To update rule and implement statutory changes from the 2013 and 2014 legislative sessions.

Notice of Proposed Rule

 

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION

Regulatory Council of Community Association Managers

RULE NO.:RULE TITLE:

61E14-2.001Standards of Professional Conduct.

PURPOSE AND EFFECT:  To update rule and implement statutory changes from the 2013 and 2014 legislative sessions.

SUMMARY: Update rule and implement statutory changes concerning standards of conduct to be followed by licensees when performing community association management services.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COST AND LEGISLATIVE RATIFICATION: The agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency. The agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein:  The rule amendments implement statutory changes from the 2013 and 2014 legislative sessions. Further, the amendments clarify, streamline and refine the correct rule’s provision. Accordingly, the Council believes the rule amendments will reduce regulatory burdens and compliance costs, which the Council also believes will result in a positive economic benefit for all affected entities, including small businesses and government.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 468.4315(2), 468.436(3) FS.

LAW IMPLEMENTED: 468.431(2), 468.4315(2), 468.4334, 468.436 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE ANNOUNCED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE REGISTER.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Robyn Barineau, Executive Director, Regulatory Council of Community Association Managers, 1940 N. Monroe Street, Tallahassee, Florida 32399, [phone]

 

THE TEXT OF THE PROPOSED RULE IS:

 

61E14-2.001 Standards of Professional Conduct.

Licensees shall adhere to the following provisions, standards of professional conduct, and such provisions and standards shall be deemed automatically incorporated, as duties of all licensees, into any written or oral agreement for the rendition of community association management services., the violation of which shall constitute gross misconduct or gross negligence:

(1) Definitions. As used in this rule, the following definitions apply:

(a) The word “control” means the authority to direct or prevent the actions of another person or entity pursuant to law, contract, subcontract or employment relationship, but shall specifically exclude a licensee’s relationship with a community association, its board of directors, any committee thereof or any member of any board or committee.

(a)(b) “Licensee” means a person licensed pursuant to Sections 468.432(1) and (2), F.S.

(b) “Community association” means a residential homeowners’ association as defined in Section 468.431(1), F.S.

(c) “Community Association Management Services” means performing any of the practices requiring specialized knowledge, judgment, and management skill as defined in Section 468.431(2), F.S.

(d)(c) “Funds” The word “funds” as used in this rule includes money and negotiable instruments including checks, notes and securities.

(e) “Professional standards” means, while performing community association management services, exercising the level of care, diligence, and skill in the management, operation, and financial accountability of the community association required to ensure the association's full compliance with Chapters 718, 719, 720 or 721, F.S.

(2) Honesty. During the performance of management services, a licensee shall not do the following: knowingly make an untrue statement of a material fact or knowingly fail to state a material fact.

(a) Make misleading, deceptive or fraudulent representations in or related to the practice of community association management; or

(b) Make or employ a trick or scheme in or related to the practice of community association management.

(3) Professional Standards Competence. During the performance of community association management services, a A licensee shall do the following: undertake to perform only those community association management services which he or it can reasonably expect to complete with professional competence.

(a) Comply with the requirements of the governing documents by which a community association is created or operated.

(b) Only deposit or disburse funds received by the community association manager or management firm on behalf of the association for the specific purpose or purposes designated by the board of directors, community association management contract or the governing documents of the association.

(c) Perform all community association management services required by the licensee's contract to professional standards and to the standards established by Section 463.4334(1), F.S.

(d) Comply with all provisions of Chapters 718, 719, 720 or 721, F.S. as applicable to the performance of community association management services pursuant to the licensee's contract with a community association.  In the event of an apparent conflict between a statutory provision and the community association's governing documents, in the absence of a rendered legal opinion, the licensee shall comply with the statutory provision and notify the board of directors of the apparent conflict for resolution.

(e) In the event of a potential conflict of interest, provide full disclosure to the association and obtain authorization or approval.

(4) Due Professional Care.

(a) A licensee shall exercise due professional care in the performance of community association management services.

(b) A licensee shall not knowingly fail to comply with the requirements of the documents by which the association is created or operated so long as such documents comply with the requirements of law.

(5) Control of Others. A licensee shall not permit others under his or the management firm’s control to commit on his or the firm’s behalf, acts or omissions which, if made by either licensee, would place that licensee in violation of Chapter 455, 468, Part VIII, F.S., or Chapter 61-20, F.A.C. or other applicable statutes or rules. A licensee shall be deemed responsible by the department for the actions of all persons who perform community association management related functions under his or its supervision or control.

(4)(6) Records. During the performance of community association management services pursuant to a contract with a community association, a licensee shall not:

(a) Withhold A licensee shall not withhold possession of the association's official records, in violation of Section 718.111(12), 719.104(2), 720.303(4) or 721.13(3)(d), F.S. or any original books, records, accounts, funds, or other property of a community association when requested by the community association to deliver the same to the association upon reasonable notice. Reasonable notice shall extend no later than 10 business days after termination of any management or employment agreement and receipt of a written request from the association. The manager may retain those records necessary for up to 20 days to complete an ending financial statement or report. Failure of the association to provide access or retention of accounting records to prepare the statement or report shall relieve the manager of any further responsibility or liability for preparation of the statement or report. The provisions of this rule apply regardless of any contractual or other dispute between the licensee and the community association. It shall be considered gross misconduct, as provided by Section 468.436(2), F.S., for a licensee to violate the provisions of this subsection.

(b) Deny or delay A licensee shall not deny access to association official records to an owner or his or her authorized representative who is entitled to access within the timeframe and under the procedures set out in Section 718.111(12), 719.104(2), 720.303(4) or 721.13(3)(d), F.S., for the purpose of inspecting or photocopying the same, to a person entitled to such by law, to the extent and under the procedures set forth in the applicable law.

(c) Create A licensee shall not create false records or alter the official records of an community association in violation of Section 718.111(12), 719.104(2), 720.303(4) or 721.13(3)(d), F.S., or of the licensee except in such cases where an alteration is permitted by law (e.g., the correction of minutes per direction given at a meeting at which the minutes are submitted for approval).

(d) Fail A licensee shall not, to the extent charged with the responsibility of maintaining records, fail to maintain the records for a community association manager or management firm or the official his or its records, and the records of any applicable community association, as required by Section 718.111(12), 719.104(2), 720.303(4) or 721.13(3)(d), F.S. in accordance with the laws and documents requiring or governing the records.

(7) Financial Matters. A licensee shall use funds received by him or it on the account of any community association or its members only for the specific purpose or purposes for which the funds were remitted.

(5)(8) Other Licenses.

(a) A licensee shall not commit acts of gross negligence or gross misconduct in the pursuit of community association management or any other profession for which a state or federal license is required or permitted. It shall be presumed that gross negligence or gross misconduct has been committed where a licensee’s other professional license has been suspended or revoked for reasons other than non-payment of fees or noncompliance with applicable continuing education requirements.

(a)(b) A licensee shall not perform, agree to perform or hold himself or itself out as being qualified to perform any services which, under the laws of the State of Florida or of the United States, are to be performed only by a person or entity holding the requisite license for the service same, unless the licensee also holds such license or registration; provided, however, that no violation of this rule hereof shall be deemed to have occurred unless and until the authority administering the license or registration in question makes a final determination that the licensee or registrant has failed to obtain a license or registration in violation of the law requiring same.

(b)(c) A licensee shall reveal all other licenses or registrations held by him or it under the laws of the State of Florida or the United States, if, as a result of such license or registration, a licensee receives any payment for services or goods from the community association or its board.

(d) Violation of any provision of Section 455.227(1), F.S., or of any part of this rule shall subject the licensee to disciplinary measures as set out in Section 468.436, F.S.

(6) Other Discipline. Violation of any provision of Sections 455.227(1) or 468.436(2), F.S., or of any provision of this rule shall subject the licensee to disciplinary action by the Department.

Rulemaking Authority 468.4315(2), 468.436(3) FS. Law Implemented 468.431(2), 468.4315(2), 468.433, 468.4334, 468.436 FS. History–New 5-5-88, Amended 2-5-91, Formerly 7D-55.007, 61B-55.007, Amended 1-8-98, 5-31-99, Formerly 61-20.503, Amended 4-21-10,_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Regulatory Council of Community Association Managers

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Regulatory Council of Community Association Managers

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 15, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR:  September 11, 2014