
records and must be kept for a period of 1 year.
The financial and accounting records of the HOA, kept according to good accounting practices.
All financial and accounting records must be maintained for a period of at least 7 years. The
financial and accounting records must include:
o Accurate, itemized, and detailed records of all receipts and expenditures.
o A current account and a periodic statement of the account for each member, designating
the name and current address of each member who is obligated to pay assessments,
the due date and amount of each assessment or other charge against the member, the
date and amount of each payment on the account, and the balance due.
o All tax returns, financial statements, and financial reports of the HOA.
o Any other records that identify, measure, record, or communicate financial information.
A copy of the disclosure summary.
Ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to
voting by parcel owners, which must be maintained for at least 1 year after the date of the
election, vote, or meeting.
All affirmative acknowledgments made pursuant to s. 720.3085(3)(c)3., F.S.
All other written records of the HOA which are related to the operation of the HOA.
The HOA bylaws must require the HOA to post all notices of board meetings in a conspicuous place in
the community at least 48 hours in advance of a meeting, except in an emergency.
18
The official records must be maintained within the state for at least 7 years and be made available to a
parcel owner for inspection or photocopying within 45 miles of the community or within the county in
which the HOA is located within 10 business days after receipt by the board or its designee of a written
request. An HOA may comply with these requirements by having a copy of the official records available
for inspection or copying in the community or, at the option of the HOA, by making the records available
to a parcel owner electronically via the Internet or by allowing the records to be viewed in electronic
format on a computer screen and printed upon request.
If the HOA has a photocopy machine available where the records are maintained, it must provide
parcel owners with copies on request during the inspection if the entire request is limited to no more
than 25 pages. However, an HOA may impose fees to cover the costs of providing copies of the official
records.
19
An HOA must allow a member or authorized representative to use a portable device,
including a smartphone, tablet, portable scanner, or any other technology capable of scanning or taking
photographs, to make an electronic copy of the official records in lieu of providing the member or
authorized representative with a copy of such records. The HOA may not charge a fee to a member or
his or her authorized representative for the use of a portable device.
20
The failure of an HOA to provide access to the records within 10 business days after receipt of a written
request submitted by certified mail, return receipt requested, creates a rebuttable presumption that the
HOA willfully failed to comply with this requirement.
21
A member who is denied access to official records is entitled to his or her actual damages or minimum
damages, as established in law, for the HOA’s willful failure to comply with this requirement.
22
The
18
S. 720.303(2)(c), F.S.
19
The association may impose fees to cover the costs of providing copies of the official records, including the costs of
copying and the costs required for personnel to retrieve and copy the records if the time spent retrieving and copying the
records exceeds one-half hour and if the personnel costs do not exceed $20 per hour. Personnel costs may not be
charged for records requests that result in the copying of 25 or fewer pages. The association may charge up to 25 cents
per page for copies made on the association's photocopier. S. 720.303(5)(c), F.S.
20
S. 720.303(5), F.S.
21
S. 720.303(5)(a), F.S. STORAGE NAME: h1243c.JDC PAGE: 6
DATE: 2/14/2024
minimum damages are to be $50 per calendar day up to 10 days, with the calculation to begin on the
11th business day after receipt of the written request.
23
The HOA may adopt reasonable written rules governing the frequency, time, location, notice, records to
be inspected, and manner of inspections, but may not require a parcel owner to demonstrate any
proper purpose for the inspection, state any reason for the inspection, or limit a parcel owner’s right to
inspect records to less than one 8-hour business day per month.
24
The following records are not accessible to members or parcel owners:
25
Any record protected by the lawyer-client privilege as described in s. 90.502, F.S., and any
record protected by the work-product privilege.
26
Information obtained in connection with the approval of the lease, sale, or other transfer of a
parcel.
Information obtained in a gated community in connection with guests’ visits to parcel owners or
community residents.
Personnel records of HOA or management company employees.
Medical records of parcel owners or community residents.
Personal identifying information of a parcel owner other than as provided for HOA notice
requirements, excluding the person’s name, parcel designation, mailing address, and property
address.
Any electronic security measure that is used to safeguard data, including passwords.
The software and operating system which allows the manipulation of data; however, the data is
part of the official records.
All affirmative acknowledgments made pursuant to s. 720.3085(3)(c)3, F.S.
Official Records- Effect of the Bill
The bill mandates that an HOA adopt written rules governing the method of retaining official records
and length of such retention and clarifies that the 10-day response time is triggered only upon receipt of
a written request by a parcel owner.
The bill also requires every HOA with 100 parcels or more to, by January 1, 2025, post a current digital
copy of specified official records on its website, or make such documents available through an
application that can be downloaded on a mobile device. Such application or website must be accessible
through the Internet and have a subpage or portal inaccessible to the general public, and that is
accessible only to HOA parcel owners and employees, and the HOA must provide a parcel owner a
username and password giving the parcel owner access to the restricted subpage or portal, upon the
parcel owner’s written request.
Further, the bill:
Provides that if an HOA receives a subpoena for records from a law enforcement agency, the
HOA must provide a copy of such records or otherwise make the records available to the
agency within 5 business days after receipt of the subpoena, unless directed otherwise by the
agency or subpoena. Under the bill, an HOA must assist a law enforcement agency in its
investigation to the extent permissible by law.
Requires an HOA to ensure that the information and records which are not allowed to be
accessible to parcel owners are not posted on the HOA’s website or application, and that, if
22
“Actual damages” are those damages a party actually suffered. Legal Information Institute, Actual Damages,
https://www.law.cornell.edu/wex/actual_damages (last visited Feb. 14, 2024).
23
S. 720.303(5)(b), F.S.
24
S. 720.303(5)(c), F.S.
25
S. 720.303(5)(c)1.-9., F.S.
26
The “work-product privilege” protects from disclosure documents and tangible things prepared in anticipation of litigation
or for trial, in order to protect an attorney’s mental impressions, conclusions, opinions, or legal theories. Legal Information
Institute, Attorney Work Product Privilege, https://www.law.cornell.edu/wex/attorney_work_product_privilege (last visited
Feb. 14, 2024). STORAGE NAME: h1243c.JDC PAGE: 7
DATE: 2/14/2024
protected or restricted information is included in documents that must be posted on the HOA’s
website or application, the information is redacted before the documents are posted. However,
the bill provides that the HOA is not liable for disclosing protected or restricted information
unless such disclosure was made with a knowing or intentional disregard of the information’s
protected or restricted nature.
Creates criminal penalties for specified records violations, as follows:
o Any director, board member, or CAM who knowingly, willfully, and repeatedly
27
violates
provisions relating to records maintenance and access in s. 720.303(5)(a), F.S., with the
intent of causing harm to the HOA or one or more of its members, commits a second-
degree misdemeanor.
28
o Any person who knowingly and intentionally defaces or destroys accounting records
during the period in which such records must be maintained, or who knowingly or
intentionally fails to create or maintain accounting records that must be created or
maintained, with the intent of causing harm to the HOA or one or more of its members,
commits a first-degree misdemeanor.
29
o Any person who willfully and knowingly refuses to release or otherwise produce HOA
records with the intent to avoid or escape detection, arrest, trial, or punishment for the
commission of a crime, or to assist another person with such avoidance or escape,
commits a third-degree felony.
30
Finally, the bill appears to authorize an HOA to shorten the amount of time that records must be
retained to some time less than 7 years if such shorter time is specified in the governing documents,
but elsewhere preserves the requirement that the records be retained for at least 7 years.
Financial Reporting - Current Situation
Florida law does not required a financial audit of all HOAs; instead, it requires certain HOAs to prepare
and complete, or contract with a third party to prepare and complete, a financial report for the preceding
fiscal year within 90 days after the fiscal year’s end, or annually on the date provided in the governing
documents.
31
Specifically, under Florida law, an HOA that meets the criteria specified below must
prepare or cause to be prepared a complete set of financial statements in accordance with generally
accepted accounting principles as adopted by the Board of Accountancy, which financial statements
shall be based on the HOA’s total annual revenues, as follows:
32
An HOA with total annual revenues of $150,000 or more, but less than $300,000, must prepare
compiled financial statements.
33
An HOA with total annual revenues of at least $300,000, but less than $500,000, must prepare
reviewed financial statements.
34
An HOA with total annual revenues of $500,000 or more must prepare audited financial
statements.
35
27
The bill defines “repeatedly” to mean two or more violations within a 12-month period.
28
A second-degree misdemeanor is punishable by up to 60 days in jail and a $500 fine. Ss. 775.082 and 775.083, F.S.
29
A first-degree misdemeanor is punishable by up to one year in county jail and a $1,000 fine. Ss. 775.082 and 775.083,
F.S.
30
A third-degree felony is punishable by up to five years’ imprisonment and a $5,000 fine. Ss. 775.082, 775.083, or
775.084, F.S.
31
S. 720.303(7), F.S.
32
Id.
33
“Compiled financial statements” involve the placement of an HOA’s accounting data into a financial statement format
but no comparison is made by a CPA firm between the financial statement’s data and the HOA’s financial records. Thus,
there are no assurances as to the financial statement’s accuracy. John H. Stroemer, Understanding Annual Financial
Reporting Requirements for Associations, https://www.stroemercpa.com/reporting_requirements.php (last visited Feb. 14,
2024).
34
“Reviewed financial statements” involve an analytical review of the HOA’s balance sheet, income statement, and board
meeting minutes, and an interview of the HOA’s management personnel, by a Certified Public Accountant (CPA). The
CPA firm then provides “negative assurances”; in other words, the CPA firm states that nothing came to its attention that
would indicate that the financial statements were not in accordance with generally accepted accounting principles. Id. STORAGE NAME: h1243c.JDC PAGE: 8
DATE: 2/14/2024
Within 21 days after the final financial report is completed by the HOA or received from the third party,
but no later than 120 days after the fiscal year’s end or other date as provided in the governing
documents, the HOA must, within specified time limits, provide each member with a copy of the annual
financial report or a written notice that a copy thereof is available upon request at no charge to the
member.
36
However, if approved by a majority of the voting interests present at a properly called HOA
meeting, an HOA may prepare or cause to be prepared:
A report of cash receipts and expenditures in lieu of a compiled, reviewed, or audited financial
statement;
A report of cash receipts and expenditures or a compiled financial statement in lieu of a
reviewed or audited financial statement; or
A report of cash receipts and expenditures, a compiled financial statement, or a reviewed
financial statement in lieu of an audited financial statement.
37
Florida law also provides that an HOA with total annual revenues of less than $150,000 must prepare a
report of cash receipts and expenditures, which report must disclose the amount of receipts by
accounts and receipt classifications, and the amount of expenses by accounts and expense
classifications, including, but not limited to the following:
Costs for security, professional, and management fees and expenses;
Taxes;
Recreation facilities costs;
Refuse collection and utility services expenses;
Lawn care expenses;
Building maintenance and repair costs;
Insurance costs;
Administration and salary expenses; and
Reserves, if maintained by the HOA.
However, parcel owners may petition the board for a level of financial reporting higher than that
required under law, and if 20 percent of the parcel owners bring such a petition, the board must notice
and hold a member meeting within 30 days of the petition’s receipt for the purpose of voting on raising
the reporting level.
38
Upon approval by a majority of the total voting interests of the parcel owners, the
HOA must provide within 90 days of the meeting or fiscal year’s end, whichever occurs later:
Compiled, reviewed, or audited financial statements, if the HOA is otherwise required to
prepare a report of cash receipts and expenditures;
Reviewed or audited financial statements, if the HOA is otherwise required to prepare compiled
financial statements; or
Audited financial statements if the HOA is otherwise required to prepare reviewed financial
statements.
39
Financial Reporting - Effect of the Bill
The bill requires an HOA with 1,000 parcels or more to prepare audited financial statements,
notwithstanding the HOA’s total annual revenue, and prohibits an HOA from preparing any financial
statement for consecutive fiscal years.
Debit Cards – Current Situation
35
“Audited financial statements” involve an in-depth audit of the HOA’s financial records and come with the CPA firm’s
expression of an opinion on the financial statements taken as a whole. Such statements provide the highest level of
accuracy. Id.
36
S. 720.303(7), F.S.
37
Id.
38
Id.
39
Id. STORAGE NAME: h1243c.JDC PAGE: 9
DATE: 2/14/2024
Nothing in the HOA Act expressly prohibits an HOA, or the officers, directors, or employees thereof,
from using a debit card issued in the HOA’s name, or billed directly to the HOA.
40
Debit Cards – Effect of the Bill
The bill prohibits an HOA and its officers, directors, employees, and agents from using a debit card
issued in the HOA’s name, or billed directly to the HOA, for the payment of any association expenses.
Further, the bill specifies that any person who uses a debit card issued in the HOA’s name, or billed
directly to the HOA, for any expense that is not a lawful HOA obligation
41
commits theft as provided
under s. 812.014, F.S.
Powers and Duties of Officers and Directors- Current Situation
The officers and directors of an HOA have a fiduciary relationship to the members who are served by
the HOA.
42
HOA Director Education Requirements
Within 90 days after being elected or appointed to the board, each director shall either:
Certify in writing to the secretary of the HOA that:
o he or she has read the HOA's declaration of covenants, articles of incorporation, bylaws,
and current written rules and policies;
o he or she will work to uphold such documents and policies to the best of his or her
ability; and
o he or she will faithfully discharge his or her fiduciary responsibility to the HOA members;
or
Submit a certification showing satisfactory completion of the educational curriculum
administered by a division-approved education provider within 1 year before or 90 days after the
date of election or appointment.
The written certification or educational certificate is valid for the uninterrupted tenure of the director on
the board. A director who does not timely file the written certification or educational certificate shall be
suspended from the board until he or she complies with the requirement, and the board may
temporarily fill the vacancy during the period of suspension.
The HOA must retain each director's written certification or educational certificate for inspection by the
members for 5 years after the director's election. However, the failure to have the written certification or
educational certificate on file does not affect the validity of any board action.
43
Kickbacks
An HOA officer, a director, or a manager who knowingly solicits, offers to accept, or accepts any thing
or service of value for which consideration has not been provided for his or her own benefit or that of
his or her immediate family from any person providing or proposing to provide goods or services to the
HOA is subject to monetary damages.
44
If the board finds that an officer or director has violated this
condition, the board must immediately remove the officer or director from office. The vacancy must be
filled according to law until the end of the director’s term of office. However, an officer, director, or
40
Contrast this to s. 718.111(15), F.S., governing condominium associations, which prohibits a condominium association,
and the officers, directors, employees, and agents thereof, from using a debit card issued in the association’s name, or
billed directly to the association, for the payment of any association expense, and provides that use of a debit card issued
in the association’s name, or billed directly to the association, for any expense that is not a lawful association obligation
may be prosecuted as credit card fraud under s. 817.61, F.S.
41
The bill defines “lawful HOA obligation” to mean an obligation that has been properly preapproved by the board and is
reflected in the meeting minutes or the written budget.
42
S. 720.303(1), F.S.
43
S. 720.3033(1)(a)-(c),F.S.
44
Monetary damages are provided for in s. 617.0834, F.S. STORAGE NAME: h1243c.JDC PAGE: 10
DATE: 2/14/2024
manager may accept food to be consumed at a business meeting with a value of less than $25 per
individual or a service or good received in connection with trade fairs or education programs.
45
Conflicts of Interest
If the HOA enters into a contract or other transaction with any of its directors or a corporation, firm, or
association that is not an affiliated HOA, or other entity in which a director is also a director or officer or
is financially interested, the board must:
46
Comply with the requirements for conflicts of interest in a corporation not for profit.
47
Enter certain disclosure requirements into the written minutes of the meeting.
Approve the contract or other transaction by an affirmative vote of two-thirds of the directors
present.
At the next regular or special meeting of the members, disclose the existence of the contract or
other transaction to the members. Upon motion of any member, the contract or transaction must
be brought up for a vote and may be canceled by a majority vote of the members present. If the
members cancel the contract, the HOA is only liable for the reasonable value of goods and
services provided up to the time of cancellation and is not liable for any termination fee,
liquidated damages, or other penalty for such cancellation.
The directors and officers of an HOA who are appointed by the developer must disclose to the HOA
their relationship to the developer each calendar year in which they serve as a director or an officer.
48
A
developer's appointment of an officer or director does not create a presumption that the officer or
director has a conflict of interest with regard to the performance of his or her official duties.
Directors and officers of an HOA are required to disclose to the HOA any activity that may reasonably
be construed to be a conflict of interest at least 14 days prior to voting on the subject of such conflict or
entering into such contract. A rebuttable presumption of a conflict of interest exists if any of the
following occurs without prior disclosure to the HOA:
49
A director or an officer, or a relative of a director or an officer, enters into a contract for goods
or services with the HOA.
A director or an officer, or a relative of a director or an officer, holds an interest in a corporation,
limited liability company, partnership, limited liability partnership, or other business entity that
conducts business with the HOA or proposes to enter into a contract or other transaction with
the HOA.
Removal from Office for Charges or Indictments
Florida law provides that any director or officer charged by information or indictment with any of the
following crimes must be removed from office:
50
Forgery of a ballot envelope or voting certificate used in an HOA election as provided in s.
831.01, F.S.
Theft or embezzlement involving the HOA’s funds or property as provided in s. 812.014, F.S.
Destruction of or the refusal to allow inspection or copying of an official record of the HOA which
is accessible to parcel owners within the time periods required by general law, in furtherance of
any crime, which act constitutes tampering with physical evidence as provided in s. 918.13, F.S.
Obstruction of justice as provided in chapter 843, F.S.
45
S. 720.3033(3), F.S.
46
S. 720.3033(2), F.S.
47
A contract or transaction with a conflict of interest is not voidable if the relationship or interest is disclosed or known to
the board; the board authorized, approved, or ratified it by vote or written consent; or the contract or transaction is fair and
reasonable at the time it is authorized. Such contract or transaction must be authorized, approved, or ratified by a majority
of the directors on the board who have no relationship or interest in such transaction. S. 617.0832, F.S.
48
S. 720.3033(6)(a), F.S.
49
S. 720.3033(6)(b), F.S.
50
S. 720.3033(4), F.S. STORAGE NAME: h1243c.JDC PAGE: 11
DATE: 2/14/2024
Powers and Duties of Officers and Directors- Effect of the Bill
HOA Director Education Requirements
The bill:
Eliminates the option for a newly elected or appointed director to submit a written certification
stating that he or she has read the governing documents, thus only allowing such director to,
within 90 days after being elected or appointed, submit a certificate showing satisfactory
completion of the educational curriculum administered by a DBPR-approved education provider
(certificate of completion).
Provides that such educational curriculum, specific to newly elected or appointed directors,
must include training relating to financial literacy and transparency, recordkeeping, levying of
fines, and notice and meeting requirements.
Provides that the certificate of completion is valid up to four years.
Requires a director to retake the DBPR-approved education curriculum at least every 4 years.
In addition to completing the educational curriculum, the bill requires a director of an association that:
has fewer than 2,500 parcels to complete at least 4 hours of continuing education annually.
has 2,500 parcels or more to complete at least 8 hours of continuing education annually.
The bill also requires DBPR to adopt rules to implement and administer the aforementioned educational
curriculum and continuing education requirements.
Prohibition of Kickbacks
The bill provides that an HOA officer, director, or manager who knowingly solicits, offers to accept, or
accepts any kickback
51
commits a third-degree felony and is subject to monetary damages.
51
The bill defines “kickback” to mean any thing or service of value for which consideration has not been provided for an
officer’s, a director’s, or a member’s benefit or for the benefit of a member of his or her immediate family from any person
providing or proposing to provide goods or services to the HOA. STORAGE NAME: h1243c.JDC PAGE: 12
DATE: 2/14/2024
Removal from Office for Charges or Indictments
The bill provides that, where a director or officer is charged by information or indictment with specified
criminal offense and therefore must be removed from office as provided under current law, a vacancy
must also be declared. Further, the bill adds to the list of criminal offenses that trigger such removal
and declaration any criminal violation under the HOA Act.
HOA Architectural and Construction Improvement Covenants and Rules- Current Situation
If the governing documents allow it, an HOA or its architectural review, construction improvement, or
other similar committee (committee) may:
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Require a review and approval of plans and specifications for the location, size, type, or
appearance of any structure or other improvement on a parcel before a parcel owner makes
such improvement.
Enforce standards for the external appearance of any structure or improvement located on a
parcel.
The HOA or committee may not restrict the right of a parcel owner to select from any options given in
the governing documents for the use of material, the size of the structure or improvement, the design of
the structure or improvement, or the location of the structure or improvement on the parcel.
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Each parcel owner is entitled to the rights and privileges set forth in the governing documents
concerning the architectural use of the parcel, and the construction of permitted structures and
improvements on the parcel, and such rights and privileges may not be unreasonably infringed upon or
impaired by the HOA or committee. If an HOA or committee unreasonably, knowingly, and willfully
infringes upon or impairs such rights and privileges, the adversely affected parcel owner may recover
damages, including any costs and reasonable attorney’s fees.
54
An HOA or committee may not enforce any policy or restriction that is inconsistent with the rights and
privileges of a parcel owner set forth in the governing documents, whether uniformly applied or not.
55
HOA Architectural and Construction Improvement Covenants and Rules- Effect of the Bill
The bill provides that:
An HOA or its committee must reasonably and equitably apply and enforce on all parcel owners
the architectural and construction improvement standards authorized by the HOA governing
documents.
If the HOA or its committee denies a parcel owner's request or application for the construction of
a structure or other improvement on a parcel, the HOA or its committee must provide written
notice to the parcel owner stating with specificity the rule or covenant on which the HOA or its
committee relied when denying the request or application.
Electronic Voting – Current Situation
Florida law authorizes an HOA to conduct elections and other membership votes though an Internet-
based online voting system if a member consents, in writing, to online voting and the following
requirements are met:
56
The HOA provides each member with:
o A method to authenticate the member’s identity to the online voting system.
o A method to confirm, at least 14 days before the voting deadline, that the member’s
electronic device can successfully communicate with the online voting system.
52
S. 720.3035(1), F.S.
53
S. 720. 3035(2), F.S.
54
S. 720.3035(4), F.S.
55
S. 720.3035(5), F.
56
S.720.317, F.S. STORAGE NAME: h1243c.JDC PAGE: 13
DATE: 2/14/2024
o A method that is consistent with the election and voting procedures in the HOA’s bylaws.
The HOA uses an online voting system that is able to:
o Authenticate the member’s identity.
o Authenticate the validity of each electronic vote to ensure that the vote is not altered in
transit.
o Transmit a receipt from the online voting system to each member who casts an
electronic vote.
o Permanently separate any authentication or identifying information from the electronic
election ballot, rendering it impossible to tie an election ballot to a specific member (but
only if the governing documents provide for secret elections).
o Store and keep electronic ballots accessible to election officials for recount, inspection,
and review purposes.
A member voting electronically must be counted as having attended the meeting for the purposes of
determining a quorum, and the electronic voting provisions apply only to an association that provides
for and authorizes an online voting system by a board resolution.
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Such a board resolution must:
Provide that members receive notice of the opportunity to vote through an online voting system;
Establish reasonable procedures and deadlines for members to consent, in writing, to online
voting; and
Establish reasonable procedures and deadlines for members to opt out of online voting after
giving consent.
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Further, written notice of a meeting at which the board resolution regarding online voting will be
considered must be mailed, delivered, or electronically transmitted to the unit owners and posted
conspicuously on the HOA’s property at least 14 days before the meeting, and a member’s consent to
online voting is valid until the member opts out of online voting pursuant to the procedures established
by the board.
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Electronic Voting – Effect of the Bill
The bill authorizes a member to consent to online voting electronically or in writing, and specifies that
the requisite board resolution must establish reasonable procedures and deadlines for members to
consent, electronically or in writing, to online voting.
Effective Date
The bill provides an effective date of July 1, 2024.
B. SECTION DIRECTORY:
Section 1: Amending s. 468.4334, F.S. relating to professional practice standards; liability.
Section 2: Amending s. 468.4337, F.S., relating to continuing education.
Section 3: Amending s. 720.303, F.S., relating to association powers and duties; meetings of board;
official records; budgets; financial reporting; association funds; recalls.
Section 4: Amending s. 720.3033, F.S., relating to officers and directors.
Section 5: Amending s. 720.3035, F.S., relating to architectural control covenants; parcel owner
improvements; rights and privileges.
Section 6: Amending s. 720.3085, F.S., relating to payments for assessments; lien claims.
Section 7: Amending s. 720.317, F.S., relating to electronic voting.
Section 8: Providing an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
57
Id.
58
Id.
59
Id. STORAGE NAME: h1243c.JDC PAGE: 14
DATE: 2/14/2024
1. Revenues:
None.
2. Expenditures:
The bill may have an indeterminate fiscal impact on state government to the extent that it increases
criminal prosecutions in the state court system and thereby reduces the amount of available prison
beds.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
The bill may have an indeterminate fiscal impact on local governments to the extent that it leads to
increased criminal prosecutions and thereby reduces the amount of available jail beds.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Provisions preventing HOA board members from soliciting, offering to accept, or accepting kickbacks,
requiring certain HOAs to prepare or cause to be prepared audited financial statements, prohibiting
debit card use in specified circumstances, and creating certain criminal penalties may prevent unlawful
behavior from occurring, and, thus, save HOAs money. However, some HOAs may have to spend
money to develop a website and certain HOAs may see an increase in expenditures related to the
audited financial statement requirement. The bill may also have a negative financial impact on HOA
board members charged with crimes created by the bill.
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:
None.
B. RULE-MAKING AUTHORITY:
DBPR is given rule-making authority to adopt rules to implement and administer an educational
curriculum and continuing education requirements for HOA directors.
STORAGE NAME: h1243c.JDC PAGE: 15
DATE: 2/14/2024
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 24, 2024, the Regulatory Reform & Economic Development Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The committee substitute:
Clarifies that a newly elected or appointed HOA director must take the educational curriculum
approved by the department at least every four years.
Clarifies that, in addition to the educational curriculum, directors are also responsible for completing
annual continuing education as follows:
o 4 hours for directors in communities with less than 2,500 members.
o 8 hours for directors in communities with 2,500 or more members.
On February 14, 2024, the Judiciary Committee adopted two amendments and reported the bill favorably
as a committee substitute. The amendments:
Authorized a member to consent to online voting electronically and specifies that the requisite board
resolution must establish reasonable procedures and deadlines for members to consent,
electronically or in writing, to online voting.
Narrowed the types of HOAs that must post a current digital copy of their official records on their
respective websites or applications and the types of official records that must be so posted.
Created new criminal penalties related to specified records violations.
Removed a provision created by the bill requiring an HOA with 2,500 or more members to use an
independent CPA to prepare the HOA’s annual budget, and to retain an attorney for specified
budget-related purposes.
Required an HOA with 1,000 parcels or more to prepare audited financial statements, and
prohibited an HOA from preparing a financial statement for consecutive fiscal years.
Modified provisions relating to annual continuing education for board members to change the
threshold determining whether a board member must complete four or eight hours annually from
“2,500 members” to “2,500 parcels.”
Prohibited an HOA and its officers, directors, employees, and agents from using a debit card issued
in the HOA’s name, or billed directly to the HOA, for the payment of any association expenses, and
specified that a person who uses a debit card issued in the HOA’s name, or billed directly to the
HOA, for any expense that is not a lawful HOA obligation commits theft.
Defined “kickback” and modified the criminal penalties associated with accepting kickbacks created
by the bill.
Specified that, where a director or officer is charged by information or indictment with a specified
criminal offense and must be removed from office as provided in current law, a vacancy must also
be declared, and listed any criminal violation under the HOA Act as a criminal offense for which
such removal and declaration is required.
This analysis is drafted to the committee substitute as passed by the Judiciary Committee.