DBPR’s Condominium Division Increases Disciplinary Civil Penalties Against Associations
Many community associations unwittingly operate contrary to the requirements of Florida law. Those mistakes can prove costly. Pursuant to section 718.501(1)(d)(6), F.S. and Chapter 61B-21 of the Florida Administrative Code, the Division of Florida Condominiums, Timeshare and Mobile Homes (“Division”) sets forth disciplinary guidelines and civil penalties against condominiums and cooperatives for violations of Florida statutes and administrative code in the operation and administration of the association. Effective December 5, 2018, the Division increased the potential civil penalities that can be imposed on condominiums and cooperatives who fail to follow the requirements of F.S. Ch. 718 or Ch. 719, and related administrative rules.
Boards of directors should carefully review their practices with qualified management professionals and legal counsel to ensure compliance. If a Notice of Non-Compliance is received, boards should immediately seek advice of counsel and remediate the violation. Failure to do so can result in substantial penalities, and, potentially, claims of breach of fiduciary duty.
The following violations are considered minor violations for which a civil penalty between $5 and $10, per unit, may be imposed for each violation, with a minimum total penalty of $500 and a maximum of no more than $2,500 for a single minor violation:
- Failing to disclose the beginning and ending dates of the period covered by the proposed budget.
- Failing to disclose periodic assessments for each unit type in the proposed budget.
- Distributing candidate information sheets consisting of more than one page.
- Failing to list candidates on a ballot alphabetically by surname.
- Verifying election outer envelope information prior to the election.
- Failing to disclose the amounts to fully fund reserves, the date reserves were estimated, and the manner reserves were estimated in year end financial reporting.
- Failing to disclose the method of allocating income and expenses in the annual financial statements or turnover audit.
The following non-exahustive list (for a complete list please review Chapter 61B-21 of the Florida Administrative Code) of the most commonly seen violations are considered more serious for which a civil penalty between $10 and $30, per unit, may be imposed for each violation, with a minimum total penalty of $500 (this is not an exhaustive list :
- Insufficient or incomplete accounting records.
- Assessments not sufficient to meet expenses.
- Collecting assessments less frequently than quarterly.
- Assessments not based upon the shares stated in the declaration of condominium or required by statute.
- Failing to charge interest on past-due assessments.
- Improper common element use fee.
- Failing to maintain adequate fidelity bonding.
- Improper transfer fees or security deposits.
- Levying late fees without documentary authority.
- Failing to obtain competitive bids on contracts that exceed five percent of the association’s budget.
- Failing to properly disclose a conflict of interest.
- Using association debit card for any association expense.
- Failing to provide space for name, unit number, or signature on outer envelope.
- Failing to provide, or timely provide, second notice of election or omitting ballots, envelopes, or candidate information sheets.
- Ballots not counted by impartial committee.
- Outer envelopes not checked against list of eligible voters.
- Outer envelopes opened prior to election meeting and not in presence of unit owners.
- Failing to maintain official records.
- Failing to timely provide access to records.
- Failing to include required documents on website.
In addition to the above, penalties, the Division may also seek to recover any other costs, penalties, attorney’s fees, court costs and damages allowed by law.