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BILL: CS/SB 1178
<br />Condominium Officers and Directors
<br />Present Situation
<br />Breaches of a Fiduciary Duty and Prohibited Acts
<br />Page 13
<br />Officers and directors of a condominium association have a fiduciary relationship to the unit
<br />owners, and may be sanctioned for breach of their fiduciary duty. 29 An officer, director, or
<br />manager may not solicit, offer to accept, or accept anything or service of value or a kickback for
<br />which consideration has not been provided for the benefit of such person (or immediate family
<br />members) from any person providing or proposing to provide goods or services to the
<br />association. 30
<br />Any such officer, director, or manager who knowingly solicits, offers to accept, or accepts
<br />anything or service of value or kickback is subject to a civil penalty pursuant to
<br />s. 718.501(1)(d), F.S., and, if applicable, a criminal penalty as provided in s. 718.111(1)(d), F.S.
<br />Section 718.11 l(1)(d), F.S., requires an officer, director, or agent to discharge his or her duties in
<br />good faith, with the care an ordinarily prudent person in a similar position would exercise under
<br />similar circumstances, and in a manner he or she reasonably believes to be in the interests of the
<br />association. An officer, director, or agent is liable for monetary damages as provided in
<br />s. 617.0834, F.S., if such officer, director, or agent breaches or fails to perform his or her duties.
<br />The breach of, or failure to perform, such duties constitutes:
<br />• A violation of criminal law as provided in s. 617.0834, F.S.;
<br />• A transaction from which the officer or director derived an improper personal benefit, either
<br />directly or indirectly; or
<br />• Recklessness or an act or omission that was in bad faith, with malicious purpose, or in a
<br />manner exhibiting wanton and willful disregard of human rights, safety, or property.
<br />Section 617.0834, F.S., relates to the provisions for the civil liability of officers and directors of
<br />not-for-profit corporations and associations. 31 Section 617.0834(l), F.S., provides that officers
<br />and directors of certain not-for-profit corporations and associations are not personally liable for
<br />monetary damages to any person for any statement, vote, decision, or failure to take an action,
<br />regarding organizational management or policy by an officer or director, unless the officer or
<br />director:
<br />• Breached or failed to perform his or her duties as an officer or director; and
<br />• Breached or failed to perform his or her duties, and the breach constitutes:
<br />o A criminal violation, unless he or she had reasonable cause to believe his or her conduct
<br />was lawful or had no reasonable cause to believe his or her conduct was unlawful.32
<br />29 Section 718.111(1)(a), F.S.
<br />31 Section 718.111(1)(a), F.S., does not prohibit an officer, director, or manager from accepting services or items received in
<br />connection with trade fairs or education programs.
<br />31 Corporations that operate residential homeowners' associations are governed by ch. 720, F.S., relating to homeowners'
<br />associations, and are subject to part I of ch. 607, F.S., the Florida Business Corporation Act, or ch. 617, F.S., relating to
<br />corporations not-for-profit.
<br />32 Section 617.0834, F.S., does not provide criminal penalties nor reference the criminal law that is violated by the officer's
<br />or director's breach or failure to perform his or her duties.
<br />323
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