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Article
Courtesy of JD SUPRA
By Joseph Beguiristain
Published July 6, 2024
CS/CS/CS/HB 1021 (“HB 1021”) covers many topics, including the
statutory recognition of condominiums in vertical subdivisions and
condominium building safety measures. However, the legislation is also a
reaction to a slew of additional issues affecting condominium associations,
such as mismanagement and mistrust, ambiguities related to storm protection,
and a lack of budget transparency. This article focuses on the new criminal
penalties, hurricane measures, and operational requirements, all intended to
address the foregoing items.
Criminal Penalties
HB 1021 imposes the following criminal penalties related to
condominium associations and certain unlawful and fraudulent behavior:
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third-degree felony for an officer, director, or
manager of a condominium association who knowingly solicits, offers to
accept, or accepts a kickback (Section 718.111(1)(a), Florida Statutes);
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third-degree felony for willfully and knowingly
refusing to release or otherwise produce association 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 (Section 718.111(12)(c)(4), Florida Statutes);
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first-degree misdemeanor for aiding in fraud in
connection with a vote cast, preventing a member from voting, or using
bribery or any other corruption to attempt to deter a voting member
(Section 718.112(r), Florida Statutes);
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first-degree misdemeanor for knowingly and
intentionally defacing or destroying required accounting records, or
knowingly and intentionally failing to create or maintain required
accounting records, with the intent of causing harm to the association
or one or more of its members (Section 718.111(12)(c)(3), Florida
Statutes); and
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second-degree misdemeanor for knowingly, willfully,
and repeatedly violating any of the requirements relating to the
inspection and copying of official association records with the intent
of causing harm to the association or one or more of its members
(Section 718.111(12)(c)(2), Florida Statutes).
Hurricane Protection
HB 1021 introduces new hurricane protection measures in an effort to
protect the health, safety, and welfare of unit owners and ensure the
uniformity of such protections installed by condominium associations across
the state. First, Section 718.103(19), Florida Statutes, creates a uniform
definition of “Hurricane protection,” which includes hurricane shutters,
impact glass, code-compliant windows or doors, and other code-compliant
hurricane products meant to protect the condominium. Under Section 718.113,
Florida Statutes, following a majority member vote, a condominium may
require that unit owners, at their expense, install hurricane protection
that complies with or exceeds applicable building code. Any installation
costs for such hurricane protection are enforceable as an assessment. The
new language exempts hurricane protection as a material alteration or
substantial addition to the common elements.
Furthermore, under Section 718.115, Florida Statutes, the board may
“operate” hurricane protection without permission of the unit owners only if
such operation is necessary to preserve and protect the condominium
property. Lastly, if the removal of hurricane protection is necessary for
maintenance, repair, or replacement of condominium property, a unit owner is
not responsible for the cost of removal or reinstallation. These hurricane
protections apply to all residential and mixed-used condominiums in the
state, regardless of when the condominium was created pursuant to its
declaration of condominium.
New Meeting and Transparency Requirements
HB 1021 introduces new requirements for board meetings. First,
Section 718.112(c), Florida Statutes, requires a residential condominium’s
board of directors to meet at least once a quarter if the condominium has
more than 10 units. Each quarterly meeting agenda must also include an
opportunity for members to ask questions. This now grants unit owners, for
example, the explicit right to inquire about ongoing construction or repair
projects, the status of revenues and expenditures during the fiscal year,
and other issues affecting the condominium. And second, Section
718.112(c)(3), Florida Statutes, maintains that any notice for a meeting
considering special assessments must include details about any related
contracts for goods and services. The preceding requirements have
retroactive effect, meaning if the existing bylaws of a condominium do not
provide for these measures, they are “deemed to include” such requirements.
In sum, a large part of HB 1021 attempts to make those operating
condominiums more accountable. The underlying issues are not necessarily
new, but many of them were on wide display during last year’s embezzlement
investigation involving The Hammocks Community Association in Miami-Dade
County. Between this and the collapse of Champlain Towers South two years
earlier, the recent negative attention on community associations—and
subsequent legislative responses—will likely reduce the already small pool
of volunteers willing to serve on their association boards.
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