Fla. Admin. Code R. 61B-20.006

Current through Reg. 50, No. 222; November 13, 2024

Section 61B-20.006 - Enforcement Resolution, Costs and Civil Penalties

(1) The division will seek compliance through an enforcement resolution for repeated minor violations, for the failure to correct or address a violation or provide unit owner redress as requested by the division, or for a major violation. These guidelines list aggravating and mitigating factors that will reduce or increase the penalty amounts within the specified range and those circumstances that justify a departure from 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 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 a developer. 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 718, F.S.

(c) Rule Establishes Norm. These guidelines do not supersede the division's authority to order a developer 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 $500, whichever amount is greater.

(d) Description of Violations. Although the violations in Rule 61B-20.006, 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-20.006, 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 in determining penalties for violations listed in this rule section. 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 same violation was committed after a Notice of Deficiency was issued.

5. The disciplinary history of the developer, including such action resulting in settlement or pending resolution.

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

7. Undue delay in initiating or completing, or failure to take affirmative or corrective action after the developer received the division's written notifications of the violation.

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

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

10. The developer impeded the division's investigation or authority.

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

(b) Mitigating Factors:

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

2. Acts of God or nature.

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

4. The developer took affirmative or corrective action before it received the division's written notification of the violation.

5. The developer expeditiously took affirmative or corrective action after it received the division's written notification of the violation.

6. The developer cooperated with the division during the investigation.

7. The investigation was concluded through consent proceedings.

(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 718, 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.

(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 a developer 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 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 $500, whichever amount is greater. Finally, in no event shall a penalty of more than $5,000 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. Section 718.112(2)(h)2., F.S.	Failure of amendment to declaration or bylaws to contain full text 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. subsection 61B-23.002(9), F.A.C.	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; 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.S.	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	Subparagraph 61B-23.0021(1)(d) 2., F.A.C.	Failure to fill vacancy properly.
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. Section 718.504(21), F.S.	Failure to include applicable line items in proposed budget.
Budgets	Section 718.112(2)(f)1., F.S. subsection 61B-22.003(5), F.A.C.	Failure to show limited common element expenses in proposed budget.
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 type 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. subsection 61B-22.005(1), F.A.C.	Failure to provide for funding of one or more reserve fund 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. subsection 61B-23.0021(3), F.A.C.	Improper nomination procedures in election.
Elections	Section 718.112(2)(d)3., F.S. subsection 61B-23.0021(5), F.A.C.	Including a candidate who did not provide timely notice of candidacy.
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 of roster to include all elements.
Records	Section 718.111(12)(a)14., F.S. paragraph 61B-23.002(7)(a), F.A.C.	Failure to maintain or annually update the question and answer sheet.
Records	Section 718.111(12)(a)15., F.S.	Failure to maintain other association records related to the operation of the association.
Records	Sections 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	Subsection 61B-22.006(5), F.A.C.	Failure to show developer assessments separately from non-developer owners in the year-end financial statements or annual financial report.
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.
Reporting	Paragraph 61B-22.0062(2)(b), F.A.C.	Failure to include in the turnover financial statements a statement of total cash payments made by the developer to the 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 $500, 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, 2, and 3, for each violation as follows:

Category 1: $10 - $18 per unit.

Category 2: $20 - $50 per unit.

Category 3: $100 - $300 for each unit offered/created; deposit or contract.

Category	Statute or Rule Cite	Description of Conduct/Violation	Suggested Penalty
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 the declaration of condominium.	2
Assessing	Sections 718.116(1), (9), F.S.	Failure by developer to pay assessments or to pay in timely manner.	2
Board	Section 718.110, F.S. Section 718.112, F.S.	Failure to follow method of amendment.	2
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. Section 718.111(11)(d), F.S.	Failure to hold annual meeting. Failure to maintain adequate fidelity bonding for all persons who control or distribute association funds.	2
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), (g), F.A.C.	Failure to include reserve schedule in the proposed budget.	1
Commingle	Section 718.111(14), F.S.	Commingling association funds with non-association funds.	2
Commingle	Section 718.111(14), F.S. subsection 61B-22.005(2), F.A.C.	Commingling reserve funds with operating funds.	1
Common Expenses	Section 718.115(1), F.S. subsection 61B-23.003(3), F.A.C.	Using association funds for other than common expenses.	2
Converter Reserves	Section 718.618(1), F.S. Rule 61B-24.007, F.A.C.	Failure to calculate converter reserves properly.	2
Converter Reserves	Section 718.618(2)(a), F.S.	Failure to fund converter reserves in a timely manner.	2
Converter Reserves	Section 718.618(3)(b), F.S.	Improper use of converter reserves.	1
Converter Reserves	Subparagraph 61B-22.003(1)(e) 5., F.A.C. Subparagraph 61B-22.006(3)(a) 6., F.A.C.	Failure to include converter reserve disclosures in the proposed budget, year-end financial statements, or annual financial report.	1
Development	Section 718.202(1), F.S. subsection 61B-17.009(1), F.A.C.	Developer using an alternative assurance, such as a Letter of Credit or Surety Bond, in lieu of an escrow account, without the prior approval of the Director.	3
Development	Section 718.202(1) or (6), F.S.	Failure to establish an escrow account or place funds therein.	3
Development	Sections 718.301(1), (2), (4), F.S.	Failure to transfer association control.	2
Development	Section 718.403(1), F.S.	Continuing to develop phases after expiration of phase deadline.	3
Development	Sections 718.403(1), (2), F.S. subsubsection 61B-17.003(9), F.A.C.	Failure to follow proper method to amend documents to alter phase development plan.	3
Development	Section 718.502(2)(a), F.S.	Accepting deposits prior to filing reservation and escrow agreements with the division.	3
Development	Section 718.502(2)(a), F.S. paragraph 61B-17.001(1)(a), F.A.C.	Offering sales contracts prior to initial filing with division and acceptance for form.	3
Development	Section 718.502(3), F.S. subsection 61B-17.006(2), F.A.C.	Failure to file amendments to documents previously filed with the division.	1
Development	Section 718.503(1)(a), F.S. subsection 61B-18.001(10), F.A.C.	Using sales contracts without required disclosures.	3
Development	Section 718.503(1)(b), F.S.	Failure to provide documents to purchasers.	3
Development	Subsection 61B-17.001(6), F.A.C.	Closing on sales of units prior to filing with division and acceptance for content.	3
Development	Subsection 61B-17.001(3), F.A.C.	Failure to provide recording information to the division.	1
Development	Subsection 61B-17.003(3), F.A.C.	Offering sales contracts on units within a phase prior to filing phase documents with the division.	3
Elections	Section 718.112(2)(d), F.S. Sections 718.301(1), (2), F.S. subsection 61B-23.0021(2), F.A.C.	Failure to hold election to permit participation on board by non-developer owners. Failure to permit participation on board by non-developer owners after 15 percent of units have been sold.	2
Elections	Section 718.112(2)(d)3., F.S. subsection 61B-23.0021(4), F.A.C.	Failure to provide, or timely provide, first notice of election.	1
Elections	Section 718.112(2)(d)3., F.S. subsections 61B-23.0021(7), (8), F.A.C.	Failure to provide, or timely provide, second notice of election or omitting materials such as ballots, envolopes, and candidate information sheets.	1
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. subsection 61B-23.0021(9), F.A.C.	Failure to include all timely submitted names of eligible candidates on the ballot.	1
Elections	Paragraphs 61B-23.0021(10)(a), (b), F.A.C.	Counting ineligible ballots. Not counting ballots in the presence of unit owners.	1
Elections	Paragraph 61B-23.0021(10)(c), F.A.C.	Failure to hold runoff election.	2
Elections	Paragraph 61B-23.003(7)(f), F.A.C.	Improperly permitting a developer to vote for a majority of the board.	2
Final Order	Section 718.501(1)(d)4., F.S.	Failure to comply with final order of the division.	2
Guarantee	Section 718.116(9), F.S. subsection 61B-22.004(1), F.A.C.	Guarantee not properly established.	2
Guarantee	Section 718.116(9)(a), F.S. subsection 61B-22.004(3), F.A.C.	Improperly assessing unit owners.	2
Guarantee	Section 718.116(9)(a), F.S. subsection 61B-22.004(5), F.A.C.	Guarantee deficit not funded.	2
Guarantee	Subsection 61B-22.004(2), F.A.C.	Guarantee period unclear/not specified, not properly extended.	2
Guarantee	Paragraph 61B-22.004(4)(a), F.A.C.	Not providing sufficient cash/resources to provide payment on a timely basis of all common expenses including full funding of reserves.	2
Guarantee	Paragraph 61B-22.004(4)(b), F.A.C. subsection 61B-22.004(5), F.A.C.	Amount owed by the guarantor for the guarantee period not properly calculated.	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
Records	Section 718.301(4), F.S.	Failure to deliver one or more association records upon transfer of association control.	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 manner.	1
Reporting	Section 718.111(13), F.S.	Failure to provide year-end financial statements.	2
Reporting	Section 718.111(13), F.S.	Prior to turnover of control of the association, developer was included in vote to waive audit requirement after the first two year of operation.	2
Reporting	Section 718.301(4)(c), F.S.	Failure to provide turnover financial statements in a timely manner.	1
Reporting	Section 718.301(4)(c), F.S. subsection 61B-22.0062(1), F.A.C.	Failure to provide turnover financial statements. Turnover financial statements not audited. Failure of turnover financial statements to cover entire period.	2
Reporting	Subsection 61B-22.006(1), F.A.C.	Failure to prepare year-end financial statements using fund accounting. Failure to prepare year-end financial statements on accrual basis.	1
Reporting	Subsection 61B-22.006(1), F.A.C.	Failure to prepare year-end financial statements in accordance with Generally Accepted Accounting Principles (GAAP). Failure to have reviewed or audited year-end financial statements prepared by a Florida licensed CPA.	2
Reporting	Subsection 61B-22.006(2), F.A.C.	Failure to include one or more components of the year-end financial statements (incomplete).	1
Reporting	Subparagraphs 61B-22.006(3)(a) 1.-6., F.A.C.	Failure to make significant reserve fund disclosures in the year-end financial statements or annual financial report.	1
Reporting	Paragraph 61B-22.006(3)(e), F.A.C. paragraph 61B-22.0062(2)(d), F.A.C.	Guarantee disclosures incomplete in, or missing from, turnover financial statements or year-end financial statements.	1
Reporting	Paragraphs 61B-22.006(6)(a), (b), F.A.C. Section 718.111(13)(b), F.S.	Failure to prepare the annual financial report on a cash basis. Failure to include in the annual financial report specified receipt or expenditure line items, or disclosures on limited common elements.	1
Reporting	Section 718.111(13)(d), F.S.	Providing lower level of reporting for year-end financial statements than required.	2
Reporting	Subsection 61B-22.0062(2), F.A.C.	Failure of turnover financial statements to present revenues and expenses for each fiscal year and interim period.	2
Reporting	Paragraphs 61B-22.0062(2)(a) -(c), F.A.C.	Turnover financial statements omit disclosure of common expenses paid by the developer.	2
Reserves	Section 718.112(2)(f)2., F.S. subsection 61B-22.005(3), F.A.C.	Failure to calculate reserve funds properly.	1
Reserves	Section 718.112(2)(f)2., F.S. subsection 61B-22.005(6), F.A.C.	Failure to fund reserves in a timely manner. Failure to fully fund reserves.	1
Reserves	Section 718.112(2)(f)2., F.S. subsections 61B-22.005(6), (8), F.A.C.	Failure to follow proper method to waive or reduce reserve funding.	1
Reserves	Section 718.112(2)(f)2., F.S.	Prior to turnover of control of the association, developer included in vote to waive/reduce reserve funding after first two years of operation.	1
Reserves	Section 718.112(2)(f)3., F.S. subsection 61B-22.005(7), F.A.C.	Failure to obtain unit owner approval prior to using reserve funds for other purposes.	2
Special Assessment	Section 718.116(10), F.S.	Failure to use special assessment funds for intended purposes.	1

Fla. Admin. Code Ann. R. 61B-20.006

Rulemaking Authority 718.501(1)(d)4., (f), 718.50153 FS. Law Implemented 718.501(1)(d)4., 718.50153 FS.

New 6-4-98, Amended 9-3-13.

New 6-4-98, Amended 9-3-13.