2026-09-10 · Florida · Legislation

What happened. The rule that decides whether a Florida association's contract with an interested director is voidable was rewritten, effective 1 July 2026. Chapter 2026-168 substantially reworded s. 617.0832, and reenacted both s. 718.3027 and s. 720.3033 to pull the new test into condominium and homeowners' association law.¹

A defined standard where there was a general one

The rewritten section defines a “director's conflict of interest transaction” and, for the first time, defines what it means for one to be fair to the corporation: that the transaction “as a whole, is beneficial to the corporation and its members,” considering the fairness of the dealings and whether the transaction is “comparable to what might have been obtainable in an arm's length transaction.”

Where a transaction is fair when authorised, the statute now says plainly that it “is not void or voidable” and “is not grounds for any equitable relief, an award of damages, or other sanctions.”

The burden shift

This is the operative change. Under subsection (3)(a), the “person challenging the validity… has the burden of proving the lack of fairness” — but only if two conditions were met at the time:

• the material facts and the director's interest were disclosed; and
• the transaction was approved either by a majority of qualified directors — and the statute adds that “the transaction may not be authorized… solely by a single director” — or by a majority of disinterested member votes.

Do the disclosure and the qualified vote properly, and the complaining owner must prove unfairness. Skip either, and the association is defending the transaction on its merits.

A narrower definition for associations specifically

The act also creates s. 617.0143, defining “material interest” — and narrowing it for community associations. For a corporation regulated by Chapter 718, 719, 720, 721 or 723, “a ‘material interest’ is limited to familial, financial, professional, or employment interests.”

1. Chapter 2026-168, Laws of Florida — §§ 11, 51, 186, 187 (ss. 617.0143, 617.0832, 718.3027, 720.3033) ↩
2. Division of Florida Condominiums, Timeshares and Mobile Homes — complaint volumes and jurisdiction, DBPR ↩
3. Notice of Proposed Rule, Rules 61B-21.001–.003 and new 61B-21.0026, published 31 July 2026 (Vol. 52/148) ↩