It wasn’t so long ago that Florida’s Department of Business and Professional Regulation (the “DBPR”) had little jurisdiction over the operation of condominium associations after their developer turnover meetings, and, what little jurisdiction the DBPR had over associations after turn over, was often exercised by providing warnings and board member education to associations that were out of compliance with condominium laws. This reflected an understanding that was prevalent in the past that most transgressions are not willful and that the small number of directors who are genuinely bad actors are not likely to be reelected (and will thereby be politically removed from their director positions at the conclusion of their terms).
While the DBPR had previously pivoted towards fining associations that were not in compliance and away from issuing warnings and offering board member education, this year’s statutory changes ushered in much more regulatory authority over post-turnover condominium associations than the DBPR has ever had. Namely, with regard to post-turnover condominium associations, the list of subjects over which the DBPR has been given authority to investigate unit owner complaints and to enforce compliance grew in 2024 to dwarf its former size.
Today, the DBPR may address unit owner complaints filed against post-turnover associations about a broad range of financial issues (including annual financial reporting, assessments, commingling reserve and operating funds, debit cards, budgets and reserves, and record-keeping), elections (including voting requirements, recalls, electronic voting, and elections affected by emergency powers), the maintenance of and access to official records, board and membership meeting procedures (including quorums, voting requirements, and proxies), conflicts of interest, removal of officers and/or directors when required by statute, the completion of structural integrity reserve studies (when required), and written inquiries. In addition, the insurance portion of the Condominium Act was also amended this year to give the DBPR jurisdiction to, in response to a complaint, issue fines and penalties to an association that fails to maintain required insurance or fidelity bonds for persons who control and disburse the association’s funds.
The effects of this increased investigative authority are difficult to predict. Therefore, it behooves associations to become more willing to obtain professional guidance in administering their operations as means of avoiding DBPR complaints. Associations also may benefit from speaking with their insurance agents about the likelihood that insurance defense coverage will be afforded in the event that a DBPR complaint is filed.
