To amend Rules 61B-21.001, 61B-21.002 and 61B-21.003, F.A.C. in order to bring current with amendments made to Chapter 718, F.S.

 

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION

Division of Florida Condominiums, Timeshares and Mobile Homes

RULE NOS.:RULE TITLES:

61B-21.001Definitions and Purpose

61B-21.002Educational Resolution

61B-21.003Enforcement Resolution and Civil Penalties

PURPOSE AND EFFECT: To amend Rules 61B-21.001, 61B-21.002 and 61B-21.003, F.A.C. in order to bring current with amendments made to Chapter 718, F.S.

SUMMARY: The proposed rulemaking amends Rules 61B-21.001, 61B-21.002 and 61B-21.003, F.A.C. in order to address amendments made to Chapter 718, F.S.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS 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 economic review conducted by the agency.

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: 718.501(1)(f), FS.

LAW IMPLEMENTED: 718.501(1)(d), 120.695, FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Rikki Anderson, Government Analyst, Division of Condominiums, Timeshares, and Mobile Homes, Department of Business and Professional Regulation, 2601 Blair Stone Road, Tallahassee, Florida 32399, [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

61B-21.001 Definitions and Purpose.

(1) Definitions. For the purposes of this rule chapter, the following definitions shall apply:

(1)(a) “Affirmative or corrective action” means putting remedial procedures in place to ensure that the violation does not recurreoccur, making any injured person whole as to the harm suffered in relation to the violation, or taking any other appropriate measures to redress the harm caused. “Accepted Complaint” means a complaint received by the division containing sufficient documentation and addressing a subject within the jurisdiction of the division, pursuant to Section 718.501(1), F.S.

(2)(b) “Association” shall have the same meaning as stated in section 718.103(2), F.S. “Affirmative or corrective action” means putting remedial procedures in place to ensure that the violation does not recur, making any injured person whole as to the harm suffered in relation to the violation, or taking any other appropriate measures to redress the harm caused.

(3)(c) “Minor violation” is a violation in which the division will issue a Notice of Noncompliance as a first response to a violation of a rule pursuant to rule 61B-21.002, F.A.C, due to the violation’s lower potential for public harm. Failure to timely comply with the Notice of Noncompliance may result in further sanctions and enforcement. “Alleged repeated violation” means any accepted complaint for the same or substantially similar recurring conduct received by the division within two years from the resolution of a previous complaint regarding that conduct.

(d) “Association,” for purposes of these guidelines, shall have the same meaning as stated in Section 718.103(2), F.S.

(e) “Bad check” means any worthless check, draft, or order of payment identified under Section 68.065, F.S.

(2) Purpose. The purpose of the resolution guidelines is to implement the division’s responsibility to ensure compliance with the provisions of Chapter 718, F.S., and the division’s administrative rules. The division recognizes that unit owner controlled associations are comprised of volunteer members who, in most circumstances, are lay people without specialized knowledge of the complex statutory and administrative rule structure of Chapter 718, F.S. Based upon this understanding, the division, as set forth in these rules, will first and foremost attept to seek statutory and rule compliance through an educational resolution. For repeated statutory or rule violations, where the violations have not been corrected or otherwise resolved by the association, the division will seek statutory or rule compliance through an enforcement resolution. The guidelines are also intended to implement the division’s statutory authority to give reasonable and meaningful notice to persons regulated by Chapter 718, F.S., and the administrative rules of the range of penalties that normally will be imposed, if an enforcement resolution is taken by the division. Finally, the rules are intended, pursuant to statutory mandate, to distinguish between minor and major violations based upon the potential harm that the violation may cause.

(3) These penalty guidelines are promulgated pursuant to the division’s authority in Section 718.501(1)(d) and (f), F.S. This rule chapter does not preclude the division from imposing affirmative or corrective action pursuant to Section 718.501(1)(d)2., F.S. Nothing in this rule chapter shall limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, settlement agreement, or consent order. Rules 61B-21.001, and 61B-21.002, and 61B-21.003, F.A.C., are necessary to explicate the division’s education and enforcement policy. This rule chapter is not intended to cover, or be applied to, willful and knowing violations of Chapter 718, F.S., or the administrative rules by an officer or association board member, pursuant to Section 718.501(1)(d)4., F.S. Such violations shall be strictly governed by the provisions of Section 718.501(1)(d)4., F.S. This rule chapter is not intended to cover, or be applied to, violations of Chapter 718, F.S., or the administrative rules by a condominium developer as defined by Section 718.103(16), F.S. Such violations shall be strictly governed by the provisions of Rules 61B-20.004, 61B-20.005, and 61B-20.006, F.A.C., and Section 718.301(5), F.S.

Rulemaking Authority 120.695, F.S.,718.501(1)(d)64.,(f) FS. Law Implemented 718.501(1)(d)64. FS. History–New 6-4-98., Amended      .     

 

61B-21.002 Minor Violations Educational Resolution.

(1) The minor violation educational resolution process, as detailed in this rule chapter, is only applicable to unit owner controlled associations.

(2) Alleged Initial Violation. An initial accepted complaint, directed at an association and involving a possible violation identified as minor in these guidelines, will be resolved as follows:

The division will review the matter and will contact the association board by letter or telephone regarding the complaint. The division will provide educational materials or guidance to the association board to assist it with addressing the subject matter of the complaint and provide the association with the opportunity to respond. The division will notify the complainant of the educational resolution and the division’s complaint file will be closed.

(3) Alleged Repeated Violations. A subsequent accepted complaint, directed at the same association involving a possible violation identified as minor in these guidelines, will be resolved as follows:

(2)If based on the complaint, the division has reasonable cause to believe that a minor statutory or rule violation has may have occurred, a Notice of Noncompliance Warning Letter will be sent to the association. The Notice of Noncompliance Warning Letter shall provide will give the association with a reasonable period of time in which to comply with the rule address, correct, or dispute the violation. The Notice of Noncompliance Warning Letter shall will identify the violation, and provide an investigator’s contact telephone number and email address an investigator’s name so that the association may contact the division to obtain for educational assistance or an educational conference in obtaining compliance. The association However, it is solely responsible for the responsibility of the association to take action, when applicable, to achieve acheiving statutory or rule compliance. Failure to fully comply with a Notice of Noncompliance respond to a Warning Letter, or take affirmative or corrective action as requested by the division, will lead to further enforcement action as permitted by law investigation. The Notice of Noncompliance Warning Letter shall not be considered final agency action. The division will notify the complainant of the edcuational resolution, or if applicable, alternative dispute resolution options.

(3)(4) The division will notify the complainant of the resolution of the complaint, or if applicable, alternative dispute resolution options. Alleged Major Violations. An initial accepted complaint, directed at an association and involving a possible violation identified as major in these guidelines, will be resolved as follows:

If based on the complaint, the division has reasonable cause to believe that a statutory or rule violation may have occurred, a Warning Letter will be sent to the association. The Warning Letter will give the association a reasonable period of time in which to address, correct, or dispute the violation. The Warning Letter will identify the violation, and provide a contact telephone number and an investigator’s name so that the association may contact the division for educational assistance or an educational conference in obtaining compliance. However, it is solely the responsibility of the association to take action, when applicable, to achieve statutory or rule compliance. Failure to respond to a Warning Letter, or take affirmative or corrective action as requested by the division, will lead to further investigation. The Warning Letter shall not be considered final agency action. The division will notify the complainant of the educational resolution, or if applicable, alternative dispute resolution options.

(4) The following violations shall be considered minor violations for which a Notice of Noncomplaince shall be issued:

 

Category	Statute or Rule	Description of Conduct/Violation
Budgets	61B-22.003(1)(b), F.A.C.	Failure to disclose the beginning and ending dates of the period covered by the proposed budget.
Budgets	61B-22.003(1)(c), F.A.C.	Failure to disclose periodic assessments for each unit type in the proposed budget.
Elections	61B-23.0021(7), F.A.C.	Distributing candidate information sheets consisting of more than one page.
Elections	61B-23.0021(9), F.A.C.	Ballot does not list candidates alphabetically by surname.
Elections	61B-23.0021(10)(b), F.A.C.	Outer envelope information verified before the date of the election.
Reporting	61B-22.006(3)(a)5.,6. F.A.C.	Failure to disclose the amount required to fully fund each reserve account as of the end of the fiscal period covered by the annual financial statements; and the manner by which reserve items were estimated and/or the date the estimates were last made in the annual financial statements or turnover audit.  Failure to disclose in the year‑end financial statements the manner by which reserve items were estimated and/or the date the estimates were last made.
Reporting	61B-22.006(3)(b),(c), F.A.C.	Failure to disclose the method of allocating income and expenses in the annual financial statements or turnover audit.

 

(5) Upon a determination of an association’s failure to comply with a Notice of Noncompliance, an enforcement action shall be taken in which the division shall impose a civil penalty between $5 and $10, per unit, for each minor violation. The penalty will be assessed beginning with the middle of the specified range and adjusted either up or down based upon any aggravating or accepted mitigating circumstances, pursuant to rule 61B-21.003(3), F.A.C. The minimum total penalty to be assessed shall be calculated according to these guidelines or $500, whichever amount is greater. In no event shall a penalty of more than $2,500 be imposed for a single minor violation. The guidelines in this rule chapter are based upon a single count violation of each provision listed. Multiple counts of the violated provision or a combination of the listed violations will be added together to determine an overall total penalty. Nothing in this rule chapter shall limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, settlement agreement, or consent order.  Nothing in this rule chapter shall limit the division’s ability to seek judicial enforcement and remedies through the courts.The provisions of this rule chapter shall not be construed so as to prohibit or limit any other adminitrative, civil, or criminal action that may be brought, including notices to cease and desist.

Rulemaking Authority 718.501(1)(d)64.,(f) FS. Law Implemented 120.695, F.S., 718.501(1)(d)64.,(k) FS. History–New 6-4-98., Amended      .  

 

61B-21.003 Penalty Guidelines Enforcement Resolution, Costs and Civil Penalties.

(1) Pursuant to section 718.501(1)(d)6., F.S., the division sets forth below disciplinary guidelines from which disciplinary penalties will be imposed upon affected parties guilty of violating Chapter 718, F.S., and the rules promulgated thereunder. The purpose of the disciplinary guidelines is to provide notice to affected parties of the range of penalties which may be imposed for each count.  Multiple counts of the violated provision or a combination of the listed violations will be added together to determine an overall total penalty. Nothing in this rule chapter shall limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, settlement agreement, or consent order.  Nothing in this rule chapter shall limit the division’s ability to seek judicial enforcement and remedies through the courts. The provisions of this rule chapter shall not be construed so as to prohibit or limit any other administrative, civil, or criminal action that may be brought, including notices to cease and desist. The division will seek compliance through an enforcement resolution for repeated minor or major violations, or for the failure to correct or address a violation or provide unit owner redress as requested by the division. These guidelines list aggravating and mitigating factors that will reduce or increase the listed penalty amounts within the specified range and those circumstances that justify a departure from the range. No aggravating factors will be applied to increase a penalty for a single violation above the statutory maximum of $5,000. The guidelines in this rule chapter are based upon a single count violation of each provision listed. Multiple counts of the violated provision or a combination of the listed violations will be added together to determine an overall total penalty. Nothing in this rule chapter shall limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, settlement agreement, or consent order.

(2) Penalties will be assessed beginning with the middle of the specified range and adjusted up or down based upon any aggravating or accepted mitigating circumstances. The minimum total penalty to be assessed shall be calculated according to these guidelines or $1,000, whichever amount is greater. In no event shall a penalty of more than the statutory maximum be imposed for a single violation. A penalty range of $10 to $30 per unit are set forth for each violation. The absence of any violation from this rule chapter shall not be construed to indicate that the violation does not cause substantial harm or is not subject to a penalty. In any instance where the violation is not listed in this rule chapter, the penalty will be determined by consideration of the closest analogous violation.General Provisions.

Category	Statute or Rule	Description of Conduct/Violation
Accounting Records	718.111(12)(a)11., F.S. 61B-22.002, F.A.C.	Insufficient or incomplete accounting records.
Accounting Records	718.111(12)(a)11., F.S.	Failure to maintain separate accounting records for each condominium.
Assessing	718.112(2)(g), F.S.	Assessments not sufficient to meet expenses.
Assessing	718.112(2)(g), F.S.	Collecting assessments less frequently than quarterly
Assessing	718.115(2), F.S.	Assessments not based upon the shares stated in the declaration of condominium or required by statute.
Assessing	718.115(4), F.S.	Assessments not properly apportioned among multiple condominiums.
Assessing	718.116(3), F.S.	Failure to charge interest on past-due assessments.
Assessing	718.116(9), F.S.	Developer or other owner improperly excused from paying assessments.
Board	718.110(4), F.S.	Improperly amending the declaration of condominium to change the proportion or percentage by which the unit owner shares the common expenses of the condominium and owns the common surplus of the condominium.
Board	718.111(4), F.S.	Improper use fee.
Board	718.111(7)(a), F.S.	Mortgaging or conveying association property without unit-owner approval.
Board	718.111(11)(h), F.S.	Failure to maintain adequate fidelity bonding.
Board	718.112(2)(a)1., F.S.	Compensating officers or members of the board without documentary authority.
Board	718.112(2)(i), F.S.	Improper transfer fees or security deposits.
Board	718.116(3), F.S.	Levying late fees without documentary authority.
Board	718.303, F.S.	Imposing fines without proper notice and opportunity for hearing.  Imposing excessive fines.  Improper suspension of voting rights without proper notices.
Board	718.112(2)(d)2., F.S.	Allowing ineligible person to run for board of administration.
Board	718.3026(1), F.S.	Failure to obtain competitive bids on contracts that exceed five percent of the association’s budget.
Budgets	718.112(2)(e), F.S.	Failure to propose/adopt budget for a given year.
Budgets	718.112(2)(f)1., F.S.	Failure to include a schedule of limited common element expenses in budget.
Budgets	61B-22.003(4)(a), F.A.C.	Failure to prepare a separate budget for each condominium operated by the association as well as for the association.
Budgets	61B-22.003(1)(e), (f), (g), F.A.C.	Failure to include reserve schedule in the proposed budget.  Failure to disclose converter-reserve funding.
Budgets	718.112(2)(f)2., F.S. 61B-22.005(3), (5) F.A.C.	Improper calculation of reserve requirements.
Commingle	718.111(14), F.S.	Commingling association funds with non-association funds.

Commingle	718.111(14), F.S. 61B-22.005(2), F.A.C.	Commingling reserve funds with operating funds.
Common Expenses	718.103(9), 718.115(1), F.S. 61B-23.003(3), F.A.C.	Using association funds for other than common expenses.
Conflict of Interest	718.112(2)(p), F.S.	Contracting with a service provider owned by a board member.
Conflict of Interest	718.3027(1),(2),(4), F.S.	Failing to properly disclose a conflict of interest.
Converter Reserves	718.618(3)(b), F.S.	Improper use of converter reserves.
Debit Card	718.111(15), F.S.	Use of an association debit card for any association expense.
Elections	718.112(2)(d), F.S. 61B-23.0021(2), F.A.C.	Failure to hold an annual election.
Elections	718.112(2)(d)4., F.S.	Failure to use ballots or voting machines.
Elections	61B-23.0021(8), F.A.C.	Failure to provide space for name, unit number, or signature on outer envelope.
Elections	718.112(2)(d)4.a., F.S. 61B-23.0021(4), F.A.C.	Failure to provide, or timely provide, first notice of election.
Elections	61B-23.0021(3), F.A.C.	Improper nomination procedures in election.
Elections	61B-23.0021(2), F.S.	Election not held at time and place of annual meeting.
Elections	61B-23.0021(6), F.A.C.	Failure to provide candidate with a receipt for written notice of candidacy.
Elections	718.112(2)(d)4.a., F.S. 61B-23.0021(7), (8), F.A.C.	Failure to provide, or timely provide, second notice of election or omitting ballots, envelopes, or candidate information sheets.
Elections	718.112(2)(d)4., F.S. 61B-23.0021(5), F.A.C.	Ballot included a candidate who is ineligible. Ballot not including an eligible candidate.
Elections	61B-23.0021(8), F.A.C.	Voters allowed to rescind or change their previously cast ballots.
Elections	61B-23.0021(8), F.A.C.	Second notice of election and accompanying documents included comments by board about candidates.
Elections	61B-23.0021(10)(a), F.A.C.	Ballots not counted by impartial committee.
Elections	718.112(2)(d)4., F.S. 61B-23.0021(7), F.A.C.	Association altered or edited candidate-information sheets.
Elections	61B-23.0021(10)(a), F.A.C.	Inner envelopes not placed in separate receptacle before being opened.
Elections	61B-23.0021(9), F.A.C.	Ballots not uniform.  Ballots identify voter. Ballot contained space for write-in candidate.
Elections	61B-23.0021(10), F.A.C.	Outer envelopes not checked against list of eligible voters.
Elections	61B-23.0021(10)(a), (b), F.A.C.	Counting ineligible ballots.
Elections	61B-23.0021(10), F.A.C.	Failure to count properly cast ballots.
Elections	61B-23.0021(10), F.A.C.	Outer envelopes opened prior to election meeting.  Outer envelopes not opened in presence of unit owners.

Elections	61B-23.0021(10)(a), F.A.C.	Not counting ballots in the presence of unit owners.
Elections	61B-23.0021(10)(b), F.A.C.	Failure to notice meeting to verify outer envelope information.
Elections	61B-23.0021(10)(c), F.A.C.	Failure to timely hold a runoff election.
Elections	61B-23.003(7)(f), F.A.C.	Improperly permitting a developer to vote for a majority of the board.
Elections	61B-23.0021(10)(a), F.A.C.	No blank ballots available at election meeting.
Estoppel Certificate	718.116(8), F.S.	Failure to timely provide an estoppel certificate or failure of the certificate to contain all required components.
Final Order	718.501(1)(d)6., F.S.	Failure to comply with final order of the division.
Fiduciary Duty	718.111(1)(a), F.S.	Violating a fiduciary duty.
Investigation	718.501(1)(n), F.S.	Failure to reasonably cooperate with an investigation.
Property	718.111(7)(a), F.S.	Failing to get approval for acquisition, conveyance, lease, or mortgage of association real property.
Property	718.111(9), F.S.	Improper purchase of unit at a foreclosure sale.
Records	718.111(12)(a), F.S.	Failure to maintain official records.
Records	718.111(12)(c), F.S. 718.115(1)(a), F.S.	Requiring a unit owner to pay a fee for access to association records.
Records	718.111(12)(b), F.S.	Failure to maintain records within 45 miles, or within the county, of the condominium property.
Records	718.111(12)(b), (c), F.S.	Failure to timely provide access to records.  Failure to allow scanning or copying of records.
Records	718.111(12)(f), F.S. 718.501(1)(d)6., F.S.	Failure of outgoing board or committee member or relinquish all official records and property of the association in his or her possession or under their control to the incoming board within 5 days after the election.
Reporting	718.111(13), F.S.	Failure to timely provide annual financial report or statements.
Reporting	61B-22.006(1), F.A.C.	Failure to timely prepare annual financial statements using fund accounting. Failure to prepare annual financial statements on accrual basis.
Reporting	61B-22.006(1), F.A.C.	Failure to prepare annual financial statements in accordance with Generally Accepted Accounting Principles (GAAP).  Failure to have reviewed or audited annual financial statements prepared by a Florida-licensed CPA.
Reporting	61B-22.006(2), F.A.C.	Failure to include one or more components of the annual financial statements (incomplete).
Reporting	61B-22.006(3)(a)1.,6., F.A.C.  61B-22.006(6), F.A.C.	Failure to make significant reserve fund disclosures in annual financial statements or annual financial report.
Reporting	61B-22.006(3)(a)7., F.A.C. 61B-22.006(6), F.A.C.	Failure to include converter reserve disclosures in the annual financial statements or annual financial report.
Reporting	61B-22.006(4), F.A.C.	Failure to include reserve fund disclosures and/or revenues, expenses, and changes in fund balances for each condominium and the association in the annual financial statements of a multi-condominium association.
Reporting	61B-22.006(5), F.A.C.	Failure to show developer assessments separately from other assessment revenues in the annual financial report (statement).

Reporting	61B-22.006(3), F.A.C. 61B-22.006(6)(c), F.A.C.	Failure to include the special assessments disclosures in the annual financial statements or annual financial report.
Reporting	61B-22.006(6)(e), F.A.C.	Failure to separately present revenues and expenses for each condominium and the association in the annual financial report of a multi-condominium association.
Reporting	61B-22.006(3)(e), F.A.C.	Guarantee disclosures incomplete or missing from annual financial statements.
Reporting	61B-22.004(5), F.A.C.	Improper calculation of guarantor’s final obligation.
Reporting	718.111(13)(b), F.S.  61B-22.006(6)(a), F.A.C.	Annual financial report not prepared on a cash basis.
Reporting	718.111(13)(b)3., F.S.	Annual financial report does not include specified receipt or expenditure items.
Reporting	61B-22.006(3)(d), F.A.C. 61B-22.006(6)(d),  F.A.C.	Annual financial statements or annual financial report does not disclose revenues and expenses related to limited common elements.
Reporting	718.111(13)(a), F.S.	Providing lower level of annual financial reporting than required based on the number of units and annual revenues.
Reserves	718.112(2)(f)2., F.S. 61B-22.005(6), F.A.C.	Failure to fund reserves in a timely manner.  Failure to fully fund reserves.
Reserves	718.112(2)(f)2., F.S. 61B-22.005(8), F.A.C.	Failure to follow proper method to waive or reduce reserve funding.
Reserves	718.112(2)(f)3., F.S. 61B-22.005(7), F.A.C.	Using reserve funds for other purposes without proper unit owner approval.

Special Assessment	718.116(10), F.S.	Using special assessment funds for other purposes.
Special Assessment	718.116(10), F.S.	Special assessment notice does not state purpose of assessment.
Website	718.111(12)(g), F.S.	Failing to include required documents on website.

 

(a) Rule Not All-Inclusive. This rule chapter contains illustrative violations. It does not, and is not intended to, encompass all possible violations of statute or division rule that might be committed by an association. The absence of any violation from this rule chapter shall in no way be construed to indicate that the violation does not cause substantial harm or is not subject to a penalty. In any instance where the violation is not listed in this rule chapter, the penalty will be determined by consideration of:

1. The closest analogous violation, if any, that is listed in this rule chapter; and

2. The mitigating or aggravating factors listed in this rule chapter.

(b) Violations Included. This rule chapter applies to all statutory and rule violations subject to a penalty authorized by Chapter 718, F.S.

(c) Rule Establishes Norm. These guidelines do not supersede the division’s authority to order an association to cease and desist from any unlawful practice, or order other affirmative action in situations where the imposition of administrative penalties is not adequate. For example, notwithstanding the specification of relatively smaller penalties for particular violations, the division will suspend the imposition of a penalty and impose other remedies where aggravating or mitigating factors warrant it. If an enforcement resolution is utilized, the total penalty to be assessed shall be calculated according to these guidelines or $100, whichever amount is greater.

(d) Description of Violations. Although the violations in Rule 61B-21.003, F.A.C., include specific references to statutes and administrative rules, the violations are described in general language and are not necessarily stated in the same language that would be used to formally allege a violation in a specific case. If any statutory or rule citation in Rule 61B-21.003, F.A.C., is changed, then the use of the previous statutory citation will not invalidate this rule chapter.

(3) When either the Petitioner or Respondent is able to demonstrate aggravating or mitigating circumstances to the division or hearing officer in an enforcement action by clear and convincing evidence, the division or hearing officer shall be entitled to deviate from the above guidelines in imposing or recommending discipline.

(a) Aggravating circumstances may include, but are not limited to, the following:

1. Filing or causing to be filed any materially incorrect document in response to any division request or subpoena.

2. Financial loss to parties or persons affected by the violation.

3. Financial gain to parties or persons responsible for the violation.

4. The disciplinary history of the association.

5. The harm caused to unit owner(s) or other persons or entities.

6. The violation occurred for a long period of time.

7. The length of time between violations

8. The association impeded the division’s investigation or authority.

(b) Mitigating circumstances may include, but are not limited to, the following:

1. The violation or harm was related to a natural or manmade disaster.

2. The violation caused no harm to unit owner(s) or other persons or entities.

3. The association took affirmative or corrective action before it received the division’s written notification of the violation.

4. The association expeditiously took affirmative or corrective action after it received the division’s written notification of the violation.

5. The association cooperated with the division during the investigation.

Aggravating and Mitigating Factors. The division will consider aggravating and mitigating factors in determining penalties for violations listed in this rule chapter. The factors are not necessarily listed in order of importance, and they shall be applied against each single count of the listed violation.

(a) Aggravating Factors:

1. Filing or causing to be filed any materially incorrect document in response to any division request or subpoena.

2. Financial loss to parties or persons affected by the violation.

3. Financial gain to parties or persons who perpetrated the violation.

4. The disciplinary history of the association, including such action resulting in an enforcement resolution as detailed in Rule 61B-21.003, F.A.C., or Section 718.501, F.S.

5. The violation caused substiantial harm, or has the potential to cause substantial harm, to condominium residents or other persons.

6. Undue delay in initiating or completing, or failure to take, affirmative or corrective action after the association received the division’s written notification of the violation.

7. The violation had occurred for a long period of time.

8. The violation was repeated within a short period of time.

9. The association impeded the division’s investigation or authority.

10. The investigation involved the issuance of a notice to show cause or other proceeding.

(b) Mitigating Factors:

1. Whether current members of the association board have sought and received educational training, other than information provided pursuant to Rule 61B-21.002, F.A.C., on the requirements of Chapter 718, F.S., within the past two years.

2. Reliance on written professional or expert counsel and advice.

3. Acts of God or nature.

4. The violation caused no harm to condominium residents or other persons.

5. The association took affirmative or corrective action before it received the division’s written notification of the violation.

6. The association expeditiously took affirmative or corrective action after it received the division’s written notification of the violation.

7. The association cooperated with the division during the investigation.

8. The investigation was concluded through consent proceedings.

(4) In addition to the penalties established in this rule chapter, the division reserves the right to seek to recover any other costs, penalties, attorney’s fees, court costs, service fees, collection costs, and damages allowed by law.The provisions of this rule chapter shall not be construed so as to prohibit or limit any other civil or criminal prosecution that may be brought.

(5) The imposition of a penalty does not preclude the division from imposing additional sanctions or remedies provided under Chapter 718, F.S.

(6) In addition to the penalties established in this rule chapter, the division reserves the right to seek to recover any other costs, penalties, attorney’s fees, court costs, service fees, collection costs, and damages allowed by law.

(a) Cost of Onsite Reviews and Investigations. Expenses charged pursuant to this subsection are computed in the manner prescribed by Section 112.061, F.S. The division will seek to collect from a developer, association, officer, director, bulk buyer, or bulk assignee the actual cost of an onsite review or investigation under Section 781.501(1)(d)8., F.S. as verified by the agency travel reimbursement approved under Section 112.061, F.S.

(b) Additionally, the division reserves the right to seek to recover any costs, penalties, attorney’s fees, court costs, service fees, collection costs, and damages imposed by law if an association submits a bad check to the division.

(7) Penalties.

(a) Minor Violations. The following violations shall be considered minor due to their lower potential for consumer harm. If an enforcement resolution is utilized, the division shall impose a civil penalty between $1 and $5, per unit, for each minor violation. The penalty will be assessed beginning with the middle of the specified range and adjusted either up or down based upon any accepted aggravating or mitigating factors. An occurrence of six or more aggravating factors or five or more mitigating factors will result in a penalty being assessed outside of the specified range. The total penalty to be assessed shall be calculated according to these guidelines or $100, whichever amount is greater. Finally, in no event shall a penalty of more than $2,500 be imposed for a single violation. The following are identified as minor violations:

Category	Statute or Rule Cite	Description of Conduct/Violation
Board	Section 718.110(1)(b), F.S.	Failure of amendment to declaration or bylaws to contain full text
	Section 718.112(2)(h)2., F.S.	showing underlined or language; etc.
Board	Section 718.111(1)(a), F.S.	Failure to maintain corporate status.
Board	Section 718.111(1)(b), F.S.	Improper use of secret ballot, or use of proxy, by board members at a
		board meeting.
Board	Section 718.112(2)(a)2., F.S.	Failure to provide a timely or substantive response to a written inquiry
		received by certified mail.
Board	Section 718.112(2)(b)1., F.S.	Improper quorum at unit owner meeting.
Board	Section 718.112(2)(b)2., F.S.	Failure of proxy to contain required elements.
Board	Section 718.112(2)(c), F.S.	Failure to properly notice and conduct board of administration or
	subsection 61B-23.002(9), F.A.C.	committee meetings: notice failed to indicate assessment would be
		considered; failure to maintain affidavit by person who gave notice of
		special assessment meeting; failure to ratify emergency action at next
		meeting; failure to adopt a rule regarding posting of notices; failure to
		notice meeting; non-emergency action taken at board meeting, not on
		agenda; no meeting agenda; failure to allow unit owners to speak at
		meeting or speech is limited to less than three minutes.
Board	Section 718.112(2)(d)2., F.S.	Failure to provide notice of the annual meeting not less than 14 days
		prior to the meeting. Failure to include agenda. Failure to maintain
		affidavit by person who gave notice of annual meeting. Failure to adopt
		a rule designating a specific place for posting notice of unit owner
		meetings.
Board	Section 718.112(2)(d)4., F.S.	Failure to hold a unit owner meeting to obtain unit owners’ approval
		when written agreements are not authorized.
Board	Section 718.112(2)(i), F.S.	Failure to have the authority in the documents when levying transfer
		fees or security deposits.
Board	Section 718.113(5), F.S.	Failure to comply with hurricane shutter requirements.
Board	Section 718.116(3), F.S.	Failure to have the authority in the documents when levying late fees.
Board	Section 718.3026(1), F.S.	Failure to obtain competitive bids on contracts that exceed five percent
		of the association’s budget.
Board	Section 718.303(3), F.S.	Failure to have the authority in the documents when levying fines.
		Failure to provide proper notice of fines.
Board	subsection 61B-23.001(2), F.A.C.	Failure to allow unit owners to attend board or committee meetings.
Board	Section 718.112(2)(b)5., F.A.C.	Failure to provide a speaker phone for board or committee meetings
		held by teleconference.
Board	subsection 61B-23.001(4), F.A.C.	Failure to employ a licensed manager when licensure is required.
Board	subsection 61B-23.002(10), F.A.C.	Failure to permit a unit owner to tape record or video tape meetings.
Board	paragraph 61B-23.0021(1)(d), F.A.C.	Failure to fill vacancy properly.
	Section 718.112(2)(d)8., F.S.
Budgets	Section 718.112(2)(e), F.S.	Failure to timely notice budget meeting. Failure to timely deliver
		proposed budget. Failure of board to call a unit owners’ meeting to
		consider alternate budget.
Budgets	Section 718.112(2)(f)1., F.S.	Failure to include applicable line items in proposed budget.
Budgets	Section 718.112(2)(f)1., F.S.	Failure to show limited common element expenses in proposed budget.
	subsection 61B-22.003(5), F.A.C.
Budgets	paragraph 61B-22.003(1)(b), F.A.C.	Failure to disclose the beginning and ending dates of the period covered
		by the proposed budget.
Budgets	paragraph 61B-22.003(1)(c), F.A.C.	Failure to disclose periodic assessments for each unit in proposed budget.
Budgets	paragraph 61B-22.003(1)(d), F.A.C.	Failure to propose full reserve funding in proposed budget.
Budgets	paragraphs 61B-22.003(1)(e), (f), (g), F.A.C.	Failure to provide for funding of one or more reserve fund
	subsection 61B-22.005(1), F.A.C.	categories in the proposed budget.
Budgets	paragraph 61B-22.003(4)(a), F.A.C.	Failure to provide the required separate proposed budget for each
		condominium operated by the association.
Elections	Section 718.112(2)(d)3., F.S.	Improper nomination procedures in election.
	subsection 61B-23.0021(3), F.A.C.
Elections	Section 718.112(2)(d)3., F.S.	Including a candidate who did not provide timely notice of candidacy.
	subsection 61B-23.0021(5), F.A.C.
Elections	subsection 61B-23.0021(6), F.A.C.	Failure to provide candidate a receipt for written notice of intent to be
		a candidate.
Elections	subsections 61B-23.0021(8), (10), F.A.C.	Counting ballots not cast in inner and outer envelopes. Failure to
		provide space for name and signature on outer envelope.
Elections	paragraph 61B-23.0021(10)(c), F.A.C.	Failure to timely hold runoff election.
Records	Section 718.111(1)(b), F.S.	Failure of minutes to reflect how board members voted at board
		meeting. Failure to record a vote or an abstention in the minutes for
		each board member present at the board meeting.
Records	Section 718.111(12)(a)2., F.S.	Failure to maintain a copy of recorded declaration and amendments.
Records	Section 718.111(12)(a)3., F.S.	Failure to maintain a copy of recorded bylaws and amendments.
Records	Section 718.111(12)(a)4., F.S.	Failure to maintain a certified copy of articles of incorporation and
		amendments.
Records	Section 718.111(12)(a)7., F.S.	Failure to maintain a current unit owner roster. Failure to roster to
		include all elements.
Records	Section 718.111(12)(a)14., F.S.	Failure to maintain or annually update the question and answer sheet.
	paragraph 61B-23.002(7)(a), F.A.C.
Records	Section 718.111(12)(a)15., F.S.	Failure to maintain other association records related to the operation
		of the association.
Records	Section 718.111(12)(b), (c), F.S.	Failure to provide access to records.
Records	subsection 61B-22.003(3), F.A.C.	Failure of budget meeting minutes to reflect adoption of the proposed
		budget.
Records	subsection 61B-23.003(6), F.A.C.	Failure to maintain a copy of the receipt for delivery of association
		records upon transfer of control.
Reporting	Section 718.111(13), F.S.	Failure to timely provide the annual financial report.
Reporting	subparagraph 61B-22.006(3)(a)5., F.A.C.	Failure to disclose in the year-end financial statements the manner by
		which reserve items were estimated and/or the date the estimates
		were last made.
Reporting	paragraphs 61B-22.006(3)(b), (c), F.A.C.	Improper disclosure in the year-end financial statements of method of
		allocating revenues and expenses. Improper special assessment
		disclosures in the year-end financial statements.
Reporting	paragraph 61B-22.006(3)(d), F.A.C.	Improper disclosure in the year-end financial statements of revenues and
		expenses related to limited common elements.
Reporting	subsection 61B-22.006(4), F.A.C.	Improper multi-condominium reserve fund disclosures in the year-end
		financial statements. Multi-condominium revenues, expenses, and
		changes in fund balance not shown for each condominium in the
		year-end financial statements. Disclosure of multi-condominium
		revenues/expenses for the association not specific to a condominium,
		is omitted, or is incomplete in the year-end financial statements.
Reporting	paragraph 61B-22.006(3)(a), F.A.C.	Failure to include the required reserve fund disclosures in the annual
		financial report.
Reporting	paragraph 61B-22.006(6)(b), F.A.C.	Improper disclosure of receipts and expenditures in the annual
		financial report in a multi-condominium association.

(b) Major Violations. The following violations shall be considered major due to their increased potential for consumer harm. If an enforcement resolution is utilized, the penalty will be assessed beginning with the middle of the specified range and adjusted either up or down based upon any accepted aggravating or mitigating factors. An occurrence of six or more aggravating factors or five or more mitigating factors will result in a penalty being assessed outside of the specified range. The total penalty to be assessed shall be calculated according to these guidelines or $100, whichever amount is greater. Finally, in no event shall a penalty of more than $5,000 be imposed for a single violation. The penalties are set forth in categories 1 and 2, for each violation as follows:

Category 1:	$6 – $10 per unit.
Category 2:	$12 – $20 per unit.
Category	Statute or Rule Cite	Description of Conduct/Violation	Suggested
Accounting	Section 718.111(12)(a)11., F.S.	Insufficient detail in the accounting records.	2
Records	Rule 61B-22.002, F.A.C.	Failure to maintain sufficient accounting records.
Assessing	Section 718.112(2)(g), F.S.	Failure to assess at sufficient amounts.	1
Assessing	Section 718.115(2), F.S.	Failure to assess based upon proportionate share or as stated in	2
		the declaration of condominium.
Board	Section 718.110, F.S.	Failure to follow method of amendment.	2
	Section 718.112, F.S.
Board	Section 718.112(2)(a)1., F.S.	Improper compensation of officers or directors.	1
Board	Section 718.112(2)(d)1., F.S.	Failure to hold annual meeting.	2
Board	Section 718.111(11)(d), F.S.	Failure to maintain adequate fidelity bonding for all persons who	2
		control or distribute association funds.
Board	Section 718.501(2)(a), F.S.	Failure to pay annual fees to the division.	2
Budgets	Section 718.112(2)(e), F.S.	Failure to propose/adopt budget for a given year.	2
Budgets	paragraphs 61B-22.003(1)(e), (f),	Failure to include reserve schedule in the proposed budget.	1
	(g), F.A.C.
Commingle	Section 718.111(14), F.S.	Commingling association funds with non-association funds.	2
Commingle	Section 718.111(14), F.S.	Commingling reserve funds with operating funds.	1
	subsection 61B-22.005(2), F.A.C.
Common	Section 718.115(1), F.S.	Using association funds for other than common expenses.	2
Expenses	subsection 61B-23.003(3), F.A.C.
Converter	Section 718.618(3)(b), F.S.	Improper use of converter reserves.	1
Reserves
Converter	subparagraph 61B-22.003(1)(e)5.,	Failure to include converter reserve disclosures in the proposed	1
	F.A.C.	budget, year-end financial statements, or annual financial report.
Reserves	subparagraph 61B-22.006(3)(a)6.,
	F.A.C.
Elections	Section 718.112(2)(d), F.S.	Failure to hold election.	2
	subsection 61B-23.0021(2), F.A.C.
Elections	Section 718.112(2)(d)3., F.S.	Failure to use ballots or voting machines.	2
Elections	Section 718.112(2)(d)3., F.S.	Failure to provide, or timely provide, first notice of election.	1
	subsection 61B-23.0021(4), F.A.C.
Elections	Section 718.112(2)(d)3., F.S.	Failure to provide, or timely provide, second notice of election or	1
	subsections 61B-23.0021(7), (8),	omitting materials such as ballots, envelopes, and candidate
	F.A.C.	information sheets.
Elections	Section 718.112(2)(d)3., F.S.	Failure to include all timely submitted names of eligible candidates	1
	subsection 61B-23.0021(9), F.A.C.	on the ballot.
Elections	paragraphs 61B-23.0021(10)(a),	Counting ineligible ballots. Not counting ballots in the presence	1
	(b), F.A.C.	of unit owners.
Elections	paragraph 61B-23.0021(10)(c),	Failure to hold runoff election.	2
	F.A.C.
Final Order	Section 718.501(1)(d)4., F.S.	Failure to comply with final order of the division.	2
Records	Section 718.111(12)(a)12., F.S.	Failure to maintain election materials for one year.	1
Records	Section 718.111(12)(a)6., F.S.	Failure to maintain minutes of meetings.	1
Records	Section 718.111(12)(b), F.S.	Failure to maintain records within Florida.	2
Reporting	Section 718.111(13), F.S.	Failure to provide the annual financial report.	2
Reporting	Section 718.111(13), F.S.	Failure to provide year-end financial statements in a timely	1
	paragraph 61B-22.006(7)(b),	manner.
	F.A.C.
Reporting	Section 718.111(13), F.S.	Failure to provide year-end financial statements.	2
Reporting	subsection 61B-22.006(1), F.A.C.	Failure to prepare year-end financial statements using fund	1
		accounting. Failure to prepare year-end financial statements on
		accrual basis.
Reporting	subsection 61B-22.006(1), F.A.C.	Failure to prepare year-end financial statements in accordance	2
		with Generally Accepted Accounting Principles (GAAP).
		Failure to have reviewed or audited year-end financial
		statements prepared by a Florida licensed CPA.
Reporting	subsection 61B-22.006(2), F.A.C.	Failure to include one or more components of the year-end	1
		financial statements (incomplete).
Reporting	subparagraphs 61B-22.006(3)(a)	Failure to make significant reserve fund disclosures in the	1
	1.-6., F.A.C.	year-end financial statements or annual financial report.
Reporting	paragraphs 61B-22.006(6)(a), (b),	Failure to prepare the annual financial report on a cash basis.	1
	F.A.C.	Failure to include in the annual financial report specified
		receipt or expenditure line items, or disclosures on limited
		common elements.
Reporting	Section 718.111(13)(d), F.S.	Providing lower level of reporting for year-end financial	2
		statements than required.
Reserves	Section 718.112(2)(f)2., F.S.	Failure to calculate reserve funds properly.	1
	subsection 61B-22.005(3), F.A.C.
Reserves	Section 718.112(2)(f)2., F.S.	Failure to fund reserves in a timely manner.	1
	subsection 61B-22.005(6), F.A.C.	Failure to fully fund reserves.
Reserves	Section 718.112(2)(f)2., F.S.	Failure to follow proper method to waive or reduce reserve	1
	subsections 61B-22.005(6), (8),	funding.
	F.A.C.
Reserves	Section 718.112(2)(f)3., F.S.	Failure to obtain unit owner approval prior to using reserve funds	2
	subsection 61B-22.005(7), F.A.C.	for other purposes.
Special	Section 718.116(10), F.S.	Failure to use special assessment funds for intended purposes.	1
Assessment

Rulemaking Authority 718.501(1)(d)64., (f), 718.50153 FS. Law Implemented 718.501(1)(d)64., 718.50153 FS. History–New 6-4-98, Amended 9-3-13.,            .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Kevin Stanfield, Director, Division of Florida Condominiums, Timeshares and Mobile Homes, Department of Business and Professional Regulation, 2601 Blair Stone Road, Tallahassee, Florida 32399, [phone]

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jonathan Zachem, Secretary, Department of Business and Professional Regulation

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: 06/21/2018

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: 10/10/2017