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“New Requirements for Condominium Association on Inspections of Official Records” – FCAP Managers Report

“New Requirements for Condominium Association on Inspections of Official Records” – FCAP Managers Report

The Florida Legislature adopted House Bill (HB) 1021, which makes certain changes to the Chapter 718, or the Condominium Act. Assuming the bill is not vetoed by the Governor, it will become law on July 1, 2024. A comprehensive review of all of the changes is beyond the scope of this article, but one of the areas of law impacted by this bill is the inspection of the official records of the association by unit owners. The association should have reasonable rules in place regarding records requests. If the association does not, this would be a good time to talk to association counsel about adopting such rules. If there are already rules in place, association counsel should be consulted to ensure that the updates to the law are adequately and accurately reflected in the rules.

Maintaining the official records in an organized manner that facilitates inspection will be a requirement under the new law. What is considered an “organized manner” is not described. However, this might be an impetus for the association to digitalize its official records and make them available on a section of its website only accessible to unit owners. Currently, all condominium associations with 150 or more units are required to have a website. Effective July 1, 2026, associations with 25 or more units will be required to post digital copies of the documents on its website or via an application that can be downloaded on a mobile device. Having a website with records available thereon will simplify inspections as the association may fulfill its obligations by directing an owner who has requested records to the website. (This can also be done via an application on a mobile device.) Additionally, when an owner requests records, the association will have to provide the requestor with a checklist of all of the records that were made available for inspection and copying, as well as identifying the records that were not made available to the requesting owner. The checklist itself also becomes an association record to be kept for seven years. Moreover, in the event that official records are lost, destroyed or unavailable, the association’s obligation to maintain the records will also include a good faith obligation to obtain and recover those records.

The law also makes changes to the accessibility of email addresses and fax numbers of other unit owners. A current roster of all owners is part of the association official records. Email addresses and fax numbers are currently not accessible by other owners if consent to receive notices by electronic transmission is not provided. The new law provides that email addresses and fax numbers are only accessible to unit owners if consent to receive notice by electronic transmission is provided, or if the owner has expressly indicated that such personal information can be shared with other owners and the owner has not provided the association with a request to opt out of such dissemination with other owners. Further, the Association must ensure that this information is only used for Association business and is not sold or used by outside parties. This information must be redacted if it is included on documents released to third parties.

The Legislature has also increased penalties for certain failures related to association records requests, which makes it even more important to ensure that the records are kept in an organized manner and that the association has rules in place to timely handle requests. The new law provides that a director or member of the board or association or a community association manager who “knowingly, willfully, and repeatedly” violates this section commits a misdemeanor of the second degree and must be removed from office and a vacancy declared. The term “repeatedly” means two or more violations within a 12-month period. Under the new law, it will also be a first degree misdemeanor if any person knowing or intentionally defaces or destroys accounting records that are required to be maintained, or who knowingly or intentionally fails to create or maintain accounting records that are required to be created or maintained, with the intent of causing harm to the association or one or more its members. This person will also be removed from their office.

With this in mind, the Condominium Act allows an association to adopt reasonable rules regarding frequency, time, location, notice, and manner of record inspections and copying. As stated, the association should discuss with counsel adopting such rules, or updating existing rules to ensure compliance with the new laws. Again, this is a large bill with major impact in a lot of different areas governing condominiums. The above only grazes the surface. Consulting with association counsel to navigate these changes is recommended.

To read the original FCAP article, please click here.

Karyan San Martano is a member of Becker’s Community Association practice and regularly provides legal counseling to the officers and directors, as well as the property manager, on the operation of condominiums, cooperatives, and homeowners associations.