Articles Posted in New Legislation

With their eco-friendly promise to Mother Nature, electric vehicles have gained popularity among U.S. consumers and policymakers alike, and auto industry giants are predicting even further growth for this high-tech and environmentally-friendly segment of the market in the future.  Notwithstanding the growth thus far, one of the challenges that has been potentially inhibiting the greater dispersion of electric vehicles throughout Florida has been the lack of clarity in the law with respect to the installation and use of electric-vehicle charging stations within condominium communities.  However, Florida’s Legislature recently passed a new law facilitating an owner’s capacity to install and use an electric-vehicle charging station within their condominium building that will surely ameliorate some of these challenges.

carchrg2-300x155Before adoption of the new law, and as a result of the potential legal, engineering and financial liabilities resulting from the installation of electric-vehicle charging stations on a large scale, many boards of directors raised questions regarding the proper method to facilitate owners’ requests to install electric-vehicle charging stations within condominium building parking garages.   The new addition to Florida’s condominium association laws provides clarity to some of these questions.

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This year’s legislative session has come to an end, establishing new laws and amendments to a number of statutes regulating community associations in Florida. On March 23, 2018, Governor Rick Scott signed the following laws into effect:Florida-legislature-photo-thumb-300x198-300x198

Official Records of Condominiums and Cooperatives – § 718.111, § 719.104

  • The deadline for condominium and cooperative associations to fulfill official record requests has been extended from 5 working days to 10 working days. §718.111(12)(b), § 719.104(2)(b), Fla. Stat.
  • Electronic records relating to voting have been included in the list of official records that must be kept by condominium and cooperative associations. §718.111(12)(a)12., § 719.104(2)(a)10., Fla. Stat.
  • Condominium associations must now permanently maintain specific documents from the inception of the association, unlike the previous 7-year limitation. The following is a list of those documents: §718.111(12), Fla. Stat., §719.104(2), Fla. Stat.
  • A copy of the articles of incorporation, declaration, bylaws and rules of the association;
  • The minutes of all meetings;
  • A copy of the plans, permits, warranties, and other items provided by the developer;
  • Accounting records for the association.

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hands-and-breaking-handcuffs_shutterstock_58240561-300x184In the pursuit of association fraud and embezzlement, one of the most important aspects of the major legislation that was adopted earlier this year is the law’s effort to curb conflicts of interest by association board members and officers.

The new law provides that presumptions of conflicts of interest exist in the following circumstances:

  • A director, officer or one of their relatives enters into a contract for goods or services with the association.
  • A director or officer . . . holds an interest in a corporation, LLC, LLP or other business entity that conducts business with the association or proposes to enter into a contract or other transaction with the association.

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Florida condominium assWebsite-300x157ociations with 150 or more units, which do not manage timeshare units, must have an independent website or web portal by July 1, 2018, according to Section 718.111, Florida Statutes. These websites or web portals can either be wholly owned and operated by the association, or operated by a third-party provider.  It is important that associations that meet the 150+ unit prerequisite begin to take the necessary steps to ensure that they are in compliance with the new law by the July 1st deadline.

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Changes in condominium association laws that were recently enacted with an aim to curb fraud in associations seem to have had a strong impact in increasing the general awareness of the problems facing Florida condo communities.  A few major media outlets have followed up on the news of the law with reports about arrests involving South Florida associations.

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Several months ago the Miami Herald reported that the administrator of an Aventura condominium named Admirals Port had been arrested on charges of accepting thousands of dollars in bribes and stealing cash from the building’s laundry machines.  Donovan Staley was charged with organized fraud, grand theft and the use of a phone to plan a crime, and he could face up to five years in prison.

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The new Florida law that establishes criminal penalties for association fraudsters should help many associations to contend with suspicious and irregular activities by unscrupulous board members.

Association boards of directors control the purse strings for their condo communities, and as such they have always made for extremely appealing targets for fraudsters who conspire to assume control via their annual elections.  In a Las Vegas case, a U.S. Justice Department investigation revealed that 11 associations were defrauded of tens of millions of dollars in a board of directors takeover scheme from 2003 to 2009.  Forty-one defendants were convicted of rigging board elections through such tactics as traveling to Mexico to print phony ballots, using the master key at a condominium complex in order to remove ballots from mailboxes, and retrieving discarded ballots from condo dumpsters.

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After several years of failed attempts, the estoppel bill has become law in Florida and mandates major changes to the way community associations in the state prepare estoppel letters (also called estoppel certificates), which are legal documents detailing the amounts owed by a unit owner prior to the sale of their residence.

Below are the changes required by the new law:

  • Reduces the time associations have to respond to written or electronic requests for estoppel certificates from 15 days to 10 business days.
  • Requires each association to provide on its website the identity of a person or entity (and their street or e-mail address) to which requests for estoppel certificates may be sent.
  • Provides that estoppel certificates must be submitted by hand delivery, regular mail, or e-mail to the requestor on the date of issuance of the certificate.
  • Changes authorized association signatories for estoppel certificates from officer or agent of association to any board member, authorized agent, or authorized representative of the association, including authorized employees of the association’s management company. Continue reading

Firm partner Gary M. Mars authored an article that appeared as a “My View” guest column in today’s “Business Monday” section of the Miami Herald.  The article, which is titled “Condo Fraud Legislation Adds Teeth to Florida’s Laws,” focuses on the ramifications of the newly minted Florida law that established criminal penalties for some of the most common maneuvers of association fraudsters.  Gary’s article reads:

The new legislation, which will add teeth to the Florida laws governing the administration of condominiums by establishing criminal penalties for fraudsters, has been signed into law by Gov. Rick Scott and took effect July 1.

The El Nuevo and Channel 23 reports revealed many cases of electoral fraud and forgery, conflicts of interest, mismanagement, and rigged bidding systems at a number of condo associations in South Florida. The Miami-Dade circuit court grand jury investigation focused on some of the cases from the news reports and several others, and its findings illustrated in detail that the state’s laws and enforcement measures are inadequate. Continue reading

Firm partner Laura M. Manning-Hudson is quoted in an article that appears in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, on Gov. Rick Scott’s veto of a bill that would have relaxed fire-protection requirements for older Florida condominium towers.  The article, which is titled “Scott Cites London High-Rise Fire in Vetoing Condominium Bill,” focuses on the Governor’s stance that the recent horrific tragedy of the deadly London apartment tower blaze has spotlighted the need for strong fire safety in residential buildings.  The article reads:

Pointing to a high-rise fire in London that killed dozens of residents, Gov. Rick Scott vetoed a bill that would have eased fire-protection requirements for older condominium buildings in Florida.

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House Bill 6027 was signed by Governor Rick Scott. The Bill makes changes to the financial reporting requirements of Florida condominiums, homeowners’ associations, and cooperatives, and will be effective as of July 1, 2017.  The Bill may be summarized as follows:

  • Sections 718.111(13)(b) and 719.104(c)2, Florida Statutes, are amended to remove the requirement that an association that operates fewer than 50 units, regardless of the association’s annual revenues, shall prepare a report of cash receipts and expenditures in lieu of financial statements, and instead bases financial reporting requirements strictly on annual revenues.
  • Sections 718.111(13)(d) and 719.104(b), Florida Statutes, are amended to remove the restriction which limit the ability of a condominium and cooperative association, respectively, to waive the financial reporting requirements of such Sections for more than three consecutive years.
  • Section 720.303(7), Florida Statutes is amended to remove the requirement that a homeowners’ association that operates fewer than 50 parcels, regardless of the association’s annual revenues, may prepare a report of cash receipts and expenditures in lieu of financial statements, and instead bases financial reporting requirements strictly on annual revenues. Continue reading