State lawmakers from Miami-Dade submit condo reform law | Miami Herald: "After decades of struggling against a condo regulatory system that experts say perpetuates impunity and makes it easy to commit fraud, thousands of condominium owners in Florida may finally see substantial changes in state laws.
Earlier this month, state senators and representatives from Miami-Dade filed a bill that includes 21 reforms to Chapter 718 of the Florida statutes. The reforms seek to correct gaps in the laws and establish criminal penalties for some irregularities in the administration of condos.
The plan classifies falsification of documents, an offense that now carries no legal consequences, as a third degree felony and sets prison terms. It also criminalizes electoral fraud, such as the falsification of signatures on ballots for condo boards of directors, and refusing access to administrative records with the intent to cover up crimes.
The proposal came one year after el Nuevo Herald and Univision 23 published a series of investigative stories on condo abuses in South Florida, like electoral fraud, falsification of signatures, conflicts of interest, embezzlement and cases of fraudulent bidding.
The series also exposed the lack of enforcement by authorities, from local police departments who refused to investigate allegations of fraud, to widespread negligence at the state agency in charge of enforcing condo laws and regulations and investigating complaints."
HOAs and condo association private governments are vulnerable to embezzlement and fraud, as well as election fraud and manipulation, because in many situations there is virtually no oversight of their actions. Often only a handful of owners are even paying attention to what the association is doing, there is no public disclosure of finances, and state and local governments rarely take an interest in financial oversight of associations. Obviously there should be criminal penalties for fraud and embezzlement, and local prosecutors should take these cases seriously instead of telling people to to away and file a civil suit. But the threat of criminal prosecution alone won't solve the problems. There need to be other incentives, such as some form of mandatory public disclosure of association finances--not just to people who have already signed a contract to buy, and more free or low-cost education programs for all owners.
Also, we need to keep in mind that the rule of law only works in any society if 99% of the time arrest and prosecution are unnecessary. Informal norms have to govern people's behavior so that they behave legally without having any contact with enforcement authorities. Most of the time that is true of association directors and officers, but if we want to improve this situation then a lot more sunlight on association finances is necessary.