Florida Senate - 2024 SB 426 By Senator Garcia 36-00295-24 2024426__ 1 A bill to be entitled 2 An act relating to community associations; creating s. 3 16.0151, F.S.; creating the Condominium Fraud 4 Investigation Pilot Program within the Department of 5 Legal Affairs in the Office of the Attorney General; 6 providing the purpose of the pilot program; 7 authorizing the department to contract with a private 8 entity to achieve the program’s purpose; requiring the 9 department to hire specified personnel under certain 10 circumstances; authorizing the submission of 11 complaints to the Office of the Condominium Ombudsman; 12 requiring the ombudsman to review such complaints and 13 take specified actions; providing powers of and 14 requirements for the department relating to the pilot 15 program; requiring that the pilot program be funded 16 from the Division of Florida Condominiums, Timeshares, 17 and Mobile Homes Trust Fund; providing for future 18 repeal of the pilot program unless it is reviewed and 19 saved from repeal by the Legislature; amending s. 20 215.22, F.S.; exempting the Division of Florida 21 Condominiums, Timeshares, and Mobile Homes Trust Fund 22 from contributing to the General Revenue Fund; 23 amending s. 718.111, F.S.; requiring the division to 24 monitor condominium associations’ compliance with 25 requirements relating to maintenance of certain 26 insurance or fidelity bonding of certain persons; 27 authorizing the division to issue fines and penalties 28 for noncompliance; creating s. 718.13, F.S.; requiring 29 the division to establish a searchable cloud-based 30 database by a specified date which contains specified 31 information regarding each condominium association in 32 this state; requiring a condominium association to 33 notify the division of any changes to the information 34 related to the association which is listed in the 35 database; requiring that the creation and 36 administration of the database be funded in part by 37 specified proceeds; amending s. 718.501, F.S.; 38 requiring the division to forward complaints received 39 alleging fraud or corruption to the Office of the 40 Condominium Ombudsman; amending s. 718.5012, F.S.; 41 revising the powers of the ombudsman; amending s. 42 718.509, F.S.; conforming a provision to changes made 43 by the act; making technical changes; creating s. 44 720.319, F.S.; creating the Office of the Homeowners’ 45 Association Ombudsman within the Division of Florida 46 Condominiums, Timeshares, and Mobile Homes of the 47 Department of Business and Professional Regulation; 48 providing for funding of the office; directing the 49 Governor to appoint the ombudsman; requiring that the 50 ombudsman be an attorney admitted to practice before 51 the Florida Supreme Court; prohibiting the ombudsman, 52 officers, or full-time employees of the office from 53 holding certain positions, engaging in certain 54 activities, or receiving certain remuneration; 55 providing for the principal location of the 56 ombudsman’s office; authorizing the ombudsman to 57 establish branch offices upon the concurrence of the 58 Governor; specifying the powers and duties of the 59 ombudsman; providing a process for monitoring 60 homeowners’ association elections; providing for the 61 appointment of an election monitor to attend an annual 62 meeting of parcel owners and to conduct the election 63 of directors; requiring that an association subject to 64 election monitoring pay all costs associated with the 65 process; requiring the division to adopt rules; 66 providing an effective date. 67 68 Be It Enacted by the Legislature of the State of Florida: 69 70 Section 1. Section 16.0151, Florida Statutes, is created to 71 read: 72 16.0151 Condominium Fraud Investigation Pilot Program.— 73 (1) The Condominium Fraud Investigation Pilot Program is 74 created within the Department of Legal Affairs, Office of the 75 Attorney General. The purpose of the pilot program is to 76 investigate condominium-related fraud and corruption in this 77 state. The department may contract with a private entity that 78 employs retired law enforcement officers who have subject matter 79 expertise in financial fraud to achieve the purpose of the pilot 80 program. If the department does not contract with a private 81 entity, the department must hire a suitable number of financial 82 investigators, investigators with previous law enforcement 83 experience, and clerical employees to staff the pilot program. 84 (2) A person may submit a complaint to the Office of the 85 Condominium Ombudsman. The ombudsman shall review all complaints 86 submitted to the office and determine which complaints to 87 forward to the department for additional analysis and 88 investigation under the pilot program. If a complaint submitted 89 to the office does not contain allegations of fraud or 90 corruption, the ombudsman must forward the complaint to the 91 Division of Florida Condominiums, Timeshares, and Mobile Homes, 92 which shall investigate claims made pursuant to s. 718.501. 93 (3) The department has the power to issue subpoenas and 94 conduct audits for investigations in furtherance of the pilot 95 program, and may administer oaths, subpoena witnesses, and 96 compel the production of books, papers, or other records 97 relevant to such investigations. If, after reviewing a complaint 98 filed under the pilot program, the department finds sufficient 99 evidence for criminal prosecution, it must refer the case to the 100 appropriate state attorney for prosecution. 101 (4) The department shall fund the pilot program from the 102 Division of Florida Condominiums, Timeshares, and Mobile Homes 103 Trust Fund as specifically appropriated annually in the General 104 Appropriations Act. 105 (5) This section is repealed October 2, 2029, unless 106 reviewed and saved from repeal through reenactment by the 107 Legislature. 108 Section 2. Paragraph (w) is added to subsection (1) of 109 section 215.22, Florida Statutes, to read: 110 215.22 Certain income and certain trust funds exempt.— 111 (1) The following income of a revenue nature or the 112 following trust funds shall be exempt from the appropriation 113 required by s. 215.20(1): 114 (w) The Division of Florida Condominiums, Timeshares, and 115 Mobile Homes Trust Fund. 116 Section 3. Paragraph (h) of subsection (11) of section 117 718.111, Florida Statutes, is amended to read: 118 718.111 The association.— 119 (11) INSURANCE.—In order to protect the safety, health, and 120 welfare of the people of the State of Florida and to ensure 121 consistency in the provision of insurance coverage to 122 condominiums and their unit owners, this subsection applies to 123 every residential condominium in the state, regardless of the 124 date of its declaration of condominium. It is the intent of the 125 Legislature to encourage lower or stable insurance premiums for 126 associations described in this subsection. 127 (h) The association shall maintain insurance or fidelity 128 bonding of all persons who control or disburse funds of the 129 association. The insurance policy or fidelity bond must cover 130 the maximum funds that will be in the custody of the association 131 or its management agent at any one time. The division shall 132 monitor compliance with this paragraph and may issue fines and 133 penalties established by the division for failure of an 134 association to maintain the required insurance policy or 135 fidelity bond. As used in this paragraph, the term “persons who 136 control or disburse funds of the association” includes, but is 137 not limited to, those individuals authorized to sign checks on 138 behalf of the association, and the president, secretary, and 139 treasurer of the association. The association shall bear the 140 cost of any such bonding. 141 Section 4. Section 718.13, Florida Statutes, is created to 142 read: 143 718.13 Database for condominium association information.— 144 (1) By July 1, 2026, the division shall establish a 145 searchable cloud-based database that contains information 146 regarding each condominium association operating within this 147 state. The database must allow a user to search the name by 148 which a condominium property is identified to find the 149 association that governs such property. At a minimum, the 150 database must include all of the following information for each 151 association: 152 (a) The names, e-mail addresses, and other contact 153 information of officers and directors of the association. 154 (b) An indication that the association is self-managed, or, 155 if not self-managed, the contact information for any person 156 licensed under part VIII of chapter 468 and responsible for 157 management of the association. 158 (c) A copy of the association’s governing documents, 159 including, but not limited to, declarations, bylaws, and rules 160 and any amendments thereto. 161 (d) A copy of the association’s adopted annual budget, in a 162 file format that is compatible with the database, which includes 163 the amount and purpose of any monthly assessments and current or 164 pending special assessments levied by the association. 165 (e) A copy of any studies regarding funds in reserve 166 accounts held by the association or any reports regarding the 167 physical inspection of properties maintained by the association, 168 including any structural integrity reserve studies conducted 169 under s. 718.112(2)(g) of such properties. 170 (2) An association must notify the division of any changes 171 to the information related to the association which is included 172 in the database within 30 days after such changes occur. 173 (3) Expenses associated with the creation and 174 administration of the database must be funded in part by 175 proceeds from the annual fee paid by associations pursuant to s. 176 718.501(2)(a). 177 Section 5. Subsection (1) of section 718.501, Florida 178 Statutes, is amended to read: 179 718.501 Authority, responsibility, and duties of Division 180 of Florida Condominiums, Timeshares, and Mobile Homes.— 181 (1) The division may enforce and ensure compliance with 182 this chapter and rules relating to the development, 183 construction, sale, lease, ownership, operation, and management 184 of residential condominium units and complaints related to the 185 procedural completion of milestone inspections under s. 553.899. 186 In performing its duties, the division has complete jurisdiction 187 to investigate complaints and enforce compliance with respect to 188 associations that are still under developer control or the 189 control of a bulk assignee or bulk buyer pursuant to part VII of 190 this chapter and complaints against developers, bulk assignees, 191 or bulk buyers involving improper turnover or failure to 192 turnover, pursuant to s. 718.301. However, after turnover has 193 occurred, the division has jurisdiction to investigate 194 complaints related only to financial issues, elections, and the 195 maintenance of and unit owner access to association records 196 under s. 718.111(12), and the procedural completion of 197 structural integrity reserve studies under s. 718.112(2)(g). If 198 the division receives a complaint about an association which 199 alleges fraud or corruption, the division must forward the 200 complaint to the Office of the Condominium Ombudsman pursuant to 201 s. 16.0151. 202 Section 6. Subsection (10) of section 718.5012, Florida 203 Statutes, is amended, and subsections (11) through (13) are 204 added to that section, to read: 205 718.5012 Ombudsman; powers and duties.—The ombudsman shall 206 have the powers that are necessary to carry out the duties of 207 his or her office, including the following specific powers: 208 (10) To appoint an election monitor to attend the annual 209 meeting of the unit owners and conduct the election of directors 210 if 15 percent of the total voting interests in a condominium 211 association, or six owners, whichever is greater, make such a 212 petition to the ombudsman.Fifteen percent of the total voting213interests in a condominium association, or six unit owners,214whichever is greater, may petition the ombudsman to appoint an215election monitor to attend the annual meeting of the unit owners216and conduct the election of directors.The ombudsman shall 217 appoint a division employee, a person or persons specializing in 218 condominium election monitoring, or an attorney licensed to 219 practice in this state as the election monitor. All costs 220 associated with the election monitoring process shall be paid by 221 the association. The division shall adopt a rule establishing 222 procedures for the appointment of election monitors and the 223 scope and extent of the monitor’s role in the election process. 224 (11) To void an election if the ombudsman determines that a 225 violation of this chapter has occurred relating to condominium 226 elections. 227 (12) To petition the court to appoint a receiver if the 228 appointment of a receiver is in the best interests of the 229 association or owners. 230 (13) To issue subpoenas and conduct audits for 231 investigations for the purposes of the Condominium Fraud 232 Investigation Pilot Program established under s. 16.0151. 233 Section 7. Subsection (2) of section 718.509, Florida 234 Statutes, is amended to read: 235 718.509 Division of Florida Condominiums, Timeshares, and 236 Mobile Homes Trust Fund.— 237 (2) All moneys collected by the division from fees, fines, 238 or penalties or from costs awarded to the division by a court or 239 administrative final order mustshallbe paid into the Division 240 of Florida Condominiums, Timeshares, and Mobile Homes Trust 241 Fund. The Legislature shall appropriate funds from this trust 242 fund sufficient to administercarry out the provisions ofthis 243 chapter and theprovisions oflaw with respect to each category 244 of business covered by the trust fund. The division shall 245 maintain separate revenue accounts in the trust fund for each of 246 the businesses regulated by the division. The division shall 247 provide for the proportionate allocation among the accounts of 248 expenses incurred by the division in the performance of its 249 duties with respect to each of these businesses. As part of its 250 normal budgetary process, the division shall prepare an annual 251 report of revenue and allocated expenses related to the 252 operation of each of these businesses, which may be used to 253 determine fees charged by the division.This subsection shall254operate pursuant to the provisions of s. 215.20.255 Section 8. Section 720.319, Florida Statutes, is created to 256 read: 257 720.319 Office of the Homeowners’ Association Ombudsman.— 258 (1) ADMINISTRATION; APPOINTMENT; LOCATION.— 259 (a) There is created the Office of the Homeowners’ 260 Association Ombudsman to be located, for administrative 261 purposes, within the Department of Business and Professional 262 Regulation. The functions of the office shall be funded by the 263 General Appropriations Act. 264 (b) The Governor shall appoint the ombudsman. The ombudsman 265 must be an attorney admitted to practice before the Florida 266 Supreme Court and shall serve at the pleasure of the Governor. 267 The ombudsman, an officer, or a full-time employee of the 268 ombudsman’s office may not actively engage in any other business 269 or profession that directly or indirectly relates to or 270 conflicts with his or her work in the ombudsman’s office; serve 271 as the representative or an executive, officer, or employee of 272 any political party, executive committee, or other governing 273 body of a political party; receive remuneration for activities 274 on behalf of any candidate for public office; or engage in 275 soliciting votes or other activities on behalf of a candidate 276 for public office. The ombudsman, an officer, or a full-time 277 employee of the ombudsman’s office may not become a candidate 278 for election to public office unless he or she first resigns 279 from his or her office or employment. 280 (c) The ombudsman shall maintain his or her principal 281 office at a location convenient to the department, which will 282 enable the ombudsman to expeditiously carry out the duties and 283 functions of his or her office. The ombudsman may establish 284 branch offices elsewhere in this state upon the concurrence of 285 the Governor. 286 (2) POWERS AND DUTIES.—The ombudsman has the powers 287 necessary to carry out the duties of his or her office, 288 including, but not limited to: 289 (a) Having access to and use of all files and records of 290 the division. 291 (b) Employing professional and clerical staff as necessary 292 for the efficient operation of the office. 293 (c) Preparing and issuing reports and recommendations to 294 the Governor, the department, the President of the Senate, and 295 the Speaker of the House of Representatives on any matter or 296 subject within the jurisdiction of this chapter. 297 (d) Acting as a liaison between the department, parcel 298 owners, boards of directors, board members, community 299 association managers, and other affected parties. The ombudsman 300 shall develop policies and procedures to assist parcel owners, 301 boards of directors, board members, community association 302 managers, and other affected parties in understanding their 303 rights and responsibilities as set forth in this chapter and in 304 the governing documents of their respective associations. The 305 ombudsman shall coordinate and assist in the preparation and 306 adoption of educational and reference materials and shall 307 endeavor to coordinate with private or volunteer providers of 308 such services so that the availability of such resources is made 309 known to the largest possible audience. 310 (e) Monitoring and reviewing procedures and disputes 311 concerning association elections or meetings, including, but not 312 limited to, recommending that the division pursue enforcement 313 action in any manner if there is reasonable cause to believe 314 that election misconduct has occurred, as well as reviewing 315 secret ballots cast at a vote of the association. 316 (f) Making recommendations to the division for changes in 317 rules and procedures for the filing, investigation, and 318 resolution of complaints filed by parcel owners, associations, 319 or managers. 320 (g) Providing resources to assist members of boards of 321 directors and officers of associations to carry out their powers 322 and duties consistent with this chapter and the governing 323 documents of their respective associations. 324 (h) Encouraging and facilitating voluntary meetings between 325 parcel owners, boards of directors, board members, community 326 association managers, and other affected parties when the 327 meetings may assist in resolving a dispute within a homeowners’ 328 association before a person submits a dispute for a formal or 329 administrative remedy. The ombudsman shall act as a neutral 330 resource for the rights and responsibilities of parcel owners, 331 associations, and board members. 332 (i) Assisting with the resolution of disputes between 333 parcel owners and the association, or between parcel owners, if 334 applicable. 335 (j) Appointing an election monitor. 336 (3) ELECTION MONITORING.— 337 (a) Fifteen percent of the total voting interests in a 338 homeowners’ association, or six parcel owners, whichever is 339 greater, may petition the ombudsman to appoint an election 340 monitor to attend the annual meeting of the parcel owners and 341 conduct the election of directors. 342 (b) The ombudsman shall appoint a division employee, a 343 person who specializes in homeowners’ association election 344 monitoring, or an attorney licensed to practice in this state as 345 the election monitor. 346 (c) The association shall pay all costs associated with the 347 election monitoring process. 348 (d) The division shall adopt rules establishing procedures 349 for the appointment of election monitors and the scope and 350 extent of the monitor’s role in the election process. 351 Section 9. This act shall take effect July 1, 2024.