Florida House Bill 797 (2026) significantly revises Section 617.0832 of the Florida Statutes, creating a modernized framework for addressing director conflict-of-interest transactions. For condominium and homeowners’ associations, these changes are particularly important because Sections 718.3027 and 720.3033 expressly require association boards to comply with Chapter 617’s conflict-of-interest standards.
Conflict-of-interest issues arise whenever a director has a personal financial interest in a transaction involving the association. Common examples include contracts with companies owned by directors, arrangements involving family members, or business relationships that could potentially influence a director’s decision-making.
The revised statute does not prohibit interested transactions. Instead, it establishes a clearer process for evaluating and approving them. The primary focus is whether the transaction is fair to the corporation at the time it is authorized and whether appropriate disclosure and approval procedures are followed. HB 797 provides a new statutory framework through which conflicted transactions may be validated. If the interested director fully discloses the conflict and a majority of disinterested directors approve the transaction, the transaction becomes presumptively valid. That presumption can be critically important in litigation. Under the revised statute, if a transaction has been properly disclosed and approved by disinterested directors, the burden shifts to the party challenging the transaction. The challenger must prove that the transaction was unfair to the corporation despite receiving proper approval.
Conversely, failing to follow the statutory procedures can create serious legal risk. If the board does not comply with the disclosure and approval requirements, then rather than requiring the challenger to prove unfairness, the interested director may be required to demonstrate that the transaction was fair to the corporation at the time it was approved. This burden-shifting mechanism creates a powerful incentive for boards to follow the statutory process carefully. Boards should ensure that potential conflicts are disclosed, documented in meeting minutes, and evaluated by directors who do not have a personal interest in the transaction.
The amendments also reinforce the Legislature’s continued emphasis on transparency in association governance. By establishing clearer standards and consequences, HB 797 seeks to increase public trust while providing guidance for directors attempting to navigate potential conflicts appropriately.
