FOUNTAINS CONDOMINIUM OPERATIONS, INC.

4615Fountains Drive, Suite B

Lake Worth, Florida 33467

Tel: (561) 964-3600 Fax: (561) 641-5631

Email:

M E M O R A N D U M

TO:ALL COURT PRESIDENTS

FROM:DEBBIE POULETTE, EXECUTIVE DIRECTOR, F.C.O.

SUBJECT:NEWLY PASSED LEGISLATION

DATE:July 12, 2017

The Florida Legislature has passed quite a few changes to the Statutes which we are in the process of implementing. I would like to draw your attention to the items you should be aware of, some of which will require action on your part (underlined).

Criminal Penalties

  • An officer, director, or manager may not solicit, offer to accept, or accept any thing or service of value or kickback for which consideration has not been provided for his or her own benefit or that of his or her immediate family. If this provision is violated, it could result in criminal penalties.
  • Forgery of a ballot envelope used in an election is punishable as provided in s.831.01.
  • Theft or embezzlement of funds of a condominium association is punishable as a crime as provided in s.812.014.
  • The destruction of or the refusal to allow inspection or copying of an official record in furtherance of any crime is punishable as tampering with physical evidence as provided in s.918.13 or as obstruction of justice as provided in chapter 843.

Conflict of Interests

  • The new law prohibits employment or a contract with a condominium association vendor or provider that is owned or operated by a director or any person who has a financial relationship with a director or officer, or a close relative, except if the ownership interest is less than 1%.
  • If a director or officer, or a relative, proposes to engage in an activity that is a conflict of interest, the proposed activity must be listed on, and all contracts and transactional documents related to the proposed activity must be attached to, the meeting agenda. If the board votes against the proposed activity, the director or officer, or the relative of the director or officer, must notify the board in writing of his or her intention not to pursue the proposed activity or to withdraw from office. If the board finds that an officer or a director has violated this provision, the officer or director shall be deemed removed from office.
  • Directors and officers of an association, and the relatives of such directors and officers, must disclose to the board any activity that may reasonably be construed to be a conflict of interest. A rebuttable presumption of a conflict of interest exists if any of the following occurs without prior notice: A director of officer, or a relative, enters into a contract for goods and services with the association; or a director or an officer, or a relative, holds an interest in a corporation, limited liability corporation or other business entity that conducts business with the association or proposes to enter into a contract or other transaction with the association.
  • A condominium association’s directors, managers and management companies may not purchase a unit at that association’s lien foreclosure sale, or as a result of a deed in lieu of foreclosure.
  • A party contracting to provide maintenance or management services to an association, or an officer or board member of such party, may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of its lien for unpaid assessments or take title by deed in lieu of foreclosure.

Official Records

  • All vendor bids must be kept as accounting records for seven years. Inspection of records is expanded to allow a member’s authorized representative to inspect records.

Financial Reporting

  • Condo associations are no longer restricted to only being able to waive the financial reporting requirements for 3 consecutive years.

Elections (Condo Associations)

  • The new law prohibits a condominium association director from serving more than four consecutive two-year terms unless: two-thirds of all voting interests approve, or there are not enough eligible candidates. There is no express prohibition on the length of time a director may serve one-year terms. (We will need to wait for the State to implement Rules to see how we are to handle.)

Elections (Homeowner Associations)

  • The new law allows homeowner associations to forgo elections when advance nominations are required (unless write-ins or nominations from the floor are allowed) and there is not a sufficient number of candidates for a contested election. Since we currently follow the condominium association method for elections, we need to put an amendment through to reflect that and to eliminate nominations from the floor.

Suspension of Voting Rights

  • Voting rights may only be suspended if the delinquent amount is more than $1,000 and more than 90 days delinquent.
  • Proof of such monetary obligation must be provided to the unit owner or member 30 days before such suspension can take effect.

Estoppel Certificates

  • If a fee is charged, then the Board of Directors must adopt a resolution in writing authorizing the collection of a fee which may not exceed:

$250 if no delinquent amounts are due to the Association

An additional $150, if there is a delinquent amount owed.

An additional $100 for a requested three day expedited period.

I strongly suggest you adopt a resolution at your next board meeting to incorporate these allowed fees. We are currently charging $100 and will continue to do so until your resolution is made and passed.

DP/s