HOA Corruption & The Journey To Justice: Proposed Changes to Florida Law

Written By Lauren Cote

Miami Dade State Attorney Announces Proposed Law Changes To Help Homeowners Dealing With HOA Corruption

Florida is known for its sprawling communities and condominiums that are governed by homeowners associations (HOAs). However, in recent years, allegations of fraud and corruption among HOA board members have become increasingly prevalent, prompting state lawmakers to take action.

In response to a massive fraud scandal in The Hammocks community, Florida lawmakers are set to take up a bill aimed at strengthening oversight of HOAs and imposing criminal penalties for board members who go rogue. The proposed reforms would require more stringent regulation of financial recordkeeping, improve oversight of HOA board elections, and criminalize board members' acceptance of kickbacks.

Miami-Dade State Attorney Katherine Fernandez Rundle has been a vocal proponent of the proposed legislation, citing the need for more robust enforcement mechanisms to combat fraud and corruption within HOAs. "The [existing] law doesn't have teeth," Fernandez Rundle said during a press conference announcing the proposal.

The new law would make it a crime to meddle in elections, destroy or hide financial records, and accept kickbacks. HOAs would be required to publicly appoint a documents custodian to be responsible for the records. Additionally, the proposed legislation would forward complaints of suspected fraud to the Florida Department of Law Enforcement.

The Hammocks fraud scandal was a tipping point for lax state oversight on HOAs, as investigators claimed that the graft exceeded $3 million. Former board members were arrested and charged with racketeering, money laundering, and theft for allegedly signing invoices to bogus companies for supposed property maintenance, with much of the money going back to the board members themselves.

Residents' frustrations with HOA corruption boiled over last year when Hammocks board election polls closed early due to a supposed "threat," though former board members never produced evidence of this to authorities.

The proposed reforms would also ban board members from using HOA funds for their own legal costs. The receiver overseeing the Hammocks following the arrests noted that former board member Marglli Gallego had used $825,000 in HOA funds for her own defense.

The bill essentially imposes on HOAs many of the same regulations that exist on municipalities and their elected officials, as some of the communities that associations oversee are as big as cities.

In conclusion, the proposed legislation is a critical step in protecting Florida homeowners from fraud and corruption in their HOAs. With strengthened oversight and criminal penalties for board members who go rogue, residents can feel more secure in their communities and trust that their HOAs are acting in their best interests.

Lauren Cote
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