Client Alert: Governor DeSantis Signs HB 1203 Affecting Homeowners Associations and Licensed Community Association Managers

Download Client Alert: Governor DeSantis Signs HB 1203 Affecting Homeowners Associations and Licensed Community Association Managers

Governor DeSantis signed House Bill 1203 (2024), which is effective July 1, 2024 and makes a number of substantial changes to statutes governing Florida community association managers and homeowners associations (HOAs). The changes include the following:

  1. Amends Section 720.303 relating to director and officer liability and record keeping, as follows:
    1. Clarifies the role of officers and directors to Section 617.0830, Florida Statutes, which provides as follows:
      1. A director shall discharge duties in good faith with care of ordinary prudent person or manager reasonably believed to be in best interest of the association. 
      2. In discharging duties, director may rely on information or opinions from employees who are believed to be reliable and competent, counsel, accountant, or other professionals and committees if confidence is merited.  
      3. Director is not liable for any action taken as a director or failure to take action if he or she performed the duty in compliance with this section.
    2. Requires Associations to keep records longer than seven years if the governing documents require longer retention.
    3. Requires Associations with 100 parcels or more to post certain official records on a website created for the association or otherwise make the documents available through a mobile application by January 1, 2025, redacted as necessary. The website must contain a subpage or portal that is password protected and inaccessible to the general public. The required records are:
      1. Declaration of covenants and amendments;
      2. Articles of Incorporation & amendments;
      3. Bylaws and amendments;
      4. Current rules;
      5. Contracts and bids;
      6. Annual budget;
      7. Financial reports;
      8. Insurance policies;
      9. Director certifications;
      10. All contracts, notices, minutes, and other documents related thereto constituting a conflict of interest (i.e., contracts with directors, their family, or entities in which they have an interest);
      11. Member Meeting notices, agenda, and any documents to be considered linked conspicuously on the homepage;
      12. Board meeting notices and enclosures.
    1. Requires the Association to adopt written rules governing method and time period for retaining official records and post the rules/policy on its website.
  2. Amends Section 720.303(5) relates to homeowners association official records access and production:
    1. Provides that a director who knowingly, willfully, and repeatedly violates the Association’s obligation to make official records available for inspection with intent to harm Association or any member is guilty of a second-degree misdemeanor.
    2. Provides that any person who knowingly and intentionally destroys accounting records or fails to create or maintain required accounting records with intent to harm Association or member is guilty of a  first-degree misdemeanor.
    3. Provides that any person who willfully and knowingly fails to produce Association records with intent to avoid detection, arrest, trial, or punishment commits third-degree felony.
    4. Requires homeowners associations to produce records to law enforcement within five days of receipt of a subpoena, unless a later date is provided in the subpoena. Requires an Association to “assist a law enforcement agency with its investigation to the extent permissible by law.”
  3. Amends Section 720.303 relating to HOA financial disclosures:
    1. Requires an Association with at least 1,000 parcels to prepare audited financial statements, notwithstanding the total annual revenue.
    2. Prohibits an Association from opting to prepare a financial statement in review of an audited financial statement in consecutive years. 
    3. Prohibits an affiliate of the Association from using a debit card issued in the name of the Association or billed directly to the Association. Specifies that a person who uses an Association debit card for any expenses other than a lawful obligation of the Association commits theft.
    4. Permits a parcel owner to make a written request for a detailed accounting of any amounts owed to the Association, which must provide such information within 15 business days. Should the Association fail to provide this, the Board forfeits any outstanding fine which is more than 30 days past due and for which Association has not given prior written notice of the imposition of fines. Once a parcel owner makes such a request, the owner cannot make another for at least 90 days.
  4. Amends Section 720.3033 relating to Board of Director education and ethical requirements:
    1. Requires that newly elected directors must attend a Board certification class within 90 days of being elected. Removes alternative option for directors to sign a certificate stating that they have read and will uphold the governing documents.
    2. Requires directors to attend an additional Board certification education course every four years.
    3. Creates annual continuing education requirements for Directors:
      1. If the community has less than 2500 parcels, directors must complete four hours of continuing education annually.
      2. If the community has more than 2500 parcels, directors must complete eight hours of continuing education annually.
    4. Provides that any officer, director, or manager who knowingly solicits, offers to accept, or accepts a kickback is guilty of a third-degree felony.
    5. Clarifies that if a Director or Officer is removed due to being charged by information or indictment for specified crimes, a vacancy is declared. Pursuant to Fla. Stat. Sec. 720.3033(b), the Board is obligated to fill the vacancy.
  5. Amends Section 720.3035 relating to enforcement of architectural standards:
    1. Provides that the Association or Architectural Review Committee (ARC) must reasonably and equitably apply and enforce the architectural standards.
    2. Prohibits the Association or ARC from limiting or placing requirements on the interior of a structure if not visible from frontage, neighboring parcel, common area, or golf course.
    3. Prohibits the Association from requiring approval of plans and specifications for A/C, refrigerator, heating, or ventilation systems if not visible from lot frontage, neighboring parcel, common area, or golf course and if substantially similar to a system approved or recommended by the Association or ARC.
    4. Provides that if an Association or ARC denies a request for modification, it must provide written notice to the parcel stating the rule/covenant on which the Association or committee relied and stating the aspect or part of the proposed improvement that does not conform to the rule/covenant.
  6. Amends Section 720.305(2) relating to fining and suspension:
    1. Requires that a hearing before the covenants committee must be held within 90 days after the 14-day notice of right to a hearing is sent to the parcel owner and the committee.
    2. Permits convening fining/suspension hearings by telephone or other electronic means if set forth on notice to owner.
    3. Requires that within seven days after the hearing, the committee must provide notice to the owner and, if applicable, to the occupant, licensee, or invitee of the committee’s findings, including fines and suspensions that were approved/rejected and how to cure the violation, if applicable, “or fulfill a suspension, or the date by which fine must be paid.”
    4. Prohibits a fine or suspension from being imposed if the violation is cured before the hearing.
    5. Requires the committee to set a due date for the fine at least 30 days after delivery of notice of imposed fine to the owner.
    6. Prohibits imposition of attorneys’ fees or costs against owner based on actions taken in a fining matter before the date for fine to be paid but permits recovery of fees and costs beginning after the due date.
  7. Amends Section 720.305(7) to prohibit an Association from levying fines or suspensions for leaving garbage at curb 24 hours before/after collection time or leaving holiday decorations or lights longer than allowed by governing documents unless they are left for more than one week after HOA gives written notice of violation to the owner.
  8. Amends Section 720.3065(2) to make the following actions first-degree misdemeanors: Knowingly aiding, abetting, or advising a person in committing fraudulent voting activity related to association elections or agreeing, conspiring to commit such activities, or having knowledge of fraudulent activity and giving aid to offender to avoid detection, arrest, trial, or punishment.
  9. Amends Section 720.3075 to provide that the Governing  Documents may not prohibit:
    1. Parking personal vehicles, including pickup trucks, in driveway or any area owner, tenant, guest, or invitee has right to park under state and local laws;
    2. Parking a work vehicle that is not a commercial motor vehicle in driveway;
    3. Inviting a contractor or worker on the owner’s parcel only because
      1. the contractor is not on a preferred vendor list, or
      2. the contractor does not have a professional or occupational license.
    4. Demanding a contractor or worker’s proof of license before allowing entry;
    5. Operating a vehicle that is not a commercial motor vehicle as defined in Section 320.01(25), Florida Statutes in conformance with state traffic laws, on public roads, or rights-of-way of property owner’s parcel.
  10. Amends Section 720.3085(3) to clarify simple interest accrues at a rate of 18 percent and cannot be compounded (i.e., interest on interest).
  11. Amends Section 720.317 to explicitly allow owners to consent electronically to online voting.
  12. Amends Section 720.318 to provide that an association may not prohibit a first responder from parking an assigned first responder vehicle in an area the owner otherwise has a right to park, “including on public roads or rights-of-way.” (prior law limited to law enforcement vehicles only).
  13. Amends Fla. Stat. Sec. 468.4334 to require a community association manager to:
    1. Attend at least one Board or membership meeting per year; 
    2. Provide to members and post on the Association’s website: the name and contact information for each manager or management company representative assigned to the Association, hours of availability, and a summary of their duties. This information must be updated within 14 business days of any change to such information.
    3. Provide a copy of the management contract to any member upon request. 
  14. Amends Section 468.4337 to prohibit the Regulatory Council of Community Association Managers from requiring more than 10 hours of continuing education annually for renewal of a license. For each two-year period, five continuing education hours must be related specifically to homeowner associations, and three of the five hours must relate to record keeping.

ACTION ITEMS: Based on these statutory amendments, many Associations will have the following action items:

  1. Review Board certification records and develop schedule for compliance for each director.
  2. Review ARC procedures and forms for compliance with new requirements.
  3. Review fining procedures and forms for compliance with new requirements.
  4. Review parking requirements for compliance with new limitations.
  5. For homeowners associations with 100 or more parcels, no later than July 1, 2025, 1) adopt a policy governing posting of records to the website, and 2) establish and post records to the website.

Shumaker has a team of attorneys specializing in community association law who can assist your association in compliance with existing and recently enacted law, as well as future legislative changes.