Meeting Packet — Regulatory Reform & Economic Development Subcommittee, Florida House (November 8, 2023)
Summary
This meeting packet is for the Regulatory Reform & Economic Development Subcommittee of the Florida House of Representatives Commerce Committee, meeting Wednesday, November 8, 2023, 9:00 AM – 11:30 AM. The agenda lists HB 133, Professional Licensing Requirements for Barbers and Cosmetologists, by Chambliss, Plakon, followed by a presentation and panel discussion on Homeowners' Associations. The staff analysis of HB 133 states that the bill reduces the time frame for using a criminal conviction as grounds to deny a barber or cosmetologist license from five years to three years, and requires the boards to approve educational program credits offered to inmates. The homeowners' association slides list proposed changes to strengthen HOA laws, including requiring HOAs to put records online.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Issuer
- Congressional materials
- Document type
- 2023 11 08 3236 Regulatory Reform Economic Development Subcommittee Meeting Packets Fn Rrs
- Date
- 2023-11-08
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- 2023 11 08 3236 Regulatory Reform Economic Development Subcommittee Meeting Packets Fn Rrs 11 8 23
Cite this document
“Meeting Packet — Regulatory Reform & Economic Development Subcommittee, Florida House (November 8, 2023).”
Original at www.flhouse.gov, dated 2023-11-08. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-11-08-2023-11-08-3236-regulatory-reform-economic-development-subcommittee-meeting-packets-fn-rrs-11-8-23/
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Regulatory Reform & Economic
Development Subcommittee
Wednesday, November 8, 2023
9:00 AM – 11:30 AM
Webster Hall (212 Knott)
Meeting Packet
Paul Renner Tyler Sirois
Speaker Chair
The Florida House of Representatives
Commerce Committee
Regulatory Reform & Economic Development Subcommittee
Paul Renner Tyler Sirois
Speaker Chair
Meeting Packet
Wednesday, November 8, 2023
9:00 am – 11:30 am
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. HB 133 Professional Licensing Requirements for Barbers and Cosmetologists by
Chambliss, Plakon
V. Presentations on Homeowners' Associations
VI. Panel Discussion on Homeowners' Associations
VII. Closing Remarks
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 133
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 133 Professional Licensing Requirements for Barbers and Cosmetologists
SPONSOR(S): Chambliss and others
TIED BILLS: IDEN./SIM. BILLS: SB 42
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development Wright Anstead
Subcommittee
2) Commerce Committee
SUMMARY ANALYSIS
The Department of Business and Professional Regulation (DBPR) regulates and licenses several Florida
professions, including barbers and cosmetologists. In 2019, the Legislature created a time-limited review
process for considering the criminal history of applicants for licensure as a barber or cosmetologist. Under s.
455.213(3)(b)1., F.S., the Barbers’ Board and Board of Cosmetology may only deny an application for
licensure on the basis of an applicant’s criminal history for:
A conviction for a crime that occurred within five years of the date of the receipt of an application for
licensure, or
A criminal history record that includes a forcible felony or crime that would require a person, upon
conviction, to register as a sexual predator, if such crime relates to the practice of the applicable
profession.
The bill reduces the time frame to look back at and use a criminal conviction as grounds to deny an application
for licensure as a barber or cosmetologist from five years to three years.
The bill allows a board to consider an applicant’s criminal history, regardless of when a conviction occurred if
the applicant was convicted of a crime at any time during the three-year period immediately preceding the
application. Boards may also continue to consider forcible felonies and crimes that require a person to register
as a sexual predator regardless of when they occurred if they relate to the practice of the profession as a
barber or cosmetologist.
The bill requires the Barbers’ Board and Board of Cosmetology to approve educational program credits
received from vocational training programs or industry certification programs offered to inmates in any
correctional institution or facility to satisfy training requirements for licensure as a barber or cosmetologist.
The bill does not have a fiscal impact on state or local governments.
The bill has an effective date of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0133.RRS
DATE: 11/2/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Department of Business and Professional Regulation
The Department of Business and Professional Regulation (DBPR) has 12 divisions that regulate
several Florida professions and businesses.1 Chapter 455, F.S., applies to the regulation of professions
constituting “any activity, occupation, profession, or vocation regulated by DBPR in the Divisions of
Certified Public Accounting, Professions, Real Estate, and Regulation.” 2 Chapter 455, F.S., also
provides general DBPR powers and sets forth the procedural and administrative framework for all
professional DBPR boards.3
Barbers
The Barbers’ Board under DBPR governs the regulation and licensing of barbers and barbershops in
the state. A barber license is required to perform barbering services. 4 Barbering services include hair
services and limited skin care services when done for compensation, but not for medical purposes.5
To be eligible for a barber license, an applicant must: 6
Be at least 16 years old,
Complete the required training,
Pass the written examination,
Not have a disqualifying criminal record, and
Pay an application fee.
Cosmetologists
The Board of Cosmetology under DBPR governs the licensing and regulation of cosmetologists, nail
specialists, facial specialists, full specialists, and related salons in the state. A cosmetology license or a
specialty registration is required to perform cosmetology services. Cosmetology services include hair
services, nail services, and skin care services when done for compensation, but not for medical
purposes.7
To be eligible for a cosmetology or specialty license, an applicant must:8
Be at least 16 years old or have a high school diploma,
Complete the required training,
Pass the licensure examination (if applicable),
Not have a disqualifying criminal record, and
Pay an application fee.
Criminal History – Barbers and Cosmetologists
1 The divisions include: Administration; Alcoholic Beverages and Tobacco; Certified Public Accounting; Drugs, Devices, and Cosm etics;
Florida Condominiums, Timeshares, and Mobile Homes; Hotels and Restaurants; Pari -mutuel Wagering; Professions; Real Estate;
Regulation; Service Operations; and Technology. S. 20.165, F.S.
2 S. 455.01(6), F.S.
3 DBPR must also provide legal counsel for boards within the DBPR by contracting with the Department of Legal Affairs, by retai ning
private counsel, or by providing DBPR staff counsel. Ss. 455.203 and 455.221(1), F.S.
4 S. 476.144(1), F.S.
5 S. 476.034(2), F.S.
6 S. 476.114, F.S.
7 S. 477.013(4), F.S.
8 S. 477.019(2), F.S.
STORAGE NAME: h0133.RRS PAGE: 2
DATE: 11/2/2023
In 2019, the Legislature created a time-limited review process for considering the criminal history of
applicants for specified professions, including barbers and cosmetologists. 9 Section 455.213(3)(b)1.,
F.S., provides the Barbers’ Board and Board of Cosmetology may only deny an application for licensure
on the basis of an applicant’s criminal history for:
A conviction10 for a crime that occurred within five years of the date of the receipt of an
application for licensure, or
A criminal history record that includes a forcible felony or a crime that would require a person,
upon conviction, to register as a sexual predator, if such crime relates to the practice of the
applicable profession.
Sexual Predators
A person is a sexual predator in Florida if he or she:
Was convicted of a qualifying offense committed on or after October 1, 1993; and
Has not received a pardon or otherwise had the conviction set aside for the qualifying offense.
Qualifying convictions for sexual predator designation include:
Capital, life, or first degree felony kidnapping or false imprisonment, when the victim is a minor
and there is a sexual component to the crime;11
Capital, life, or first degree felony sexual battery;12
Capital, life, or first degree felony lewd or lascivious battery or molestation; 13
Capital, life, or first degree felony selling or buying minors to engage in sexually explicit
conduct;14
An offense that would require registration as a sexual offender, other than transmission of child
pornography by electronic device or transmission of material harmful to minors, by a person with
a prior conviction for a sexual offense;15 or
A conviction for a similar offense committed in another jurisdiction.16
The court must make written findings designating a person who meets the criteria as a sexual
predator.17
Forcible Felonies
Section 776.08, F.S., defines a forcible felony as any of the following crimes:
Treason;
Murder;
Manslaughter;
Sexual battery;
Carjacking;
Home-invasion robbery;
Robbery;
Burglary;
Arson;
Kidnapping;
Aggravated assault;
Aggravated battery;
Aggravated stalking;
9 Ch. 2019-167, Laws of Fla.
10 For purpose of licensing, the term “conviction” means a determination of guilt that is the result of a plea or trial, regardl ess of whether
adjudication is withheld. S. 455.213(3)(b)1., F.S.
11 Ss. 787.01 and 787.02, F.S.; Raines v. State, 805 So.2d 999 (Fla. 4th DCA 2001).
12 S. 794.011, F.S.
13 S. 800.04, F.S.
14 S. 847.0145, F.S.
15 S. 775.21(4)(a)1.b., F.S.
16 S. 775.21(4), F.S.
17 Ss. 775.21(4)(c) and 775.21(5), F.S.
STORAGE NAME: h0133.RRS PAGE: 3
DATE: 11/2/2023
Aircraft piracy;
Unlawful throwing, placing, or discharging of a destructive device or bomb; and
Any other felony that involves the use or threat of physical force or violence against any
individual.
Vocational Training in Correctional Facilities
The Florida Department of Corrections Bureau of Education partners with state colleges, technical
colleges, and community education organizations to provide vocational training in 37 trades to
incarcerated inmates.18 Included in these vocational programs are barbering programs at Blackwater
River Correctional Facility,19 Graceville Correctional Facility,20 and Lake City Correctional Facility,21 as
well as cosmetology programs at Lowell Correctional Institution, 22 Homestead Correctional Institution,23
and Gadsden Correctional Facility.24
Effect of Proposed Changes
Criminal History – Barbers and Cosmetologists
The bill amends s. 455.213, F.S., to reduce the time frame, from five years to three years, that an
applicable board may look back at and use a criminal conviction as grounds to deny an application for
licensure as a barber or cosmetologist.25
The bill provides the applicable board may consider an applicant’s criminal history, regardless of when
a conviction occurred if, at any time during the three-year period immediately preceding the application,
the applicant was convicted of a crime. Boards may also continue to consider forcible felonies and
crimes that require a person to register as a sexual predator regardless of when they occurred if they
relate to the practice of the profession as a barber or cosmetologist.
Vocational Training in Correctional Facilities
The bill requires the Barbers’ Board and Board of Cosmetology to approve educational program credits
received from vocational training programs or industry certification programs offered to inmates in any
correctional institution or facility to satisfy training requirements for licensure as a barber or
cosmetologist.
The bill provides an effective date of July 1, 2024.
B. SECTION DIRECTORY:
Section 1: Amends s. 455.213, F.S., relating to general licensing provisions.
Section 2: Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
18
Florida Department of Corrections, Bureau of Education, http://www.dc.state.fl.us/development/programs.html (last visited Nov. 1,
2023).
19 Florida Department of Corrections, Blackwater River Correctional Facility, http://www.dc.state.fl.us/ci/185.html (last visited Nov. 1,
2023).
20 Florida Department of Corrections, Graceville Correctional Facility, http://www.dc.state.fl.us/ci/159.html (last visited Nov. 1, 2023).
21 Florida Department of Corrections, Lake City Correctional Facility, http://www.dc.state.fl.us/ci/219.html (last visited Nov. 1, 2023).
22 Florida Department of Corrections, Lowell Correctional Institution, http://www.dc.state.fl.us/ci/314.html (last visited Nov. 1, 2023).
23 Florida Department of Corrections, Homestead Correctional Institution, http://www.dc.state.fl.us/ci/419.html (last visited Nov. 1,
2023).
24 Florida Department of Corrections, Gadsden Correctional Facility, http://www.dc.state.fl.us/ci/111.html (last visited Nov. 1, 2023).
25 For purposes of calculating the recidivism rate for inmates released from custody, the Florida Department of Corrections uses the
definition of “recidivism” in s. 945.041(2), F.S., which means an inmate’s rearrest, reconviction, reincarceration, or probation revocation
within a three-year time period following the inmate’s release from incarceration.
STORAGE NAME: h0133.RRS PAGE: 4
DATE: 11/2/2023
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may allow more people to become licensed as barbers or cosmetologists by reducing
disqualifications to licensure.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
Not applicable.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
STORAGE NAME: h0133.RRS PAGE: 5
DATE: 11/2/2023
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 133 2024
1 A bill to be entitled
2 An act relating to professional licensing requirements
3 for barbers and cosmetologists; amending s. 455.213,
4 F.S.; providing a period of time when a conviction, or
5 any other adjudication, for a crime may not be grounds
6 for denial of licensure as a barber or cosmetologist;
7 providing an exception; requiring the applicable board
8 to approve certain educational program credits offered
9 to inmates in certain institutions or facilities for
10 purposes of satisfying training requirements for
11 licensure as a barber or cosmetologist; providing an
12 effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Paragraph (b) of subsection (3) of section
17 455.213, Florida Statutes, is amended, paragraph (f) is added to
18 that subsection, and paragraph (a) of that subsection is
19 republished, to read:
20 455.213 General licensing provisions.—
21 (3)(a) Notwithstanding any other law, the applicable board
22 shall use the process in this subsection for review of an
23 applicant's criminal record to determine his or her eligibility
24 for licensure as:
25 1. A barber under chapter 476;
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hb0133-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 133 2024
26 2. A cosmetologist or cosmetology specialist under chapter
27 477;
28 3. Any of the following construction professions under
29 chapter 489:
30 a. Air-conditioning contractor;
31 b. Electrical contractor;
32 c. Mechanical contractor;
33 d. Plumbing contractor;
34 e. Pollutant storage systems contractor;
35 f. Roofing contractor;
36 g. Sheet metal contractor;
37 h. Solar contractor;
38 i. Swimming pool and spa contractor;
39 j. Underground utility and excavation contractor; or
40 k. Other specialty contractors; or
41 4. Any other profession for which the department issues a
42 license, provided the profession is offered to inmates in any
43 correctional institution or correctional facility as vocational
44 training or through an industry certification program.
45 (b)1. A conviction, or any other adjudication, for a crime
46 more than 3 years before the date the application is received by
47 the applicable board may not be grounds for denial of a license
48 specified in subparagraph (a)1. or subparagraph (a)2. unless the
49 applicant was convicted of a crime at any time during the 3-year
50 period immediately preceding the application. A conviction, or
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hb0133-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 133 2024
51 any other adjudication, for a crime more than 5 years before the
52 date the application is received by the applicable board may not
53 be grounds for denial of a license specified in subparagraph
54 (a)3. or subparagraph (a)4. paragraph (a). For purposes of this
55 paragraph, the term "conviction" means a determination of guilt
56 that is the result of a plea or trial, regardless of whether
57 adjudication is withheld. This paragraph does not limit the
58 applicable board from considering an applicant's criminal
59 history that includes a crime listed in s. 775.21(4)(a)1. or s.
60 776.08 at any time, but only if such criminal history has been
61 found to relate to the practice of the applicable profession.
62 2. The applicable board may consider the criminal history
63 of an applicant for licensure under subparagraph (a)3. if such
64 criminal history has been found to relate to good moral
65 character.
66 (f) The applicable board shall approve educational program
67 credits offered to inmates in any correctional institution or
68 correctional facility as vocational training or through an
69 industry certification program for purposes of satisfying
70 applicable training requirements for licensure in a profession
71 under subparagraph (a)1. or subparagraph (a)2.
72 Section 2. This act shall take effect July 1, 2024.
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hb0133-00
Presentation 1
DBPR HOMEOWNERS’
ASSOCIATION ARBITRATION
JURISDICTION
House Regulatory Reform & Economic Development Subcommittee
Deputy Secretary Brian McManus
November 8, 2023
RON DESANTIS, GOVERNOR MELANIE S. GRIFFIN, SECRETARY
Condominiums, Timeshares, & Mobile Homes
The Division of Condominiums, Timeshares, and Mobile Homes (CTMH) has regulatory oversight
of Condominiums, Cooperatives, Timeshares, Mobiles Homes, and Yacht & Ship Brokers
Regulatory Program Areas
• Bureau of Standards and Registration - Reviews proposed association governing documents and
amendments for all program areas for consistency with the applicable law or rule.
• Bureau of Compliance - Investigates public complaints and ensures compliance with applicable laws or
rules and also processes applications for licensure for yacht and ship brokers.
• Education Section - provides educational resources to condominium board members and unit owners.
• Arbitration - Provides alternative dispute resolution for certain condominium and cooperative disputes; also
provides election and recall arbitration for homeowner association disputes.
1
Statutory Jurisdiction
Chapter 720, Florida Statute – the “Homeowners’ Association Act” (“HOA”),
the Division of Condominiums, Timeshares, and Mobile Homes is authorized
to arbitrate specific disputes which include:
- Recalls of association board members pursuant to Section
720.303(10), F.S.
- Election disputes pursuant to S. 720.306, F.S.
- Parties may also enter into arbitration conducted by the department to
attempt to resolve disputes that could not be resolved in presuit
mediation. Both parties must agree to arbitration.
2
Community Association Managers
Community Association Managers (CAM) are licensed by DBPR pursuant to Ch. 468, F.S., and can be hired by
HOAs to provide community association management services. The department licenses approximately 21,940
CAMs and CAM Firms.
The services provided by a CAM to a community association will vary by each association’s needs. Services can
include:
• Maintaining budgets and dispersing funds
• Assisting in noticing meetings and conducting meetings
• Determining association dues and collection of dues
• Drafting pre-arbitration demands, and
• Complying with the association’s governing documents and requirements of law as necessary to perform
such practices.
3
TYPICAL ELECTION PROCESS LEADING TO
ARBITRATION
• Homeowner(s) believe that the election was conducted in violation of the
Association’s governing documents or Ch. 720, F.S.
• Homeowner(s) send a pre-arbitration notice to the Association advising of the
defects in the election process, demand that the Association correct those
defects.
• Within 60 days of the election results, if the Association has not corrected the
defects, the Homeowner(s) file a Petition for Arbitration of their election dispute.
• The Petition is assigned to an Arbitrator who handles the case on an expedited
basis because the next annual election moots any pending election or recall
dispute.
4
TYPICAL RECALL PROCESS LEADING TO
ARBITRATION
• Homeowners decide that the Board is not performing their duties as desired.
• The CTMH approved ballot form is sent by the Homeowners’ Representative,
listing the Board Members they are seeking to have recalled along with a listing of
replacement members, to all Homeowners.
• The Representative gathers the ballots and serves them to the Association. The
Association has 5 business days to meet and either accept or reject the recall.
• If the Board rejects the recall, it has an additional 5 business days after their
meeting to file a Petition for Arbitration requesting that their decision be upheld.
• If the Board fails to file a Petition, the unit owner representative, after giving pre-
arbitration notice to the Association, can file a Petition within 60 days of the Board
meeting challenging the Board’s decision to not accept the recall.
5
The Arbitration Process
HOA Recall & Election Disputes – Ch. 720, F.S.
Petitioner other than the Association must serve Respondent and subsequently file a pre-arbitration notice complying with
S.718.1255(4)(b), F.S. Unit Owner, Recalled Board Member, or the Association submits Petition in the required format.
Step 1 Arbitration Petition Received. (Filing fee for HOA arbitration is $200)
Step 2 Assigned Arbitrator reviews petition and:
- Dismisses the Petition for lack of jurisdiction, or other failure to comply with statutory requirements; or
- Arbitrator issues a preliminary order requiring Petitioner to amend or supplement its Petition; or
- Arbitrator requires that the Respondent file an answer and defenses to the Petition.
Step 3 Arbitrator reviews the Answer from the Respondent and addresses any Motions filed by the Parties before
holding a case management hearing.
6
The Arbitration Process
Step 4 If there are no material issues of fact or law, the Arbitrator issues a Summary Final Order based on the
evidence submitted by the Parties. Parties are given an opportunity to submit final briefs.
Step 5 If there are material issues of fact or law, the Arbitrator sets a Formal Hearing where the Parties have an
opportunity to present witnesses and documentary evidence, and submit proposed post hearing findings of
fact and conclusions of law.
Step 6 After the Formal Hearing the Arbitrator issues a Final Order.
HOA Arbitration Petitions
FY 2020-2021 81 Petitions
FY 2021-2022 98 Petitions
FY 2022-2023 91 Petitions
• Additionally, over the last two Fiscal Years CTMH has received 270 complaints related to HOAs, a majority of which are outside of our
jurisdiction. Complaints relating to election disputes and/or recalls are referred to the arbitration process.
7
QUESTIONS?
Presentation Point of Contact – Derek Miller
Legislative Affairs Director
(850) 717-1580 | Derek.Miller@myfloridalicense.com
MyFloridaLicense.com
RON DESANTIS, GOVERNOR MELANIE S. GRIFFIN, SECRETARY
Presentation 2
Private Government, Public Authority:
An Economist’s Look at Homeowners
Associations
Ron Cheung
Professor of Economics
Oberlin College
Motivation: The Blurry Line
•What is the line between the “public sector” and
the “private sector”?
•Our expectations for what governments
should/can do are changing.
•Increasingly blurry distinctions in residential
development, especially in financially-constrained
localities.
Functions of a City Government
Provide public services • Police services
• Parks
• Roads
• Waste disposal
Levy taxes and fees • Property taxes
• Sales taxes
• Permit fees
Regulate development • Zoning ordinances
• Parking rules
• Other land-use regulations
Since the 1960s, a new set of private institutions has taken off in
popularity with very similar functions.
Homeowners Associations
(HOAs)
Private association of property owners that shares
characteristics with
Clubs and private institutions of collective decision-
making;
Corporations;
Local governments.
HOAs Are Found in HOAs Are
Managed/Governed by
Gated communities
Planned
developments
A Small HOA: Forest Hill HOA,
Cleveland Heights, OH
• 235 acres, 1000 homes
• Six tennis courts,
playground, nature trails
• Easter egg hunts, 5K runs
• Proposed exterior
alterations require
committee review
A Large HOA: The Villages,
Sumter County, FL
• Over 100,000 senior citizen residents
• One of the fastest growing
communities in the U.S.
• 50 golf courses, 100 recreation centers,
archery ranges, polo stadium.
Local Governments HOAs
Provide public • Police services • Security patrols / gates
services • Parks • Recreation & green space
• Roads • Private roads
• Waste disposal • Sanitation
Levy taxes and • Property taxes • Mandatory assessments on
fees • Sales taxes every household inside
• Permit fees • Fines for violating rules
• Traffic fines
Regulate • Zoning ordinances • Contractual obligations
development • Parking rules and restrictions (CC&Rs)
• Other land-use • Architectural controls
regulations
HOAs can be thus thought of as “private governments.”
Why Should Economists Care About
HOAs?
1: Their sheer numbers = impact on economy.
2: The way they arose is a reflection of changing
perceptions of government.
3: Their actions feed back to our traditional
“public” governments.
Evidence from research I have conducted on
each of these reasons.
The Growing Numbers
Half of new housing constructed in US incorporates an HOA.
At least 70 million Americans live governed by one.
HOAs Nationwide Top Ten States for HOAs
400000
350000
300000
250000
200000
150000
100000
50000
0
1970 1980 1990 2000 2010 2015
Estimates by the Community Associations Institute
Data Snapshot #1: California
Number of Annual HOA Incorporations - California
I have collected and worked
extensively with data on HOAs
2,000
in California and Florida. 1,800
California has over 40,000
1,600
HOAs in state, with over 1/3 of 1,400
them planned developments.
Number of HOAs incorporated
1,200
(Condominiums are covered
1,000
under similar laws to PDs in 800
CA.) 600
18% of PDs have more than 400
150 units. 200
0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995
Year of Incorporation
Condominiums Co-ops
Mobile home parks Planned developments
Data Snapshot #2: Florida
Reasons for Rapid Growth
Industry Changes:
◦ Economies of scale in large developments, esp. in fast-growing areas.
Demographic Changes:
◦ Dissatisfaction with local government services, the “secession of the
successful.”
◦ Demographic changes homeowners want “all-inclusive” communities.
◦ Desire for greater local control over development & property values.
Regulatory/Government Changes:
◦ Tax-constrained governments “offload” responsibilities to developers.
Cheung (2008) focused on Proposition 13, the first statewide property tax
limitation, as a causer of HOA growth in California.
◦ Later work from FL shows that some cities actively court HOA developers
via development-friendly regulations.
Why & Where Do They Form?
Cheung & Meltzer (2014) conducted a “duration analysis” to explore
what factors predict when an HOA first enters a census tract in
Florida.
Some factors associated with sooner arrival of an HOA:
• Percent white
• Less foreign born residents
• High income
• Further from city center
• Higher vacancy rates and newer housing
• Lower levels of public expenditures
Their Impact on the Local
Landscape
Major Theme 1: HOAs Affect Traditional
Government
◦ In California, Cheung (2008) found that a 10% increase in
prevalence of HOAs in a city will reduce public
expenditures by 1.5%.
◦ Specifically, expenditures are reduced in services that are
easily substitutable with HOA services: parks and rec,
garbage disposal, even public safety.
◦ There is no effect on more “public” goods like roads or
government administration.
◦ Larger cities more prone to this “strategic substitution.”
◦ Do HOAs affect cities’ demand for land-use regulation?
◦ Local governments view HOAs as regulatory complements:
homeowners “want both more zoning and more private
regulation,” for instance to preserve property values.
◦ Or as regulatory substitutes: reliance of internal land use
controls.
◦ Cheung & Meltzer (2013) found that in Florida cities,
more HOAs result in the use of more land-use
management techniques.
◦ Particularly, these HOAs are associated with more
incentivizing land use regulations (e.g. incentive zoning,
performance zoning, cluster zoning).
◦ HOA developers seeking out cities with incentivizing
climates
Major Theme 2: HOAs Affect Our
Perception of Government
◦ In recent work, Cheung, Salmon & Xie (2022)
conducted an economic laboratory experiment that
provides evidence that HOA membership can be seen
as a form of partial “secession” from the city.
◦ Impact: Better organization might lead to increased
power for HOAs, even as they might erode traditional
role of governments.
Major Theme 3: HOAs Affect Property Markets
◦ In Florida, Meltzer and Cheung (2014) found that comparing
similar non-HOA and HOA properties, HOA parcels sell for 4.9%
more.
◦ This differential dissipates over time: 15 years after HOA
formation, the premium is gone.
• Premium is strongest for
smaller HOAs.
(Exclusivity sells.)
• Premium even spreads
to nearby non-HOA
parcels. (HOAs have
spillover benefits.)
◦ In another study, Cheung, Cunningham and Meltzer
(2014) find that HOAs seem to lessen the negative
effects of nearby foreclosures during the housing
bust.
◦ HOAs can provide positive remediation for homes in
early stages of delinquency (30-day), but not for later
ones.
◦ This makes sense given that HOAs may be able to
address external or visible signs of homeowner
distress.
◦ This time, the larger HOAs are ones who are in better
position to remediate nearby distress.
Some Unanswered Questions
•Although research has looked into the broad impacts of
HOAs on different variables, there is still a lot we don’t
know about impacts of specific services, rules or governance
structures.
•This is mainly due to a lack of systematic data on the types
of services HOAs provide, how much they spend, their
governance structures and the motivations of board
members.
•We also have no information on the effectiveness or even
the scope of tools that HOAs use to enforce their rules, such
as assessments, fines and liens.
Presentation 3
HOT TOPICS IN
HOMEOWNER ASSOCIATIONS:
CHALLENGES AND PATHWAYS FORWARD
Presented by Dania S. Fernandez, Esq
Homeowner Association
What Is an HOA? HOA Governance Models
•A governing body for a residential community •Self-managed by volunteer residents
•Enforces community rules and regulations •Outsourced to professional management companies
•Hybrid models combining volunteer and professional
management
HOA Roles and Purposes
•Maintains communal property and amenities
•Upholds property values and community standards
•Collects and manages dues for upkeep and improvements
Benefits of HOAs
•Benefits of HOAs
• Access to shared amenities like gyms, pools, and
community centers
• Maintenance of common areas ensures
neighborhood appeal and functionality
•Property Value Protection
• Enforcing aesthetic standards preserves and can
increase home values
• Community rules prevent individual actions that
could detract from neighborhood quality
•Community Cohesion
• Organized events encourage a sense of belonging
and community spirit
• HOA boards can facilitate neighborly support
systems and dispute resolution
Struggles with HOAs
•Struggles Within HOAs
• Balancing individual homeowner rights with
community rules
• Handling disputes over assessments and
compliance with regulations
•Common Struggles
• High fees and special assessments causing
financial strain
• Rigid enforcement of rules leading to homeowner
discontent
•Conflict Case Studies
• Disputes between homeowners and board
decisions continue to rise
• Legal battles stemming from enforcement of HOA
covenants
Transparency Issues
•Transparency Issues in HOAs
• The need for transparent communication about decisions and finances
• The effect of non-transparent operations on trust and contentment among residents
•Consequences of Non-Transparent Practices
• Risk of mismanagement and uncontrolled board authority
• Disenchantment and increased conflicts among residents
•Strategies for Enhancing Transparency
• Consistent, comprehensive financial disclosures and accessible board meetings
• Promoting resident participation in governance decisions
Role of Management & Attorneys
•Role of Management and Attorneys in HOAs
• Outsourcing to specialized firms for operational efficiency
• Legal counsel for navigating HOA laws and homeowner disputes
•Pros and Cons of Professional Management
• Expertise in property management versus costs
• Delegation of duties can ease burden on volunteer board
members
•Legal Challenges
• Complexities of enforcing the Covenants, Conditions and
Restrictions of the Association and handling litigation.
• Importance of legal advice in protecting the HOA's and
homeowners' interests
Board of Director Inexperience & Education Gaps
•Board of Directors: Inexperience and Education •Importance of Board Education
Gaps • Training in financial, legal, and operational aspects of
• Impact of board member inexperience on HOA management
community governance • Resources and workshops for continual learning
• The necessity for board education in •Enhancing Board Competency
effective HOA management • Implementing mentorship programs with experienced
board members
• Encouraging additional certification courses for new
and existing board members
Financial Concerns and
Budgeting
•Financial Management in HOAs
• Critical role of accurate budgeting for
community health
• Allocation of dues to maintenance,
improvements, and reserve funds
•Budgeting Challenges
• Anticipating and planning for large
expenditures
• Balancing short-term costs with long-
term community investments
•Effective Financial Tools
• Use of financial management software
for transparency and accuracy
• Regular audits to ensure financial
integrity and trust
Rising Assessments and
Homeowner Impact
•Trend in Assessment Increases
• Data on the rise of HOA fees and special
assessments over time
• Comparing average costs across similar
communities
•Impact on Homeowners
• Financial strain leading to difficult
choices for residents
• Foreclosure due to inability to meet
increased fees
•Mitigation Policies
• Establishing clear guidelines for fee
increases
• Financial assistance programs and
payment plans for affected homeowners
Communication Breakdown
•The Crucial Role of Communication •Common Communication Failures
• Ensuring timely and clear information • Examples of misunderstandings leading to disputes
flow from the board to residents • The need to address misinformation promptly
• Addressing the negative impact of poor
communication on community morale •Best Practices for Effective Communication
• Utilizing multiple channels: newsletters, emails,
community meetings
• Encouraging resident feedback and participation in
discussions
Recall movement and Board Turnover
•Understanding Recall Movements
• The process and legal grounds for recalling an HOA
board
• Reasons behind initiating a recall: dissatisfaction,
mismanagement, or malfeasance
•Impact of Successful Recalls
• Changes in governance and policy direction
• Restoration of homeowner confidence and community
stability
•Dynamics of Board Turnover
• Challenges and opportunities during transition periods
• The importance of strategic planning and
communication for new boards
Impact of New Legislation and
Educational Needs
•HOA Reforms
• Overview of recent legislative changes "Homeowners' Association Bill of Rights"
• Objectives of these reforms in enhancing oversight and accountability
•Bridging Knowledge Gaps
• Addressing the disconnect between HOA board members' expertise and business
management requirements
• Emphasizing the importance of ongoing education and support for board members
•Addressing Language Barriers
• Recognizing the diversity in HOAs and the need for multilingual resources
• Implementing inclusive communication strategies to ensure all members understand
HOA policies and their rights
Residual Mistrust and Accountability
Concerns Post-Reform
•Enduring Mistrust •Suspicions of Financial Misconduct
• Homeowners remain skeptical of the • Accusations of financial misdeeds persist, with calls for
board's integrity despite new HOA more stringent financial oversight
regulations • Residents express concerns that increased assessments
may not be justified and could be fraudulent
•Transparency Shortfalls •Communication Deficiencies
• Community members continue to • A significant gap in communication fuels discontent
voice the need for clearer, more open and suspicion among the community
board actions • Urgent calls for the board to engage in honest, regular
• Ongoing demands for verifiable dialogue with homeowners
transparency to combat fears of •Recall and Reform
hidden agendas • Strong momentum for recalling board members as a
means to restore trust
• The community's push for new leadership reflects a
desire for radical change and accountability
Embracing Change: A Path Forward for HOAs
• Education: The Cornerstone of Change •Enhanced Communication
• Emphasizing the vital role of educational • Stressing the importance of regular, open dialogue to
initiatives in reforming HOA governance bridge the gap between homeowners and the board
• Committing to ongoing learning as a pathway to • Implementing a robust communication strategy to
rebuild trust and enhance transparency address and alleviate concerns proactively
• Enlightened Financial Stewardship
• Promoting financial literacy programs for board •Overcoming Mistrust and Distrust
members and residents • Understanding the roots of mistrust stemming from
• Initiating workshops on budgeting, assessments, past actions and working diligently to restore
and fraud prevention confidence
• Commitment to Transparency • Differentiating between the general unease of
•Highlighting the imperative of clear, accessible mistrust and the more profound suspicion of distrust;
information to dispel doubts and foster trust addressing both with equal seriousness
•Pledging to hold open forums and ensure
financial disclosures are straightforward and
timely
Presentation 4
Office of the State Attorney
KATHERINE FERNANDEZ RUNDLE
THE HAMMOCKS
EMBLEM OF THE HOA CRISIS
John Perikles
Deputy Chief Assistant of Special Prosecutions
Economic Crimes/Insurance Fraud/
Elder and Vulnerable Adult Task Force
WHAT IS THE HAMMOCKS
COMMUNITY ASSOCIATION?
Master Association pursuant to FS 720 made
up of 40 smaller self managed communities
2nd Largest HOA in Florida
Over 6,500 single family homes, apartments,
and townhouses
50,000+ residents spread across 3,800 acres
Exists much like a small city
6 volunteer elected board members
(currently in receivership)
4+ million in annual revenues
Responsible for maintenance of common
areas including parks, beaches, sports courts,
pools, sidewalks, and lighting
INVESTIGATION BEGINS:
HOMEOWNER COMPLAINTS
JUNE 2017
“Missing” Funds
Questionable Billing from Vendors
No Invoices
No Board Meetings
No Board Minutes
Incomplete Records provided to requests
Election Fraud
Intimidation and Harassment by security
hired by the Board
HOA Laws Ignored
720.303(3)(f) – Written minutes of meetings required
720.303(3)(i) – Copies of HOA contracts
720.303(3)(j)1 – Accurate, itemized, and detailed records of all receipts and
expenditures
720.303(5) – Must make records available for inspection and copying
720.303(6)(a) – Associations shall prepare an annual budget (accurate)
720.303(7)(a)3 – Must prepare timely audited financial statements
720.3033(3) – Officers may not solicit or accept kickbacks(civil penalty)
Laws Used to Target
HOA Crimes
812.014 – Theft
817.034 – Scheme to Defraud
896.101 – Money Laundering
895.03 – Racketeering (rarely)
720.3065 – HOA Election Fraud (brand new)
2018 SAO INVOLVEMENT
THE BATTLE FOR HOA RECORDS
3 subpoenas served between May 2018 and June 2021- no voluntary compliance
Service blocked by:
Switching registered agents
Law firm agent refusing service
Law firm claims that service needed to be directly upon the custodian of record- but
refused to identify the custodian of records
State Attorney served Association President
Personal criminal attorney for Association president (paid by HOA)motions to block 2018
subpoena
Association fights new subpoenas, demands $50,000 for collecting records
Association sued police detectives & State attorney to block subpoenas
State Attorney insisted on going forward and fighting lawsuits
June 2017 Homeowners report to Miami
Dade Police Department
September 2017 Miami Dade State
Attorney’s Office becomes involved
Investigation focuses on Association board
CRIMINAL members and questionable vendors
Association fights every subpoena using
INVESTIGATION HOA funded lawyers
Through legal delays, took the SAO & the
police years to gather necessary evidence
Vendors refuse to cooperate with
subpoenas
SAO/police obtain third party records from
banks and credit card companies
Interview numerous witnesses
Marglli Gallego
First Arrest, April 2021 Board President
Association funds used for:
Payment of private investigator to
investigate the police detectives
Conducting surveillances on political
board opponents
Performing surveillance on her own
property outside the Hammocks
Use of Association credit card to pay for
clearly personal expenses
CHARGED WITH ORGANIZED SCHEME TO DEFRAUD OVER $50,000 AND GRAND THEFT 2ND DEGREE
CRIMINAL LAWYERS FOR THIS CASE WERE PAID FOR OUT OF ASSOCIATION FUNDS
THE INVESTIGATION CONTINUES…
After the President’s Arrest, she was removed from office
Despite removal, evidence showed she continued to exercise control
Police and SAO Investigators continued to collect evidence of where money went and why
In January of 2022, another Board election was held
Limited voting hours for hundreds of owners lined up
Election ended abruptly and early with claims of a bomb threat- Association Attorney refused to
cooperate with police and the SAO to investigate this “bomb threat”
This election was counted, and the old board was “reelected”
Once reelected, board imposed a 300% increase on Association dues to cover budget shortfalls
Multiple civil actions ensued- resulting in receivership
Against the election
Against the unfounded increases
SECOND ARREST
In between the first arrest of the
Board President and the civil actions
that resulted in the receivership the
police and the SAO continued to
investigate
This investigation led to the arrest of
5 people- 3 current board members,
1 prior board member, and the
spouse of a prior board member on
November 15, 2022.
Charges: Racketeering, Grand
Theft, Scheme to Defraud, Money
Laundering
Examples of where some of the money went
“
Receiver cooperated with Law Enforcement
by providing records that have been sought
since May of 2018
Hired proper financial professionals to sort out
records
Lawsuits filed to “claw back” money paid to DAYS AFTER
ARREST COURT
multiple lawyers for services provided that
”
were for the Association Board members
rather than the Association itself
Fired old security personnel and hired new APPOINTED A
security firm
Hired forensic accountants who have
RECEIVER TO
uncovered more fraud
RUN AFFAIRS OF
Ended meritless lawsuits
THE HAMMOCKS
Filed fifth supplemental report to Court on
October 16, 2023, outlining progress
Continued work with ASA to further ongoing
investigations
STATE ATTORNEY KATHERINE FERNANDEZ RUNDLE PROPOSED CHANGES
TO STRENGTHEN HOA LAWS
Pursuant to FS 720, HOA’s are not regulated by any government agency - Owners must file expensive
lawsuits to enforce basic rules designed to guarantee transparency (limited regulation by DBPR for
elections and recalls)
There are no personal consequences for not keeping, hiding, or destroying records
No specific requirement to keep vendor invoices, and other records detailing expenditures
Board members are usually inexperienced and there is limited training
Boards can take out huge loans without owner approval
No specific criminal sanctions for kickbacks
The Ombudsman has no power to monitor HOA elections (although DBPR can deal with disputes)
Require HOAs put records online. This would cut down on storage and retrieval costs and improve
transparency
Prohibit HOA to pay criminal defense attorneys. Only permit reimbursement if charges are not proven
Require an official designated custodian of records
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