New Florida Laws Mandate HOA Transparency, Board Member Training

Governor Ron DeSantis on Friday signed into law new legislation tightening the reins on HOA officials and giving a tad more freedom to homeowners.

The legislation establishes dozens of new requirements for HOAs, including provisions on mandatory training for board members and association managers, records transparency, financial reporting and covenant and rule enforcement. The legislation also creates misdemeanor and felony violations for HOA board members who mismanage official community records or fail to release them upon request, and who aid others in fraudulent voting activity.

Both chambers of the Florida legislature voted unanimously in March to approve the legislation, which becomes law July 1.

Board Member & Community Manager Training

The next elections in Watercrest aren’t for a while, but once the new set of board members take their seats, they’ll have to take some time to learn about the ins and outs of heading an HOA.

Newly elected or appointed board members are now required to complete education related to financial literacy and transparency, recordkeeping, levying of fines and meeting requirements, which undoubtedly includes education on an HOA board’s legal requirement to provide members with three minutes to speak at board meetings—something the Watercrest Board of Directors has neglected to do at some past meetings, but has since rectified.

New board members must complete that education within 90 days of their election or appointment. Previously, completing educational courses was an option for new board members in lieu of certifying they had read and vowed to uphold their governing documents.

Board members of HOAs with less than 2,500 parcels, like Watercrest, must also now complete at least four hours of continuing education annually.

Community association managers are also now required complete at least 10 hours of continuing education annually, and must twice annually complete at least five hours of continuing education relating specifically to HOAs, with three hours devoted to recordkeeping.

Heightened Requirements For Records Transparency

The records library of an HOA will soon increase, as associations are now required to maintain official records for at least seven years, unless their governing documents require longer. That includes all written records related to the operation of an HOA, like the governing documents, plans for improvements on common areas, minutes of all board and member meetings, member rosters, insurance policies, accounting records, contracts with vendors, tax returns, ballots and all records related to the operation of an association.

New law also requires an association manager to provide residents with a copy of his or her contract with the HOA upon request, and gives HOAs five business days to furnish subpoenaed records to law enforcement agencies.

And beginning January 1, 2025, HOAs with 100 or more parcels, like Watercrest, will be required to post certain documents on their websites or on a mobile app. Those documents include the governing documents, the budget, the financial report, insurance policies, the certification of each board member and contracts with vendors, including every bid the HOA received for the work within the previous year.

HOAs will also have to do more than post notification of upcoming board meetings in conspicuous places in the community at least 48 hours prior, as required by state law. Now, they’ll have to post those notices, along with the agendas and any associated documents, on their websites or apps prior to meetings.

Criminal Violations For Mismanaging Records

Going hand-in-hand with new laws surrounding the maintenance and release of association records are new criminal penalties for HOA leaders, such as board members, who act as gatekeepers or tamper with official association records.

It’s now a second-degree misdemeanor for a board member to knowingly, willfully and repeatedly—with the intent to harm the association or one or more of its members—fail to maintain official records for at least seven years and furnish those records to a homeowner within 10 business days of receiving the homeowner’s request. “Repeatedly” is defined as being twice or more in a 12-month period.

Conviction of a second-degree misdemeanor is punishable by up to 60 days in jail and a fine of up to $500.

It’s now a first-degree misdemeanor to knowingly and intentionally deface or destroy accounting records with the intent to harm the association or one or more of its members. The same violation applies to anyone who knowingly and intentionally fails to create and maintain those accounting records.

Conviction of a first-degree misdemeanor is punishable by up to a year in jail and a fine of up to $1,000.

It’s now a third-degree felony to willfully and knowingly refuse to produce association records to avoid or escape detection, arrest, trial or criminal punishment, or to assist someone else in doing the same.

Conviction of a third-degree felony is punishable by up to five years in prison and a fine of up to 5,000.

The new laws also redefine punishment for an HOA official who solicits or accepts a kickback. Previously, a board member who knowingly solicited or accepted a kickback was subject solely to paying monetary damages. Now, they commit a third-degree felony.

The new legislation also furthers the state’s existing prohibitions on fraudulent voting activity by making it a first-degree misdemeanor for someone to so much as aid another person in the commission of fraudulent voting activity.

And any HOA official who unlawfully uses an association debit card can now be charged with theft. The new law stipulates that an association officer, director, employee or agent can use such debit cards only for a “lawful obligation of the association,” defined as being “an obligation that has been properly preapproved by the board and is reflected in the meeting minutes or the written budget.”

The degrees of theft for which a person can be convicted in Florida depend on the scenario and amount of property stolen. Punishment ranges anywhere from a second-degree misdemeanor to a first-degree felony.

Regulating HOA Procedures

The new laws establish a few new methods governing the ways in which an HOA handles homeowner requests, denies architectural review applications and imposes fines and suspensions.

If a homeowner inquires as to how much they may owe their HOA, the association must provide that information within 15 business days. If the HOA fails to do so, it must waive the homeowner’s outstanding fines that are more than 30 days delinquent, granted the association did not provide the homeowner with prior notice of those fines. Homeowners can make such requests only once every 90 calendar days.

If an association, or specifically an architectural review committee, denies a homeowner’s application for the construction of a structure or improvement, the committee must provide the homeowner with written notice pinpointing the rule or covenant used to deny the application.

To impose a fine or suspension, an HOA board must first provide a homeowner with at least 14 days’ written notice that he or she has a right to a hearing—emphasis on the “written” aspect of the notice to be given.  That hearing must also be held within 90 days of the notice being issued.

An HOA now has seven days from the date of the hearing to provide the homeowner with written notice of its findings. If an association resolves to issue a violation, it must give the homeowner in violation at least 30 days to pay the fine. If a homeowner doesn’t pay in time, they might have to pay the HOA’s “reasonable attorney fees and costs.” Still, those fees and costs can’t accrue until after the payment due date.

Another reworked rule applies to when an HOA can fine a homeowner for leaving holiday decorations up for too long. While fines can be handed out for such infractions, an HOA can only issue those fines one week after providing the homeowner with written notice of the violation.

The Watercrest Standards dictate that holiday decorations can be put up one week prior to a holiday or event and must be removed no more than a week after. Residents can display “winter holiday” decorations between November 15 and January 15.

One small change to the HOA voting procedure was also made. In addition to consenting to electronic voting in writing, homeowners can now electronically consent thereto.

Clotheslines, Garbage Bins and Parking: Elevated Homeowner Freedoms

Residents living in HOAs will now reap the benefits of more than just revamped homeowner-centric procedures. They’ll now also have a bit more leeway when it comes to living out their everyday lives.

Under existing law, governing bodies are unable to prohibit the installation of clotheslines. Now, HOAs specifically are barred from writing such prohibitive rules; they can not restrict homeowners from installing clotheslines, or vegetable gardens for that matter, so long as neither can be seen from the front of a parcel, an adjacent parcel or an adjacent common area.

Homeowners can also now take their garbage bins to the curb 24 hours before trash pickup, and leave them there until 24 hours after pickup, without fear of being fined.

HOAs are now unable to prohibit homeowners or their tenants, guests or visitors from parking personal or work vehicles in their driveways. That’s not a problem in Watercrest, where residents are allowed to park in their driveways as long as they don’t block the sidewalks. The Community Wide Standards does stipulate, however, that “resident vehicles are to be garaged to the greatest extent possible, as to enhance community appearance.”

The new law does not allow for the parking of commercial vehicles—a vehicle with a fairly controversial definition, depending on who’s asked.

The Watercrest Community Wide Standards defines a commercial vehicle as being “any vehicle bearing signage identifying a business name or logo” or “any oversized vehicle unable to fit in the garage combined with obvious intent to be a mobile business or shop.” Meanwhile, the State of Florida defines a commercial vehicle as weighing more than 26,0001 pounds or having three or more axles, or both.

Applying It All In Watercrest

While these laws are set to hit the law books July 1, many HOAs will inevitably pushback a bit—specifically HOAs with governing documents that exclude the Kaufman language from their declarations, like Watercrest.

In 1977, Florida’s 3rd District Court of Appeal held in the case of Kaufman v. Shere that newly enacted amendments to the state’s Condominium Act should be incorporated into a condominium association’s declaration, but only if the association’s declaration contains specific language stipulating that such new laws, as they’re amended from time to time, will apply to the association.

Through the decades, courts have ruled similarly for HOAs, finding that newly enacted amendments to Florida’s Homeowners’ Association Act should apply to a community if the community’s declaration includes this Kaufman language.

But if an HOA’s declaration does not include that language, like Watercrest’s, only newly enacted laws that are procedural in nature, and not substantive, might apply to that community. It has been argued and determined in many cases that it’s unconstitutional to apply new substantive laws retroactively. The Florida Constitution’s Contract Clause establishes: “No bill of attainder, ex post facto law or law impairing the obligation of contracts shall be passed.”

While determining whether a new law is substantive or procedural might seem fairly straightforward, interpretation has been controversial.

But generally speaking, procedural laws relate to how, or the correct procedure in which, a rule is to be carried out. Substantive laws relate to actual changes to those rules.

It is at the moment unclear how Watercrest’s leaders will interpret the new laws.

Read the full version of the new legislation here.

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This story features only highlights of the newly signed legislature, which passed through the Florida House of Representatives and Senate as House Bill 1203. As noted, the legislation contains dozens of changes to the state’s Homeowners’ Association Act, which is found under Chapter 720 of the Florida Statutes.