HOUSE BILL 797
House Bill 797, consisting of 327 pages was signed by Governor Desantis June 25, 2026 to become law July 1, 2026. This is the first significant rewrite of Florida Not-For-Profit Corporation Act (“Chapter 617”) in over fifteen years. As of July 1st, 2026, it will now be called the Florida Nonprofit Corporations Act. The new law is dominated by considerations to align Chapter 617 with the Florida Business Corporation Act, Chapter 607, Model Non-Profit Corporation Act and the Model Non-Profit Corporation Act. While most community associations in Florida are Chapter 617 corporations, not every provision within Chapter 617 applies to community associations. Therefore, extreme caution must be taken considering the new provisions found in Chapter 617.
The new provisions include many new definitions, few of which are applicable to a community association. The most controversial change is to refer to Chapter 617 corporations as “nonprofit,” which is not to be confused with “non-profit” in the context of the IRS’s 501(c)(3) organizations.
The new law creates Section 617.0143 regarding ‘qualified directors.’ These directors who are qualified to vote on conflict transactions, derivative actions, and indemnification decisions. This section safeguards against directors who vote on matters in which they have an interest in that may conflict with and affect their objectivity.
The law revises provisions on required corporate recordkeeping, establishes minimum retention periods for certain types of records and must be maintained by the non-profit corporation. These provisions apply to all 617 corporations other than those governed by Chapter 718 or 720. Section 617.1602 was amended with new provisions allowing the corporation to impose reasonable restrictions on a member’s disclosure and use of information that has been inspected, including the maintaining of confidential information. In addition, there is a subsection that prohibits the Articles of Incorporation or Bylaws from abolishing or limiting a member’s right of inspection.
The law establishes the minimum duties of corporation’s registered agent and provides default rules for changing, replacing or terminating a registered agent. The new law revises the default process for amending the Articles of Incorporation and details the applicable notice standards and the minimum voting requirements for an amendment to Articles of Incorporation requiring a member vote.
The law reduces the minimum number of directors required to be on the Board of Directors of a non-profit corporation to one individual, while it maintains the three individual minimum requirement for 501(c)(3) organizations.
The law establishes the default term length of directors as one year, unless the Articles of Incorporation or Bylaws provide otherwise. Further, a director whose term has expired may continue to serve until his or her successor is selected. The Board may fill any Board vacancy after three months if the members fails to elect a successor.
The law establishes the procedure for removing a director by judicial proceeding when a court finds that the director engaged in fraudulent conduct, grossly abused the position of director or intentionally inflicted harm on the entity and that removal is in the best interest of the non-profit corporation. Interestingly, the court may also bar the director from seeking reelection for a period of time to be determined by the court.
The law expands personal liability protections to directors and officers of all non-profit corporations, granting them personal liability immunity for all actions or inactions taken in their role as director or officer. The law establishes the minimum duties and standards of care an officer owes to the non-profit corporation.
The law establishes that all members of a non-profit corporation have the same rights and obligations, unless the Articles of Incorporation or Bylaws provide otherwise. This provision could have far-reaching implications for an association with limited voting rights and class memberships.
The law creates an exception to the rule that members of a non-profit corporation are not personally liable by allowing a creditor of a non-profit corporation who has obtained a judgment against the entity to bring a proceeding against a member who owes money to the entity to the extent of the money owed.
The law establishes that a member of a non-profit corporation may resign at any time for any reason. Implications of this provision to community association are uncertain.
The law establishes the default rules governing proxy voting, including the procedure for implementing and terminating a proxy. It also updates provisions permitting remote participation in meetings.
The law revises the procedure for derivative proceedings brought on behalf of a non-profit corporation in that it gives standing to directors and officers of a non-profit corporation and allows the filing a complaint without prior notice to the Board of Directors when providing such notice would be futile.
The law permits non-profit corporations to merge with other eligible entities and does not require that the surviving entity be a non-profit corporation.
Section 617.1605 was amended to impose time frames for the delivery of financial records and add additional time if needed to prepare requested records. Section 617.1605 (01) is a new statute copied entirely from Chapter 607 and allows directors broad inspection rights consistent with their duties.
We can anticipate a glitch bill made in a subsequent legislative session. However, until then, all community associations would be well-advised to consult with their attorneys regarding the application of this new law.
