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U.S. Treasury Department Announces Suspension of Enforcement of the CTA

U.S. Treasury Department Announces the Suspension of Enforcement of the Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies

Keeping up with the “on again, off again” requirements of the Corporate Transparency Act is like watching a basketball bounce up and down. Finally, however, it appears as though the point guard took the shot and the basket is made.

On March 2, 2025, The Treasury Department announced that, with respect to the Corporate Transparency Act, not only will it NOT enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further NOT enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.

The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

You can view the official Press Release HERE.

It was also rumored that the Executive branch made an announcement that the United States Treasury will be suspending all future enforcement of the Corporate Transparency Act on American businesses and is working towards an emergency rule for codification of the new enforcement policy in furtherance of its goals toward less governmental regulation.

As new information is obtained we will share it with you, our readers.

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Thinking of Filing a New Lawsuit?

Thinking of Filing a New Lawsuit?

The Florida Supreme Court approved multiple substantial amendments to the Florida Rules of Civil Procedure that went into effect on January 1, 2025. While these changes are significant, they do not appear to be terribly overwhelming. This article is not intended to provide a comprehensive review of these changes but rather to point out some of the more interesting changes. It is important to note that these new procedural amendments to the Florida Rules of Civil Procedure only apply to lawsuits filed on or after January 1, 2025. In speaking with several litigators about these new rules, their takeaway is that a plaintiff best be ready for trial when filing your lawsuit. They say this because of the new discovery rules that fast track the process.

Courts now have the authority to extend deadlines for responding to motions either with or without a formal motion and with or without notice. This increased flexibility should streamline procedural timelines and reduce delays. Litigants may find that the court is not as willing to grant such motions as it was in days gone by.

Newly filed cases must be assigned to one of three tracks: complex, general, or stream-lined within 120 days of the filing date. Each of the three tracks has their own unique deadlines for filing and service of motions, etc., ensuring that the cases are managed according to their complexity.

Deadlines outlined in case management orders, which must be issued by the relevant court within 120 days of the commencement of action, will be strictly enforced unless modified by a court order. Obtaining extensions for these deadlines will be more challenging and limited to extraordinary circumstances only.

Courts can schedule case management conferences either on their own initiative or upon proper notice by a party. When a party requests such a conference, it must outline all specific issues to be addressed and provide a list of all pending motions. Failure to include unresolved motions may result in those motions never being heard by the court, highlighting the importance of thorough preparation.

Interestingly, motions for summary judgment and motions requiring an evidence hearing may be heard at case management conferences upon agreement of the parties. Attorneys are now expected to enter the courtroom prepared to make decisions and enter binding agreements regarding motions, issues, and scheduling. The excuse  “I need to check with my client” does not seem as though it will suffice any longer.

Failure to attend a case management conference can lead to serious consequences, including the dismissal of the action, striking of pleadings, or limitations on witness testimonies.

When filing a motion that is not dispositive of the case (a dispositive motion is a motion to dismiss or motion for summary judgment), the moving party must file a statement with the court certifying that they conferred with the opposing party and whether the opposing party agrees on a resolution of the motion or not.

Certain discovery disclosures must be made within a 60-day window after service of the complaint is completed, and discovery cannot commence before these initial disclosure obligations are satisfied unless otherwise provided for by court order.

Objections to interrogatories must be stated with specificity including the actual reasons for objecting, and if done incorrectly such objections can be considered waived. The same goes for production of documents required by subpoena.

Motions to continue the trial date are now disfavored and should be rarely granted except upon a showing of good cause.

The deadline to respond to a motion for summary judgment is 40 days after service of the motion. A hearing on the motion must be scheduled at least 10 days after the response deadline. Due to previously congested court calendars, it has been nearly impossible to schedule hearings promptly. Hopefully this will no longer be the case.

The Florida Supreme Court hopes that the adoption of these changes to the Florida Rules of Civil Procedure will streamline cases to help avoid backlogs, to provide for more timely hearing of motions, and most importantly to keep the case on track for the intended trial date unless the case is settled sooner.

Only time will determine whether these procedural changes achieve their intended effects. The legal community will no doubt closely monitor the implementation and impact of these amendments on the efficiency and effectiveness of Florida’s civil litigation process.

What is the takeaway from all of the above information? Well, those in the know say that the plaintiff in any newly filed a litigation better have all of their ducks in a row before they file their lawsuit. Failure to be prepared in this fashion could be disastrous. Stay tuned for further updates and analyses as these rules take effect and are applied in practice. Of course, your association’s attorney can also explain these procedural changes to you as they may relate to your association’s litigation.

Written by Jeffrey Rembaum, Esq. Reprinted with permission as it appears in the February 2025 issue of the Florida Community Association Journal.

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The Consequences of Failing to Maintain The Official Records

The Consequences of Failing to Maintain the Official Records

The following scenario happens all too often. A member makes a written records request to inspect the official records of the association and proceeds to provide a laundry list of documents that the member wants to inspect. In response, the association may arrange to have the member come to the property management office to inspect the records or, if the laundry list is not extensive, provide the requested records to the member by making copies or providing them electronically. Sometimes, however, associations do not always maintain official records in accordance with the requirements of Chapters 718 and 720, Fla. Stat., and an association may argue that it gave the member what it could, so that is all that really matters, right? Wrong! If your association operates this way, you are in for a surprise.

In the case of William Pecchia and Kathleen Porter v. Wayside Estates Home Owners Association, Inc., 388 So. 2d 1136 (Fla. 5th DCA 2024), litigation initially arose between the homeowners (Pecchia and Porter) and the association due to the belief by Pecchia that the association was failing to maintain the common area and that the association was not enforcing violations. Pecchia observed that over the years the association lowered annual assessments and seemed to spend less money on maintenance despite observable deteriorating conditions to the property.

Accordingly, Pecchia requested to inspect the association’s records including copies of several years’ worth of insurance policies and certain records relating to the association’s upkeep of lots and common areas, including financial statements, canceled checks, and bank statements. The association did not respond to Pecchia’s records request in the statutory timeframe of 10 working days, and when it finally did respond, only copies of some of the requested records were provided. Eventually Pecchia submitted a renewed request for records, and then the parties negotiated for several months to no avail. Finally Pecchia filed for injunctive relief against the association. Initially Pecchia was unsuccessful in convincing the trial court that the association failed to maintain and produce requested records and was unsuccessful in obtaining an injunction against the association mandating that the requested records be provided. She appealed.

However, on appeal the Appellate Court found the following:

      1. The association did not sufficiently comply with the requirements of section 720.303, Fla. Stat., (which pertains to HOA official records requests); and
      2. The association did not sufficiently comply with its obligations to maintain its common area and properly enforce violations of the governing documents.

During the trial court proceedings, in regard to whether the association sufficiently complied with section 720.303, Fla. Stat., the trial court found that the association did not provide copies of requested insurance policies but that the association was not statutorily required to provide requested bank statements and canceled checks because section 720.303(4), Fla. Stat., only requires that an association maintain “accounting records.” Despite the lack of the association providing all of the records requested by Pecchia, the trial court found that the association had provided “sufficient documents in response to the Plaintiff’s request.” Further, while the trial court found that while the requested records were not provided within the statutory timeline, the association was not in violation because “sufficient” documents were eventually provided to Pecchia’s request. The appellate court disagreed!

On appeal, the appellate court found that the trial court misinterpreted section 720.303(4)-(5), Fla. Stat., when it held that the association had sufficiently complied with the statute. In short the appellate court found that the use of the word “shall” in the foregoing sections meant that there was no flexibility in the association’s obligation to maintain records provided for in section 720.303(4) and to permit inspection in accordance with section 720.303(5). The appellate court went on to discuss the meaning of the word “shall” (i.e., being mandatory) and the meaning of the word “may” (i.e., being permissive).

Additionally, the appellate court discussed that pursuant to other subsections of section 720.303, Fla. Stat., financial penalties are provided for beginning on the 11th business day in which an association does not make records available. In the aforementioned case, although the association ended up providing (or making available for inspection) some of Pecchia’s requested records, it did not provide access to all of Pecchia’s requested records, including insurance records, bank statements, and canceled checks, all of which the appellate court held would be “included in the financial and accounting records which a homeowners’ association is required to maintain.” Additionally, the records provided were provided after the statutory deadline. As stated by the appellate court,

“[S]ections 720.303(4) and (5) do not provide for substantial compliance. Rather, the language of the statute clearly provides that a homeowners’ association “shall” (1) maintain all items enumerated in 720.303(4) and (2) make them available to the homeowners within ten business days upon request [for inspection or by providing the records requested]. This language is mandatory.”

In regard to finding that the association did not maintain the common areas, there is scant mention as to why the appellate court found this to be the case.

Those involved with homeowners’ associations should also be aware of some recent legislative changes that became effective and pertain to official records and are incorporated into the most recent revision to section 720.303, Fla. Stat. For example, by January 1, 2025, an association with 100 or more parcels is required to post many, but not all, of its official records on its website or make such documents available through an application that can be downloaded on a mobile device. Additionally, homeowners’ associations are now required to maintain most of their official records for a period of seven  years unless the governing documents of the association provide for a longer period of time. Also, homeowners’ associations must adopt written rules governing the method or policy by which the official records of the association are to be retained and the time period such records must be retained.

For those involved with condominium associations, there are also some recent legislative changes pertaining to official records that became effective and are incorporated into the most recent revision to section 718.111, Fla. Stat. For example, by January 1, 2026, an association managing a condominium with 25 or more units—which does not contain timeshare units—shall post copies of its official records on its website or app. If official records are posted on the association’s website or app, the association may direct the unit owner or their authorized representative to the website or app (at this time HOAs may not do similarly). Clarification is provided that email addresses and fax numbers are only accessible to unit owners if such owner has consented to receive their official notices by electronic transmission or has personally indicated that such personal information may be shared with other unit owners. Official records now include all invoices, transaction receipts, or deposit slips that substantiate any receipt or expenditure of funds by the association, copies of building permits, and all satisfactorily completed board member educational certificates. Additionally, official records must now be maintained in an organized manner that facilitates inspection by a unit owner. A condominium association must now provide a checklist of all records made available for inspection and copying along with records that were not made available to the requester. The condominium association must retain the checklist provided to every requesting member for at least seven  years. If a director, board member, or manager knowingly, willfully, and repeatedly (i.e., two or more times in a 12-month period) fails to provide official records, such person commits a misdemeanor of the second degree. Finally, if a person willfully and knowingly refuses to release official records with the intent to avoid or escape detection, arrest, trial, or punishment, then it is the equivalent of a felony of the third degree.

To conclude, all community associations should be diligent, prompt, and thorough in responding to official records requests. While associations are not required to “cherry pick” and provide specific records that a member demands to inspect, associations have the obligation to maintain the official records and provide an opportunity for members to inspect the official records. If you are unsure of which records must be posted to the association’s website, or if you are in doubt as to your association’s responsibility in regard to official records and official record requests, then be sure to consult with your association counsel regarding these important responsibilities.

Reprinted with permission as it appears in the January 2025 issue of the Florida Community Association Journal.

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Disability Discrimination Under the Fair Housing Act

Disability Discrimination Under the Fair Housing Act

The Lesser Known Yet Equally Important “Reasonable Modification” Request

Guest Columnist: Danielle M. Brennan, Esq. B.C.S. [Kaye Bender Rembaum]

As directors and managers of community associations, it is likely that you are very familiar with disability-related requests for reasonable accommodations under the Fair Housing Act, particularly requests for accommodation to pet restrictions so that a disabled person may have an assistance animal within the community. However, the failure to grant reasonable accommodations is not the only form of disability discrimination under the Fair Housing Act.

The Fair Housing Act also makes it unlawful for a housing provider to refuse to permit, at the expense of the disabled person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises. For example, reasonable modifications may include widening doorways to make rooms more accessible for persons in wheelchairs, installing grab bars in bathrooms, lowering kitchen cabinets to a height suitable for persons in wheelchairs, adding a ramp to make a primary entrance accessible for persons in wheelchairs, or altering a walkway to provide access to a common use area.

In order for an individual to be entitled to a reasonable modification under the Fair Housing Act, the individual must first make a request for a reasonable modification. An individual makes a reasonable modification request whenever he/she makes clear to the association that he/she is requesting permission to make a structural change to the premises because of his/her disability. Although the association may adopt and use specified forms and procedures for processing modification requests, the association cannot refuse a request because the individual does not use the specified form or follow the established procedures. All the individual needs to do is make the request, orally or in writing, in a manner that a reasonable person would understand to be a request for permission to make a structural change because of a disability.

As part of the request, the individual must (i) establish that he/she is disabled (i.e., the person has a physical or mental impairment that substantially limits one or more major life activities) if the disability is not already known to the association or readily apparent; (ii) describe the type of modification requested; and (iii) explain the relationship, or nexus, between the requested modification and the individual’s disability.

The association is required to provide a prompt response to a reasonable modification request. An undue delay in responding to a reasonable modification request may be deemed a failure to permit a reasonable modification. There is no clarity as to what constitutes a “prompt response” or “undue delay” for a reasonable modification. However, if we are to borrow from guidance from the U.S. Department of Housing and Urban Development regarding reasonable accommodations under the Fair Housing Act, then a response should be issued within ten days.

The failure to permit a person with a disability to make a reasonable modification or the failure to promptly respond to a request for a reasonable modification is deemed discrimination under the Fair Housing Act. If discrimination is found to have occurred, the association may be subject to an injunction, forcing the association to permit the requested modification, and an award for damages, which may include punitive damages. In addition, violations of the Fair Housing Act are one of the few instances in which individual board members may be held personally liable for such violations. Given the potential for liability and the many factors which must be considered upon receiving such a request, the board must carefully evaluate a request for a reasonable modification in a timely manner and on a case-by-case basis.

The association cannot condition its approval of the requested modification upon the payment of a security deposit or the purchase of additional insurance and cannot insist that a particular contractor do the work. However, the association can require that the unit owner obtain any building permits needed to make the modification and that the work be performed in a workmanlike manner. From a practical perspective, there will need to be coordination between the association and the unit owner, for example, to obtain whatever permits may be required and to schedule the work, given that the modification may be made to the common areas owned by the homeowners’ association or the common elements controlled by the condominium association.

As to the modification itself, the disabled person is responsible for determining the type of modification and for payment of the costs of the modification. Generally, the association cannot insist on an alternative modification, particularly if the requested modification is to the interior of the unit. However, if the requested modification is to the common area or common elements, the association can propose an alternative modification (e.g., different type of modification, different placement, different design, etc.). However, if the association’s proposed alternative modification costs more than the modification requested by the disabled person, the association will be required to pay the difference.

Once the modification is installed, whether the disabled person or the association will be responsible for the upkeep and maintenance of the modification will depend upon where the modification is located and who is able to use the modification. As to modifications made to the common areas or common elements, if the modification is used exclusively by the disabled person, such person is responsible for the upkeep and maintenance of the modification. However, if the modification is installed on the common areas or common elements which are normally maintained by the association and may be used by others, the association is responsible for the upkeep and maintenance of such modification under the Fair Housing Act.

Although some modifications to the interior of the unit must be restored if requested by the association when the disabled person vacates the unit, the association cannot require the disabled person to have a modification made to the common areas or the common elements removed and area restored.

Additionally, the Fair Housing Act controls over the provisions of the governing documents of the association and any requirements of Chapter 718, Florida Statutes. For example, even if the modification is a material alteration or substantial addition to the common elements or association property subject to membership approval under a community association’s governing documents and/or section 718.113(2)(a), Florida Statutes, such membership approval would not be required for a reasonable modification under the Fair Housing Act. However, the board still must approve the requested modification at a properly noticed board meeting, and the minutes of such meeting must reflect the board’s approval of same.

Regarding property insurance for modifications to a condominium’s common elements, section 718.111(11)(f), Florida Statutes, requires that the condominium association carry adequate property insurance for primary coverage of all portions of the condominium property, only excluding from such coverage the following which is the responsibility of the unit owner: 1) all personal property within the unit or limited common elements and 2) floor, wall, and ceiling coverings; electrical fixtures; appliances; water heaters; water filters; built-in cabinets and countertops; and window treatments (including curtains, drapes, blinds, hardware, and similar window treatment components); or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Therefore, if modifications are not within the unit or the limited common elements serving the unit, the condominium association is responsible to carry property insurance for the modification and will be responsible for the reconstruction, repair, or replacement of the modification if it is damaged by an insurable event.

Finally and importantly, because there are so many ways for a board to create legal liability when handling reasonable modification and/or reasonable accommodation requests, the board and manager should absolutely involve the association’s attorney, particularly if the board is going to request additional information or deny the request. Simply asking the wrong question can create legal liability for an association, such as asking for additional information regarding a person’s disability when the disability is readily apparent. Because there are so many ways to misstep in this arena, significant caution is advised.

Reprinted with permission as it appears in the December 2024 issue of the Florida Community Association Journal.

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MySafe Florida Condominium Pilot Program Launching

MySafe Florida Condominium Pilot Program Launching

Not with a Condominium Association? Please feel free to share with colleagues who are! The information below is a copy of the email from the State’s program.

The Department of Financial Services is thrilled to announce the upcoming launch of the My Safe Florida Condominium Pilot Program on November 14, 2024! This new initiative aims to enhance the safety and resilience of condominiums across Florida, and we are excited to invite potential applicants like you to take part in this important program.

The My Safe Florida Condominium Pilot Program is designed to help condominium associations strengthen their properties against the impacts of natural disasters, such as hurricanes, by offering access to critical resources, safety improvements, and financial assistance. Whether you’re looking to improve your condominium’s wind resistance or apply for funding to offset improvements, this program is here to support you.

Key Program Details:

    • Launch Date: November 14, 2024.
    • Who can apply: Condominium Associations in the state of Florida located within the Program’s Service Area.
    • What’s offered to Eligible Condominium Associations: 1. A no-cost wind mitigation inspection and report, which includes recommendations for improvements and potential insurance premium savings. 2. A Grant Award to reimburse condominium associations following the completion of authorized improvements.

We encourage you to stay tuned for more updates as we get closer to the official launch date. In the meantime, be sure to check our website https://mysafeflcondo.com/ for more information on eligibility requirements, program benefits, and how to get ready to apply.

This is a wonderful opportunity to improve your condominium’s safety while contributing to a stronger, more resilient Florida. We look forward to welcoming you to the program!

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A Differing Tale of Two Terminating Condominiums

A Differing Tale of Two Terminating Condominiums

An extremely similar fact pattern leads to diametrically opposed results between Florida’s Fourth District Court of Appeal and Florida’s Third District Court of Appeal.

In the case before the Fourth District Court of Appeal, Fellman v. Mission Viejo Condominium Association, Inc., Case No. 4D22-1260, (Fla. 4th DCA April 6, 2023), 175 of the 176 condominium units were acquired over time by a bulk owner, and the bulk owner sought termination of the condominium. However, Fellman as the single holdout objected to the plan of termination. At trial, the trial court entered a summary judgment in favor of terminating the condominium, which Fellman then appealed to the Fourth District Court of Appeal.

The Mission Viejo Declaration of Condominium was recorded in 1980 and required 100 percent consent of all unit owners as necessary to terminate the condominium form of ownership. Forty-one years later, on February 5, 2021, the bulk owner amended the required vote to terminate the condominium from 100 percent to 80 percent, using the general amendatory provision set out in the Declaration of Condominium, which required only 80 percent consent of the voting interests. Therefore, notwithstanding the original 100 percent requirement necessary to terminate the condominium, only 80 percent of the owners had to vote in favor of lowering the consent needed from 100 percent to 80 percent, which resulted in fully divesting Fellman of the right to object to the termination of the condominium.

Obviously, Fellman did not vote in favor of the amendment. Fellman argued that by allowing 80 percent of the unit owners to amend the otherwise required 100 percent consent of all owners to terminate the condominium, it fully eviscerated his right to object to the termination of the condominium and his voting rights—a right bestowed upon him when he purchased the unit. There are few things more sacrosanct than an owner’s right to vote. Nevertheless, neither the trial court nor the Fourth District Court of Appeal agreed.

While Fellman should have been able to rely on the 100 percent termination approval requirement as originally required in the declaration of condominium, the trial court believed that if the 100 percent requirement was to be protected from being amended with a lower percentage of voting interests, then the provision in the declaration of condominium should have clarified that it could only be amended by nothing less than 100 percent approval of the unit owners. Since it did not, the trial court found no issue with the bulk buyer eviscerating the 100 percent vote needed to terminate the condominium with 80 percent of the voting interests casting their vote in favor of the amendment.

Fast forward eleven months to March 13, 2024, when Florida’s Third District Court of Appeal, in Avila v. Biscayne 21 Condominium, Inc., Case No. 3D23-1616 (Fla. 3d DCA Mar. 13, 2024), noted that the provision in the Biscayne 21 Declaration of Condominium (requiring 100 percent of the voting interests to vote in favor of the termination could NOT be amended using the lower vote threshold needed to amend the declaration of condominium) was likely to prevail. As you will note, this decision diametrically opposes the outcome in the Fellman case. In this case, Avila sought a temporary injunction to stop the plan of termination. The trial court denied it. Avila appealed, and the Third District Court of Appeal agreed with Avila that Avila’s claim stood a substantial likelihood of success on the merits. The declaration of condominium at issue in the Avila case had an additional provision that required “100 percent approval for amendments that alter the voting power of unit owners.” However, it should be axiomatic that to obliterate an owner’s right to vote by terminating the condominium where the declaration had required 100 percent of the owners to vote in favor of termination could not be amended by a termination provision of anything less than 100 percent of the owners.

The Third District Court of Appeal commented that the change to the termination vote threshold materially altered the unit owners’ voting rights. By requiring a unanimous vote for termination, the declaration of condominium originally gave every unit owner an effective “veto” over any termination plan, which would be lost if the amendment adopted by using the general amendatory powers set out in the declaration of condominium were to stand. The Court even cited the Tropicana Condominium Association, Inc. v. Tropical Condominium , LLC, 208 So. 3d 755 (Fla. 3d DCA 2016), finding that nonunanimous amendments to a declaration reducing the vote threshold for termination of condominium could not be applied where the declaration expressly required the unanimous vote to amend the termination provision, and the amendment, if retroactively applied, would eviscerate the unit owners’ contractually bestowed veto rights.

In fact, Fellman also argued the Tropicana case to the trial court, which rejected the argument; and to add insult to injury, such decision was affirmed by the Fourth District Court of Appeal. So, in the world of inconsistent decisions, Fellman was denied by the Fourth District Court of Appeal the right to veto the plan of termination and is in process of potentially losing his unit, while the Avila court found his right to veto the plan of termination seemingly protected by the Third District Court of Appeal as evidenced by issuance of the temporary injunction in his favor. Unfortunately, even once the Avila case reaches a final judgment, and if in Avila’s case that decision is appealed and upheld by the Florida Supreme Court, Fellman still loses his right to veto the plan of termination as initially bestowed upon him and, even more unfortunately, will lose ownership of the unit.

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Corporate Transparency Act Compliance and How to File Your Association’s Report

Corporate Transparency Act Compliance and How to File Your Association's Report

The Corporate Transparency Act (“CTA”) was enacted in 2021. The CTA requires that on or before January 1, 2025, all cooperatives, condominiums and homeowner’s associations (collectively, “Associations”) are required to file certain information with the US Treasury department, Financial Crimes Enforcement Network (“FinCEN”). This law requires businesses that are registered with their state’s division of corporations, which includes Community Associations, to provide information on its ‘Beneficial Owners’ which are the decision makers, meaning board members, and officers (and possibly managers, too). Your Association will need to comply with the registration requirements of the CTA or face significant penalties. In addition, any changes to the board members or officers must be reported by updating the information on FinCEN within 30 days of the change.

1) What is the CTA? The CTA aims to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. Under the new legislation, businesses that meet certain criteria must submit a Beneficial Ownership Information (“BOI”) Report to the U.S. Department of Treasury’s FinCEN, providing details identifying the decision-making individuals for the Association.

2) What information will each Association have to report? An Association will have to report:

    • Its legal name;
    • Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
    • The current street address of its principal place of business if that address is in the United States (for example, company’s headquarters. The company address must be a U.S. street address and cannot be a P.O. box;
    • Its jurisdiction of formation or registration (State of Organization) and the date of formation;
    • Its Taxpayer Information Number; and
    • Any beneficial owner/board member (the decision maker).

3) Who is considered a beneficial owner of an Association? A beneficial owner of the Association is defined as an individual who either directly or indirectly exercises substantial control over the Association company. The Association will have to provide:

    • The individual’s name;
    • Date of birth;
    • Residential address; and
    • A copy of an acceptable identification document such as a passport or U.S. driver’s license.

Individuals who meet one of the following criteria are considered to exercise substantial control over the Association:

    • the individual is a senior officer;
    • the individual has authority to appoint or remove certain officers or a majority of directors of the Association, such as developers of a developer controlled Association;
    • the individual is an important decision-maker; or
    • the individual has any other form of substantial control over the Association.

4) When should an Association file this report? When should our report be updated?

    • An Association created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
    • An Association created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
    • An Association created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
    • Importantly, there are continuing registration requirements as well. Anytime there is any change in the beneficial ownership it must be reported to FinCin by updating the BOI report within 30 days of the event. This applies to such events as a mid-year replacement board member or officer and possibly after each year’s annual election, too.

5) Are there any penalties associated with not filing or missing the deadlines?

Yes. As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues, plus it is adjusted annually for inflation.

Both individuals and corporate entities can be held liable for willful violations such as a failure to comply with the FinCEN registration requirements. This can also include not only an individual who actually files (or attempts to file) false information with FinCEN, but also anyone who willfully provides the filer with false information to report.

6) Are there third-party service providers to help Associations with filing?

Yes. Associations may use third-party service providers to submit beneficial ownership information reports. Third-party service providers will have the ability to submit the reports via FinCEN’s BOI E-Filing website or an Application Programming Interface (API).

While there are many third-party providers which can be located by doing a simple Google search, at this time we cannot recommend one company over another. Therefore, we are merely sharing the following information which we discovered through our own Google search. Four companies assisting with the CTA filings include:

There are others, too.

We understand that some management companies may also offer this service for an additional fee. Whether to consider using your current management company or a qualified third-party provider is a Board business decision.

Please note that Kaye Bender Rembaum, P.L., will not be performing any FinCen registrations.

7) Can an Association file on its own, without the use of a third-party?

Yes, an Association may file on its own electronically through a secure filing system via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov). There is no fee for submitting your BOI to FinCEN. An Association can access the form by going to FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov) and select “File BOIR.”

However, due to the potential liability exposure to the Association and possibly individuals, we do not recommend that an Association undertake compliance with this act by filing on their own.

8) Are there any efforts undertaken to exempt community associations from the registration requirements?

In July, 2024, the Community Associations Institute (CAI) Board of Trustees approved filing a lawsuit to exempt and protect community associations from burdensome requirements outlined in the Corporate Transparency Act. On October 11, 2024 there was a hearing on CAI’s request for a preliminary injunction against the U.S. Department of Treasury to try and exempt Community Associations from the burdensome reporting requirements of the CTA. A ruling is expected in the next few weeks, but not guaranteed. As such, for now, compliance with the CTA by January 1, 2025 remains required.

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2024 Legislative Clarifications for Board Members and Managers – An Update

2024 Legislative Clarifications For Board Members and Managers

The purpose of this article is to address the following:

    • Homeowners’ and condominium association board member certification requirements, certificate retention and continuing education requirements (all of which are quite different);
    • Condominium association and homeowners’ association hurricane protection requirements;
    • Clarify homeowners’ association website posting requirements and remind homeowners’ association board members of mandates from the 2024 legislation.

Chapter 718, F.S.: CONDOMINIUM ASSOCIATION BOARD MEMBER CERTIFICATION REQUIREMENTS, CERTIFICATE RETENTION AND CONTINUING EDUCATION REQUIREMENTS:

    • Each newly elected or appointed board member must submit to the secretary of the association the: (i) written certification AND (ii) educational certificate within 1 year before being elected or appointed or 90 days after the date of election or appointment.
    • Specifically, for the (i) written certification, all residential condominium board members must certify, in writing to the secretary of the association, that he or she has read the association’s declaration of condominium, articles of incorporation, bylaws, and current written policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members.
    • For the (ii) educational certificate, condominium association board members must complete an educational curriculum that has been approved by the DBPR that is at least four hours long with certain mandated subjects.
    • A director of an association of a residential condominium who was elected or appointed before July 1, 2024, must comply with both written certification AND educational certificate requirements by June 30, 2025.
    • To reiterate, a director of an association of a residential condominium who was elected or appointed after July 1, 2024, must comply with both the written certification AND educational certificate requirement within 90 days after being elected or appointed to the board.
    • The written certification and/or educational certificate is valid for seven years after the date of issuance and does not have to be resubmitted as long as the director serves on the board without interruption during the seven-year period.
    • Continuing Education: In addition to the (i) written certification and (ii) educational certificate discussed above, one year after submission of the most recent written certification and educational certificate, and annually thereafter, a board member of an association of a residential condominium must submit to the secretary of the association a certificate of having satisfactorily completed at least one hour of continuing education administered by the division, or a division-approved condominium education provider, relating to any recent changes to this chapter and the related administrative rules during the past year.
    • Condominium association board members elected or appointed before July 1, 2024, have until June 30, 2025, to meet the new education curriculum requirement consisting of 1 hour of continuing education per year.
    • The condominium association must retain a director’s written certification and/or educational certificate for inspection by the members for seven years after a director’s election or the duration of the director’s uninterrupted tenure, whichever is longer.
    • Any director who fails to timely comply with the foregoing written certification and educational certificate requirements is suspended from service on the board until he or she complies.

Chapter 720, F.S.: HOMEOWNERS’ ASSOCIATION BOARD MEMBER CERTIFICATION REQUIREMENTS, CERTIFICATE RETENTION AND CONTINUING EDUCATION REQUIREMENTS:

    • Homeowners’ association board members elected or appointed to the board on or after July 1, 2024, must take a board certification course within 90-days after being elected or appointed to the board (no minimum time required, typically around two hours).
    • In addition, homeowners’ association board members must complete the education specific to newly elected or appointed directors at least every four years.
    • The DBPR approved educational curriculum specific to newly elected or appointed directors must include training relating to financial literacy and transparency, recordkeeping, levying of fines, and notice and meeting requirements.
    • In addition to the education course specific to newly elected or appointed board members, Homeowners’ association board members with fewer than 2,500 parcels in the association must take four hours of continuing education annually and if 2,500 parcels or more in the association, then eight hours of continuing education annually.
    • The homeowners’ association must retain each director’s written certification or educational certificate for inspection by the members for five years after the director’s election.
    • The ability of a recently elected or appointed homeowners’ association board member to simply submit a written certificate certifying that they read the association’s declaration of covenants, articles of incorporation, bylaws, and current written rules and policies; that he, or she, will work to uphold such documents and policies to the best of his or her ability; and that he, or she, will faithfully discharge his or her fiduciary duties to the association, is no longer an option to meet certification requirements as it has been removed from Section 720.3033, Florida Statutes.

HURRICANE PROTECTION REQUIREMENTS:

    • Chapter 718, F.S.: Condominium Association Hurricane Protection Specifications. Each board of a residential condominium or mixed used condominium must adopt hurricane protection specifications for each building within the condominium operated by the association which may include color, style, and other factors deemed relevant by the board (please note that this provision used to apply to hurricane shutters but now applies to all hurricane protection).
    • Chapter 720, F.S.: Homeowners’ Association Hurricane Protection Specifications. The board or any architectural, construction improvement, or other similar committee of an association must adopt hurricane protection specifications for each structure or other improvement on a parcel governed by the association. The specifications may include the color and style of hurricane protection products and any other factor deemed relevant by the board. All specifications adopted by the board must comply with the applicable building code.

Chapter 720, F.S.: HOMEOWNERS’ ASSOCIATIONS NEW WEBSITE / APP POSTING REQUIREMENTS FOR THOSE HOA’S REQUIRED TO HAVE A WEBSITE / APP:

HOA New Website: By January 1, 2025, an association with 100 or more parcels shall post several documents within its Official Records on its website or make available such documents through an application that can be downloaded on a mobile device.

    • HOA New Website Posting Requirement for Members’ Meetings– Notice of any scheduled meeting of the members and the agenda for the meeting, as required by Section 720.306, Florida Statutes, at least 14 days before such meeting. The notice must be posted in plain view on the homepage of the website or app, or on a separate subpage of the website or app labeled “Notices” which is conspicuously visible and linked from the homepage. The association shall also post on its website or app, any document to be considered and voted on by the members during the meeting, or any document listed on the meeting agenda, at least seven days before the meeting at which such document or information within the document will be considered.
    • HOA New Website Posting Requirement for Board Meetings– Notice of any board meeting, the agenda, and any other document required for such meeting must be posted on the website or app no later than the date required for such notice.

REMEMBER, EVERY HOMEOWNERS’ ASSOCIATION BOARD MUST DO THE FOLLOWING:

    • Adopt hurricane protection standards/rules as discussed above.
    • Provide copies of the rules and covenants to every association member before October 1, 2024, or post same on the association’s website and send notice to each member at their address used for official notices as to where they can locate them.
    • Adopt rules and regulations governing official record retention.

(Written by Jeffrey Rembaum (Kaye Bender Rebaum) and reprinted with permission from the September 2024 edition of the “Florida Community Association Journal“.)

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It’s the Manager’s Fault…Or Is It?

It’s the Manager’s Fault…Or Is It?

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Disclaimer: In January 2022 the The Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation issued an opinion which drastically alters the information provided herein. Please consult with an attorney of your choosing to obtain the latest guidance in this ever evolving area.

Few professions have more demands placed upon them than that of the Florida licensed community association manager (CAM). Depending on whom you ask, the CAM is the organizer, rules enforcer, keeper of secrets (meaning confidential and statutorily protected information not limited to the medical record of owners and attorney-client privileged information), best friend, the “bad guy” (a frequent misconstruction), and the first person in the line of fire when things go wrong; in other words, the one who takes all the blame and gets little credit when things go right.

When things at the association go wrong, what comment is most likely heard? “It’s the manager’s fault!” But, is it? Unless the manager failed to carry out a lawful directive from the board, breached a management contract provision, or violated a Florida statute, then in all likelihood, the manager has no culpability. CAMs are licensed by the State of Florida pursuant to Part VIII of Chapter 468 of the Florida Statutes, and there are statutory standards by which CAMs must conduct themselves.

Pursuant to §468.4334, Florida Statutes, “[a] community association manager or a community association management firm is deemed to act as agent on behalf of a community association as principal within the scope of authority authorized by a written contract or under this chapter. A community association manager and a community association management firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees.”

As set forth herein, statutory standards provide guidance to CAMs as to how they should conduct themselves. They must discharge their duties with skill and care and in good faith. They must act with loyalty to their association employer and deal with the association both honestly and fairly. They must provide full disclosure, which can be interpreted as both keeping the board informed of current events and providing disclosures of any conflict of interests. They must be able to account for all funds, too, which means both assessment income and expenditures; in other words, they must mind the budget.

Best practices for CAMs include becoming extremely familiar with the governing documents of the association (including the declaration, articles of incorporation, bylaws, and rules and regulations) and the financials of the association, walking the physical property, engaging with their team and residents, as well as providing weekly status updates to the board regarding all ongoing association business. If you are a CAM and do these things, then you have an opportunity to shine and stand head and shoulders above your peers and competition. This weekly status report is an excellent communication tool yet seems to be a rarity. CAMs should also make themselves available to owners. However, when an owner becomes offensive or insulting, the CAM should politely and firmly request that the owner communicate respectfully and in a professional manner. A CAM should always be financially transparent and should be extremely familiar with the management contract to fully understand her obligations and authority; for example, the limitation to spend association funds. Finally, the CAM should strive to keep a written record of her activities.

The two most obvious and biggest ways to get in trouble include committing acts of gross misconduct or gross negligence in connection with the profession or contracting on behalf of an association with any entity in which the CAM has a financial interest that is not disclosed. Disciplinary actions against a CAM fall under the purview of the Florida Department of Business and Professional Regulation (DBPR). Section 455.227, Florida Statutes, governs grounds for discipline, penalties, and enforcement.

For example, the following activities constitute grounds for which disciplinary actions may be taken by the DBPR (this list is not all inclusive):

(i) making misleading, deceptive, or fraudulent representations in or related to the practice of the CAM’s profession; (ii) intentionally violating any rule adopted by the DBPR; (iii) being convicted or found guilty of, or entering a plea of guilty or nolo contendere (“I do not wish to contend”) to, a crime in any jurisdiction which relates to the practice of, or the ability to practice, a CAM’s profession; (iv) having been found liable in a civil proceeding for knowingly filing a false report or complaint with the DBPR against another CAM; (v) attempting to obtain, obtaining, or renewing a license to practice a profession by bribery, by fraudulent misrepresentation, or through an error of the DBPR; (vi) failing to report to the DBPR any person who the CAM knows is in violation of the laws regulating CAMs or the rules of the DBPR; (vii) aiding, assisting, procuring, employing, or advising any unlicensed person or entity to practice a profession contrary to law; (viii) failing to perform any statutory or legal obligation; (ix) making or filing a report which the licensee knows to be false; (x) making deceptive, untrue, or fraudulent representations in or related to the practice of a profession or employing a trick or scheme in or related to the practice of a profession; and  (xi) performing professional responsibilities the licensee knows, or has reason to know, the licensee is not competent to perform.

The Florida Administrative Code, in Rule 61E14-2.001, also provides standards for professional conduct which are deemed automatically incorporated as duties of all CAMs into any written or oral agreement for community association management services. A CAM must adhere to the following standards:

  1. comply with the requirements of the governing documents by which a community association is created or operated
  2. only deposit or disburse funds received by the CAM or management firm on behalf of the association for the specific purpose or purposes designated by the board, community association management contract, or the governing documents of the association
  3. perform all community association management services required by the CAM’s contract to professional standards and to the standards established by §468.4334(1), Florida Statutes
  4. in the event of a potential conflict of interest, provide full disclosure to the association and obtain authorization or approval; and
  5. respond to, or refer to the appropriate responsible party, a notice of violation or any similar notice from an agency seeking to impose a regulatory penalty upon the association within the timeframe specified in the notice.

In addition, during the performance of community association management services pursuant to a contract with a community association, a CAM cannot withhold possession of the association’s official records or original books, records, accounts, funds, or other property of the association when requested in writing by the association to deliver the foregoing to the association upon reasonable notice. However, the CAM may retain those records necessary to complete an ending financial statement or report for up to 20 days after termination of the management contract. Additionally, a CAM cannot (i) deny or delay access to association official records to an owner, or his or her authorized representative, who is entitled to inspect and copy the association’s official records within the timeframe and under the applicable statutes governing the association; (ii) create false records or alter the official records of an association or of the CAM except in such cases where an alteration is permitted by law (e.g., the correction of minutes per direction given at a meeting at which the minutes are submitted for approval); or (iii) fail to maintain the records for a CAM, management firm, or the official records of the association as required by the applicable statutes governing the association.

How do you know if your association requires a licensed community association manager? Pursuant to §468.431, Florida Statutes, if the association has 10 or more units or has a budget of $100,000 or more and the person is conducting one or more of the following activities in exchange for payment, the person must be a licensed CAM:

  1. controlling or disbursing funds of a community association
  2. preparing budgets or other financial documents for a community association
  3. assisting in the noticing or conduct of community association meetings
  4. determining the number of days required for statutory notices
  5. determining amounts due to the association
  6. collecting amounts due to the association before the filing of a civil action
  7. calculating the votes required for a quorum or to approve a proposition or amendment
  8. completing forms related to the management of a community association that have been created by statute or by a state agency
  9. drafting meeting notices and agendas
  10. calculating and preparing certificates of assessment and estoppel certificates
  11. responding to requests for certificates of assessment and estoppel certificates
  12. negotiating monetary or performance terms of a contract subject to approval by an association
  13. drafting pre-arbitration demands
  14. coordinating or performing maintenance for real or personal property and other related routine services involved in the operation of a community association, or
  15. complying with the association’s governing documents and the requirements of law as necessary to perform such practices.

However, a person who performs clerical or ministerial functions under the direct supervision and control of a CAM or who is charged only with performing the maintenance of a community association and who does not assist in any of the management services described above is not required to be licensed.

So, whose fault is it when things go awry? A CAM’s role is far different than that of a rental complex manager who often has decision-making authority. The CAM does not have that same type of decision-making authority. The CAM must take direction from the board and perform pursuant to the obligations set out in the management agreement and Florida law. It is the board of directors of the community association that actually makes the decisions. So, while the uninformed might blame the CAM, you now know that the buck stops with the board of directors. If you have further questions regarding a CAM’s responsibility, then please discuss this with your association’s lawyer.

(Reprinted with permission from the October 2021 edition of the Florida Community Association Journal)

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The Subtle and Not-So-Subtle Differences Between Homeowners and Condominium Associations

Florida has created an abundance of legislation governing homeowners’ and condominium associations. You would think that, by now, laws affecting both types of communities would have more parity than they actually do. (Please note that that commercial condominiums are not addressed in this article.)

Perhaps the most appreciative difference between a homeowners association and a residential condominium association is that the homeowners association exists in common law, but the condominium only exists because of legislation adopted by the Florida Legislature. That said, homeowners associations are subject to Chapter 720, Florida Statutes, and condominium associations are subject to Chapter 718, Florida Statutes. There is both parity and significant differences between these two Acts, the latter of which are further addressed below. We begin by examining bidding.

 Bidding: A homeowners association is only required to obtain bids if the aggregate cost of the project (referring to the materials, work, and/or services) exceeds 10 percent of the total budget including reserves, if any. On the other hand, condominium associations are required to obtain bids if the aggregate cost of the project exceeds 5 percent of the total budget including reserves, if any. Please note, there is no requirement in the legislation for a community association to obtain a definitive number of a bids. Therefore, at least two would be appropriate. Also remember, there are exceptions to the bidding requirement for professional services such as attorneys, accountants, and landscape architects.

Certified Written Inquiry: A condominium association owner has the right to send a certified written inquiry to the board, and the board is obligated to answer it within 30 days (or 60 days if the certified written inquiry is provided to the community association’s lawyer to respond to). A failure to respond means that if the owner files a legal action over the item for which certified written inquiry was provided and loses, the owner will not be responsible to pay for the association’s prevailing party attorneys’ fees. There is no similar provision for a homeowners association.

Common Areas: Common areas in a homeowners association are owned by the association itself. In other words, no owner can claim an ownership interest in a homeowner association’s common areas. However, as to condominiums, the equivalent of the homeowner association’s common area is referred to as “common elements”. All of the unit owners of the condominium association own an indivisible interest in the common elements.

Disputes: In a homeowners association, disputes between an association and a parcel owner regarding use of or changes to the parcel or the common areas and other covenant enforcement disputes, disputes regarding amendments to the association documents, disputes regarding meetings of the board and committees appointed by the board, membership meetings not including election meetings, and access to the official records of the association must be the subject of a demand for pre-suit mediation served by an aggrieved party before the dispute is filed in the local court. Before a homeowners association can commence litigation where the amount in controversy is in excess of $100,000, the approval of a majority of a quorum of the membership is required. There is no similar provision as applied to condominium associations.

In a condominium association, prior to the institution of court litigation, a party to a “dispute” (as such term is hereinafter defined) must petition the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation for non-binding arbitration or, as of July 1, 2021, avail themselves of the presuit mediation process as set out in Chapter 720.  “Disputes” subject to mandatory arbitration or presuit mediation include 1) the authority of the board of directors, under this chapter or association document to: i) require any owner to take any action, or not to take any action, involving that owner’s unit or the appurtenances thereto ii) alter or add to a common area or element; or 2) the failure of a governing body, when required by this chapter or an association document, to: i) properly conduct elections ii) give adequate notice of meetings or other actions iii) properly conduct meetings iv) allow inspection of books and records; and 3) a plan of termination pursuant to §718.117, Fla. Stat.

Elections: Elections in a homeowners association take place as per the bylaws, while elections for condominiums take place following the regime set out in chapter 718, Florida Statutes, more specifically §718.112, Fla. Stat., and the provisions of the Florida Administrative Code. In order to hold a homeowners association election, a quorum must be attained unless the bylaws provide otherwise. No quorum is required to hold a condominium election, but rather 20 percent of the eligible voters need to cast a ballot in order to hold the election. In a condominium association of more than 10 units, co-owners of a unit cannot serve on the board at the same time unless there are not enough candidates, or they own more than one unit. Commencing July 1, 2018, condominium association board members cannot serve more than eight consecutive years absent certain exceptions (note, this statute is not retroactive in its application). There is no similar co-owner prohibition and term limit restriction for homeowners associations.

Elections by acclimation: In a condominium association if the same number of candidates, or less, run for the board as the number of seats available, then there is no need to have the election. This is referred to as an “election by acclimation” which means, those candidates will comprise the present board upon the annual meeting. If the election is contested because there are more candidates than seats available and at least 20 percent of the eligible voters do not cast a ballot, then last year’s board rolls over.

As to homeowners associations, if the election process allows candidates to be nominated in advance of the meeting, the association is not required to allow nominations at the meeting. An election is not required unless more candidates are nominated than vacancies exist. If an election is not required because there are either an equal number or fewer qualified candidates than vacancies exist, and if nominations from the floor are not required pursuant to the statute or the bylaws and write-in nominations are not permitted, then the candidates who nominated themselves in advance shall commence service on the board of directors regardless of whether a quorum is attained at the annual meeting. Otherwise, if those conditions are not met and a quorum is not attained for a homeowners association’s election, then last year’s board rolls over to this year’s board.

Elections, Voting: Unless otherwise set out in the bylaws, homeowners association members vote in the election for the board by proxy and/or ballot. On the other hand, condominium association owners cannot vote for the election of directors by proxy but rather must vote themselves by secret absentee ballot using the the inner and outer envelope system. A homeowners association only needs to use the inner and outer envelope system when the bylaws call for secret absentee ballots.

Fines: A condominium association cannot levy a fine greater than $1,000 for any one violation and cannot lien and foreclose the fine under any circumstances. In a homeowners association, an association can foreclose to collect a fine if both i) the fine is $1,000 or more and ii) the authority to lien is set out in the declaration.

Frequently Asked Questions and Answers Sheet: As to condominium associations §718.504, Fla. Stat., requires that a “Frequently Asked Questions and Answers” sheet be made available to prospective purchasers and to owners who request it. It must be updated annually and must include the following questions along with the answers to these questions: 1) What are my voting rights in the condominium association? 2) What restrictions exist in the condominium documents on my right to use my unit? 3) How much are my assessments to the condominium association for my unit type, and when are they due? 4) Do I have to be a member in any other association? If so, what is the name of the association and what are my voting rights in this association? Also, how much are my assessments? 5) Am I required to pay rent or land use fees for recreational or other commonly used facilities? If so, how much am I obligated to pay annually? 6) Is the condominium association or any other mandatory membership association involved in any court cases in which it may face liability in excess of $100,000? If so, identify each such case. There is no similar provision or requirement for homeowners associations.

Leasing Restrictions: Effective July 1, 2021  as to HOA leasing restrictions, any restriction that prohibits or regulates rental agreements applies only to (i) an owner who acquires title to a parcel after the effective date of the governing document or amendment, or (ii) an owner who consents, individually or through a representative, to the governing document or amendment.  As to condominium associations, according to §718.110(13), Fla. Stat., an amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period, applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of the amendment.

Liens and Foreclosures: In a homeowners association, prior to recording a lien against a delinquent owner’s lot, the owner must be provided a statutorily compliant warning letter at least 45 days prior to recording the lien, warning the homeowner that if the assessment is not paid a lien may be recorded. Then, the owner must be provided a second letter at least 45 days prior to filing the foreclosure lawsuit warning that if the lien is not satisfied (paid-off), then a lawsuit to foreclose the lien may be filed anytime thereafter. For a condominium association the warning/waiting periods for both letters was 30 days. Effective July 1, 2021 this was changed to 45 days.

Material Alterations: Unless otherwise provided in the declaration of covenants and restrictions, a material alteration to a homeowners association’s common area is decided by the board. In condominium associations, material alterations require 75 percent approval of all unit owners unless the declaration provides otherwise.

Official Records Requests: In a homeowners association, official record requests must be made by certified U.S. mail to create the rebuttable presumption the association willfully failed to respond. There is no similar requirement for a condominium association. Every community association should adopt specific rules governing official records requests, how often they can be made, and where they must be delivered. If your association has not done so, you are urged to discuss this with the association‘s lawyer.

Quorums: A quorum of the membership for a homeowners association membership meeting consists of 30 percent of the entire membership unless a lower number is provided for in the bylaws. A quorum for a condominium association membership meeting occurs when there is a majority of the voting interests present unless a lower number is provided for in the bylaws.

Reserve Accounts: A homeowners association only has restricted reserve accounts if initially created by the developer or voted on and approved by a majority of the entire membership. In a condominium association, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000. Condominium boards and homeowners association boards with restricted reserves may propose lower or no reserves to the membership which is subject to approval by a majority of a quorum of the members. However, neither board is obligated to propose lower reserves. A condominium association board and a homeowners association board with restricted reserves must fully fund those reserves in the budget each year as must homeowners association boards whose association has adopted restricted reserves.

Transfer Fees: As per §689.28, Fla. Stat., transfer fees when buying and leasing a home in the state of Florida are prohibited. But, there are exceptions for both homeowners and condominium associations with this caveat. There is no cap, per se, that a homeowners association can charge a prospective member as a part of acquiring their property, but such fee must be authorized in the declaration (or other recorded document). However, as per §718.112 Fla. Stat., a condominium association can only charge up to $150 per applicant. A husband/wife or parent/dependent child are considered one applicant. A condominium association can only charge a transfer fee if it has the authority to approve transfers, and the authority for the transfer fee, specifically, must be set out in the declaration or bylaws (and as set forth above, as of July 1, 2021 it is presently limited to a maximum $150.00).

Warranties: A developer and general contractor of a condominium provides statutory warranties to buyers of units as further detailed in Chapter 718, Fla. Stat. There are no similar statutory warranties set out in Chapter 720, Fla. Stat., for buyers of a home within a homeowners association. A developer of a condominium, pursuant to relevant law, also provides an implied warranty of habitability. As to a homeowners association, §553.835, Fla. Stat., provides in relevant part that there is no such warranty for off-site improvements (i.e., the common areas) with a small exception for the shared components of a townhome type community.

Websites: A condominium association that has a condominium with 150 or more units must host an association website and post certain official records to it. Homeowners associations have no similar requirement.

If you have any questions in regard to these matters be sure to discuss them with an attorney of your choosing.

(Reprinted with permission from the April 2021 edition of the Florida Community Association Journal and updated to reflect  recent legislation effective July 1, 2021)

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Kaye Bender Rembaum, P.L.