11 Jun 2015 Community Association Legislation
The Florida Legislature passed a number of bills this session. Governor Rick Scott has signed many new bills into law recently including legislation affecting community associations while some are still pending review.
The primary bills related to Florida community associations include:
- SB 748/HB 791, Relating to Residential Properties (approved by the Governor on June 2 as Chapter 2015-097),
- HB 643/SB 1172, Relating to Termination of a Condominium Association (presented to the Governor on June 11),
- HB 87/SB 418, Relating to Construction Defects (presented to the Governor on June 11), and
- HB 71/SB 414, Relating to Service Animals (presented to the Governor on June 1).
[Note citations to statutory sections within the text of a bill are as follows: 617 (not for profit corporations which may also include various types of community associations), 718 (condominium), 719 (cooperative) and 720 (homeowners’ association)].
The bill relates to the governance of condominium, cooperative, and homeowners’ associations (community associations).
The bill permits corporations not for profit to use a copy, facsimile, or other reliable reproduction of the original proxy for any purpose for which the original proxy could be used if it is a complete reproduction of the entire proxy. In current law, community associations may be corporations for profit or corporations not for profit.
For condominium associations, the bill:
- Provides that, in cases where damage to condominium property is not the result of an insurable event, the maintenance provisions of the declaration or bylaws determine whether the association or the unit owners are responsible for the repair or replacement;
- Provides that, for the period before turnover of control, the developer’s vote to reduce or waive the funding of reserves is based on the developers voting interests allocated to its units;
- Permits the condominium association to file a lien on unpaid administrative late fees; and
- Extends from July 1, 2016 to July 1, 2018 the date before which condominium parcels must be purchased to qualify as a bulk assignee or bulk buyer.
For cooperative associations, the bill provides that neither the authorized designee of the cooperative association or persons residing in the home of the board’s designee may sit on the committee charged with determining whether to confirm or reject the fine or suspension levied by the board.
For condominium and cooperative associations, the bill provides that the priority provisions for applying a homeowner’s payments to a monetary obligation in ss. 718.116(3) and 719.108, (3), F.S., respectively, apply notwithstanding any negotiated instrument resolving a dispute on the debt or any purported accord and satisfaction.
For condominium and homeowners’ associations, the bill provides that, when voting rights are suspended, the total number of voting interests of the association must be reduced by the number of suspended voting interests when calculating the total percentage or number required to take or approve any action, and that the suspended voting interests may not be used for any purpose.
For condominium, cooperative, and homeowners’ associations, the bill:
- Permits associations to provide electronic notice of unit owner and board meetings without having specific authority in the bylaws of the association for giving notice by electronic transmission;
- Creates a mechanism for Internet-based online voting in condominium, cooperative, and homeowners’ associations;
- Permits associations to file a lien on unpaid administrative late fees; and
- Clarifies that it is the board of the association that levies any fines and that the role of the impartial committee is limited to determining whether to confirm or reject the fine or suspension levied by the board.
Regarding homeowners’ associations, the bill provides that:
- The board may not levy a fine exceeding $100, unless otherwise provided in the association’s governing documents;
- Members that fail to pay a fine may be suspended from the board of directors or barred from running for a seat on the board;
- Chapter 720, F.S., may be cited as the “Homeowners’ Association Act;” and
- The association’s failure to timely provide notice of the recording of the amendment does not affect the validity or enforceability of the amendment.
Approved by the Governor on June 2 as Chapter 2015-097, Laws of Florida. These provisions take effect July 1, 2015.
Vote: Senate 39-0; House 98-17
The bill revises the requirements for the optional termination of condominiums. Current law permits a condominium to be terminated at any time if a plan of termination is approved by 80 percent of the condominium’s total voting interests and no more than 10 percent of the total voting interests reject the termination. The bill provides that, if 10 percent or more of the voting interests of a condominium reject a plan of termination, another termination may not be considered for 18 months.
The bill prohibits condominiums that have been created pursuant to the condominium conversion procedures in Part VI of ch. 718, F.S., from undertaking an optional plan of termination until 5 years after the conversion.
The bill provides the following conditions and limitations for the termination of a condominium if at the time the plan of termination is recorded, at least 80 percent of the total voting interests are owned by a bulk owner or a bulk owner with an entity which would be considered an insider under s. 726.102, F.S.:
- Upon timely request, unit owners must be allowed to retain possession of units and lease their former units for 12 months after the effective date of the termination if the units are offered to the public;
- Any unit owner whose unit was granted homestead exemption must be paid a relocation payment equal to 1 percent of the termination proceeds allocated to the unit;
- Unit owners other than the bulk owner must be paid at least 100 percent of the fair market value of their units as determined by one or more independent appraisers;
- The fair market value for a unit of an owner who was an original purchaser from the developer and who dissented or objected to the plan of termination must be at least the original purchase price paid for the unit; and
- The plan of termination must provide the manner by which each first mortgage on a unit will be satisfied in full at the time the plan is implemented.
Before a plan of termination can be presented to the unit owners for consideration the following disclosures must be made in a sworn statement:
- The identity of any person owning or controlling 50 percent or more of the condominium units or if owned by an artificial entity, the person who owns or controls it and the person who owns or controls 20 percent of the entity that constitutes the bulk owner;
- The units acquired by the bulk owner, the date of acquisition and the price of each unit; and
- The relationship of any board member to the bulk owner.
If members of the board are elected by the bulk owner, other unit owners may elect at least one-third of the board before approval of any plan of termination.
It provides for termination of common elements, withdrawal of the plan, correction of errors, and valuation of the common elements in the plan of termination.
The bill provides timeframes for objections to the plan of termination, including plans approved at a meeting and plans approved by a written consent or joinder.
The bill permits unit owners to contest a plan of termination by petitioning the Division of Florida Condominiums, Timeshares, and Mobile Homes for mandatory nonbinding arbitration. It repeals the unit owners’ right to contest the plan of termination in a court by initiating a summary procedure pursuant to s. 51.011, F.S. Unit owners may contest the fairness and reasonableness of the apportionment of the proceeds from the sale, that the first mortgages of unit owners will not be fully satisfied, or that the required vote was not obtained.
If approved by the Governor, these provisions take effect upon becoming law.
Vote: Senate 38-0; House 117-0
The bill amends ch. 558, F.S., relating to construction defect claims. The bill contains a legislative finding that the opportunity to resolve claims without legal process should be extended to insurers of a contractor, subcontractor, supplier, or design professional and contains a finding that the settlement negotiations should be confidential. The bill revises the definition of “completion of a building or improvement” to include a temporary certificate of occupancy.
The bill amends requirements for filing a notice of claim. The notice must describe the claim in reasonable detail and must sufficiently identify the location of the defect to enable the responding party to locate the defect without undue burden. It does not require destructive or other testing.
The bill provides that a written response to a claim must include one or more offers or statements that the respondent disputes the claim, or that the respondent will remedy the claim, compromise and settle the claim by means of a combination of repairs and monetary payments, or await a determination by an insurer.
The bill states that providing a copy of a notice of claim to a person’s insurer does not constitute a claim for insurance purposes unless the insurance policy specifies otherwise.
The bill provides requirements for the exchange of documents by the parties and provides that a party may assert any claim of privilege recognized under Florida law respecting any of the disclosure obligations mandated by ch. 558, F.S.
The bill amends s. 718.203, F.S., and s. 719.203, F.S., regarding condominiums and cooperatives respectively, to provide that completion of a building or improvement includes issuance of a temporary or other certificate of occupancy, that allows for occupancy or use of the entire building or improvement.
If approved by the Governor, these provisions take effect October 1, 2015.
Vote: Senate 35-4; House 112-0
The bill amends Florida’s law related to service animals and aligns it with similar provisions in the American with Disabilities Act and the Fair Housing Act. The bill redefines “service animal,” and for the purposes of public accommodation, limits the term to a dog or miniature horse. The bill amends the definition of public accommodation to include a timeshare that is a transient public lodging establishment, and exempts air carriers covered by the Air Carrier Access Act of 1986.
The bill requires a business to modify its policies to accommodate the use of a service animal by an individual with a disability. Although a business may not ask about the nature of an individual’s disability, it may ask if the service animal is required because of a disability and what tasks the service animal is trained to perform. A service animal must be on a leash or harness unless it would interfere with the service animal’s ability to perform the tasks it is trained to do, and it must be under the handler’s control. If an animal is not under the handler’s control, is not housebroken, or poses a threat, the business may request its removal. In addition to the criminal penalties in current law, the bill requires a business unlawfully denying or interfering with an individual’s right to use or train a service animal to perform 30 hours of community service with an organization that serves individuals with disabilities.
The bill creates a second-degree misdemeanor for a person who knowingly and willfully misrepresents that he or she is qualified to use a service animal or is a trainer of service animals. In addition to the criminal penalty, an individual in violation of this provision must also perform 30 hours of community service with an organization that serves individuals with disabilities.
If approved by the Governor, these provisions take effect July 1, 2015.
Vote: Senate 38-0; House 112-0