HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/CS/HB 1021 Community Associations
SPONSOR(S): Commerce Committee, State Administration & Technology Appropriations Subcommittee,
Regulatory Reform & Economic Development Subcommittee, Lopez, V. and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1178
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 14 Y, 0 N, As CS Larkin Anstead
Subcommittee
2) State Administration & Technology 14 Y, 0 N, As CS Helpling Topp
Appropriations Subcommittee
3) Commerce Committee 16 Y, 0 N, As CS Larkin Hamon
SUMMARY ANALYSIS
Related to community association managers (CAMs) and CAM firms, the bill:
Requires a CAM to return all community association records in its possession within 20 days of the
termination of a services agreement or a written request whichever occurs first.
Provides conflict of interest disclosure requirements and a process for associations to follow when approving
contracts with a CAM with a possible conflict of interest.
Related to official records, the bill:
Provides that on January 1, 2026, condominium associations with 25 units or more will be required to
maintain specified records available for download on the association’s website or by an application on a
mobile device.
Requires associations to maintain additional accounting records (e.g., invoices and other documentation that
substantiates any receipt or expenditure).
Provides that a condominium association may satisfy a request for access to records by making the records
available for download on the association website or through an application on a mobile device.
Provides criminal penalties related to the association refusing to release or destroy ing official records.
The bill:
Provides criminal penalties for accepting a kickback and for fraudulent vot ing activities.
Requires directors to annually complete continuing education on recent changes to the condominium laws
and rules.
Requires a residential condominium association of 10 or more units to meet once each quarter for the
purpose of responding to inquiries from members and informing members on the state of the condominium.
Allows the condominium board with regard to the structural integrity reserve study to recommend a
temporary pause in the reserve funding or reduced funding in certain circumstanc es.
Clarifies and expands the jurisdiction of the Division of Condominiums, Timeshares and Mobile Homes
(Division) after turnover occurs.
Requires Division employees to refer suspected criminal activity to law enforcement agencies.
Requires the Division to create a database on its website of the condominium and cooperative associations
that have completed their structural integrity reserve study by January 1, 2025.
Requires every contract for sale of a unit that is located within a condominium that is within a portion of
a building or within a building other than a building consisting entirely of a single condominium , to
include a certain disclosure.
The bill provides appropriations and staff to implement the bill. See Fiscal Analysis and Economic Impact Statement.
The bill has an effective date of July 1, 2024, unless otherwise expressly provided.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Community Associations – Background
The Florida Division of Condominiums, Timeshares and Mobile Homes (Division), within the
Department of Business and Professional Regulation (DBPR), provides consumer protection for Florida
residents living in regulated communities through education, complaint resolution, mediation and
arbitration, and developer disclosure. The Division has regulatory authority over the following business
entities and individuals:
Condominium associations;
Cooperative associations;
Florida mobile home parks and related associations;
Vacation units and timeshares;
Yacht and ship brokers and related business entities; and
Homeowners' associations (limited to arbitration of election and recall disputes).
Community Association Managers- Current Situation
Community association managers (CAMs) are licensed and regulated by the Department of Business
and Professional Regulation (DBPR) pursuant to part VIII of ch. 468, F.S. Community association
managers are regulated by the seven-member Regulatory Council of Community Association
Managers at DBPR.1
Section 468.431(2), F.S., defines “community association management” to mean:
any of the following practices requiring substantial specialized knowledge, judgment, and
managerial skill when done for remuneration and when the association or associations
served contain more than 10 units or have an annual budget or budgets in excess of
$100,000: controlling or disbursing funds of a community association, preparing budgets
or other financial documents for a community association, assisting in the noticing or
conduct of community association meetings, and coordinating maintenance for the
residential development and other day-to-day services involved with the operation of a
community association.
A license is not required for a person who:
Performs clerical or ministerial functions under the direct supervision and control of a licensed
manager, or
Performs only the maintenance of a community association and does not assist in any of the
management services.2
To become licensed as a CAM, a license applicant must:
Submit to a background check to determine good moral character,
Attend a DBPR-approved in-person training prior to taking the examination, and
Pass the licensure examination.3
CAMs must also complete not more than 10 hours of continuing education hours as approved by the
council to renew and maintain their licenses.4
1 S. 468.4315(1), F.S.
2 S. 468.431(2), F.S.
3 S. 468.433, F.S.
4 S. 468.4336 and 468.4337, F.S.
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Section 468.4334, F.S., outlines the professional practice standards for CAMs and CAM firms, including
the duty to “discharge the duties performed on behalf of the association as authorized by [ch. 468,
F.S.], 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.”
The license of a CAM or CAM firm may be disciplined, including a suspension or revocation of their
license, or denial of a license renewal, for the grounds specified in s. 468.436, F.S., including:
Committing acts of gross misconduct or gross negligence in connection with the profession.
Contracting, on behalf of an association, with any entity in which the CAM has a financial interest
that is not disclosed.
Violating any provision of chapter 718 (relating to condominiums), chapter 719 (relating to
cooperatives), or chapter 720 (relating to homeowners’ associations) during the course of
performing community association management services pursuant to a contract with a community
association.5
Community Association Managers- Effect of the Bill
Return of Official Records
The bill provides additional professional practice standards for CAMs and CAM firms. The bill requires
CAMs and CAM firms to return all community association official records in its possession within 20
days of the termination of a contractual agreement to provide CAM services or a written request for the
return of the official records, whichever occurs first.
Failure of a CAM or a CAM firm to timely return all of the official records within its possession to the
community association creates a rebuttable presumption that such CAM or CAM firm willfully failed to
comply. If the CAM or CAM firm fails to timely return the applicable official records to the community
association, the CAM or CAM firm will be subjected to:
suspension of its license under s. 468.436, F.S., and
a civil penalty of $1,000 per day (up to 10 days) which is assessed beginning on the 21st day after
the termination of a contractual agreement receipt of a written request from the association for
return of the records.
The bill requires such notice of termination to be sent by:
Certified mail;
Return receipt request; or
In the manner required in the management contract.
The CAM or CAM firm may retain, up to 20 business days, those records necessary to complete an
ending financial statement or report. Failure of the association to provide access or retention of
accounting records to prepare the statement or report shall relieve such CAM or CAM firm of any
further responsibility or liability for the preparation of the statement or report.
The bill provides that such time periods above do not apply to CAMs related to management of a
timeshare plan created under chapter 721, but that the time periods provided in s. 721.14(4)(b), F.S.,
apply in those situations.
Conflicts of Interest
The bill requires disclosure of any activity that may reasonably be construed to be a conflict of interest
by the CAMS and creates a conflict of interest disclosure process for CAMs and CAM firms, including
directors, officers, persons with a financial interest in a CAM firm, or a relative6 of such persons.
5 S. 468.436(2)(b)5.-7., F.S.
6 The term “relative” in the bill means a relative within the third degree of consanguinity by blood or by marriage.
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If any of the following exist without providing prior notice, there is a presumption that there is a conflict
of interest unless proven otherwise:
Contracts for goods or services with the association.
Receiving compensation or anything of value from a business entity that conducts business with
the association or proposes to enter into a contract or other transaction with the association.
Under the bill, if the association receives and considers a bid to provide a good or service that exceeds
$2,500, other than a CAM service, from an individual with a financial interest in the community
association, the association must also solicit multiple bids from other third-party providers of such good
or service.
If an individual discloses that he or she engages in an activity that is a conflict of interest as described
above:
Such activity must be listed on all contracts;
Transactional documents related to the proposed activity must be attached to the meeting agenda
of the next board meeting; and
The disclosures of a possible conflict of interest must be entered into the written minutes of the
meeting.
The bill provides:
A contract or other transaction with a possible conflict of interest must be approved by an
affirmative vote of two-thirds of all directors present.
A contract or other transaction with a possible conflict of interest must be disclosed to the
members at the next regular or special meeting.
The bill allows the association to cancel its community association management contract with the CAM
or the CAM firm, if the board finds that a CAM or a CAM firm, including directors, officers, and persons
with a financial interest in a CAM firm, or a relative of such persons have a conflict of interest. If such
contract is canceled, the association:
would only be liable for the reasonable value of the goods and services provided up to the time of
cancellation, and
would not be liable for any termination fees, liquidated damages, or other form of penalty for such
cancellation.
Under the bill, if a CAM or a CAM firm has previously disclosed a conflict of interest in an existing
management contract entered into between the board of directors and the CAM or CAM firm, the
conflict of interest does not need to be additionally noticed and voted on during the term of the contract
between the community association and the CAM or management firm, but must be noticed and voted
on upon renewal.
The bill provides:
A procedure for terminating a contract if a conflict of interest was not properly disclosed.
A contract is voidable and terminates upon the association filing a written notice of the termination
of the contract with its board of directors.
The notice must contain the consent of at least 20 percent of the voting interests of the association
if:
o an association enters a contract with an individual or the individual has an interest in an
activity that is a possible conflict of interest, and
o such activity has not been properly disclosed as a conflict of interest or potential conflict of
interest.
The bill revises the disciplinary grounds for CAMs and CAM firms to provide a disciplinary ground on
the basis of a CAM or CAM firm’s failure to disclose a conflict of interest as required by s. 468.4335,
F.S.
The bill makes conforming changes.
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Condominiums and Cooperatives Background
Condominiums
A condominium is a form of real property ownership created under ch. 718, F.S., the “Condominium
Act.” Persons own condominium units along with an undivided right of access to the condominium’s
common elements.7 A condominium is created by recording a declaration of condominium, which
governs the relationship between condominium unit owners and the condominium association, in the
public records of the county where the condominium is located. 8 All unit owners are members of the
condominium association, and the association is responsible for common elements operation and
maintenance.9 The condominium association is overseen by an elected board of directors, commonly
referred to as a “board of administration,” which is responsible for the association’s administration.10
Cooperatives
A cooperative is a form of property ownership created under ch. 719, F.S., the “Cooperative Act,” in
which the real property is owned by the cooperative association and individual units are leased to the
residents, who own shares in the association.11 The lease payment amount is the pro-rata share of the
cooperative’s operational expenses. Cooperatives operate similarly to condominiums, and the laws
regulating cooperatives are largely identical to those regulating condominiums.
Fiduciary Relationship
Board members and officers of a condominium or cooperative association have a fiduciary relationship
with the unit owners in their condominium or cooperative. This fiduciary relationship requires board
members and officers to act in good faith and in the best interests of the unit owners. Under the
“business judgment rule,” the board must act within the scope of its authority, in a reasonable manner,
and must perform its duties with the care and responsibility that an ordinarily prudent person would
exercise under similar circumstances.12
Board members and officers can be the subject of a cause of action for a breach of their fiduciary duty.
However, a person bringing such action must prove that the board member or officer had a fiduciary
duty that was breached that caused damages and rose to the level of criminal activity, fraud, self-
dealing, unjust enrichment, or other improper personal benefit. 13
To determine if a board member or officer breached his or her fiduciary duty, Florida courts look to see
if the board member or officer violated the business judgment rule by determining if the association had
the contractual or statutory authority to perform the relevant act and if the decision was reasonable. The
business judgment rule generally will protect association board members and officers, as long those
board members or officers act within the scope of their authority and in a reasonable manner. 14
It is a breach of a board member or officer’s fiduciary duty if an association fails to complete a
milestone inspection or structural integrity reserve study.
Milestone Inspections- Current Situation
7 S. 718.103(11), F.S.
8 S. 718.104(2), F.S.
9 S. 718.103(2), F.S.
10 S. 718.103(4), F.S.
11 S. 719.103(2), (26), F.S.