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.
   68  Be It Enacted by the Legislature of the State of Florida:
   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 voting
  213  interests in a condominium association, or six unit owners,
  214  whichever is greater, may petition the ombudsman to appoint an
  215  election monitor to attend the annual meeting of the unit owners
  216  and 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 must shall be 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 administer carry out the provisions of this
  243  chapter and the provisions of law 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 shall
  254  operate 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.—
  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.