Rounding Up HB 1021’s Impact on Florida Condominiums

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:

1. 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);
2. 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);
3. 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);
4. 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
5. 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.