TALLAHASSEE, Fla. – Sept. 21, 2017 – A new sheriff arrived in Florida's Condo World on July 1 when a spate of tough laws governing their boards and management companies went into effect.
These laws, resulting from numerous amendments to Florida Statute 718, were aimed at taming avaricious, owner-unfriendly practices that escalated during the recent foreclosure crisis.
"The Florida Legislature made significant changes in condo law this year amid wide-ranging support," said Robert Rydzewski, a trial attorney with Treasure Coast Legal who specializes in homeowners association disputes and representation. "Several of the themes had to do with codifying criminal penalties for directors, particularly pertaining to conflicts of interest, and improving transparency."
It was important to have more checks and balances, noted Rydzewski, because many abuses were taking place, both on the Treasure Coast and elsewhere.
Until the new laws were passed, a condo director who used his position for financial gain or did anything unethical could be pursued by an aggrieved party only in civil court – a costly and impractical safeguard.
"This resulted in a David and Goliath situation," said Rydzewski, "with associations being the ones with deep pockets. With certain abuses now criminalized, a violator can have to pay a large fine and/or serve jail time."
Some of the new laws
• A condo's management company or directors are prohibited from purchasing condos that have gone into lien foreclosure.
"I've seen instances where a board member interested in buying a condo aggressively pursued collection in order to push the owners into foreclosure, instead of working with them to keep the property," explained Rydzewski.
There are also now criminal penalties for an officer, director or manager soliciting or accepting a kickback for his own benefit or that of his family; forging a ballot envelope or voting certificate used in an election; stealing or embezzling condo association funds; or destroying or refusing to allow inspection or copying of official records in furtherance of any crime.
• Directors are now prohibited from using a debit card issued in the condo's name.
"Debit cards have fewer protections against fraud," noted Rydzewski. "If a fraud was committed while using a credit card, the funds are more likely to be recoverable."
• As of July 1, 2018, condo associations with more than 150 units must have a website posting most official records related to the operation of the condo.
This improves the current system where the condo owner must submit their request in writing and wait up to 10 business days to get the documents.
"This law opened up a whole new realm of transparency – a big deal when people think boards aren't operating according to the law," noted Rydzewski.
This particular law won't have much impact on the Treasure Coast, he added, because there are very few condos containing more than 150 units.
Here are a few other changes:
© 2017 Journal Media Group, Gwen Carden
- Board members may not serve more than four two-year terms unless voted in by a 2/3 majority of the membership or unless there are not enough eligible candidates to fill vacancies.
- Voting rights may only be suspended if the delinquent amount is more than $1,000 and more than 90 days delinquent.
- Condo associations cannot contract for goods and services with any company or individual where a board member or officer, or a close relative, has a financial relationship with that vendor.