Florida Senate - 2022                                     SB 274
       
       
        
       By Senator Rodriguez
       
       
       
       
       
       39-00119B-22                                           2022274__
    1                        A bill to be entitled                      
    2         An act relating to the Condominium Fraud Investigation
    3         Pilot Program; creating s. 16.81, F.S.; creating the
    4         Condominium Fraud Investigation Pilot Program within
    5         the Department of Legal Affairs in the Office of the
    6         Attorney General; providing a purpose for the program;
    7         authorizing the department to contract with a private
    8         entity to achieve the purpose of the program;
    9         requiring the department to hire specified personnel;
   10         authorizing a person to submit a complaint to the
   11         Office of the Condominium Ombudsman; requiring the
   12         ombudsman to review complaints and take specified
   13         actions; providing powers of and requirements for the
   14         department relating to the pilot program; requiring
   15         that the pilot program be funded from the Division of
   16         Florida Condominiums, Timeshares, and Mobile Homes
   17         Trust Fund; providing for future repeal of the program
   18         unless reviewed and saved from repeal by the
   19         Legislature; amending s. 718.501, F.S.; requiring the
   20         Division of Florida Condominiums, Timeshares, and
   21         Mobile Homes to forward complaints received alleging
   22         fraud or corruption to the office; amending s.
   23         718.5012, F.S.; revising the powers of the ombudsman;
   24         providing an effective date.
   25          
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Section 16.81, Florida Statutes, is created to
   29  read:
   30         16.81 The Condominium Fraud Investigation Pilot Program.—
   31         (1)The Condominium Fraud Investigation Pilot Program is
   32  created within the Department of Legal Affairs in the Office of
   33  the Attorney General. The purpose of the program is to
   34  investigate condominium-related fraud and corruption in Broward,
   35  Miami-Dade, and Monroe Counties. The department may contract
   36  with a private entity that employs retired law enforcement
   37  officers who have subject matter expertise in financial fraud to
   38  achieve the purpose of the program. The department shall hire
   39  five law enforcement officers certified under chapter 943 to
   40  carry out the purpose of the program. If the department does not
   41  contract with a private entity, the department must hire three
   42  financial investigators, five investigators with previous law
   43  enforcement experience, and three clerical employees to staff
   44  the program.
   45         (2)A person may submit a complaint to the Office of the
   46  Condominium Ombudsman. The ombudsman shall review all complaints
   47  submitted to the office and determine which complaints to
   48  forward to the department for additional analysis and
   49  investigation under the program. If a complaint submitted to the
   50  office does not contain allegations of fraud or corruption, the
   51  ombudsman must forward the complaint to the Division of Florida
   52  Condominiums, Timeshares, and Mobile Homes.
   53         (3)The department has the power to subpoena, audit, and
   54  investigate for the purposes of the program. The department may
   55  administer oaths, subpoena witnesses, and compel the production
   56  of books, papers, or other records relevant to investigations it
   57  conducts. If, after reviewing a complaint under the program, the
   58  department finds sufficient evidence for criminal prosecution,
   59  it must refer the case to the appropriate state attorney for
   60  prosecution.
   61         (4)The program must be funded annually from the Division
   62  of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund
   63  with funds specifically appropriated in the General
   64  Appropriations Act.
   65         (5)This section is repealed October 2, 2027, unless
   66  reviewed and saved from repeal through reenactment by the
   67  Legislature.
   68         Section 2. Subsection (1) of section 718.501, Florida
   69  Statutes, is amended to read:
   70         718.501 Authority, responsibility, and duties of Division
   71  of Florida Condominiums, Timeshares, and Mobile Homes.—
   72         (1) The division may enforce and ensure compliance with
   73  this chapter and rules relating to the development,
   74  construction, sale, lease, ownership, operation, and management
   75  of residential condominium units. In performing its duties, the
   76  division has complete jurisdiction to investigate complaints and
   77  enforce compliance with respect to associations that are still
   78  under developer control or the control of a bulk assignee or
   79  bulk buyer pursuant to part VII of this chapter and complaints
   80  against developers, bulk assignees, or bulk buyers involving
   81  improper turnover or failure to turnover, pursuant to s.
   82  718.301. However, after turnover has occurred, the division has
   83  jurisdiction to investigate complaints related only to financial
   84  issues, elections, and the maintenance of and unit owner access
   85  to association records under s. 718.111(12). If the division
   86  receives a complaint alleging fraud or corruption, the division
   87  must forward the complaint to the Office of the Condominium
   88  Ombudsman.
   89         (a)1. The division may make necessary public or private
   90  investigations within or outside this state to determine whether
   91  any person has violated this chapter or any rule or order
   92  hereunder, to aid in the enforcement of this chapter, or to aid
   93  in the adoption of rules or forms.
   94         2. The division may submit any official written report,
   95  worksheet, or other related paper, or a duly certified copy
   96  thereof, compiled, prepared, drafted, or otherwise made by and
   97  duly authenticated by a financial examiner or analyst to be
   98  admitted as competent evidence in any hearing in which the
   99  financial examiner or analyst is available for cross-examination
  100  and attests under oath that such documents were prepared as a
  101  result of an examination or inspection conducted pursuant to
  102  this chapter.
  103         (b) The division may require or permit any person to file a
  104  statement in writing, under oath or otherwise, as the division
  105  determines, as to the facts and circumstances concerning a
  106  matter to be investigated.
  107         (c) For the purpose of any investigation under this
  108  chapter, the division director or any officer or employee
  109  designated by the division director may administer oaths or
  110  affirmations, subpoena witnesses and compel their attendance,
  111  take evidence, and require the production of any matter which is
  112  relevant to the investigation, including the existence,
  113  description, nature, custody, condition, and location of any
  114  books, documents, or other tangible things and the identity and
  115  location of persons having knowledge of relevant facts or any
  116  other matter reasonably calculated to lead to the discovery of
  117  material evidence. Upon the failure by a person to obey a
  118  subpoena or to answer questions propounded by the investigating
  119  officer and upon reasonable notice to all affected persons, the
  120  division may apply to the circuit court for an order compelling
  121  compliance.
  122         (d) Notwithstanding any remedies available to unit owners
  123  and associations, if the division has reasonable cause to
  124  believe that a violation of any provision of this chapter or
  125  related rule has occurred, the division may institute
  126  enforcement proceedings in its own name against any developer,
  127  bulk assignee, bulk buyer, association, officer, or member of
  128  the board of administration, or its assignees or agents, as
  129  follows:
  130         1. The division may permit a person whose conduct or
  131  actions may be under investigation to waive formal proceedings
  132  and enter into a consent proceeding whereby orders, rules, or
  133  letters of censure or warning, whether formal or informal, may
  134  be entered against the person.
  135         2. The division may issue an order requiring the developer,
  136  bulk assignee, bulk buyer, association, developer-designated
  137  officer, or developer-designated member of the board of
  138  administration, developer-designated assignees or agents, bulk
  139  assignee-designated assignees or agents, bulk buyer-designated
  140  assignees or agents, community association manager, or community
  141  association management firm to cease and desist from the
  142  unlawful practice and take such affirmative action as in the
  143  judgment of the division carry out the purposes of this chapter.
  144  If the division finds that a developer, bulk assignee, bulk
  145  buyer, association, officer, or member of the board of
  146  administration, or its assignees or agents, is violating or is
  147  about to violate any provision of this chapter, any rule adopted
  148  or order issued by the division, or any written agreement
  149  entered into with the division, and presents an immediate danger
  150  to the public requiring an immediate final order, it may issue
  151  an emergency cease and desist order reciting with particularity
  152  the facts underlying such findings. The emergency cease and
  153  desist order is effective for 90 days. If the division begins
  154  nonemergency cease and desist proceedings, the emergency cease
  155  and desist order remains effective until the conclusion of the
  156  proceedings under ss. 120.569 and 120.57.
  157         3. If a developer, bulk assignee, or bulk buyer fails to
  158  pay any restitution determined by the division to be owed, plus
  159  any accrued interest at the highest rate permitted by law,
  160  within 30 days after expiration of any appellate time period of
  161  a final order requiring payment of restitution or the conclusion
  162  of any appeal thereof, whichever is later, the division must
  163  bring an action in circuit or county court on behalf of any
  164  association, class of unit owners, lessees, or purchasers for
  165  restitution, declaratory relief, injunctive relief, or any other
  166  available remedy. The division may also temporarily revoke its
  167  acceptance of the filing for the developer to which the
  168  restitution relates until payment of restitution is made.
  169         4. The division may petition the court for appointment of a
  170  receiver or conservator. If appointed, the receiver or
  171  conservator may take action to implement the court order to
  172  ensure the performance of the order and to remedy any breach
  173  thereof. In addition to all other means provided by law for the
  174  enforcement of an injunction or temporary restraining order, the
  175  circuit court may impound or sequester the property of a party
  176  defendant, including books, papers, documents, and related
  177  records, and allow the examination and use of the property by
  178  the division and a court-appointed receiver or conservator.
  179         5. The division may apply to the circuit court for an order
  180  of restitution whereby the defendant in an action brought under
  181  subparagraph 4. is ordered to make restitution of those sums
  182  shown by the division to have been obtained by the defendant in
  183  violation of this chapter. At the option of the court, such
  184  restitution is payable to the conservator or receiver appointed
  185  under subparagraph 4. or directly to the persons whose funds or
  186  assets were obtained in violation of this chapter.
  187         6. The division may impose a civil penalty against a
  188  developer, bulk assignee, or bulk buyer, or association, or its
  189  assignee or agent, for any violation of this chapter or related
  190  rule. The division may impose a civil penalty individually
  191  against an officer or board member who willfully and knowingly
  192  violates this chapter, an adopted rule, or a final order of the
  193  division; may order the removal of such individual as an officer
  194  or from the board of administration or as an officer of the
  195  association; and may prohibit such individual from serving as an
  196  officer or on the board of a community association for a period
  197  of time. The term “willfully and knowingly” means that the
  198  division informed the officer or board member that his or her
  199  action or intended action violates this chapter, a rule adopted
  200  under this chapter, or a final order of the division and that
  201  the officer or board member refused to comply with the
  202  requirements of this chapter, a rule adopted under this chapter,
  203  or a final order of the division. The division, before
  204  initiating formal agency action under chapter 120, must afford
  205  the officer or board member an opportunity to voluntarily
  206  comply, and an officer or board member who complies within 10
  207  days is not subject to a civil penalty. A penalty may be imposed
  208  on the basis of each day of continuing violation, but the
  209  penalty for any offense may not exceed $5,000. The division
  210  shall adopt, by rule, penalty guidelines applicable to possible
  211  violations or to categories of violations of this chapter or
  212  rules adopted by the division. The guidelines must specify a
  213  meaningful range of civil penalties for each such violation of
  214  the statute and rules and must be based upon the harm caused by
  215  the violation, the repetition of the violation, and upon such
  216  other factors deemed relevant by the division. For example, the
  217  division may consider whether the violations were committed by a
  218  developer, bulk assignee, or bulk buyer, or owner-controlled
  219  association, the size of the association, and other factors. The
  220  guidelines must designate the possible mitigating or aggravating
  221  circumstances that justify a departure from the range of
  222  penalties provided by the rules. It is the legislative intent
  223  that minor violations be distinguished from those which endanger
  224  the health, safety, or welfare of the condominium residents or
  225  other persons and that such guidelines provide reasonable and
  226  meaningful notice to the public of likely penalties that may be
  227  imposed for proscribed conduct. This subsection does not limit
  228  the ability of the division to informally dispose of
  229  administrative actions or complaints by stipulation, agreed
  230  settlement, or consent order. All amounts collected shall be
  231  deposited with the Chief Financial Officer to the credit of the
  232  Division of Florida Condominiums, Timeshares, and Mobile Homes
  233  Trust Fund. If a developer, bulk assignee, or bulk buyer fails
  234  to pay the civil penalty and the amount deemed to be owed to the
  235  association, the division shall issue an order directing that
  236  such developer, bulk assignee, or bulk buyer cease and desist
  237  from further operation until such time as the civil penalty is
  238  paid or may pursue enforcement of the penalty in a court of
  239  competent jurisdiction. If an association fails to pay the civil
  240  penalty, the division shall pursue enforcement in a court of
  241  competent jurisdiction, and the order imposing the civil penalty
  242  or the cease and desist order is not effective until 20 days
  243  after the date of such order. Any action commenced by the
  244  division shall be brought in the county in which the division
  245  has its executive offices or in the county where the violation
  246  occurred.
  247         7. If a unit owner presents the division with proof that
  248  the unit owner has requested access to official records in
  249  writing by certified mail, and that after 10 days the unit owner
  250  again made the same request for access to official records in
  251  writing by certified mail, and that more than 10 days has
  252  elapsed since the second request and the association has still
  253  failed or refused to provide access to official records as
  254  required by this chapter, the division shall issue a subpoena
  255  requiring production of the requested records where the records
  256  are kept pursuant to s. 718.112.
  257         8. In addition to subparagraph 6., the division may seek
  258  the imposition of a civil penalty through the circuit court for
  259  any violation for which the division may issue a notice to show
  260  cause under paragraph (r). The civil penalty shall be at least
  261  $500 but no more than $5,000 for each violation. The court may
  262  also award to the prevailing party court costs and reasonable
  263  attorney fees and, if the division prevails, may also award
  264  reasonable costs of investigation.
  265         (e) The division may prepare and disseminate a prospectus
  266  and other information to assist prospective owners, purchasers,
  267  lessees, and developers of residential condominiums in assessing
  268  the rights, privileges, and duties pertaining thereto.
  269         (f) The division may adopt rules to administer and enforce
  270  this chapter.
  271         (g) The division shall establish procedures for providing
  272  notice to an association and the developer, bulk assignee, or
  273  bulk buyer during the period in which the developer, bulk
  274  assignee, or bulk buyer controls the association if the division
  275  is considering the issuance of a declaratory statement with
  276  respect to the declaration of condominium or any related
  277  document governing such condominium community.
  278         (h) The division shall furnish each association that pays
  279  the fees required by paragraph (2)(a) a copy of this chapter, as
  280  amended, and the rules adopted thereto on an annual basis.
  281         (i) The division shall annually provide each association
  282  with a summary of declaratory statements and formal legal
  283  opinions relating to the operations of condominiums which were
  284  rendered by the division during the previous year.
  285         (j) The division shall provide training and educational
  286  programs for condominium association board members and unit
  287  owners. The training may, in the division’s discretion, include
  288  web-based electronic media, and live training and seminars in
  289  various locations throughout the state. The division may review
  290  and approve education and training programs for board members
  291  and unit owners offered by providers and shall maintain a
  292  current list of approved programs and providers and make such
  293  list available to board members and unit owners in a reasonable
  294  and cost-effective manner.
  295         (k) The division shall maintain a toll-free telephone
  296  number accessible to condominium unit owners.
  297         (l) The division shall develop a program to certify both
  298  volunteer and paid mediators to provide mediation of condominium
  299  disputes. The division shall provide, upon request, a list of
  300  such mediators to any association, unit owner, or other
  301  participant in alternative dispute resolution proceedings under
  302  s. 718.1255 requesting a copy of the list. The division shall
  303  include on the list of volunteer mediators only the names of
  304  persons who have received at least 20 hours of training in
  305  mediation techniques or who have mediated at least 20 disputes.
  306  In order to become initially certified by the division, paid
  307  mediators must be certified by the Supreme Court to mediate
  308  court cases in county or circuit courts. However, the division
  309  may adopt, by rule, additional factors for the certification of
  310  paid mediators, which must be related to experience, education,
  311  or background. Any person initially certified as a paid mediator
  312  by the division must, in order to continue to be certified,
  313  comply with the factors or requirements adopted by rule.
  314         (m) If a complaint is made, the division must conduct its
  315  inquiry with due regard for the interests of the affected
  316  parties. Within 30 days after receipt of a complaint, the
  317  division shall acknowledge the complaint in writing and notify
  318  the complainant whether the complaint is within the jurisdiction
  319  of the division and whether additional information is needed by
  320  the division from the complainant. The division shall conduct
  321  its investigation and, within 90 days after receipt of the
  322  original complaint or of timely requested additional
  323  information, take action upon the complaint. However, the
  324  failure to complete the investigation within 90 days does not
  325  prevent the division from continuing the investigation,
  326  accepting or considering evidence obtained or received after 90
  327  days, or taking administrative action if reasonable cause exists
  328  to believe that a violation of this chapter or a rule has
  329  occurred. If an investigation is not completed within the time
  330  limits established in this paragraph, the division shall, on a
  331  monthly basis, notify the complainant in writing of the status
  332  of the investigation. When reporting its action to the
  333  complainant, the division shall inform the complainant of any
  334  right to a hearing under ss. 120.569 and 120.57. The division
  335  may adopt rules regarding the submission of a complaint against
  336  an association.
  337         (n) Condominium association directors, officers, and
  338  employees; condominium developers; bulk assignees, bulk buyers,
  339  and community association managers; and community association
  340  management firms have an ongoing duty to reasonably cooperate
  341  with the division in any investigation under this section. The
  342  division shall refer to local law enforcement authorities any
  343  person whom the division believes has altered, destroyed,
  344  concealed, or removed any record, document, or thing required to
  345  be kept or maintained by this chapter with the purpose to impair
  346  its verity or availability in the department’s investigation.
  347         (o) The division may:
  348         1. Contract with agencies in this state or other
  349  jurisdictions to perform investigative functions; or
  350         2. Accept grants-in-aid from any source.
  351         (p) The division shall cooperate with similar agencies in
  352  other jurisdictions to establish uniform filing procedures and
  353  forms, public offering statements, advertising standards, and
  354  rules and common administrative practices.
  355         (q) The division shall consider notice to a developer, bulk
  356  assignee, or bulk buyer to be complete when it is delivered to
  357  the address of the developer, bulk assignee, or bulk buyer
  358  currently on file with the division.
  359         (r) In addition to its enforcement authority, the division
  360  may issue a notice to show cause, which must provide for a
  361  hearing, upon written request, in accordance with chapter 120.
  362         (s) The division shall submit to the Governor, the
  363  President of the Senate, the Speaker of the House of
  364  Representatives, and the chairs of the legislative
  365  appropriations committees an annual report that includes, but
  366  need not be limited to, the number of training programs provided
  367  for condominium association board members and unit owners, the
  368  number of complaints received by type, the number and percent of
  369  complaints acknowledged in writing within 30 days and the number
  370  and percent of investigations acted upon within 90 days in
  371  accordance with paragraph (m), and the number of investigations
  372  exceeding the 90-day requirement. The annual report must also
  373  include an evaluation of the division’s core business processes
  374  and make recommendations for improvements, including statutory
  375  changes. The report shall be submitted by September 30 following
  376  the end of the fiscal year.
  377         Section 3. Subsections (11), (12), and (13) are added to
  378  section 718.5012, Florida Statutes, to read:
  379         718.5012 Ombudsman; powers and duties.—The ombudsman shall
  380  have the powers that are necessary to carry out the duties of
  381  his or her office, including the following specific powers:
  382         (11)To void an election if the ombudsman determines that a
  383  violation of this chapter has occurred relating to a condominium
  384  association election.
  385         (12)To petition the court to appoint a receiver if the
  386  appointment of a receiver is in the best interests of the
  387  association or unit owners.
  388         (13)To subpoena, audit, and investigate for the purposes
  389  of the Condominium Fraud Investigation Pilot Program under s.
  390  16.81.
  391         Section 4. This act shall take effect October 1, 2022.