Florida’s New Law Expands Condo, Homeowners’ Rights Providing New Tools for Obtaining Financial Information from Community Associations by Richard S. Fechter, JD, CFE, CAMS
Earlier this summer, Florida’s legislators passed House Bill 1021 (HB 1021), which places more rigorous governance, transparency and accountability requirements on the state’s condominium and homeowners associations and the management firms with which they work. These changes, which went into effect on July 1, 2024, also give homeowners and their legal counsel new tools for staying abreast of association business operations and investigating claims of malfeasance against association management and/or association board members.
Expanded Reporting Requirements for Community Association Managers
Among the new law’s provisions is a requirement that community association managers (CAMs) return all community association records in their possession within 20 business days of a service agreement termination or a written request, whichever occurs first. Historically, associations have been conservative in their approach to dealing with suspicions of financial misdeeds among CAMs or board members due to fears of public accusations. This new law should reduce any concerns of operational impact during a financial investigation into potential wrongdoing.
New Conflict of Interest Disclosure Requirements
HB 1021 also has new conflict-of-interest disclosure requirements mandating that when an association receives and considers bids for goods or services exceeding $2,500 from a CAM, a CAM firm or a related entity, it must also solicit multiple bids from other third-party providers. Any proposed activity involving a conflict of interest must be listed on the board’s meeting agenda and entered into the meeting minutes. Moreover, boards seeking to approve contracts with potential conflicts of interest and all management contracts must do so with a majority vote of two-thirds of the directors.
More Transparency and Improved Access to Records for Condo Owners
To help improve transparency and condominium owners’ access to records, the law expands the types of documents CAMs must maintain to include invoices and other financial records that substantiate receipts and expenditures. This is the first law in Florida to require production of the type of support oftentimes relied upon by professionals conducting financial investigations.
CAMs also have obligations to take reasonable steps to recover any lost or destroyed documents and fulfill unit owners’ requests for information along with a checklist of all the records they do and do not provide.
Finally, beginning Jan. 1, 2026, associations managing condos with a minimum of 25 units will also be required to make specific notices and records available on the community’s website or mobile app. Currently, this provision applies to associations with 150 units or more.
In addition, strict guidelines are now in place for CAMs to limit the use of unit owners’ email addresses and facsimile numbers for association business. They are, therefore, responsible for protecting this information and preventing it from being sold or shared with third parties.
Stricter Financial Reporting Provisions
Under the new law, condominium associations are prohibited from reducing the required type of financial statement for consecutive years. When it comes to funding reserves, they may now pause or reduce funding temporarily if the condominium building is uninhabitable due to a natural emergency, as determined by the local enforcement agency. Moreover, structural integrity reserve studies (SIRS) must be made available to unit owners within 45 days of completion.
Enhanced Criminal Penalties
Association directors, officers and board members who violate any provisions of the new law will face criminal penalties. This includes first-degree misdemeanors for anyone who knowingly and intentionally defaces or destroys accounting records and second-degree misdemeanors for those who knowingly, willfully and repeatedly violate any specified requirements relating to inspecting and copying an association’s official records.
While CAMs and board members must ensure they understand and abide by the new regulations under Florida’s HB 1021, condo and homeowners must also recognize their rights to access the information they need. This is critical to not only make informed decisions about association operations, but to also relay information to professionals experienced in assessing and analyzing these records for red flags or indicia of wrongdoing.
About the Authors: Richard S. Fechter, JD, CFE, CAMS, is an associate director with Berkowitz Pollack Brant’s Forensic and Advisory Services practice, where he conducts forensic accounting investigations and provides expert analysis on the economic, finance, and accounting issues related to economic damages and other business matters in complex commercial disputes. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or info@bpbcpa.com.
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