Sir Winston Churchill once proclaimed, “Where there is great power, there is great responsibility.” This timeless adage has not only been echoed by the likes of Stan Lee’s Spiderman but has become the bedrock for modern day fiduciary relationships in America and across the globe. But who do you think of when you hear the word “fiduciary”? A lawyer?...doctor?... financial advisor? If you answered yes to all the above, then you are on the right track. And if you live in a Florida Homeowner’s Association (HOA) or Condominium Association (COA), you can include your association’s board members to the list too.

A fiduciary has control over another individual's money, property, or person, and has a duty to always act on that person's behalf in a loyal, honest, and trustworthy manner. A fiduciary must put the individual's needs, goals, and benefit ahead of their own by virtue of their position .

Florida has long held association board members to a fiduciary standard, but until now, there has been little to no oversight or enforcement to ensure that board members were actually complying with their responsibilities. In fact, in many instances it became evident that certain residents joined the board to promote self-serving interests, or with the intent to exercise “control” over the community’s residents and money and had not even read the associations’ rules that they were making decisions about.

In 2023, Florida ranked second in the nation, for having the most homes belonging to an HOA or COA. Out of 8.9 million homes in Florida, 3.9 million of those are in HOAs–which is about 45%. Moreover, about 35% of these homeowners spend more on HOA fees than their monthly mortgage payments. These statistics demonstrate why this issue is so important to Florida homeowners, and why it is time for the legislature to finally “tighten the reins” on HOA and COA board member authority .

One way to regulate the great power that is given to board members is with another heavy-hitting superpower.... education. Some of the more pertinent provisions of House Bill 1203, codified as Florida Statutes, Section 720.3033(1), and House Bill 1021, codified as Florida Statutes, Section 718.112(2)(d)4.b, will not only ensure that board members are armed with the knowledge about the important day-to-day fiduciary responsibilities owed to their communities but will also require them to be educated on more critical issues like safety inspections, financial literacy and transparency, and evolving changes in the law. Moreover, these amended provisions outline the serious repercussions, including criminal prosecution, for not abiding by the same.

Prior to July 1, 2024, board members were only charged with having read the association’s governing documents to ensure compliance with the primary objectives of the community. These objectives typically consist of things like maintaining common areas, upkeep and beautification of properties, complying with state and local ordinances, collecting dues, and generally keeping the peace between neighbors. While these may seem like simple tasks, in retrospect, and in light of the recent issues that have surfaced in the HOA/COA arena, it became clear that board members were not taking their fiduciary roles seriously and lacked the knowledge and tools necessary to properly perform their duties.

Now, Section 720.3033(1) will require board members to submit a certificate showing that they “satisfactorily” completed the new education curriculum required of new members within ninety (90) days of being appointed or elected. The curriculum will consist of training and education on the following topics:
• Financial Literacy and Transparency
• Record Keeping
• Levying of Fines
• Notice of Meeting Requirements

The curriculum must be administered through an education provider that has been approved through the Department of Business and Professional Regulation. The certificate of completion is valid for up to 4 years and the association must retain each member’s certificate for inspection for 5 years after the member’s election.

The length of the education curriculum will be dependent on the size of the community involved. Specifically, if the community consists of less than 2,500 parcels the member will complete at least 4 hours of continuing education annually. For a community that has more than 2,500 parcels, the minimum requirement will be 8 hours. Critically, the amendment also provides that a director who does not timely file the educational certificate is suspended from the board until he or she complies with the requirement.

Similarly, for condominiums, Section 718.112(2)(d)4.b provides that board members must certify in writing that they have read the association’s governing documents (i.e., Declaration, Articles of Incorporation, Bylaws and any other current written policies relating to the condominium), that they will work to uphold such documents and policies to the best of their ability and will “faithfully discharge [their] fiduciary responsibility to the association’s members.” Condominium members must also submit proof of completion that they have undergone the educational requirements after election or appointment to the board but provides for a global deadline of June 25, 2025 (approximately one year post enactment).

The educational requirements are similar to that for Homeowners’ Associations, but include a few additional components that address safety and structural integrity inspections, in an apparent nod to the Surfside disaster that occurred in 2021, as follows:
• Milestone Inspections (These inspections determine if there is evidence of substantial structural deterioration/distress that negatively affects a building's general structural condition and integrity)
• Structural Integrity reserve Studies (A structural integrity reserve study assesses the condition, life expectancy, and replacement costs of major components (e.g., roof, foundation). It must be done every 10 years and is used to guide the association’s reserve fund planning)
• Record Keeping
• Financial Literacy and Transparency
• Levying of fines
• Notice of meeting requirements

Moreover, although property managers are already required to undergo continuing education and other requirements as part of their licensure under the Department of Business and Professional Regulation, because both COA and HOAs often rely on their professional services the amendments have amped up these requirements and now prohibit the Department of Business and Professional Regulations from renewing a property manager’s license until they submit proof that they too have completed the requisite hours of continuing education (not more than 10 hours, annually).

Notably, the amendments require an association board member to be “generally competent” by having read and being familiar with the association’s governing documents but also requires them to receive ongoing education in areas that are ripe with problems and litigation that impact the residents (i.e. finances, fraud, record keeping, etc...).

To many, these changes are welcome and show significant progress in the right direction, but others speculate that the new requirements are too burdensome and will deter residents from volunteering for these positions at all, further contributing to the low participation levels that many communities deal with already. After all, keep in mind that HOA/COA members are unpaid volunteers. Will the new requirements deter them? Possibly, but in some instances, it could be a good thing – paid or unpaid, board members need to remember that their position does come with great power, and they should want to be as educated and prepared as possible. Because “[p]ower without responsibility-[is] nothing but a curse.” – Spiderman

If you are a Florida home or condominium owner that has questions or concerns about the fiduciary responsibilities of your board, it is important to work with an experienced HOA/COA attorney. Contact LS Carlson Law, PC today for a case review.