The 2024 legislative session has introduced several significant changes for homeowners’ associations (HOAs) in Florida with the passing of House Bill 1203. Enforcing new regulations aimed at improving transparency, accountability, and governance within community associations. As your property management company, dedicated to staying ahead of industry trends and legislative changes, Bahia Property Management is glad to keep residents and/or association members informed. While there are many changes, the following outlines some of the key changes of this new Florida Law that goes into effect July 1, 2024.
Financial Transparency
One of the critical aspects of HB 1203 is the emphasis on financial transparency. HOAs are now required to provide more detailed financial reports to their members. This includes:
- Quarterly Financial Statements: HOAs must now distribute quarterly financial statements to all members, ensuring homeowners have regular updates on the association’s financial health.
- Detailed Budgets: Annual budgets must include detailed line items for all expenses, making it easier for homeowners to understand where their money is being spent.
- Reserve Studies: HOAs are required to conduct reserve studies at least once every three years. These studies assess the long-term financial needs for maintaining and repairing common areas, ensuring that associations are adequately prepared for future expenses.
- Independent Audits: HOAs with annual revenues exceeding $500,000 must undergo an independent financial audit every three years. This measure aims to prevent financial mismanagement and ensure accurate financial reporting.
- Bank Account Restrictions: Associations are now required to maintain all association funds in accounts that are exclusively in the name of the association. This provision aims to prevent the commingling of funds and ensure financial integrity.
Governance and Accountability
HB 1203 also introduces new measures to enhance governance and accountability within HOAs:
- Board Member Training: Newly elected or appointed board members must complete a certified training program within 90 days of taking office. This training will cover their fiduciary duties, financial responsibilities, and the basics of association governance.
- Conflict of Interest Policies: HOAs must adopt and enforce conflict of interest policies to ensure board members act in the best interest of the community. Any potential conflicts must be disclosed and appropriately managed.
- Term Limits: The bill sets term limits for board members to promote fresh perspectives and prevent entrenchment. Board members can now serve a maximum of two consecutive terms unless no other candidates are available.
- Elections and Voting: The new legislation includes stricter rules for conducting elections and voting within HOAs. Proxy voting is limited, and electronic voting must be made available to all members, ensuring broader participation in the electoral process.
- Board Member Removal: A clear process for the removal of board members by the membership has been established. This includes the ability for homeowners to petition for a special meeting to vote on the removal of board members if they are not fulfilling their duties appropriately.
- Document Retention: HOAs must retain official records, including meeting minutes, financial reports, and contracts, for at least seven years. This ensures that historical records are available for reference and accountability.
Member Rights and Protections
Protecting the rights of HOA members is another focus of HB 1203:
- Access to Records: Homeowners now have more robust rights to access association records. HOAs must provide access to these records within ten business days of a request, and they cannot charge excessive fees for copies.
- Meeting Notices: HOAs must provide timely and detailed notices of board meetings, including agendas and any items that will be voted on. This ensures members are well-informed and can participate in the decision-making process.
- Dispute Resolution: The bill encourages the use of alternative dispute resolution methods, such as mediation or arbitration, to resolve conflicts between homeowners and the association more efficiently and amicably.
- Pet Policies: The new provisions clarify the rights of homeowners regarding pet ownership. HOAs must have clear and reasonable pet policies that are uniformly enforced, preventing arbitrary or discriminatory practices.
- Architectural Review: Homeowners now have a defined right to appeal decisions made by the architectural review committee. This ensures fair and consistent application of architectural guidelines and provides a recourse for homeowners who feel their requests were unjustly denied.
Environmental and Safety Regulations
HB 1203 also addresses environmental and safety concerns within community associations:
- Energy Efficiency: HOAs are encouraged to adopt energy-efficient practices and technologies. This includes promoting the use of solar panels, energy-efficient lighting, and other sustainable initiatives.
- Safety Standards: The bill mandates regular safety inspections for common areas, including playgrounds, pools, and recreational facilities. These inspections are crucial to ensure the safety and well-being of all residents.
- Building Inspections: HOAs must conduct structural inspections of all buildings over 30 years old, or over three stories high, every ten years. This is to ensure the safety and integrity of residential buildings, preventing potential hazards.
- Maintenance Plans: Associations are required to develop and implement comprehensive maintenance plans for all common areas and amenities. These plans must be reviewed and updated annually, ensuring ongoing upkeep and safety.
- Interior Modifications: Prevents the enforcement of a rule or covenant restricting what can be done inside the interior of structures for changes that are not visible from the parcel’s frontage, an adjacent parcel, common area or community golf course.
Additional key provisions affecting HOAs under HB 1203
- An HOA with 100 or more parcels must have a website, and the new law provides for which documents must be posted on that website
- Before October 1, 2024, all HOAs must provide a physical or digital copy of the association’s covenants and rules to every member of the association
- All HOAs must adopt hurricane protection specifications for each structure or other improvement on a parcel governed by the association.
- Pickup trucks cannot be prohibited from being parked in the owner’s driveway or any other area where the owner or their guest or invitee has the right to park
- Work vehicles regardless of any insignia or visible designation on the vehicle cannot be prohibited from being parked anywhere the owner, guest, or invitee may park, so long as it is not a “commercial motor vehicle” as defined in the Florida Statutes
- Contractors may not be prohibited from entering the community solely because the contractor is not on a preferred vendor list
- Homeowners’ association documents may not preclude a property owner from hiring a contractor solely because the contractor does not have a professional or occupational license to conduct work.
- The HOA may not require a contractor or worker to present an occupational license to be allowed entry into the HOA.
Bahia Property Management: Navigating Legislative Changes with you
As the landscape of HOA regulations continues to evolve, Bahia Property Management remains committed to providing our clients with the latest information and expert guidance. At Bahia Property Management, we are here to ensure your community thrives under the new legislation.
Contact us today to learn more about our comprehensive property management services and how we can help your association stay compliant and efficient.
