The Latest From Tallahassee: Real Estate Focused Legislation
For years, many communities have faced allegations of fraud and mismanagement by board members. In response, recent legislative sessions have seen the introduction of bills aimed at tackling these issues, including the creation of a fraud investigation pilot program and expanded powers for state oversight agencies to better monitor associations.
For years, many communities have faced allegations of fraud and mismanagement by board members. In response, recent legislative sessions have seen the introduction of bills aimed at tackling these issues, including the creation of a fraud investigation pilot program and expanded powers for state oversight agencies to better monitor associations.
Other proposed bills focus on the structural safety requirements imposed on condo associations following the collapse of Champlain Towers South in Surfside in 2021. To enhance building safety, lawmakers introduced stricter mandates, requiring all Florida condo associations to complete structural integrity reserve studies (SIRS) by the end of 2023. Starting this year, associations must fully fund these reserves, and buildings must undergo milestone inspections at 30 years of age, with subsequent inspections every 10 years. However, the findings from both SIRS and recertification inspections have created significant financial challenges for condo owners, often resulting in multimillion-dollar assessments for associations and their members.
Explore the latest proposed bills below:
SB 120/HB 137 - HOA Ombudsman
The Florida Legislature is considering SB 120/HB 137, which proposes the creation of an HOA ombudsman to serve as a liaison between homeowners, boards of directors, managers, and state agencies like the Department of Business and Professional Regulation (DBPR). This ombudsman would mediate disputes, ensure that homeowners understand their rights and responsibilities, and monitor board elections. In cases of suspected election tampering, the ombudsman would be empowered to recommend investigations. Additionally, the ombudsman could appoint election monitors if at least 15% of homeowners, or six homeowners, request it. The position would be appointed by the governor and serve under DBPR’s Division of Florida Condominiums, Timeshares, and Mobile Homes. This bill aims to provide better oversight for HOAs, which currently lack the same level of state oversight as condo associations.
SB 368 - Fraud Investigation Pilot Program
SB 368 seeks to create the Economic Crime, Fraud, and Corruption Investigation Pilot Program within the Florida Legal Affairs Department to combat fraud in both condo and homeowners associations. This program would expand the existing powers of the condo association ombudsman to include HOAs, allowing the ombudsman to request investigations, issue subpoenas, and audit association records. If fraud or corruption is uncovered, the ombudsman can forward complaints to state attorneys for prosecution. The bill also requires condo associations to maintain a searchable, cloud-based database containing information such as contact details for board members, governing documents, and financial reports. Additionally, the bill gives DBPR the authority to impose fines on condo associations for failing to maintain insurance or a fidelity bond. The pilot program, based in Miami-Dade County, would sunset in 2030 unless extended by the legislature.
HB 983/SB 1600 - Voting Rights and Board Elections
HB 983/SB 1600 address the issue of voting rights in board recalls and general elections. These bills ensure that homeowners cannot have their voting rights suspended during a recall election, even if they have other suspensions in place, such as for overdue assessments. They also set the requirement that at least 20% of homeowners must vote in board elections for the elections to be considered valid. Additionally, HB 983 introduces a provision for amenity dues at HOAs, which would be paid to private owners of recreational facilities, rather than the HOA itself, to use those amenities. These provisions aim to protect homeowners' participation in governance and ensure the legitimacy of elections in their communities.
HB 913 - Withholding Insurance for Non-Compliance
HB 913 targets condo associations that fail to meet the structural integrity reserve study (SIRS) requirements by proposing that these associations lose coverage from Citizens Property Insurance, the state’s insurer of last resort. This proposal seeks to enforce compliance with safety mandates by making it more difficult for non-compliant associations to obtain insurance. The bill also facilitates the dissolution of condo associations when the costs of necessary repairs exceed the value of the property. This provision is likely to benefit developers looking to take control of buildings where repair costs are unaffordable, providing them with a clearer path to dissolve the association and potentially redevelop the property.
SB 1742 - Reserve Fund Management and Structural Integrity Relief
SB 1742 offers financial relief for condo associations that struggle to meet structural integrity requirements. The bill allows condo associations to invest their reserve funds in depository accounts, such as those at community banks, credit unions, or commercial banks, and sets up investment committees to manage these funds. The committee would consist of two board members and two unit owners who are not on the board. The bill also provides condo associations with the ability to temporarily pause reserve funding to prioritize urgent repairs identified during structural integrity assessments. Additionally, it requires SIRS to include recommendations for funding schedules alongside necessary repairs, aiming to prevent conflicts of interest between the contractors conducting the studies and those doing the repairs.
SB 690/HB 1415 - Reduced SIRS Requirements for Smaller Condos
SB 690/HB 1415 propose reducing the burden of structural integrity reserve studies (SIRS) on smaller condo buildings. Under these bills, condo associations for buildings that are five stories or shorter could vote to waive or reduce the reserve funding requirements. This change would help alleviate the financial pressure on smaller communities, which often face difficulties meeting the costly mandates set in place after the Surfside collapse. The bills aim to provide more flexibility and options for smaller associations, recognizing that the financial and logistical challenges faced by smaller buildings are different from those of larger, more complex structures.
