61B-78.004. Enforcement Resolution and Civil Penalties

(1) 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. If the division issues a notice to show cause, it will notify the association of its right to a hearing under Chapter 120, F.S. The guidelines in this rule section 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 these rules shall limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, settlement agreement, or consent order.

(2) General Provisions.

(a) Rule Not All-Inclusive. This rule section 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 section 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 section, the penalty will be determined by consideration of:

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

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

(b) Violations Included. This rule section applies to all statutory and rule violations subject to a penalty authorized by Chapter 719, 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-78.004, 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-78.004, F.A.C., is changed, then the use of the previous statutory citation will not invalidate this rule section.

(3) Aggravating and Mitigating Factors. The division will consider aggravating and mitigating factors, which will reduce or increase the penalty amounts within the specified range, in determining penalties for both minor and major violations listed in this rule section. No aggravating factors will be applied to increase a penalty for a single violation above the statutory maximum of $5,000. The factors shall be applied against each single count of the listed violation.

(a) Aggravating Factors:

No.	Description
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, including such action resulting in an enforcement resolution as detailed in Rule 61B-78.004, F.A.C., or Section 719.501, F.S.
5.	The violation caused substantial harm to unit owners, other persons, or entities.
6.	The violation occurred for a long period of time.
7.	The violation was repeated within 2 years.
8.	The association impeded the division’s investigation or authority.

(b) Mitigating Factors:

No.	Description
1.	The violation or harm was related to a natural or manmade disaster(s).
2.	Financial hardship to respondent.
3.	The violation caused no harm to unit owners, other persons, or entities.
4.	The violation occurred despite reliance on written professional or expert counsel advice.
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.

(4) The provisions of this rule section 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 719, F.S.

(6) In addition to the penalties established in this rule section, 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. 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 public 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 submitted with proper documentation. 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. In no event shall a penalty of more than $2,500 be imposed for a single violation. The enumeration of violations is descriptive only; the full language of each statutory and rule provision cited must be consulted in order to determine the conduct included in the violation. The following are identified as minor violations:

No.	Category	Statute or Rule Cite	Description of Conduct/Violation
1.	Assessments	Section 719.108(6), F.S.	Failure to provide within 15 days a certificate stating all assessments and other moneys owed to the association by the unit owner with respect to the cooperative parcel.
2.	Board	Section 719.1055(4)(b), F.S.	Failure to include the full text showing underlined or strikethrough language in the proposed amendment to the cooperative documents.
3.	Board	Section 719.1035(1), F.S.	Failure to maintain corporate status of the association.
4.	Board	Section 719.106(1)(a)3., F.S.	Failure to provide a timely or substantive response to a written inquiry received by certified mail.
5.	Board	Section 719.106(1)(b)1., F.S.	Action taken at unit owner meeting without quorum.
6.	Board	Section 719.106(1)(c), F.S.	Failure to properly notice and conduct board of administration or 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. Action on item not on agenda. Notice did not include agenda. Failure to allow unit owners to speak or unreasonably restricting the frequency, duration, or manner of unit owner statements at meeting. Failure to allow unit owner to attend meeting.
7.	Board	Section 719.106(1)(d), 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.
8.	Board	Section 719.106(1)(d)2., F.S.	Permitting unit owner action by written agreement without express authority from Chapter 719, F.S., or the cooperative governing documents.
9.	Board	Section 719.106(1)(h), F.S.	Failure to include the full text showing underlined or strikethrough language in the proposed amendment to the bylaws.
10.	Board	Section 719.3026(1), F.S.	Failure to obtain competitive bids on contracts that exceed five percent of the association’s budget.
11.	Board	Section 719.106(1)(b)5., F.S.	Failure to provide a speaker phone for board or committee meetings held by teleconference.
12.	Board	Section 719.106(1)(c), F.S. Rule 61B-75.004, F.A.C.	Failure to allow a unit owner to tape record or video tape meetings.
13.	Budgets	Section 719.106(1)(e), F.S.	Failure to timely notice budget meeting. Failure to timely deliver proposed budget.
14.	Budgets	Section 719.106(1)(e)2., F.S.	Failure of board to call a unit owners’ meeting to consider alternate budget.
15.	Budgets	Section 719.106(1)(j)1., F.S. Section 719.504(20)(c), F.S.	Failure to include applicable line items in proposed budget.
16.	Budgets	Paragraph 61B-76.003(1)(b), F.A.C.	Failure to disclose the beginning and ending dates of the period covered by the budget.
17.	Budgets	Paragraph 61B-76.003(1)(c), F.A.C.	Failure to disclose periodic assessments for each unit type in proposed budget.
18.	Elections	Subsection 61B-75.005(8), F.A.C.	Failure to provide space for name, unit number, and signature on outer envelope.
19.	Elections	Subsection 61B-75.005(9), F.A.C.	Failure to list candidates alphabetically by surname on the ballot.
20.	Elections	Paragraph 61B-75.005(10)(b), F.A.C.	Improper verification of outer envelopes.
21.	Records	Section 719.104(2)(a)2., F.S.	Failure to maintain a copy of the cooperative documents.
22.	Records	Section 719.104(2)(a)5., F.S.	Failure to maintain a current and complete unit owner roster.
23.	Records	Section 719.104(2)(a)12., F.S.	Failure to maintain or annually update the question and answer sheet.
24.	Records	Section 719.104(2)(a)13., F.S.	Failure to maintain other association records related to the operation of the association.
25.	Records	Section 719.104(8)(b), F.S.	Failure to record a vote or an abstention in the minutes for each board member present at the board meeting.
26.	Records	Subsection 61B-76.003(3), F.A.C.	Failure to reflect the adoption of the budget in meeting minutes.
27.	Reporting	Subparagraph 61B-76.006(3)(a)5., F.A.C.	Failure to disclose in the annual financial statements the manner by which reserve items were estimated and/or the date the estimates were last made.
28.	Reporting	Paragraph 61B-76.006(3)(b), F.A.C.	Failure to disclose the method of allocating income and expenses in the annual financial statements.

(b) Major Violations. The following violations shall be considered major due to their increased potential for public 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 submitted with proper documentation. 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. In no event shall a penalty of more than $5,000 be imposed for a single violation. The enumeration of violations is descriptive only; the full language of each statutory and rule provision cited must be consulted in order to determine the conduct included in the violation. The penalties for each violation are as follows:

Level 1: $6 – $10 per unit.

Level 2: $12 – $20 per unit.

No.	Category	Statute or Rule Cite	Description of Conduct/Violation	Penalty Level
1.	Accounting Records	Section 719.104(2)(a)9., F.S.	Insufficient or incomplete accounting records.	2
2.	Assessing	Section 719.106(1)(g), F.S.	Failure to assess at sufficient amounts to meet expenses.	1
3.	Assessing	Section 719.106(1)(g), F.S.	Collecting assessments less frequently than quarterly.	1
4.	Assessing	Section 719.107(2), F.S.	Failure to assess based upon the shares stated in the cooperative documents.	2
5.	Assessing	Section 719.108(3), F.S.	Failure to charge interest on past due assessments.	2
6.	Assessing	Sections 719.108(1), (8), F.S.	Developer or other owner improperly excused from paying assessments.	2
7.	Board	Section 719.104(3), F.S.	Failure to insure the association property.	2
8.	Board	Section 719.104(5), F.S.	Improper use fee.	1
9.	Board	Section 719.104(8)(b), F.S.	Use of proxies or improper use of secret ballots by board members at a board meeting.	1
10.	Board	Section 719.105, F.S. Section 719.109(1), F.S.	Unit owner denied access to unit or to common areas.	1
11.	Board	Section 719.1055, F.S.	Improperly amending the cooperative documents.	2
12.	Board	Subsection 61B-75.005(13), F.A.C.	Improperly filling a vacancy of an unexpired term on the board.	1
13.	Board	Section 719.106(1)(a)1., F.S.	Compensating officers or members of the board without express authority from the cooperative governing documents.	2
14.	Board	Section 719.106(1), F.S.	Allowing ineligible person to serve on board of administration.	2
15.	Board	Section 719.106(1)(b)2., F.S.	Improper use of general proxies. Use of non-conforming limited proxies.	1
16.	Board	Section 719.106(1)(c), F.S.	Excluding unit owners from board or committee meetings.	1
17.	Board	Section 719.106(1)(d), F.S.	Failure to hold annual meeting.	2
18.	Board	Section 719.106(1)(f), F.S.	Improper removal of board member.	1
19.	Board	Section 719.106(1)(h), F.S.	Improperly amending the association bylaws.	2
20.	Board	Section 719.106(1)(i), F.S.	Requiring transfer fees or security deposits without express authority from the cooperative governing documents. Requiring excessive transfer fees.	1
21.	Board	Section 719.106(1)(k), F.S.	Failure to maintain adequate fidelity bonding for all persons who control or disburse association funds.	2
22.	Board	Section 719.108(3), F.S.	Levying late fees without express authority from the cooperative governing documents.	1
23.	Board	Section 719.115(3), F.S.	Failure to notify, or timely notify, unit owners of legal action.	1
24.	Board	Sections 719.303(3), (4), (5), (6), F.S.	Imposing fines without proper notice. Imposing excessive fines. Improper suspension of use rights and voting rights; failure to provide proper notice.	1
25.	Budgets	Section 719.106(1)(e), F.S.	Failure to propose/adopt budget for a given year.	2
26.	Budgets	Subparagraph 61B-76.003(1)(e)5., F.A.C.	Failure to disclose converter reserve funding.	1
27.	Budgets	Paragraphs 61B-76.003(1)(e), (f), (g), F.A.C.	Failure to include reserve schedule in the proposed budget.	1
28.	Budgets	Paragraphs 61B-76.003(1)(e), (f), F.A.C. Subsection 61B-76.005(1), F.A.C.	Failure to include a required reserve item in proposed budget.	1
29.	Budgets	Section 719.106(1)(j)2., F.S. Subsection 61B-76.005(3), F.A.C.	Improper calculation of reserve requirements.	1
30.	Commingle	Section 719.104(7), F.S.	Commingling association funds with non-association funds.	2
31.	Commingle	Section 719.104(7), F.S.	Association funds deposited in account not in association’s name.	1
32.	Commingle	Section 719.104(7), F.S. Subsection 61B-76.005(2), F.A.C.	Commingling reserve funds with operating funds.	1
33.	Common Expenses	Section 719.107(1), F.S.	Using association funds for other than common expenses.	2
34.	Converter Reserves	Section 719.618(3)(b), F.S.	Improper use of converter reserves.	1
35.	Converter Reserves	Subparagraph 61B-76.003(1)(e)5., F.A.C.	Failure to include converter reserve disclosures in the proposed budget.	1
36.	Elections	Section 719.106(1)(d), F.S. Subsection 61B-75.005(2), F.A.C.	Failure to hold election.	2
37.	Elections	Subsection 61B-75.005(2), F.A.C.	Election not held at time and place of annual meeting.	1
38.	Elections	Section 719.106(1)(d)1., F.S. Subsection 61B-75.005(3), F.A.C.	Use of nomination procedures in an election.	2
39.	Elections	Section 719.106(1)(d)1.a., F.S. Subsection 61B-75.005(4), F.A.C.	Failure to provide, or timely provide, first notice of election.	2
40.	Elections	Section 719.106(1)(d)1.a., F.S. Subsection 61B-75.005(5), F.A.C.	Ballot included candidate who did not timely submit notice of candidacy.	2
41.	Elections	Subsection 61B-75.005(6), F.A.C.	Failure to provide candidate a receipt for personally delivered written notice of candidacy.	1
42.	Elections	Section 719.106(1)(d)1.a., F.S. Subsections 61B-75.005(7), (8), F.A.C.	Failure to provide, or timely provide, second notice of election or omitting ballots, envelopes, and candidate information sheets.	2
43.	Elections	Subsection 61B-75.005(7), F.A.C.	Distributing candidate information sheets consisting of more than one page.	1
44.	Elections	Subsection 61B-75.005(8), F.A.C.	Voters allowed to rescind or change their previously cast ballots.	1
45.	Elections	Subsection 61B-75.005(8), F.A.C.	Second notice of election included comments by board about candidates.	2
46.	Elections	Section 719.106(1)(d)1.a., F.S. Subsection 61B-75.005(7), F.A.C.	Association altered or edited candidate information sheets.	2
47.	Elections	Section 719.106(1)(d)1., F.S.	Failure to use ballots or voting machines.	2
48.	Elections	Paragraph 61B-75.005(10)(a), F.A.C.	Inner envelopes not placed in separate receptacle before being opened.	2
49.	Elections	Section 719.106(1)(d)1.a., F.S. Subsection 61B-75.005(9), F.A.C.	Failure to include all timely submitted names of eligible candidates on the ballot.	2
50.	Elections	Subsection 61B75.005(9), F.A.C.	Ballots not uniform. Ballots identify voter. Ballots included space for write-in candidate.	2
51.	Elections	Subsection 61B-75.005(10), F.A.C.	Outer envelopes not checked against list of eligible voters.	1
52.	Elections	Paragraphs 61B-75.005(10)(a), (b), F.A.C.	Counting ineligible ballots.	1
53.	Elections	Paragraph 61B-75.005(10)(a), F.A.C.	Failure to count properly cast ballots.	1
54.	Elections	Subsection 61B-75.005(10), F.A.C.	Outer envelopes opened prior to election meeting. Outer envelopes not opened in presence of unit owners.	2
55.	Elections	Paragraph 61B-75.005(10)(a), F.A.C.	Not counting ballots in the presence of unit owners.	2
56.	Elections	Paragraph 61B-75.005(10)(a), F.A.C.	Ballots not counted by impartial committee.	1
57.	Elections	Paragraph 61B-75.005(10)(b), F.A.C.	Failure to notice meeting to verify outer envelope information.	1
58.	Elections	Paragraph 61B-75.005(10)(c), F.A.C.	Failure to hold, or timely hold, runoff election.	2
59.	Elections	Paragraph 61B-75.005(10)(a), F.A.C.	No blank ballots available at election meeting.	2
60.	Final Order	Section 719.501(1)(d)4., F.S.	Failure to comply with final order of the division.	2
61.	Records	Section 719.104(2)(a)4., F.S.	Failure to maintain minutes of meetings.	1
62.	Records	Section 719.104(2)(a)6., F.S.	Failure to maintain a copy of a current insurance policy.	1
63.	Records	Section 719.104(2)(a)7., F.S.	Failure to maintain copy of management agreement or other contract under which the association has obligations.	1
64.	Records	Section 719.104(2)(a)8., F.S.	Failure to maintain bills of sale or transfer.	1
65.	Records	Section 719.104(2)(a)10., F.S.	Failure to maintain election or voting materials for one year.	1
66.	Records	Section 719.104(2)(a)11., F.S.	Failure to maintain rental records.	1
67.	Records	Section 719.104(2)(c), F.S. Section 719.107(1)(a), F.S.	Requiring a unit owner to pay a fee for access to association records.	1
68.	Records	Section 719.104(2)(b), F.S.	Failure to maintain records within Florida.	2
69.	Records	Sections 719.104(2)(b), (c), F.S.	Failure to provide access to records. Failure to allow scanning or copying of records.	1
70.	Records	Section 719.104(2)(e), F.S.	Failure of outgoing board or committee member to relinquish all official records and property of the association in his or her possession or under his or her control to the incoming board within 5 days after the election.	2
71.	Reporting	Section 719.104(4), F.S. Subsections 61B-76.006(6), (8), F.A.C.	Failure to provide, or timely provide, the annual financial report or statements.	2
72.	Reporting	Subsection 61B-76.006(1), F.A.C.	Failure to prepare annual financial statements using fund accounting. Failure to prepare annual financial statements on accrual basis.	1
73.	Reporting	Section 719.104(4)(a), F.S. Subsection 61B-76.006(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.	2
74.	Reporting	Subsection 61B-76.006(2), F.A.C.	Failure to include one or more components of the annual financial statements (incomplete).	1
75.	Reporting	Subparagraphs 61B-76.006(3)(a)1.-5., F.A.C.	Failure to make significant reserve fund disclosures in the annual financial statement.	1
76.	Reporting	Subparagraph 61B-76.006(3)(a)6., F.A.C.	Failure to include converter reserve disclosures in the annual financial statements.	1
77.	Reporting	Paragraph 61B-76.006(5)(c), F.A.C.	Failure to include converter reserve disclosures in the annual financial report.	1
78.	Reporting	Paragraph 61B-76.006(5)(c), F.A.C.	Failure to include the required reserve fund disclosures in the annual financial report.	1
79.	Reporting	Paragraph 61B-76.006(3)(c), F.A.C.	Failure to include the special assessment disclosures in the annual financial statements.	1
80.	Reporting	Paragraph 61B-76.006(3)(d), F.A.C.	Incomplete or missing guarantee disclosures in the annual financial statements.	1
81.	Reporting	Paragraph 61B-76.006(5)(a), F.A.C.	Failure to prepare the annual financial report on a cash basis.	1
82.	Reporting	Section 719.104(4)(c), F.S. Paragraph 61B-76.006(5)(b), F.A.C.	Failure to include in the annual financial report specified receipt or expenditure items.	1
83.	Reporting	Subsection 61B-76.006(8), F.A.C.	Providing lower level of annual financial reporting than required.	2
84.	Reserves	Section 719.106(1)(j)2., F.S. Subsection 61B-76.005(6), F.A.C.	Failure to fund reserves in a timely manner. Failure to fully fund reserves.	1
85.	Reserves	Section 719.106(1)(j)2., F.S. Subsections 61B-76.005(6), (8), F.A.C.	Failure to follow proper method to waive or reduce reserve funding.	1
86.	Reserves	Section 719.106(1)(j)3., F.S. Subsection 61B-76.005(7), F.A.C.	Using reserve funds for other purposes without proper unit owner approval.	2
87.	Special Assessment	Section 719.108(9), F.S.	Using special assessment funds for other than intended purposes.	1
88.	Special Assessment	Section 719.108(9), F.S.	Failure to state purpose of special assessment in the special assessment notice.	1

Rulemaking Authority 719.501(1)(f) FS. Law Implemented 719.501(1)(d)4., (m) FS. History–New 6-4-98, Amended 2-19-15.