Florida built a court path to remove condo board directors. New York's Condominium Act has no equivalent.

New York Real Property Law Article 9-B, the Condominium Act, gives unit owners a vote to remove a board member and a path to court to seek money damages or an injunction. It does not give them a path to ask a court to remove a director who has committed fraud or grossly abused their position. Florida, which rewrote its nonprofit corporation statute in June 2026, does. The gap between the two states' owner remedies grew wider on July 1, 2026.

What Florida built with HB 797.

Florida HB 797 (2026) overhauled Chapter 617 of the Florida Statutes, formerly the Florida Not For Profit Corporation Act, renaming it the Florida Nonprofit Corporation Act. Governor DeSantis signed the bill on June 25, 2026; it took effect July 1. The bill made dozens of changes to the governance framework for Florida's nonprofit corporations, which include most Florida condominium and homeowners associations organized under Chapter 718 and Chapter 720.

The most significant change for unit owners is the judicial removal mechanism created at Florida Statutes § 617.08091. A court may now remove a director if it finds the director engaged in fraudulent conduct, grossly abused the position of director, or intentionally harmed the corporation. The court may also prohibit the removed director from seeking reelection for a period the court determines is appropriate.

A removal action may be brought by the corporation itself or by members holding at least 10 percent of the corporation's voting power, derivatively on behalf of the corporation. That derivative path is what makes the provision enforceable at the owner level, without first persuading the sitting board to sue one of its own members. Florida condo associations are organized as nonprofit corporations, and Florida Statutes § 718.3027 of the Florida Condominium Act expressly incorporates Chapter 617's director conduct standards. The judicial removal provision applies directly to every Florida condo board on the day the bill took effect.

Before HB 797, removing a Florida condo board director required organizing a unit owner vote meeting the association's quorum and majority requirements. That path is still available. The court order path is in addition to it, available when a vote fails or when the facts of misconduct make a judicial remedy more appropriate than an owner election.

The derivative lawsuit framework added by HB 797.

HB 797 also created Florida Statutes §§ 617.0741–617.0747, a seven-section statutory framework governing derivative actions by members of nonprofit corporations. Before this addition, Florida unit owners who wanted to sue on behalf of their association depended on general common law principles that courts applied without a uniform procedure.

Under the new framework, a member must generally provide written notice to the corporation before filing a derivative suit, specifying the claim and the relief requested. The corporation then has an opportunity to investigate. The board may appoint a committee of disinterested directors to evaluate the claim, and that committee's determination about whether to proceed carries weight in court. Any settlement of a derivative action requires court approval, with the court finding the settlement is in the best interests of the corporation and its members.

The framework does not eliminate litigation costs. It structures the process: an owner who has documented board misconduct has a defined sequence to follow and a judicial check at each stage. That structure matters when a unit owner is weighing whether to spend money on a lawsuit whose procedural requirements were previously uncertain.

What New York gives condo unit owners instead.

New York Real Property Law § 339-dd permits unit owners to bring an action against the board of managers for violations of the Condominium Act, the bylaws, rules, regulations, or board resolutions. The remedies are damages and injunctive relief. Director removal is not listed.

Unit owners can also vote to remove a board member under RPL § 339-dd. The vote requires written consent from owners holding a sufficient common interest percentage, and the board may challenge the sufficiency of the consent. For unit owners facing a director who has approved contracts with related parties or misdirected association funds, the legal options are: organize a removal vote, sue for money damages, or seek an injunction against specific conduct. None of those remedies produces a judicially ordered removal of the director.

New York's business judgment rule, as articulated in Levandusky v. One Fifth Avenue Apartment Corp., 75 N.Y.2d 530 (1990), gives condo and co-op boards broad protection from judicial challenge of their decisions. To overcome that protection, a challenger must show bad faith, self-dealing, or a decision that no reasonable person acting in good faith could have reached. That standard is high. In Florida after HB 797, a court may act on proof of fraud, gross abuse, or intentional harm, which are not identical standards.

New York condominiums are also unincorporated associations organized under the RPL, not corporations. Courts reviewing whether New York's derivative suit statute for corporations applies to condo unit owners have not arrived at a uniform answer. The procedural uncertainty for a New York condo owner who wants to sue derivatively on behalf of the association is not resolved by statute. It must be litigated each time.

The co-op side: more tools, the same accountability gap.

New York co-ops are organized as business corporations under the Business Corporation Law, which gives shareholders tools that condo unit owners do not have. BCL § 706(d) allows a court to remove a director upon petition by holders of at least ten percent of outstanding shares if the director engaged in fraudulent or dishonest acts, or gross abuse of authority or discretion with respect to the corporation. Co-op shareholders can also bring derivative suits under BCL § 626, which requires a written demand on the board before filing.

Both provisions exist, but neither has been adapted for residential community associations. The BCL § 706(d) threshold of ten percent of shares is a real barrier in buildings with absentee or investor shareholders. BCL § 626's demand requirement for derivative suits is borrowed from general corporate law and has no investigation framework or court-supervised settlement procedure equivalent to what Florida created in §§ 617.0741–617.0747. And in a co-op where the managing agent recommends the directors who should be removed, a pre-suit demand addressed to those same directors has predictable results.

Florida vs. New York: what unit owners can ask a court to do.

Why the removal gap matters for vendor oversight.

Most extraction at NYC condos does not arrive labeled as fraud. It arrives as a board approving a vendor recommended by the managing agent, at a price the managing agent negotiated, on a contract the managing agent drafted. The managing agent holds no state license. New York's conflict of interest statute, extended to condominiums by BCL § 727 in 2018, requires that interested director transactions be disclosed to unit owners and approved by disinterested directors. It does not authorize any agency to enforce that disclosure requirement, and no court remedy for a § 727 violation includes director removal.

A unit owner who can document that a condo board director voted on a contract with a company in which the director held a financial interest has one statutory disclosure requirement behind them and no removal path in front of them. The sequence available in New York is: file a complaint with the AG's Real Estate Finance Bureau (which, as this site has documented, has no post-closing governance enforcement authority), seek an injunction against specific conduct, or organize a vote to remove the director through the consent procedure. Each of those paths requires time and money, and the vote can be blocked by the same director faction that approved the underlying contract.

Florida's HB 797 does not eliminate the cost of filing a lawsuit. It changes the available remedy when the lawsuit succeeds. A Florida condo unit owner who proves that a board director committed fraud or gross abuse of their position can leave court with an order removing that director and a bar on re-election. A New York condo unit owner who proves the same facts can leave court with a damages award or an injunction against specific future conduct. The director stays on the board.

Bottom line.

Florida HB 797, signed June 25, 2026, and effective July 1, created two instruments New York condo unit owners do not have: a statutory path to ask a court to remove a board director who commits fraud, grossly abuses their position, or intentionally harms the association, and a structured derivative lawsuit framework with defined demand, investigation, and court-supervised settlement procedures. New York's Condominium Act is silent on judicial removal. New York co-op shareholders have BCL §§ 626 and 706(d), written for general business corporations, with no adaptation for residential community associations. The pattern documented on this site holds: Florida adds an owner accountability instrument; New York does not adopt the equivalent. The gap is not new. It is larger now.

Primary sources:
Florida HB 797 (2026) — Florida Senate bill text
Florida Statutes § 617.08091 — judicial removal of directors (eff. July 1, 2026)
Florida Statutes § 718.3027 — condo association director standards
NY Real Property Law § 339-dd — unit owner actions against board
NY Business Corporation Law § 706 — director removal
NY Business Corporation Law § 626 — derivative suits
NY Business Corporation Law § 727 — interested director transactions, condominiums
Levandusky v. One Fifth Avenue Apartment Corp., 75 N.Y.2d 530 (1990)

Companion resources: Florida HB 913 vs. NY condo transparency · Business judgment rule and condo financing defaults · Why the NY AG cannot help with most condo governance disputes · Ten NY condo reform bills that did not advance · National comparison tracker · All governance gaps