Customer Alert: Governor DeSantis Signs HB 1203 Relating to Homeowners Associations and Licensed Community Association Managers | Shumaker, Loop & Kendrick, LLP

Governor DeSantis signed House Bill 1203 (2024), effective July 1, 2024. and makes a number of significant changes to the statutes governing Florida’s community associations and homeowner’s associations (HOAs). Changes include:

1. Amends section 720.303 regarding the liability of directors and officers and record keeping as follows:
2. 1. Explains the role of officers and directors in Florida Statutes Section 617.0830, which provides as follows:
      1. A director should perform his or her duties in good faith, caring for an ordinary, prudent person or manager who may reasonably be believed to be in the best interests of the association.
      2. In the performance of his duties, the director may rely on information or opinions of employees believed to be reliable and competent, legal advisors, accountants or other professionals and commissions, if the reliance is justified.
      3. A director shall not be liable for any action taken or failure to act as a director where he has discharged his duty under this section.
   2. Requires associations to retain records for longer than seven years if governing documents require longer retention.
   3. Requires associations with at least 100 parcels of land to post certain official records on a website established for the association or otherwise make documents available through a mobile application by January 1, 2025, redacted as necessary. The website must contain a subpage or portal that is password-protected and inaccessible to the general public. The required records are:
      1. Declaration of Agreements and Amendments;
      2. Statute and changes;
      3. Regulations and their changes;
      4. Current rules;
      5. Contracts and offers;
      6. Annual budget;
      7. Financial reports;
      8. Insurance policy;
      9. Director certificates;
      10. All contracts, notices, minutes and other related documents constituting a conflict of interest (i.e. contracts with directors, their family or entities in which they have shares);
      11. Notices of membership meetings, agendas and any documents requiring attention should be placed in prominent links on the home page;
      12. Notices and attachments to Management Board meetings.
3. 4. Requires the Association to adopt written policies governing the manner and duration of retention of official records and to post those policies/policies on its website.
4. Section changes 720.303(5) concerns access to the official records of the homeowners association and their production:
   1. Provides that a director who knowingly, willfully and repeatedly violates the Association’s obligation to make official records available for inspection with intent to harm the Association or any member is guilty of a misdemeanor of the second degree.
   2. Provides that any person who knowingly and willfully destroys accounting records or fails to create or maintain required accounting records with intent to harm the Association or a member is guilty of a misdemeanor of the first degree.
   3. Provides that any person who willfully and knowingly fails to produce records of the Association with intent to avoid detection, arrest, trial or punishment is guilty of a crime of the third degree.
   4. Requires homeowners associations to submit records to law enforcement agencies within five days of receiving a subpoena, unless the subpoena specifies a later date. It requires the association to “assist law enforcement in the investigation to the extent permitted by law.”
5. Amends section 720.303 regarding HOA financial disclosures:
   1. Requires an association with at least 1,000 lots to prepare audited financial statements, regardless of total annual revenues.
   2. Prohibits the association from making decisions to prepare financial statements by reviewing audited financial statements for subsequent years.
   3. Prohibits an affiliate from using debit cards issued on behalf of the Association or charged directly to the Association. Specifies that a person who uses an Association debit card for a purpose other than a lawful obligation of the Association commits theft.
   4. It allows the owner of the plot to submit a written request for a detailed settlement of all liabilities to the Association, which is obliged to provide such information within 15 business days. If the Association fails to provide this, the Board will forfeit any outstanding penalty that is more than 30 days past due and for which the Association has not previously notified in writing that the penalty has been imposed. Once the plot owner submits such an application, he or she cannot submit another one for at least 90 days.
6. Amends section 720.3033 relating to the educational and ethical requirements of the Management Board:
   1. This is required by newly elected directors have to Attend Board certification classes within 90 days of election. Removes the alternative option for directors to sign a certificate stating that they have read the governing documents and will comply with them.
   2. Requires directors to attend an additional Board certification education course every four years.
   3. Creates annual continuing education requirements for principals:
      1. If a community has fewer than 2,500 lots, directors must complete four hours of continuing education per year.
      2. If a municipality has more than 2,500 lots, directors must complete eight hours of continuing education annually.
   4. Provides that any officer, director or manager who knowingly solicits, offers to accept or accepts a bribe is guilty of a crime of the third degree.
   5. Clarifies that when a director or officer is removed due to being accused of providing information or charged with certain crimes, a vacancy is declared. According to Fla. Stat. knot. 720.3033(b), the Board is required to fill the vacancy.
7. Amends section 720.3035 regarding the enforcement of architectural standards:
   1. Provides that the association or Architectural Review Commission (ARC) must reasonably and fairly apply and enforce architectural standards.
   2. Prohibits an association or ARC from restricting or imposing requirements on the interior of a facility if it is not visible from the frontage, adjacent lot, common area or golf course.
   3. Prohibits the Association from requiring approval of plans and specifications for air conditioning, refrigeration, heating or ventilation systems if they are not visible from the front of the lot, adjacent lot, common area or golf course and if they are substantially similar to a system approved or recommended by the Association or ARC.
   4. Provides that if the Association or ARC denies a request for a modification, it must deliver written notice to the parcel setting forth the rule/covenant upon which the Association or committee relied and stating the aspect or portion of the proposed improvement that is not consistent with the rule/covenant.
8. Amends section 720.305(2) regarding financial penalties and suspension:
   1. Requires a hearing before the covenants commission to be held within 90 days after a 14-day notice of the right to a hearing is sent to the lot owner and the commission.
   2. Permits fine/suspension hearings to be convened by telephone or other electronic means if specified in the owner’s notice.
   3. Requires the commission, within seven days of the hearing, to notify the owner and, if applicable, the tenant, licensee, or invitee of the commission’s findings, including approved/disapproved fines and suspensions and how the violation will be cured, as applicable, “or complied with.” suspension or the deadline by which the penalty must be paid.”
   4. Prohibits the imposition of a fine or suspension if a violation is corrected before a hearing.
   5. Requires the commission to set a fine payment deadline of at least 30 days from the date of delivery of notice of the fine to the owner.
   6. Prohibits the assessment of attorney’s fees or costs to an owner based on action taken on a fine prior to the fine’s payment date, but allows recovery of fees and costs beginning after the due date.
9. Amends section 720.305(7) Prohibit an association from imposing fines or suspensions for leaving trash at the curb 24 hours before/after pickup time or for leaving holiday decorations or lights longer than allowed in the governing documents, unless they are left for more than one week after a written notice of violation by HOA owner.
10. Amends section 720.3065(2) to commit the following acts, constituting first-degree misdemeanors: Knowingly aiding, abetting, or advising a person to commit fraudulent voting activity in connection with an association election, or arranging, conspiring to commit such acts, or having knowledge of the fraudulent activity and assisting the perpetrator in order to avoid detection, arrest, trial or punishment.
11. Amends section 720.3075 ensuring that Regulatory Documents cannot prohibit:
12. 1. Parking personal vehicles, including pickup trucks, in a driveway or in any area Owner, tenant, guest or invitee has the right to park in accordance with state and local regulations;
    2. Parking a company vehicle that is not a commercial motor vehicle in a driveway;
    3. Inviting a contractor or employee to the owner’s plot just because
       1. the contractor is not on the preferred supplier list, or
       2. the contractor does not have any professional qualifications or qualifications.
    4. Requiring a contractor or employee to provide proof of licensing before being allowed entry;
    5. Operating a vehicle that is not a commercial motor vehicle as defined in Section 320.01(25) of the Florida Statutes, pursuant to state traffic laws, on a public road or on a property owned by a property owner.
13. Amends section 720.3085(3) to explain simple interest charged at a rate of 18 percent and which cannot be accumulated (i.e. interest on interest).
14. Amends section 720.317 to explicitly enable owners to electronically consent to online voting.
15. Amends section 720.318 providing that an association cannot prohibit an emergency service from parking its assigned vehicle in an area where the owner would have the right to park, “including on public roads or rights-of-way.” (previous law was limited to law enforcement vehicles only).
16. Changes Fla. Stat. knot. 468.4334 request the head of the community association:
    1. Attend at least one Board or membership meeting per year;
    2. Provide members and post on the Association’s website: the name and contact information of each manager or management company representative assigned to the Association, their hours of availability, and a summary of their responsibilities. This information must be updated within 14 business days of any change to such information.
    3. Upon request, provide each member with a copy of the Management Agreement.
17. Amends section 468.4337 Prohibiting the Community Association Managers Regulatory Board from requiring more than 10 hours of continuing education per year for license renewal. In each two-year period, five hours of continuing education must be devoted specifically to homeowners associations, and three of the five hours must be related to recordkeeping.

ACTION ELEMENTS: Based on these statutory changes, many associations will have the following actions:

1. Reviewing Board certification documentation and developing a compliance schedule for each director.
2. Review ARC procedures and forms for compliance with new requirements.
3. Review financial penalty procedures and forms for compliance with new requirements.
4. Review parking requirements for compliance with new restrictions.
5. In the case of housing communities with 100 or more plots, no later than July 1, 20251) adopt a policy of posting records on the website and 2) create and post records on the website.