Don't get caught off guard: The importance of association record-keeping in Florida

Wednesday May 15, 2024

Every business has records, and the rules around keeping and maintaining those records vary from business to business and from place to place. Condo and homeowner associations are no different. New laws in Florida aim to hold associations more accountable by expanding the list of official records for condominiums, requiring homeowners associations with 100 or more parcels to make official records available on a website, and adding penalties for failure to provide record access or damaging records.
 
“Associations are obligated to keep accurate and complete records of all official association activities, transactions, and decisions,” explains Anthony Gragnano, a vice president in FirstService Residential's high-rise division. “Meticulous recordkeeping is imperative to ensure regulatory compliance and transparency. Some board members may unintentionally overlook the rules due to a lack of understanding or oversight.”
 
Florida House Bills 1021 and 1203, both pending with the governor’s office as of May 2024, address official recordkeeping for Florida condo and homeowners associations. Keep reading to learn more about official records and what the new laws require of Florida associations and board members. Existing statutes already address some aspects of official records, but the new laws go into more detail and establish guidelines for how long to maintain them.

What’s an “official record”?

Let’s start by eliminating confusion about what constitutes an “official record.”
 
“Generally speaking, official records would be any written record of the association that relates to the operation of the association,” says Jonathan Mofsky, Esq., a shareholder at Siegfried Rivera. “The Condominium Act contains a list that includes  the governing documents, contracts, bids, accounting records, meeting minutes, and a roster of owners among other things. These are all official records, but at the end of that list, there’s a catchall that says, ‘all other written records of the association not specifically included in the foregoing.’ That’s where questions come in.”

Florida law outlines a broad scope for official records in condo and HOA communities. These include:

  • Governing documents: The declaration of condominium/covenants, articles of incorporation, bylaws, and any adopted rules and regulations.

  • Financial records: Detailed accounting records, financial statements, budgets, and contracts.

  • Meeting-related documents: Meeting minutes (board and membership), agendas, notices, ballots, voting proxies, and sign-in sheets.

  • Maintenance and project records: Bids for work, contracts, warranties, , and other documentation relating to repairs, improvements, or purchases.

  • Insurance information: Copies of all insurance policies for insurance maintained by the association.

  • Official rosters: Lists of unit/homeowners, contact information, and voting rights.

With a  some exceptions, associations are required to maintain records for 7 years. For example, the governing documents and minutes must be maintained indefinitely ballots, sign-in sheets and voting proxies must be maintained for 1 year from the date of an election.

What official records can association members see?

The short answer? Most of them, especially as related to budgeting and meeting minutes. Records must be made available to owners (or the owner’s representative) within 10 working days (for both condominium and HOA) of receiving a written request sent to the board or designee. The association is NOT responsible for a homeowner's use or misuse of information if the request is within the law.

Homeowners cannot see anything protected by attorney-client privilege, work product privileged documents (usually related to litigation), personnel records, passwords, electronic security measures, medical records of unit owners, anything that could lead to identify theft and a few other exceptions. In most cases, contact information, including emergency contact information, of residents is not available to homeowners on request.

Best practices for record-keeping

How should you maintain your association’s records? Start by investing in a centralized system for storing and labeling your records. Today, at least part of that will be cloud-based, so make sure you have a reliable, secure solution for your sensitive information. Your professional property management company can simplify that process for you.

However you choose to maintain your records, you must have ways for association members to access them. Options include PDFs in a password-protected area of your community website and hard copies available in the office.

Best practices for record maintenance include having multiple backups for digital records, including local backups and remote (cloud) storage, in the event of power failures, hurricanes, floods, fires or other severe damage. If you use a digital portal for resident access to some information, make sure its security is robust and updated regularly.

Hard copy records kept on site should also be well-organized and updated regularly to align with any digital updates. (For example, make sure the printed budget you have available for homeowner review matches the digital version in your system.)

It’s also important to keep logins for official records separate from personal email addresses and logins. Board members change and property managers change. Using neutral logins and making sure passwords for board business are shared will make transitions easier if there’s an emergency.

Legal requirements and recent legislative changes

During the legislative session that ended March 8, 2024, the Florida House passed two comprehensive measures related to condo associations and homeowner associations, including new regulations around record-keeping. HB 1021 was specific to condo associations, while HB 1203 focused on HOAs. Both pieces of legislation are awaiting the governor’s signature as of May 2024.

Some key takeaways for condo associations from pending HB 1021:

  • An association is obligated to make a good-faith effort to obtain and/or recover any records absent from inventory.

  • The association must furnish a checklist of records made available for inspection. The checklist must identify any requested records not made available during inspection. The checklist must be retained for 7 years.

  • The state Department of Business and Professional Regulation, which governs condominiums,  may levy enhanced penalties for willful and/or repeated violations.

  • Every condo association with 25 units or more must have a website with records available for access by owners.

  • Contracts to be approved must be attached to the agenda for the meeting or otherwise made available to owners at or before the meeting.

Under pending HB 1203 for homeowner associations:

  • Effective January 1, 2026, HOAs with 100 or more parcels must maintain a digital copy of specified official records for download on the association’s website or through an application on a mobile device.

  • HOAs must provide a copy of records or otherwise make the records available that are subpoenaed by a law enforcement agency within 5 days of receiving a subpoena.

  • Boards must maintain official records for at least 7 years, unless the governing documents of the association require a longer period of time.

Policies around records requests

As noted above, associations must provide access to official records within 10 working days of receiving a written request. That can become daunting to manage. First, establish a clear policy governing how you handle records requests, if you don’t already have one. Some best practices to make handling records requests easier include:

  • Delegate: Identify a specific person (a board member, manager, or dedicated team member) to handle requests.

  • Outline: Define the acceptable process for submitting requests, including timeframes for providing records and any associated fees for copies, etc.

  • Accommodate: Address how to accommodate individuals with disabilities who may need assistance in accessing records.

  • Track: Implement a system to track requests, responses, and any possible disputes.

Board member responsibilities and education

Florida requires that elected board members complete an approved course of education before beginning their terms and then continue that education throughout their terms. It is part of a board member’s fiduciary responsibility to stay on top of changes in laws and regulations around record-keeping and follow any changes as they arise. The right property management partner will assist in making sure that your board’s members are always updated on important changes, so you stay in compliance at all times.
 
To learn more about how FirstService Residential can help you stay informed about regulatory changes and maintain your association’s compliance, contact us today.

Wednesday May 15, 2024