No “Wiggle Room” in Statutory Requirements to Provide Documents

By Michael J. Gelfand, Esq. / Published October 2024

When an owner in a Florida community requests documents from the community association, what is the response? Is it, “How fast does the association have to comply?” Or is it, “Dig in and hold the owner off as long as possible?” Will partial compliance suffice?

     Hot off the press, Florida associations must take heed of answers flowing from a Florida appellate court decision issued last month. The facts in Pecchia v. Wayside Estates Home Owners’ Association, Inc., 49 Fla. L. Weekly D 1242 (Fla. 5th DCA, June 7, 2024), reflect that Pecchia and Porter, as members in a ten-home self-managed homeowners’ association, submitted a formal records request to the association to make the official association records available for inspection.

     After the statutory deadline for providing access to inspect and copy records had passed, the association responded by providing photocopies of some of the requested documents, but many documents were still missing. The owners then filed a complaint for injunctive relief to force the association to provide the missing records, for money damages, and for attorney’s fees. The owners alleged that the association failed to maintain or produce the association records that were requested, including financial statements such as canceled checks, bank statements, and insurance policies. The trial court denied the owners’ request for injunctive relief, finding that the association had “provided sufficient documents in response to the plaintiffs’ request.”

     The Florida appellate court reversed the portion of the trial court’s final judgment which found that the association sufficiently complied with its statutory recordkeeping and inspection requirements. The court began by pointing out that Section 720.303 requires homeowners’ associations to maintain their official records and to provide them upon request. Specifically, associations “shall maintain” the following:

     The financial and accounting records of the association, kept according to good accounting practices. All financial and accounting records must be maintained for a period of at least seven years. The financial and accounting records must include the following:

1. Accurate, itemized, and detailed records of all receipts and expenditures …

3. All tax returns, financial statements, and financial reports of the association.

4. Any other records that identify, measure, record, or communicate financial information.

     Concerning these records, Section 720.303(5) requires that associations “shall” make their official records available for inspection within 10 business days after receipt of a written request.

     The appellate court focused on the exact language of the Homeowners’ Association Act, specifically the word “shall,” which is mandatory. Because the association did not make the records available within 10 days, the trial court erred in not complying with the timing requirements of the statute. Additionally, the trial court should have entered an injunction requiring the association to provide the insurance policies which were requested by the owners. The court applied a strict compliance with text interpretation, finding that a homeowners’ association’s strict compliance with records production is mandated by the statutory text “shall maintain” in Section 720.303, Fla. Stat. (2019).

     Rejecting the age-old concept of “wiggle room,” the appellate court held that the trial court erred in ruling that the association had sufficiently complied with the requirements of the statute. The repeated use of the word “shall” signifies that there is no statutory flexibility in an association’s obligations to maintain the records and to permit inspection. The word “shall” is and has always been mandatory. “[T]he use of word ‘shall’ in the statute means that an association is not afforded discretion in determining which documents to maintain for the inspection of its members or to provide to its members, nor is the ten-day period discretionary,” the court stated. “These obligations are clearly mandatory under the statute.”

     Condominium associations should not be smug and ignore this decision. The decision is unclear whether the result would be different if the association’s records were destroyed without malicious intent, such as if a storm destroyed papers or hard drive. Nonetheless, it cannot be understated how important it is for an association to properly keep its records and to provide documents upon request to owners in a timely manner!!

     The bottom line: Plan now, and don’t wait for a claim to arise. Make certain that your association created, gathered, and retained the records it is required to have. If not, ensure that diligent efforts are made to do so. Further, in the present tense, continue to do so as a regular course of business. Last but not least, confer with your association counsel on records retention requirements, especially for homeowners’ associations seeking to comply with the new law regarding records retention requirements, and for condominium associations seeking to avoid the new law imposing penalties for noncompliance!

Michael J. Gelfand, Esq.

Senior Partner, Gelfand & Arpe, P.A.

     Michael J. Gelfand, Esq., the senior partner of Gelfand & Arpe, P.A., emphasizes a community association law practice, counseling associations and owners how to set legitimate goals and effectively achieve those goals. Gelfand is a dual Florida Bar board-certified lawyer in condominium and planned development law and in real estate law, a certified circuit and county civil court mediator, a homeowners’ association mediator, an arbitrator, and parliamentarian. He is a past chair of the Real Property Division of the Florida Bar’s Real Property, Probate & Trust Law Section, and a Fellow of the American College of Real Estate Lawyers. Contact him at ga@gelfandarpe.com or 561-655-6224.