Article Courtesy of JD SUPRA

By Stevie M. Henderson and Tiffany Love    

Published September 9, 2026

What Community Associations Need to Know After July 1, 2026

While the 2026 Florida Legislative Session left Chapters 718, 719, and 720 untouched, the Legislature passed HB 797, which significantly amends Chapter 617—the statute now renamed the "Florida Nonprofit Corporation Act." Because virtually all community associations in Florida are organized as nonprofit corporations under Chapter 617, these amendments directly affect how every community association is governed.

Director Standards of Conduct – A Substantial Rewrite

One of the most impactful changes is the substantial rewrite of Section 617.0830, which governs director standards of conduct. Under the statute, each director must act: (a) in good faith; and (b) in a manner the director reasonably believes is in the best interests of the corporation.

The new law also codifies a split "duty of care," requiring directors to exercise the care that an ordinarily prudent person in a like position would reasonably believe appropriate under similar circumstances—both when becoming informed in connection with a decision-making function and when devoting attention to oversight functions. This effectively codifies a Caremark-style oversight duty, meaning boards must actively monitor finances, vendors, insurance, and statutory compliance.

Importantly, the statute expressly permits directors to rely on the performance, information, opinions, reports, or statements of certain qualified persons (including officers, legal counsel, accountants, and board committees) so long as the director does not have knowledge that makes such reliance unwarranted. By engaging qualified professionals and following their recommendations, boards can satisfy their fiduciary obligations and invoke the business judgment rule.

These standards are not limited to the board alone. Committee members (including those serving on architectural review, finance, budget, and covenant committees) are now expressly covered by the same standard.

Officer Duties and the New Duty to Inform

HB 797 also creates new Section 617.0833, establishing minimum duties and standards of care for officers. Officers who learn of problems now have an express statutory obligation to escalate, including informing a superior officer or the board of any material information, any actual or probable material violation of law, or any material breach of duty to the corporation.

Expanded Liability Immunity

Under revised Section 617.0834, directors and officers are generally immune from personal liability for monetary damages unless their breach constitutes: (1) a violation of criminal law; (2) an improper personal benefit; (3) conscious disregard or willful misconduct; or (4) recklessness, bad faith, or malicious purpose. This expanded protection extends to all nonprofit directors and officers - though notably, developer-appointed directors do not benefit from the indemnification provisions.

Conflict-of-Interest Transactions

Section 617.0832 has been substantially reworded to expand safe harbors for conflict-of-interest transactions. Transactions are not void or voidable if fair to the corporation when properly authorized, including through disclosure and approval by a majority of qualified directors or by a majority of disinterested member votes. Cross-references in Sections 718.3027 (condominiums) and 720.3033 (HOAs) require compliance and entry of disclosures into meeting minutes.

Other Notable Changes

Additional amendments under HB 797 include: a new "qualified director" framework for sensitive votes; codified registered agent duties with a 31-day window to designate a replacement upon resignation; reduction of the minimum number of directors from three to one; a new judicial removal of directors mechanism under Section 617.08091; codified proxy voting with authorization of electronic signatures; and a new derivative-proceeding framework.

Action Items for Your Association

Boards that engage qualified professionals, document their decision-making process, and actively monitor association operations will be well-positioned to satisfy these statutory requirements and invoke the protections of the business judgment rule.