At the beginning of July, HB 1021 became official and with it came multiple new requirements for record retention and record production for condominium associations in Florida.
With it also comes hefty fines and potential criminal charges if not followed.
In the new law, the state aims at two aspects of record retention.
First, the law looks at how to handle financial records after the contract between an association and a community association management company ends.
Second, the law adds new steps for providing records to unit owners. This is where repeatedly withholding records from owners can result in a second-degree misdemeanor.
While the new law seems strict, the reality is that the new law is very specific in how to treat these records making it easy to follow to not be fined or convicted of a crime.
The attorneys at The Orlando Law Group represent more than 100 communities in Central Florida. If you live in Orlando, Winter Garden, Altamonte Springs, Kissimmee or anywhere throughout Central Florida, The Orlando Law Group is ready to help you.
How can directors be convicted of a crime?
For the most part, the records of a condominium association, like homeowners’ associations, should be open for inspection by any unit owner at almost any time. The state statutes are clear on what records are open and the limited exemptions to that rule.
For years, the statutes have been clear that records must be produced within 10 days of the request, or it is assumed the association is willfully ignoring the request. At that time, the association is fined $50 per day and can be liable for attorney fees.
Apparently, there were too many associations accepting this as a cost of doing business.
Under the new law, if an association violates the records law in the manner above twice in 12 months, the association manager or board member is removed from office and charged with a second-degree misdemeanor.
The punishment for a second-degree misdemeanor? Up to 60 days in jail, a $500 penalty and up to six months in probation.
Of course, that is easy to avoid. Simply provide the records of the association when asked.
The new law also allows public records to be on a website or a mobile app. When records are requested, the association can simply instruct an owner to go to the website to find any records, and, as long as the records are current on the website, this allows the association to avoid any fines or criminal charges.
Create a checklist of records to provide to requestors
HB 1201 added a new step for providing records to someone requesting them – a checklist of all records available for inspection that were requested and any records not available for inspection.
When the records are requested, this new checklist must be provided simultaneously to the response and, if provided, the association is presumed to have complied with the requirements of the statute.
The penalties for not providing this checklist are the same as not providing records, including the possibility of criminal charges.
Plus, there is an extra piece to this checklist not included with other records. All associations must maintain the checklists for seven years.
Breaking up is harder to do under the new law
Ending a relationship between a condominium association and its community association management company is never easy, but with the new law, an association management company could lose its license if it doesn’t follow the new statute.
The new law specifically covers financial records and puts a 20-day time limit for both the association and the management company to provide its financial records for a final review, along with the same time limit to return any records to the association.
The first step in the process under the new law is how the request for termination is given. While there is some leeway if the contract specifies how to cancel a contract, the notification must be delivered by certified mail with a return receipt given.
Once that happens, or just a written request for the records is given, the 20-day clock starts and at the end of those 20 days, the records must be returned with no excuses. Simply not returning the records is presumed to violate the new statute.
Starting on day 21, the management company can be fined $1,000 per day, up to $10,000. Plus, the manager who oversaw the community and their company could have their licenses suspended by the state.
The association must also participate, regardless of the circumstance. During that time, the association must also provide access to any records that are needed for the management company to provide the final report.
If it doesn’t provide access to the records, the association management company does not have to provide any financial report for the termination.
What to do now?
As with much of the new law, the most critical action an association can take is to review its procedures for providing records when requested. We also recommend that if an association hasn’t already done so, it should look for ways to put all of its public records online with access provided to any unit owner.
Similarly, it is important to create the template for the checklist that is now required to be provided. It is not a difficult task and one that will save the association headaches later.
The attorneys at The Orlando Law Group can help association board members and managers in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
Last Updated on July 15, 2024 by The Orlando Law Group
