17 Jun New 2014 Community Association Legislation
Governor Rick Scott signed many new bills into law recently including legislation affecting community associations.
The primary bills related to Florida community associations include House Bill 807, House Bill 7037, Senate Bill 440 and Senate Bill 356 which take effect July 1, 2014. For informational purposes, the Florida Senate published the following summaries of the new legislation:
The bill relates to the operation and regulation of condominium associations, cooperative associations, homeowners’ associations, and timeshare projects.
For homeowners’ associations, the bill clarifies the notice requirements for the preservation of association covenants and restrictions under the Marketable Record Title Act.
For timeshare projects, the bill:
- Defines the term “timeshare project” to mean any timeshare property as defined in ch. 721, F.S., which is located in this state and that is also a transient public lodging establishment;
- Provides that public lodging units that are classified as timeshare projects are not subject to the requirement of at least biannual inspections by the Division of Hotels and Restaurants of the Department of Business and Professional Regulation (DBPR or department);
- Exempts timeshare projects from the requirements that public lodging establishments maintain public bathroom facilities, provide soap and clean towels or other approved hand-drying devices in the main public bathroom, and provide guests with clean pillowslips and under and top sheets; and
- Removes timeshare plans from the definition of a “vacation rental,” and provides that a vacation rental is a transient public lodging establishment that is not a timeshare project.
The provisions related to condominium associations include:
- Authorizes the associations to enter an abandoned unit to inspect the unit and adjoining common elements, to make specific repairs, and to maintain the unit, and permits the association to charge the unit owner for expenses incurred by the association,
- Provides the circumstances in which a unit may be considered abandoned;
- Provides that the insurance responsibility of the association or unit owners for reconstruction, repair, or replacement in the absence of an insurable event shall be determined by the provisions of the declaration or bylaws;
- Permits board and committee members to participate, including voting, in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication, and for such participation to count towards a quorum;
- Provides that the previous owner does not include an association that acquires the title to a delinquent property through foreclosure or by deed in lieu of foreclosure. The present unit owner’s liability for these costs associated with the collection process is limited to the amounts that accrued before the association acquired the title to the delinquent property.
- Prohibits condominium associations from recording a termination of condominium that failed to receive the required approval (80 percent of the voting interesting and 80 percent of the original principal amount of outstanding recorded mortgage liens of timeshare estates in the condominium, unless the declaration provides for a lower voting percentage). It provides that a new attempt to terminate the condominium may not be proposed at a meeting or by solicitation for joinder and consent for 180 days after the date the failed plan was first given to all unit owns;
- Repeals the Community Association Living Study Council; and
- Extends the time period to be classified as a bulk buyer or bulk assignee from July 1, 2015 to July 1, 2016.
For cooperative associations, the bill:
- Revises the financial reporting requirements by increasing from 60 days to 90 days the time to prepare a financial statement, or to contract with a third party to prepare the financial statement;
- Specifies the type of financial reporting required based on the association’s total annual revenue amounts;
- Limits the financial reporting requirement, for associations of fewer than 50 units, regardless of the association’s annual revenues, to the preparation of a report of cash receipts and expenditures, unless otherwise required by the declaration or other recorded governing documents;
- Provides that persons who have been suspended or removed by the division or who are delinquent in the payment of any monetary obligation due to the association are not eligible to be a candidate for board membership and may not be listed on the ballot; and
- Provides for the removal from office of a director or officer charged by information or indictment with a felony theft or embezzlement offense involving the association’s funds or property.
In regard to homeowners’ associations, the bill:
- Requires that meetings of the board of directors of a homeowners’ association and meetings of the association’s membership must be held at locations that are accessible to physically handicapped persons; and
- Provides that an association does not have to provide members with copies of an amendment to the governing documents after it is approved by the membership if a copy of the proposed amendment was previously provided to the members before the vote on the amendment and the proposed amendment was not changed before the vote.
In regard to condominium and cooperative associations, the bill requires outgoing board or committee members to relinquish all official records and property of the association in their possession or control to the incoming board within five days after the election. The bill provides that an outgoing board or committee member who violates this requirement is personally subject to a civil penalty by the Division of Florida Condominiums, Timeshares, and Mobile Homes. It also prohibits a board member from voting by e-mail.
For cooperative and homeowners’ associations, the bill authorizes boards to exercise specified emergency powers in response to the declaration of a state of emergency, including the authority to implement a disaster plan, mitigate damages, and borrow money with the approval of the membership.
In regard to condominium, cooperative, and homeowners’ associations, the bill provides that unit owners may consent in writing to the disclosure of contact information to which other owners are prohibited from having access.
The bill expands the services that may be performed by community association managers on behalf of condominiums, cooperatives, and homeowners’ associations. The bill permits community association managers to:
- Determine the number of days required for statutory notices;
- Determine the amounts due the association;
- Collect amounts due to the association before filing a civil action;
- Calculate the votes required for a quorum or to approve a proposition or amendment;
- Complete forms related to the management of a community association that have been created by statute or by a state agency;
- Draft meeting notices and agendas;
- Calculate and prepare certificates of assessment and estoppel certificates;
- Respond to requests for certificates of assessment and estoppel certificates;
- Negotiate monetary or performance terms of a contract subject to approval by an association;
- Draft prearbitration demands;
- Coordinate or perform maintenance for real or personal property and other routine services involved in the operation of a community association; and
- Comply with the association’s governing documents and the requirements of law as necessary to perform such practices.
The bill provides a “notice of intent to file a claim of lien” form, “notice of contest of lien” form, and a “release of lien” form for condominium, cooperative, and homeowners’ associations. It provides a “delinquent assessment” form for condominium and homeowners’ associations. It also provides a “notice of contest of lien” form for cooperative associations.
The bill provides professional standards for community association managers and firms. It provides for indemnification by the association and specifies the actions that cannot be indemnified.
The bill provides that the claim of lien of a cooperative association is not effective one year after the claim of lien was recorded unless, within that time, an action to enforce the lien is commenced. It provides that the one-year period is automatically extended for any length of time during which the association is prevented from filing a foreclosure action by an automatic stay resulting from a bankruptcy petition filed by the parcel owner or any other person claiming an interest in the parcel. This conforms the requirements for a claim of lien by cooperative associations with the claim of lien requirements for condominium associations.
The bill amends several provisions in s. 718.112, F.S., which specifies the provisions that must be included in the bylaws of condominiums, to distinguish the bylaws requirements for residential condominiums from those for commercial condominiums. The bill limits the following bylaw requirements to residential condominiums:
- The time periods for associations to respond to a unit owner’s written inquiries;
- The requirements for the election of board members, the use of staggered terms for members of the board, and the use of limited and general proxies;
- Prohibitions on persons who are not eligible to serve on the board of a condominium association, including co-owners of a unit, persons who have been suspended, persons who are delinquent in the payment of a monetary obligation due to the association, and persons convicted of a felony;
- The pre-election certification requirements for newly elected or appointed board members; and;
- The requirement that the bylaws of the association must provide for mandatory nonbinding arbitration of disputes by the Division of Florida Condominiums, Timeshares, and Mobile Homes within the Department of Business and Professional Regulation.
The bill also limits the requirement that associations initiate an application for a building permit for the required installation of a sprinkler system by the specified date to residential condominiums. The bill also extends the specified date by which residential condominium associations must make the application for a building permit from the end of 2019 to January 1, 2020.
The bill also limits the following condominium laws to residential condominiums:
- Requirements that condominium boards adopt shutter specifications for each building within each condominium operated by the association;
- Requirements that condominium boards approve a unit owner’s installation of hurricane protections that conform to the specifications adopted by the board;
- Requirements that the alternative dispute resolution provisions in s. 718.1255, F.S., which provide for the mediation and voluntary non-binding arbitration of certain disputes, do not apply to nonresidential condominiums unless specifically provided for in the declaration of the nonresidential condominium;
- Limitations on the ability of the developer to modify the plot plan for phase condominiums; and
- Requirements that certain information related to the development of a phase condominium be described in the original declaration of condominium or approved by an amendment.
The bill also extends the bulk buyer provisions in s. 718.505, F.S., from July 1, 2015 to July 1, 2016.
The bill prohibits local laws, ordinances, or regulations that regulate the duration or frequency of rental of vacation rentals. It repeals the provisions in current law that prohibit local laws, ordinances, or regulations that restrict the use of vacation rentals or that regulate vacation rentals based solely on their classification, use, or occupancy. The bill maintains the current prohibition against local laws, ordinances, or regulations that prohibit vacation rentals.