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Florida's new derivative-suit rules carry no association carve-out — and that may cost owners standing

Florida · Legislation

Florida's new derivative-suit rules carry no association carve-out — and that may cost owners standing

What happened. Two new sections of Florida's nonprofit corporation act took effect on 1 July 2026, imposing standing and pre-suit demand requirements on anyone suing on a corporation's behalf. Sections 34 and 35 of Chapter 2026-168 created ss. 617.0741 and 617.0742, Fla. Stat.1

Most Florida community associations are Chapter 617 nonprofit corporations. Neither new section contains an exemption for them — and that absence is conspicuous, because the same act expressly exempts associations from several neighbouring provisions.

The standing rule

Section 617.0741 provides:

“A director, an officer, or a member may not commence a proceeding in the right of a domestic or foreign corporation unless such director, officer, or member holds that position at the time the action is commenced and: (1) Was a director, an officer, or a member when the conduct giving rise to the action occurred; or (2) The person became a member through transfer or by operation of law from a person who was a member when the conduct… occurred.”

Two requirements, both of which must hold: current status at filing, and status at the time of the conduct complained of (or acquisition from someone who had it).

The demand rule

Section 617.0742 requires the complaint to “be verified and allege with particularity” the demand made on the board and that it “was refused, rejected, or ignored by the board of directors before the expiration of 90 days” — or why waiting 90 days would cause “irreparable injury… or misapplication or waste of corporate assets.”

That is a pleading requirement with teeth: a verified complaint, particularised allegations, and a documented 90-day wait or a pleaded reason for not waiting.

Why the missing carve-out matters

The drafters of this act plainly knew how to exempt community associations, because they did it repeatedly. Section 617.0605 (membership admission), s. 617.0701 (member meetings), s. 617.0721 (member voting) and s. 617.1606 (corporate records) all carry express carve-outs for associations as defined in s. 720.301 and for corporations regulated under Chapters 718 and 719.

Sections 617.0741 and 617.0742 do not.

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Related Florida HOA Topics

← All Florida HOA Topics

  1. Chapter 2026-168, Laws of Florida — §§ 34, 35 creating ss. 617.0741 and 617.0742; compare §§ 25, 32, 33, 146 ↩
  2. CS/CS/HB 797 (2026), Nonprofit Corporations — bill record, Florida Senate ↩
  3. House Final Bill Analysis, CS/CS/HB 797 ↩

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