The Legislative Hammer: How Florida is Rewriting the Rules for 2025 and Beyond

The response to recent high-profile governance failures, including the tragic structural collapse in Surfside, has not been quiet; it has been legislative. Florida, a state where condominium living is pervasive, has pushed forward significant reforms that serve as a blueprint for governance integrity nationwide. For associations in Florida, the changes signed into law by Governor DeSantis via House Bill 913, taking effect July 1, 2025, are transformative, directly targeting the weak points exploited in cases like the one at Brickell Bay.

Mandatory Manager Vetting: A New Contractual Obligation

One of the most direct preventative measures addresses the management personnel themselves. Under the new law, if a condo association hires a professional manager or firm, that manager *must* possess an active LCAM license as a condition of the contract. More importantly, the board members now carry an *explicit duty* to verify that license is valid *before* they sign the agreement. This shifts a piece of the burden back to the volunteer board:

1. Verify, Don’t Assume: Never accept a manager’s word. Check the state database yourself.
2. Document Everything: Keep the license verification record in the association’s official files. This documentation proves you fulfilled your duty of due diligence.
3. Check Credentials Annually: If the manager is licensed, ensure the license remains in good standing every renewal cycle, not just at the start of the contract.

This legislative move aims to prevent unlicensed individuals from gaining administrative control and potentially criminal access to association funds. For a deeper dive into the specifics of compliance, understanding **Florida condo governance reform** is no longer optional for associations in the state.

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The Brickell Bay situation involved allegedly manipulated payroll records—a classic case where obfuscation was the key to theft. The 2025 reforms counter this by strengthening financial disclosure requirements:

• Full Reserve Funding: The old practice of waiving or partially funding reserve accounts to artificially lower monthly fees has been strictly limited. Reserves must now be fully funded to ensure long-term **financial review** is based on realistic capital needs.
• Mandatory Annual Disclosures: Annual financial statements must now be disclosed to *all* unit owners, not just the board.
• The Audit Imperative: Owners now have the power to *insist* on a full annual audit by a Certified Public Accountant (CPA), which is a much deeper review than a simple financial compilation that might miss complex fraud.

This commitment to financial sunshine makes it exponentially harder for an individual to hide phantom payrolls or divert contract payments.

Building Resilience: Proactive Financial Controls for Every Community

While state laws like Florida’s are powerful, the most resilient communities build their own layers of defense from the ground up. These are the core **best practices for community association financial oversight** that apply whether you’re in Miami, Dallas, or Seattle. This is where boards move from being *reactive* to *preventative*.

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One volunteer cannot—and should not—be the sole gatekeeper of the community’s wealth. The most effective control is distributed responsibility.

Establish a Dedicated Finance or Audit Committee

This committee serves as the board’s rigorous deep-dive unit. It doesn’t replace the manager or the bookkeeper; it scrutinizes their output.

1. Composition Matters: Recruit members with a background in accounting, finance, law, or contracting. Their expertise lends credibility to their findings.
2. The Review Cadence: This committee should meet *monthly*—not quarterly—to reconcile bank statements against the General Ledger. The longer the lag between a transaction and its review, the more time fraud has to take root and become harder to trace.
3. Vendor Contract Scrutiny: This is where schemes like the alleged janitorial kickback are stopped. The committee must review major contracts to ensure the vendor matches the invoice, the scope of work is clear, and the pricing aligns with market rates. A management company might be one entity, but the actual service provider must be clearly defined and verifiable.. Find out more about Ex-Miami condo property manager ghost employee scheme tips.

Implement Ironclad Banking Controls

This is the low-hanging fruit of fraud prevention, yet often neglected in smaller associations. The goal is to ensure no single person can authorize a financial transaction from beginning to end.

• Dual Signature Requirement: For any check or electronic transfer over a modest, pre-set threshold (e.g., $1,000), require two authorized signatures—one from a board officer, the other from the management company’s designated contact, or two different board officers.
• Positive Pay: Utilize bank services like Positive Pay, which is an excellent tool against check fraud. The association tells the bank which checks were issued (check number, exact amount), and the bank will automatically reject any presented check that doesn’t match the exact recorded data—a digital stopper for paper-based forgery.
• Segregated Accounts: Maintain separate, interest-earning bank accounts for Operating Funds and Reserve Funds. Mixing these accounts is a huge red flag and makes it easy to dip into reserves without authorization.. Find out more about Ex-Miami condo property manager ghost employee scheme strategies.

For an overview on how to make these processes part of your regular business, look into resources on **community association management best practices**.

Beyond Finance: Strengthening Governance for Ethical Culture

Integrity isn’t just about the numbers; it’s about the culture that allows those numbers to be scrutinized honestly. The fallout from governance failures often includes a breakdown of community trust that can last a decade. Future prevention must, therefore, involve structural integrity in the board itself.

Mandatory Board Education and Certification

If the state mandates manager licensing, it should be a baseline requirement that board members—the ultimate fiduciaries—are educated on their roles. Some jurisdictions are moving toward this, demanding that board members complete certified training on **fiduciary responsibilities** to ensure they understand the gravity of their oversight duties. This training shouldn’t just cover Robert’s Rules of Order; it must emphasize: * The legal definition of a **fiduciary duty** and the potential for personal liability. * Conflict of interest policies—what to disclose and when to recuse oneself from a vote. * The proper procedures for hiring, supervising, and firing a management company.

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Secrecy is the oxygen of malfeasance. The trend—accelerated by recent legislation—is toward radical transparency. If a board is seen as hiding information, residents will rightly assume the worst.

It’s a simple truth: When an organization has a higher perception of the quality of its governance, its internal team tends to be more aligned. Where governance is weak, misalignment and distrust creep in. An open book policy isn’t just legally sound; it’s a management tool that fosters internal confidence and external cooperation.

Boards should proactively publish: * Monthly financial statements (with an executive summary prepared by the Finance Committee). * The minutes of all board meetings, detailing votes and the rationale behind major decisions. * The status and funding level of the **reserve study**—the roadmap for the community’s big-ticket repairs.

Managing Conflicts of Interest: Beyond the Manager

The Brickell Bay case involved not only phantom employees but also directing a contract to a family-owned business. This type of self-dealing requires clear, strict rules for *all* board members, not just the manager. For instance, if a board member’s spouse owns a local painting company, that company should be excluded from bidding on association projects unless the board member declares the relationship immediately, steps away from all discussions and votes regarding that bid, and the remaining board members document the rationale for choosing that vendor (or explicitly state why they *still* chose that vendor over others). This level of public scrutiny and documented process acts as a powerful deterrent against casual, low-level ethical lapses that can snowball into major integrity crises.

The Ongoing Evolution: Property Management in 2026 and Beyond

Looking forward from this crucial moment in 2025, the industry is clearly moving toward technology adoption and data-driven decision-making as key fraud-prevention mechanisms. Technology is no longer a convenience; it is a security feature.

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Modern accounting software specifically designed for community associations is no longer a luxury; it’s fundamental security infrastructure. It automates ledger reconciliation, tracks dues collection, and, most importantly, integrates those crucial fraud-prevention tools mentioned earlier. For example, in 2025, the widespread adoption of electronic payments was already high among management companies. This trend must be embraced fully by boards, as digital transaction trails are often cleaner and easier to audit than stacks of paper checks.

The Role of the Property Manager Moving Forward

The market itself is consolidating, with larger management firms expanding their portfolios. This consolidation can be a double-edged sword. On one hand, larger firms often have deeper resources for forensic accounting and more sophisticated internal controls. On the other hand, it can lead to less personalized attention, where one manager handles an unwieldy number of communities, increasing the risk that their oversight weakens. Boards must use this market shift to their advantage by demanding service level agreements (SLAs) that specify review times, reporting formats, and fraud protection protocols. The relationship between the HOA and the property management company is one of agency—the management company is an arm of the association, and any misconduct is imputed back to the association itself. If the management company fails in its duties—financial or otherwise—the homeowner’s recourse is against the HOA, which then holds the contract against the manager. This clarifies the legal hierarchy and the board’s ultimate accountability.

Conclusion: Trust is Earned, Not Assumed

The conclusion of this saga, as it plays out in the courts, will indeed set precedents for years to come, but the defense against future schemes is being built today, in boardrooms across the nation. The alleged actions at The Club at Brickell Bay are a somber reminder that high professional standing is no guarantee against criminal intent. Integrity is not something granted by a state license; it must be earned daily through transparent action and meticulous **governance reform**.

Key Takeaways and Your Action Plan for November 2025

To protect your community’s financial health and the trust you hold, focus on these immediate, actionable steps:

• Demand the Audit: If your community does not receive a full, independent financial audit annually, make it your board’s top priority for the next fiscal year.
• Split the Authority: Institute a mandatory dual-signature policy for all significant financial disbursements immediately.
• Verify the Credentials: Review your property manager’s current license status and ensure it is publicly documented in your files. If you are in Florida, confirm their compliance with HB 913 requirements.
• Empower the Finance Committee: Give a dedicated, skilled committee the mandate and time to review the *detail* of the monthly financial package, not just the summary page.
• Embrace Openness: Commit to a policy where no reasonable request for financial information is met with delay or vague pushback. Secrecy breeds suspicion, and suspicion destroys trust.

What is the single biggest point of friction on your board right now regarding financial transparency? Share your experience in the comments below—because illuminating the dark corners is the only way to forge a truly resilient governance structure.