IT’S A HEARTACHE

An Opinion By Milena D. Macias

Chair and Director, CCFJ Legislative Affairs Committee

Published November 25, 2025

You know the story, or maybe you are living the story.    You work diligently, save your money, purchase your dream home or condo, trusting that your community association with clear rights and rules — managed by your neighbors and a professional company will safeguard your interests.    Yet, this sense of security can prove misleading, and when you find out, you realize ….

IT'S A HEARTACHE

Does the common phrase  “I serve on the board because I love the community and want to improve it,” truly reflect the reality in your association?   Too often, this sentiment masks unethical behavior, where board members, management companies or their attorneys engage in criminal behavior and other actions that undermine members’ rights, or allow discrimination based on disability, race or sexual orientation.  Ultimately, such statements can prove misleading as they may conceal misconduct rather than genuine commitment to the community.   Unfortunately, a bill that did not pass in prior sessions defined “corruption”  as “the act of an official or a fiduciary person who unlawfully and wrongfully uses his or her position to procure a benefit for himself or herself or for another person contrary to the duty and rights of others.”     

And, it’s a heartache …  what can we do when they take your sorrow and make it into their treasured gold, breaking vows and promises that ….   

WE COULD HAVE HAD IT ALL

Instead of having it all -- we get nothing at all, (with the exception of more money coming out of our pockets with less service or continuing discrimination based on disability, race or sexual orientation).   Why do we allow such behaviors to continue?   What rights do we have to address arrogant and possibly corrupt boards and their cohorts and/or property management companies, who are most eager to keep their contracts. 

In Florida, most mandatory community associations operate as non-profit corporations, while management companies are typically for profit corporations. Boards and management companies are expected to act in good faith and with honorable dealing for the benefit of the membership so that “we could have it all.”    It is unacceptable for any board or management company to neglect its ethical responsibilities or compromise transparency and fairness for financial gain or discriminatory reasons. 

In Florida, generally, officers and directors of associations that are not for profit are immune from civil liability.   However, an officer or director is not immune from civil liability if the officer or director engages in  “[a] violation of the criminal law …. a transaction from which the officer or director derived an improper personal benefit, directly or indirectly; or … [engages in] recklessness or an act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.  (emphasis added)  FL Stat § 617.0834 (2024) FS  

In terms of criminality, both s. 718, F.S. and s. 720 F.S. provide that a director or an officer cannot be on the board if charged with forgery, theft, or embezzlement that involve association’s funds or property, or … destruction of, or the refusal to allow inspection or copying of, an official record of a condominium association which is accessible to unit owners within the time periods ….  in furtherance of any crime… If the findings are without guilt, the officer or director can be reinstated for the remainder of his or her term in office.

Not only does the Florida Civil Rights Act of 1992 under s. 760, F.S. prohibit discriminatory behavior in the treatment of persons, but, in 2021, the Florida Commission on Human Relations affirmed that discrimination in housing based on sexual orientation in the state of Florida is illegal.

Should we just cross our fingers and hope for the best … ?

Or remind oneself that … it’s now or never ..

ITS’ MY LIFE

Financial crimes such as embezzlement, money laundering, insider trading and tax evasion, as well as crimes that discriminate on disability, race or sexual orientation occur in mandatory community associations.   Members have the right – and responsibility – to address such issues with strategies of self-policing, self-reporting and remediation.  

A good start for members is to avail themselves of the official records of the association.     If something seems amiss, it would be prudent to retain private investigation firms that specialize in financial or white-collar fraud, and to employ a forensic auditor to examine the financial documents.   In terms of discrimination, what measures has the association employed to ensure the rights of the disabled or what preventative measures are used to address claims of religion, race or sexual orientation.

What due diligence questions or steps can you or members be on the lookout for?     It might be beneficial to adopt the Securities and Exchange Commission “Seaboard Report.”

The Seaboard Report provides the framework for self-policing, self-reporting, remediation and cooperation to resolve actions.   The bullets below are directly quoted in the Report. 

• What is the nature of the misconduct involved? Did it result from inadvertence, honest mistake, simple negligence, reckless or deliberate indifference to indicia of wrongful conduct, willful misconduct or unadorned venality? Were the company's auditors misled?

• How did the misconduct arise? Is it the result of pressure placed on employees to achieve specific results, or a tone of lawlessness set by those in control of the company? What compliance procedures were in place to prevent the misconduct now uncovered? Why did those procedures fail to stop or inhibit the wrongful conduct?

• Where in the organization did the misconduct occur? How high up in the chain of command was knowledge of, or participation in, the misconduct? Did senior personnel participate in, or turn a blind eye toward, obvious indicia of misconduct? How systemic was the behavior? Is it symptomatic of the way the entity does business, or was it isolated?

• How long did the misconduct last? Was it a one-quarter, or one-time, event, or did it last several years?

• How much harm has the misconduct inflicted upon the constituencies by the board (or management company)?

• How was the misconduct detected and who uncovered it?

• How long after discovery of the misconduct did it take to implement an effective response?

• What steps did the board or your management company  take upon learning of the misconduct? Did they immediately stop the misconduct? Are persons responsible for any misconduct still with the company? If so, are they still in the same positions? Did the company promptly, completely and effectively disclose the existence of the misconduct

• Did the company cooperate completely with appropriate regulatory and law enforcement bodies? Did the company identify what additional related misconduct is likely to have occurred? Did the company take steps to identify the extent of damage to investors and other corporate constituencies? Did the company appropriately recompense those adversely affected by the conduct?

• What processes did the company follow to resolve many of these issues and ferret out necessary information? Were the Audit Committee and the Board of Directors fully informed? If so, when?

• Did the company commit to learn the truth, fully and expeditiously?

• Did it do a thorough review of the nature, extent, origins and consequences of the conduct and related behavior? Did management, the Board … oversee the review? Did company employees or outside persons perform the review? If outside persons, had they done other work for the company? Where the review was conducted by outside counsel, had management previously engaged such counsel? Were scope limitations placed on the review? If so, what were they?

• Did the company promptly make available to our … members the results of its review and provide sufficient documentation reflecting its response to the situation? Did the company identify possible violative conduct and evidence with sufficient precision to facilitate prompt enforcement actions against those who violated the law? Did the company produce a thorough and probing written report detailing the findings of its review? Did the company voluntarily disclose information … to its members….,

• What assurances are there that the conduct is unlikely to recur? Did the association adopt and ensure enforcement of new and more effective internal controls and procedures designed to prevent a recurrence of the misconduct? ….

• Is the [management] company the same company in which the misconduct occurred, or has it changed?

WHO’S SORRY NOW

Amazing.   Some associations and property managers continue to live in fantasyland.    They disregard laws and rules, engaging in fraud, misconduct and broken promises to members.   Challenging these actions can be difficult, and vulnerable individuals don’t often know where to turn.  You have the right to be free of discrimination based on your disability, religion, race or sexual orientation. and to file complaints with the Florida Commission on Human Relations.    You have the right to protect your interests by gathering accurate facts, consulting private investigation firms that specialize in financial or white-collar fraud, and employing forensic auditors to review financial documents.

Make those who have disregarded the law and rules be the ones who are sorry now for breaking their vow.

I continue to invite your input on potential changes to laws governing mandatory community associations.    Together, we can advocate for justice, transparency, and fairness in our communities.

“Individually, we are one drop. Together, we are an ocean.”  Ryunosuke Satoro