2024 has come and gone, and with the new statutes, the Legislature has doubled down on making it clear that no funny business is allowed in association operations – even if they’ve included some fairly obvious new “crimes”. Steal from the association? It’s a crime. Try to cover up a crime? It’s a crime. Who knew, right?
It’s understandable that these added criminal penalties might make you second guess whether you want to volunteer for the Board after all, or for you managers, to second guess your careers. It can be scary, but the important thing to remember is that you are probably not the kind of person the legislature is worried about anyway. Most of these new “association crimes” are already crimes under the criminal statutes, and many require the willful failure to comply, malicious intent, and/or repeated violations to be prosecutable. The good news is that this means you don’t have to worry about being thrown in jail just because you messed up.
Key Changes and Focus Areas:
The new criminal penalties are primarily aimed at addressing transparency, financial mismanagement, and election fairness. Below is a breakdown of just a few key areas. For more detailed information about specific acts and potential penalties, consult your association attorney.
- Official Records Inspections: The new laws reinforce the importance of providing access to official records. Failure to provide access as required, in the furtherance of another crime, can now result in criminal penalties. In other words, trying to cover up wrongdoing by refusing to allow an inspection or hiding documents can lead to charges.
- Financial Mismanagement: There are new laws targeting misappropriation and misuse of association funds. One issue that the legislature seems to have latched onto is the use of debit cards. Despite the fact that debit cards cannot be used at all, both Ch. 720 and Ch. 718 now say it is theft to use a debit card for any reason that is not a preapproved obligation of the association as reflected by meeting minutes or the budget. Depending on the amount the debt card was used for, theft could be a misdemeanor or felony.
- Election Irregularities: The new laws also introduce penalties for tampering with ballots and election processes, including prohibitions against forgery, intimidation, and coercion. Additionally, it is prohibited to give or promise “anything of value” with the intent to buy a vote or corruptly influence a vote. Intent is often difficult to prove, but what if you are running for reelection and want to have a barbeque in your backyard for voters? That’s probably giving something with the intent to influence a vote, but is it corruptly influencing a vote? Is it buying a vote? What if you only let owners into the barbeque if they agree to vote for you? As you can see, there are some grey areas.
Key Takeaway:
While the introduction of criminal penalties may seem daunting, it’s essential to maintain perspective. By focusing on transparency, implementing sound policies, and seeking professional guidance, you can effectively mitigate risks and ensure your association’s continued success. Have clear, written rules or policies for official records inspections. Protect yourself by cancelling all debit cards if you are still using them. Check with your bank to see if there are ways to prevent a future rogue director from getting a debit card, and importantly, because of the potential wide net of “theft,” if you see something, say something. It will be some time before the courts have time to weigh in on these new laws and the dust settles. Some things will be obvious, but there are many grey areas. Consult an attorney if you have any questions about the legality of your policies and procedures.
The main thing to remember is not to be afraid of these new laws. They are not aimed at punishing honest mistakes. They are an attempt to rein in those unscrupulous few who give all associations a bad name. The best way to protect yourselves is to stay updated on the laws by keeping up with your educational requirements. Becker has many classes to help you do just that. Click here for more details.
