A Comprehensive Guide to Key Changes and Impacts Under the Homeowners’ Association Bill of Rights

On October 1, 2023, House Bill 919, also known as the “Homeowners’ Association Bill of Rights” took effect. This comprehensive bill provides several crucial changes related to the removal of homeowners’ association (“HOA”) officers and directors, fines and suspensions for violations of the declarations, bylaws, or rules of the HOA, as well as new requirements for the comingling of funds, official records requirements, and board meeting notices. This blog provides an overview of the impact of these changes, specifically focusing on the adjustments that affect HOA officers, directors, and members.

For an in-depth examination of the legislative changes taking effect, follow this link, where Joby Birr, Partner at Jimerson Birr, shares the details and implications of the Homeowners’ Association Bill of Rights.

Ensuring Accountability: Key Changes Related to HOA Officers and Directors

The Homeowners’ Association Bill of Rights made several changes related to HOA officers and directors. Specifically, the Homeowners’ Association Bill of Rights provides that officers and directors must be removed from serving on the board of an HOA if they are charged with certain crimes, provides criminal penalties for certain actions by officers and directors related to fraudulent voting activities, provides liability for officers and directors for monetary damages for accepting kickbacks, and provides additional requirements for disclosing officer or director conflicts of interest.

Expanded Scope of Criminal Charges:
The Homeowners’ Association Bill of Rights broadens the range of criminal charges that can lead to the removal of officers and directors. Notably, offenses such as forgery of a ballot, theft or embezzlement, destruction of official records, and obstruction of justice now warrant removal.

Fraudulent Voting Activities:
Section 720.3065 establishes first-degree misdemeanor penalties for various acts constituting fraudulent voting activities, including preventing a member from voting by fraudulently changing a ballot, and using or threatening to use force, violence, or intimidating to induce or compel a member to vote or refrain from voting.

Liabilities for Kickbacks:
The bill introduces strict prohibitions against officers, directors, or managers accepting kickbacks. Apart from immediate removal from office, individuals involved may face personal liability for monetary damages.

New Conflict of Interest Requirements:

– Developer-Appointed Officers and Directors:
The legislation mandates disclosure by officers and directors appointed by developers, emphasizing transparency regarding their relationship with the developer. Disclosure must occur annually during their term.

– Rebuttable Presumption of Conflict:
Specific acts, such as entering contracts for goods or services with the association, create a rebuttable presumption of a conflict of interest, and must be disclosed at least 14 days before voting on an issue or entering into a contract that is the subject of a conflict.

Fine-Tuning Fairness: Key Changes Related to HOA Fines and Suspensions

All owners, tenants, and guests are required to comply with the declaration, bylaws, or rules of an HOA. If an owner, tenant, or guest fails to comply with the declaration, bylaws, or rules, then the HOA is permitted to levy fines or suspend certain rights. The Homeowners’ Association Bill of Rights now limits when an HOA may levy a fine or suspend rights for a violation of the declaration, bylaws, or rules of the HOA.

Limitations on Fines and Suspensions:
The bill sets constraints on when an HOA can levy fines or suspend rights for rule violations. It ensures that proper notice, including details of the alleged violation, hearing information, and the specific action needed to cure such violation, is provided to the parcel owner at his or her designated mailing or e-mail address at least 14 days in advance of the hearing.

Committee Approval Process:
Following a committee hearing, written notices detailing findings and any imposed fines or suspensions are sent to the parcel owner. The proposed penalties require committee approval by a majority vote.

Financial Clarity: Key Changes Related to HOA Funds

All HOA funds are required to be maintained separately by the developer in the HOA’s name. HOA reserve funds and operating funds are not permitted to be comingled prior to turnover, and the developer is not permitted to comingle any HOA funds with the developer’s funds or with the funds of any other HOA. In addition to those requirements, Section 720.303(8)(d), Florida Statutes now provides some additional requirements.

Separation of HOA Deposit Funds:
If an HOA collects a deposit from a member for any reason, including to pay for expenses that may be incurred as a result of construction on a member’s parcel, such funds must be maintained separately and may not be comingled with any other association funds.

Accounting and Reimbursement:
Members who provide deposits for construction or other reasons are entitled to request an accounting. The HOA must respond within 7 days of the request, and any unused funds must be reimbursed within 30 days after the completion of the project.

Record-Keeping Redefined: Key Changes Related to HOA Official Records

The Homeowners’ Association Bill of Rights amends what information the HOA must keep as part of its current roster in the official records.

Expanded Information in Official Records:
Section 720.303(4)(g), Florida Statutes, now requires the HOA maintain a designated mailing address for each homeowner, which is the member’s property address, unless the member has sent written notice to the HOA requesting that a different mailing address be used for all notices.

Meeting Transparency: Key Changes Related to HOA Board Meeting Notices

The Homeowners’ Association Bill of Rights also amends Section 720.303(2)(c)1. to provide key changes relating to HOA board meeting notices.

Agenda Item Identification:
Notices for all board meetings must now specifically identify agenda items. This ensures transparency and informs members about the topics that will be discussed during the meeting.

Advance Posting Rule:
The legislation requires notices to be posted at least 48 hours in advance, except in emergencies. This advance posting ensures that members have adequate time to prepare for and participate in board meetings.

Conclusion

The Homeowners’ Association Bill of Rights created several changes that impact HOA board members, members of an HOA, and community association managers. HOA board members and community association managers should familiarize themselves with these changes and make any changes necessary to ensure the HOA is complying with these new requirements.