PROPOSED BILL DRAFT FS 720

cyber citizens for justice, Inc.

Draft to amend Florida statutes 720

“homeowners’ associations”

DECEMBER 2005

 

CODING: Words stricken are deleted; words underlined are additions

A bill to be entitled

An act relating to community associations; amending s. 20.165, F.S.: redesignating the Division of Florida Land Sales, Condominiums and Mobile Homes as the Division of Florida Land Sales, Condominiums, Homeowners' Associations, and Mobile Homes; amending s. 720.301, F.S.: revising definitions related to common areas, real property, declaration of covenants, governing documents, associations, homeowners’ associations, member, division and parcel; amending s. 720.301, F.S.; defining Ombudsman; defining the Advisory Council On Mandated Properties; amending s. 720.302, F.S.: amending s. 720.303, F.S.: powers, duties, clarifying right members right to speak at meetings,  significantly amends s. 720.303 for clarity and accountability, amending s. 720.304, F.S.: describing type of flags; clarifying signs; amending s. 720.305, F.S.: removing fines; diminishing role of governing documents; amending s. 720.3055, F.S.: clarifying governing documents; clarifying contracts; clarifying role of managers; amending s. 720.306, F.S.: substantial rewording, amendments, meeting of members, quorums, proxies, election of board; amending s. 720.307, F.S.;: clarifying transitions; designating application; creating s. 720.3071, F.S.: requiring training of homeowners' association board members; wherever appropriate Florida Statutes shall be amended to include the new definition of the Division of Florida Land Sales, Condominiums, Homeowners' Associations and Mobile homes; s. 720.3075, F.S.: creates additional prohibitions; amending  s. 720.3086, F.S.: requires audit; s. 720.3086 F.S.;: restricts use of fees; s. 720.3086, F.S.: defines exclusive uses; amending ss. 720.401-720.402 F.S.: delegates “division” powers; creates ombudsman and Advisory Council On Homeowners’ Associations; amends ss. 720.301, 720.304, 720.305, 720.3055, 720.306, 720.307, 720.3075, 720.3086; ss 720.401, 720.4012, 720.4014, 720.4016; renumbers ss. 720.401, 720.402; providing an effective date.

 

Be It Enacted By The Legislature Of The State Of Florida:

 

Section 1. Paragraph (d) of subsection (2) of section 20.165, Florida Statutes, is amended to read:

20.165 Department of Business and Professional Regulation.-

There is created a Department of Business and Professional Regulation.

(2) The following divisions of the Department of Business and Professional Regulation are established:

(d) Division of Florida Land Sales, Condominiums, Homeowners' Associations, and Mobile Homes.

 

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Section 2. Subsection (2) of section 720.301, Florida Statutes, is amended to read:

720.301 Definitions. – As used in this chapter, the term:

(2)   “Common area” means all real property within a community which is

owned or leased by an association or dedicated for use or maintenance by the,association or its members, including:

(a)  Real property the use of which is dedicated to the association or its members by a recorded plat; or

(b)  Real property committed by a declaration of covenants to be leased or conveyed to the association.

  

Section 4. Subsection (4) of section 720.301, Florida Statues, is amended to read:

720.301 Definitions. – As used in this chapter, the term:

(4) "Declaration of covenants," or "declaration," means a recorded written instrument in the nature of covenants running with the land, according to the recorded plat, which subjects the land comprising the community to the jurisdiction and control of an association or associations in which to the owners of the parcels, or their association representatives, must be members.

Upon the execution of the sale of the first lot, the declaration shall not be

amended without the vote of approval of a 2/3 majority of the owners of

residential parcels that have been purchased.  A tie vote equals a negative vote.  Exceptions shall be amendments identifying additional phases of the community as they are constructed. These amendments shall not contain any other changes to the existing declaration.

 

Section 5. Subsection (8) of section 720.301, Florida Statutes, is amended to read:

720.301 Definitions. – As used in this chapter, the term;

(8)  "Governing documents" means:

(a)  Each set of  recorded declaration of covenants for a community or communities and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto; and

(b) The articles of incorporation and bylaws of the homeowners' association, and any duly adopted amendments thereto.

(c) When different sets of covenants exist for each recorded plat,

those covenants shall only apply to the plat for which they are recorded and specified.. The different sets of covenants shall not be commingled.

 

Section 6. Subsection (9) of section 720.301, Florida Statutes, is amended to read:

720.301 Definitions. – As used in this chapter, the term:

(9)  "Homeowners' association" or "association" means a Florida corporation, as authorized by Chapter 720 F.S. or was authorized as a not-for-profit corporation pursuant to Chapter 617 F.S. that is responsible for the operation administration of a community or a mobile home subdivision in compliance with applicable federal, state

 

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and local laws and the governing documents of the association. In addition, a homeowners’ association means a Florida corporation in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. Any homeowners’ association or other named association that administers a residential community where membership is mandatory shall be required to comply with this chapter, except if exempted.  The term "homeowners' association" does not include a community development district or other similar special taxing district created pursuant to statute.

       

Section 7. Subsection (10) of section 720.301, Florida Statutes, is amended to read:

720.301 Definitions. – As used in this chapter, the term:  

(10)  "Member" means a member of an association, and may include,

but is not limited to, a parcel owner or an association representing parcel

owners or a combination thereof, and includes any person or entity obligated by the governing documents to pay an assessment or amenity fee.

 

Section 8. Subsection (11) of section 720.301, Florida Statutes, is amended to read:

720.301 Definitions. – As used in this chapter, the term:  

(11)  "Parcel" means a platted or unplatted lot, tract, unit, or other subdivision of real property within a community, as described in the declaration:

              

Section 9. Subsections (14), (15) and (16) are added to section 720.301, Florida Statues, to read:

720.301 Definitions. – As used in this chapter, the terms:        

(14) “Ombudsman” means an attorney admitted to practice before the

Florida Supreme Court and appointed by the Governor to insure  compliance with existing laws related to deed-restricted communities.

(15) “Homeowners’ Association Advisory Council” means a group of persons appointed to recommend changes in laws that affect the administration of mandatory homeowners’ associations.

(16) "Division" means the Division of Florida Land Sales, Condominiums,

Homeowners' Associations, and Mobile Homes of the Department of Business and Professional Regulation.

Section 11. Section 720.302, Florida Statutes, is amended to read:

720.302 Purposes, scope, and application.—

(1) The purposes of this chapter are to give statutory recognition to

corporations not for profit that operate administer residential communities in this state to provide procedures regulations for operating homeowners' associations, and to protect the rights of association members without unduly impairing the ability of such associations to perform their functions, as authorized by federal, state and local laws and the governing documents of the association.

 

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(2)   (2) Since the Legislature has granted quasi-governmental authority

to homeowners’ associations and deed restrictions created by developers of Mandated Properties in residential communities, the Legislature recognizes that it is not in the best interest of homeowners' associations or the individual association members thereof to create or impose a bureau or other agency of  state government to regulate the affairs of homeowners' associations. necessary to provide regulatory oversight to insure compliance with federal, state and local laws. It is the intent of the Legislature to protect the rights of parcel owners by insuring that the quasi-governmental authority granted to homeowners' associations and that the deed restrictions created by developers of Mandated Properties in residential communities conform to the premises established in Articles I, II, and III of the United States Constitution whereby a system of checks and balances is established to prevent abuses of governmental authority.  The Department of Business and Professional Regulation (DBPR) shall create a Division of Mandated Properties, which shall contain the Homeowners’ Association Ombudsman Office for defined purposes. No later than one (1) year after enactment of this provision, the Ombudsman Office shall establish a process for collecting an annual fee which shall not exceed $4 during each of the following two years and, thereafter shall not exceed the Cost of Living Index. Funds collected shall be deposited in the Mandated Properties Trust Fund. Funds shall be utilized by the Ombudsman Office for, but not limited to, the review and approval of deed restrictions before releasing for recording at the county level by the developer or owner of the initial lots to be developed; education; enforcement; investigation; and prosecution of policies and procedures related to mandated properties. Upon transition of authorities, duties, responsibilities, and rights from the developer to the parcel owners all amendments, alterations, or modifications to the governing documents must be approved by at least two-thirds (67%) of the parcel owners and/or homeowners' association members. The governing documents shall not contain provisions that reduce this percentage of majority approval for changes to the governing documents.  The Ombudsman must not engage the services of industry partisans with a vested interest in the administration of deed-restricted communities or in the mandatory homeowners’ association to implement its powers, who practiced in this field within the last three years. However, Furthermore, in accordance with s. 720.311, the Legislature finds that homeowners' associations and their individual members will benefit from an expedited alternative process for resolution of election and recall disputes and pre-suit mediation of other disputes involving covenant enforcement, disputes relating to the transition of control of the association from the developer or owner to members of the association, and authorize the department to hear, administer, and determine these disputes as more fully set forth in this chapter. Further, the Legislature recognizes that certain contract rights have been created for the benefit of homeowners' associations and members thereof before the effective date of this act and that ss. 720.301-720.407 are not intended to impair such contract rights, as long as they are accepted by a 2/3 majority of the homeowners’ association members, including but not limited to, the rights of the developer to complete the community as initially contemplated.

 

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(3) This chapter does not apply to:

(a) A community that is composed of property primarily intended for

commercial, industrial, or other nonresidential use; or

(b) The commercial or industrial parcels in a community that contains both residential parcels and parcels intended for commercial or industrial use.

(4) This chapter does not apply to any association that is subject to regulation under chapter 718, chapter 719, or chapter 721; or to any non-mandatory association formed under chapter 723.

(5) Unless expressly stated to the contrary, corporations not-for-profit that operate residential homeowners' associations in this state shall be governed by and subject to chapter 617 and this chapter. This subsection is intended to clarify existing law.  

         

Section 12. Section 720.303, Florida Statutes, is amended to read:

720.303 Association powers and duties; meetings of board; official

records; budgets; financial reporting; association funds; recalls. –

(1) POWERS AND DUTIES.--An association which operates administers a community as defined in s. 720.301, must be operated administered by an association that is a Florida corporation. After October 1, 1995, the association must be incorporated and the initial governing documents must be recorded in the official records of the county in which the community is located. An association may operate administer more than one community. The officers and directors of an association have a fiduciary relationship to the members who are served by the association. The powers and duties of an association include those set forth in this chapter and, except as expressly limited or restricted in this chapter, those set forth in the governing documents. After control has been obtained by members other than the developer, under no circumstances may the governing documents restrict the association powers and duties, as set forth in this chapter. After control of the association is obtained by members other than the developer, the association may institute, maintain, settle, or appeal actions or hearings in its name on behalf of all members concerning matters of common interest to the members, including, but not limited, to the common areas; roof or structural components of a building, or other improvements for which the association is responsible; mechanical, electrical, or plumbing elements serving an improvement or building for which the association is responsible; representations of the developer pertaining to any existing or proposed commonly used facility; and protesting ad valorem taxes on commonly used facilities. The association may defend actions in eminent domain or bring inverse condemnation actions. Before commencing litigation against any party in the name of the association involving amounts in controversy in excess of $100,000, the association must obtain the affirmative approval of a simple majority of the total voting interests at a meeting of the membership. at which a quorum has been attained. This subsection does not limit any statutory or common-law right of any individual member or class of members to bring any action without participation by the association. A member does not have authority to act for the association by virtue of being a member. An association may have more than one class of members and may issue membership certificates. An association of 15 or fewer parcel owners may shall enforce only the requirements of those deed restrictions established prior to the

 

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purchase of each parcel upon an affected parcel owner or owners.

1(2) BOARD MEETINGS.— {Please see footnote below.}

(a) A meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. All meetings of the board must be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege.  

(b) Members have the right to attend all meetings of the board and to speak on any matter placed on the agenda by petition of the voting interests for at least 3 minutes. The association may adopt written reasonable rules expanding the right of members to speak and governing the frequency, duration, and other manner of member statements, which rules must be consistent with this paragraph. and may include a sign-up sheet for members wishing to speak. Notwithstanding any other law, the requirement that board meetings and committee meetings be open to the members is inapplicable to meetings between the board or a committee and the association's attorney, with respect to meetings of the board held for the purpose of discussing personnel matters.

(c) The bylaws shall provide for giving notice to parcel owners and members of all board meetings and, if they do not do so, shall be deemed to provide the following:

1.  Notices of all board meetings and the agendas must be posted in a conspicuous place in the community at least 48 hours in advance of a meeting, except in an emergency. In the alternative, if notice is not posted in a conspicuous place in the community, notice of each board meeting and the agenda must be mailed or delivered to each member at least 7 days before the meeting, except in an emergency. Notwithstanding this general notice requirement, for communities with more than 100 members, the bylaws may provide for a reasonable alternative to posting or mailing of notice for each board meeting, including publication of notice, provision of a schedule of board meetings, or the conspicuous posting and repeated broadcasting of the notice on a closed-circuit cable television system serving the homeowners' association. However, if broadcast notice is used in lieu of a notice posted physically in the community, the notice must be broadcast at least four times every broadcast hour of each day that a posted notice is otherwise required. When broadcast notice is provided, the notice and agenda must be broadcast in a manner and for a sufficient continuous length of time so as to allow an average reader to observe the notice and read and comprehend the entire content of the notice and the agenda. The bylaws or amended bylaws may provide for giving notice by electronic transmission in a manner authorized by law for meetings of the board of directors, committee meetings requiring notice under this section, and annual and special meetings of the members; however, a member must consent in writing to receiving notice by electronic transmission.

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1(2) BOARD MEETINGS.— {Footnote applicable to above subsection.}

1Note.--As amended by s. 18, ch. 2004-345, and s. 135, ch. 2005-2. For a description of multiple provisions in the same session affecting a statutory provision, see preface to the Florida Statutes, "Statutory Construction." Subsection (2) was also amended by s. 2, ch. 2004-345, and that version reads:

(2) BOARD MEETINGS.--A meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. All meetings of the board must be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. Notices of all board meetings must be posted in a conspicuous place in the community at least 48 hours in advance of a meeting, except in an emergency. In the alternative, if notice is not posted in a conspicuous place in the community, notice of each board meeting must be mailed or delivered to each member at least 7 days before the meeting, except in an emergency. Notwithstanding this general notice requirement, for communities with more than 100 members, the bylaws may provide for a reasonable alternative to posting or mailing of notice for each board meeting, including publication of notice, provision of a schedule of board meetings, or the conspicuous posting and repeated broadcasting of the notice on a closed-circuit cable television system serving the homeowners' association. However, if broadcast notice is used in lieu of a notice posted physically in the community, the notice must be broadcast at least four times every broadcast hour of each day that a posted notice is otherwise required. When broadcast notice is provided, the notice and agenda must be broadcast in a manner and for a sufficient continuous length of time so as to allow an average reader to observe the notice and read and comprehend the entire content of the notice and the agenda. The bylaws or amended bylaws may provide for giving notice by electronic transmission in a manner authorized by law for meetings of the board of directors, committee meetings requiring notice under this section, and annual and special meetings of the members; however, a member must consent in writing to receiving notice by electronic transmission. An assessment may not be levied at a board meeting unless a written notice of the meeting is provided to all members at least 14 days before the meeting, which notice includes a statement that assessments will be considered at the meeting and the nature of the assessments. Rules that regulate the use of parcels in the community may not be adopted, amended, or revoked at a board meeting unless a written meeting notice is provided to all members at least 14 days before the meeting, which notice includes a statement that changes to the rules regarding the use of parcels will be considered at the meeting. Directors may not vote by proxy or by secret ballot at board meetings, except that secret ballots may be used in the election of officers. This subsection also applies to the meetings of any committee or other similar body, when a final decision will be made regarding the expenditure of association funds, and to any body vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community.  

~~~~~~~~~~~~~~~~~~~~~~{End Of Footnote}~~~~~~~~~~~~~~~~~~~~~~

 

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22.   {Please see footnote below.}  

An assessment may not be levied at a board meeting unless the notice of the meeting includes a statement that assessments will be considered and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which amendments to rules regarding parcel use will be considered must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting.

22.   {Footnote applicable to above subsection.}

  2Note.--As amended by s. 18, ch. 2004-345. For a description of multiple acts in the same session affecting a statutory provision, see preface to the Florida Statutes, "Statutory Construction." Subparagraph (2)(c)2. was also amended by s. 15, ch. 2004-353, and that version reads:

2.  An assessment may not be levied at a board meeting unless a written notice of the meeting is provided to all members at least 14 days before the meeting, which notice includes a statement that assessments will be considered at the meeting and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which rules that regulate the use of parcels in the community may be adopted, amended, or revoked must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting. A written notice concerning changes to the rules that regulate the use of parcels in the community must include a statement that changes to the rules regarding the use of parcels will be considered at the meeting.

Note.--Former s. 617.303.

~~~~~~~~~~~~~~~~~~~~~~{End Of Footnote}~~~~~~~~~~~~~~~~~~~~~

3.  Directors may not vote by proxy or by secret ballot at board meetings. , except that secret ballots may be used in the election of officers. This subsection also applies to the meetings of any committee or other similar body, when a final decision will be made regarding the expenditure of association funds, and to any body vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community.

(d) If 20 10 percent of the total voting interests petition the board to address an item of business, the board shall, at its next regular board meeting or at a special meeting of the board, but not later than 60 days after the receipt of the petition, take the petitioned item up on an agenda. The board shall give all members notice of the meeting at which the petitioned item shall be addressed in accordance with the 14-day notice requirement pursuant to 3subparagraph (c) 2.  Each member shall have

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the right to speak for at least 3 minutes on each matter placed on the agenda by petition. provided that the member signs the sign-up sheet, if one is provided. or submits a written request to speak prior to the meeting. Other than addressing the petitioned item at the meeting, the The board is not obligated to address all items on the agenda. take any other action requested by the petition.

e) Detailed agendas for board meetings with specific items that will be addressed shall be published and made available to all members no less than 7 days prior to the date of the board meeting.

(3) MINUTES---Minutes of all meetings of the members of an association and of the board of directors of an association must be maintained in written form or in another form that can be converted into written form within a reasonable time. A vote or abstention from voting on each matter voted upon for by each director present at a board meeting must shall be recorded in the minutes.

(4) OFFICIAL RECORDS.--The association shall maintain each of the following items, when applicable, which constitute the official records of the association:

(a) Copies of any plans, specifications, permits, and warranties related to improvements constructed on the common areas or other property as platted and recorded that the association is obligated to maintain, repair, or replace. If such documents do not exist, the association shall obtain the documents or forfeit the right to assess any fees to maintain the common areas of property.

(b) A copy of the bylaws of the association and of each amendment to the bylaws.

(c) A copy of the articles of incorporation of the association and of each amendment thereto.

(d) A copy of the each set of declaration of covenants and a copy of each amendment thereto.

(e) A copy of the current rules of the homeowners' association.

(f) The minutes of all meetings of the board of directors and of the members, which minutes must be retained for at least 7 years.

(g) A current roster of all members and their mailing addresses and parcel  identifications. The association shall also maintain the electronic mailing addresses and the numbers designated by members for receiving notice sent by electronic transmission of those members consenting to receive notice by electronic transmission. The electronic mailing addresses and numbers provided by unit owners to receive notice by electronic transmission shall be removed from association records when consent to receive notice by electronic transmission is revoked. However, the association is not liable for an erroneous disclosure of the electronic mail address or the number for receiving electronic transmission of notices.

(h) All of the association's insurance policies or a copy thereof, which policies must be retained for at least 7 years.

(i) A current copy of all contracts to which the association is a party, including, without limitation, any management agreement, lease, or other contract under which the association has any obligation or responsibility. No contract or written agreement shall be allowed to maintain property that is not owned by and deeded to the association. Bids received by the association for work to be performed must also be considered official records and must be kept for a period of 1 year.  

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(j) The financial and accounting records of the association, kept according to good accounting practices. All financial and accounting records must shall be maintained a period of at least 7 years. The financial and accounting records must include:

1.  Accurate, itemized, and detailed records of all receipts and expenditures.

2.  A current account and a periodic statement of the account for each member, designating the name and current address of each member who is obligated to pay assessments, the due date and amount of each assessment or other charge against the member, the date and amount of each payment on the account, and the balance due.

3.  All tax returns, financial statements, and financial reports of the association.

4.  Any other records that identify, measure, record, or communicate financial information.

(k) A copy of the disclosure summary described in s. 720.401(1).

(l)  All other written records of the association not specifically included in the foregoing which are related to the operation of the association.

(m) All interpretations of any governing documents, as provided by any legal source or lawyer as long as they are not part of a pending lawsuit.

(n) All architectural requests and approvals or denials shall be maintained as long as the association exists or is active.

(5) INSPECTION AND COPYING OF RECORDS.--The official records shall be maintained within the state county in which the governing documents are recorded and must be open to inspection and available for photocopying by machine, video, digital cameras or any other methods available to by members or their authorized agents at reasonable times and places within 10 business days after receipt of a written request for access. This subsection may be complied with by having a copy of the official records available for inspection or copying in the community. If the association has a photocopy machine available where the records are maintained, it must provide parcel owners with copies on request during the inspection. if the entire request is limited to no more than 26 pages.

(a) The failure of an association to provide access to the records within 10 business days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with this subsection.

(b) A member who is denied access to official records is entitled to the actual damages or minimum damages for the association's willful failure to comply with this subsection. The minimum damages are to be $50 $100 per calendar day up to 10 days, the calculation to begin on the 11th business day after receipt of the written request. 

(c) The association may adopt reasonable written rules governing the frequency, time, location, notice, records to be inspected, and manner of inspections, but may not impose a requirement that a parcel owner demonstrate any proper purpose for the inspection, state any reason for the inspection, or limit a parcel owner's right to inspect records to less than one 8-hour business day. per month. The association may impose fees to cover only the actual costs of providing copies of the official records. , including, without limitation, the costs of copying. The association may charge up to 50 5 cents per page for copies made on the association's photocopier. If the association does not have a photocopy machine available where the records are

 

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kept, or if the records requested to be copied exceed 25 pages in length, the association may have copies made by an outside vendor and may charge only the actual cost of copying.The association may impose a one-time fee not to exceed one cent per page and limited to a total of five dollars, if the parcel owner provides the necessary equipment and materials for copying and the labor to make the requested copies.  The association shall maintain an adequate number of copies of the recorded governing documents, to ensure their availability to members and prospective members. Notwithstanding the provisions of this paragraph, the following records shall not be accessible to members or parcel owners:

1.  Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including, but not limited to, any record prepared by an association attorney or prepared at the attorney's express direction which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association and was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings or which was prepared in anticipation of imminent civil or criminal litigation or imminent adversarial administrative proceedings until the conclusion of the litigation or adversarial administrative proceedings.

2.  Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a parcel.

3. Disciplinary, health, insurance, and personnel records of the association's employees.

4. Medical records of parcel owners or community residents.

(6) BUDGETS.--The association shall prepare an annual budget. The budget must reflect the estimated revenues and expenses for that year and the estimated surplus or deficit as of the end of the current year. The budget must set out separately all fees or charges for recreational amenities, whether owned by the association, the developer, or another person. The association shall provide each member with a copy of the annual budget or a written notice that a copy of the budget is available upon request at no charge to the member. The copy must be provided to the member within the time limits set forth in subsection (5).

(7) FINANCIAL REPORTING.--The association shall prepare an annual financial report within 60 days after the close of the fiscal year. The association shall, within the time limits set forth in subsection (5), provide each member with a copy of the annual financial report or a written notice that a copy of the financial report is available upon request at no charge to the member. Financial reports shall be prepared as follows:

(a) An association that meets the criteria of this paragraph shall prepare or cause to be prepared a complete set of financial statements in accordance with generally accepted accounting principles. The financial statements shall be based upon the association's total annual revenues, as follows:

1.  An association with total annual revenues of $100,000 $25,000 or more, but less than $200,000, shall prepare compiled financial statements.

2.  An association with total annual revenues of at least $200,000, but less than

 

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$400,000, shall prepare reviewed financial statements.

3.  An association with total annual revenues of $400,000 or more shall prepare audited financial statements.

(b) 1.  An association with total annual revenues of less than $100,000 $25,000 shall prepare a report of cash receipts and expenditures.

2.  An association in a community of fewer than 50 parcels, regardless of the association's annual revenues, may prepare a report of cash receipts and expenditures in lieu of financial statements required by paragraph (a) unless the governing documents provide otherwise.

3.  A report of cash receipts and disbursement must disclose the amount of receipts by accounts and receipt classifications and the amount of expenses by accounts and expense classifications, including, but not limited to, the following, as applicable: costs for security, professional, and management fees and expenses; taxes; costs for recreation facilities; expenses for refuse collection and utility services; expenses for lawn care; costs for building maintenance and repair; insurance costs; administration and salary expenses; and reserves if maintained by the association.

(c) If 20 10 percent of the parcel owners petition the board for a level of financial reporting higher than that required by this section, the association shall duly notice and hold a meeting of members within 30 days of receipt of the petition for the purpose of voting on raising the level of reporting for that fiscal year. Upon approval of a majority of the total voting interests of the parcel owners, the association shall prepare or cause to be prepared, shall amend the budget or adopt a special assessment to pay for the financial report a complete set of financial statements in accordance with the vote of owners, an amendment to regardless of any provision to the contrary in the governing documents, if necessary, and shall provide within 90 60 days of the meeting or the end of the fiscal year, whichever occurs later: sooner:

1.  Compiled, reviewed, or audited financial statements, if the association is otherwise required to prepare a report of cash receipts and expenditures;

2.  Reviewed or audited financial statements, if the association is otherwise required to prepare compiled financial statements; or

3.  Audited financial statements if the association is otherwise required to prepare reviewed financial statements.

(d) If approved by a majority of all of the voting interests present at a properly called meeting of the association, an association may prepare or cause to be prepared:

1.  A report of cash receipts and expenditures in lieu of a compiled, reviewed, or audited financial statement;

 2.  A report of cash receipts and expenditures or a compiled financial statement in lieu of a reviewed or audited financial statement; or

 3.  A report of cash receipts and expenditures, a compiled financial statement, or a reviewed financial statement in lieu of an audited financial statement.

(8)  ASSOCIATION FUNDS; COMMINGLING.—

(a) All association funds held by a developer shall be maintained separately in the association's name. Reserve and operating funds of the association shall not be commingled prior to turnover except the association may jointly invest reserve funds; however, such jointly invested funds must be accounted for separately.

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(b) No developer in control of a homeowners' association shall commingle any association funds with his or her funds or with the funds of any other homeowners' association, or community association or corporation for profit created by the developer.

(c) Association funds may not be used by a developer to defend a civil or criminal action, administrative proceeding, or arbitration proceeding that has been filed against the developer or directors appointed to the association board by the developer, even when the subject of the action or proceeding concerns the operation of the developer-controlled association.

(9) APPLICABILITY.--Sections 617.1601-617.1604 do not apply to a homeowners' association in which the members have the inspection and copying rights set forth in this section.        

(10) RECALL OF DIRECTORS.—

(a) 1.  Regardless of any provision to the contrary contained in the governing documents, subject to the provisions of s. 720.307 regarding transition of association control, any member of the board 4of directors may shall be recalled and removed from office with or without cause by a majority of the total voting interests. who are required to be the registered and recorded owners.

2.  When the governing documents, including the declaration, articles of incorporation, or bylaws, provide that only a specific class of members is entitled to elect a board director or directors, only that class of members may vote to recall those board directors so elected.

(b) 1.  Board directors may be recalled by an agreement in writing or by written ballot without a membership meeting. The agreement in writing or the written ballots, or a copy thereof, shall be served on the association by certified mail or by personal service in the manner authorized by chapter 48 and the Florida Rules of Civil Procedure.

2.  The board shall duly notice and hold a meeting of the board within 5 full business days after receipt of the agreement in writing or written ballots. At the meeting, the board shall either certify the written ballots or written agreement to recall a director or directors of the board, in which case such director or directors shall be recalled effective immediately and shall turn over to the board within 5 full business days any and all records and property of the association in their possession, or proceed as described in paragraph (d).

3.  When it is determined by the department pursuant to binding arbitration proceedings that an initial recall effort was defective, written recall agreements or written ballots used in the first recall effort and not found to be defective may be reused in one subsequent recall effort. However, in no event is a written agreement or written ballot valid for more than 120 days after it has been signed by the member.

4.  Any rescission or revocation of a member's written recall ballot or agreement must be in writing and, in order to be effective, must be delivered to the association before the association is served with the written recall agreements or ballots.

5.  The agreement in writing or ballot shall list at least as many possible replacement directors as there are directors subject to the recall, when at least a majority of the board is sought to be recalled; the person executing the recall

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instrument may vote for as many replacement candidates as there are directors subject to the recall.

(c)1.  If the declaration, articles of incorporation, or bylaws specifically provide, the m Members may also recall and remove a board director or directors by a vote taken at a special meeting of the members. If so provided in the governing documents, a A special meeting of the members to recall a director or directors of the board of administration may be called by 10 percent of the voting interests give notice of the meeting as required for a meeting of members, and the notice shall state the purpose of the meeting. Electronic transmission may not be used as a method of giving notice of a meeting called in whole or in part for this purpose.

2. The board shall duly notice and hold a board meeting within 5 full business days after the adjournment of the member meeting to recall one or more directors. At the meeting, the board shall certify the recall, in which case such member or members shall be recalled effective immediately and shall turn over to the board within 5 full business days any and all records and property of the association in their possession, or shall proceed as set forth in subparagraph (d).

(d) If the board determines not to certify the written agreement or written ballots to recall a director or directors of the board or does not certify the recall by a vote at a meeting, the board shall, within 5 full business days after the meeting, file with the department a petition for binding arbitration pursuant to the applicable procedures in ss. 718.112(2)(j) and 718.1255 and the rules adopted thereunder. For the purposes of this section, the members who voted at the meeting or who executed the agreement in writing shall constitute one party under the petition for arbitration. If the arbitrator certifies the recall as to any director or directors of the board, the recall will be effective upon mailing of the final order of arbitration to the association. The director or directors so recalled shall deliver to the board any and all records of the association in their possession within 5 full business days after the effective date of the recall.

(e) If a vacancy occurs on the board as a result of a recall and less than a majority of the board directors are removed, the vacancy may be filled by the affirmative vote of a majority of the remaining directors, notwithstanding any provision to the contrary contained in this subsection or in the association documents. If vacancies occur on the board as a result of a recall and a majority or more of the board directors are removed, the vacancies shall be filled by members voting in favor of the recall; if removal is at a meeting, any vacancies shall be filled by the members at the meeting. If the recall occurred by agreement in writing or by written ballot, members may vote for replacement directors in the same instrument in accordance with procedural rules adopted by the division, which rules need not be consistent with this subsection.

(f) If the board fails to duly notice and hold a board meeting within 5 full business days after service of an agreement in writing or within 5 full business days after the adjournment of the member recall meeting, the recall shall be deemed effective and the board directors so recalled shall immediately turn over to the board all records and property of the association.

(g) If a director who is removed fails to relinquish his or her office or turn over records as required under this section, the circuit court in the county where the association maintains its principal office may, upon the petition of the association, summarily

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order the director to relinquish his or her office and turn over all association records upon application of the association

(h) The minutes of the board meeting at which the board decides whether to certify the recall is an official association record. The minutes must record the date and time of the meeting, the decision of the board, and the vote count taken on each board member subject to the recall. In addition, when the board decides not to certify the recall, as to each vote rejected, the minutes must identify the parcel number and the specific reason for each such rejection.

(i) When the recall of more than one board director is sought, the written agreement, ballot, or vote at a meeting shall provide for a separate vote for each board director sought to be recalled.

(2) BOARD MEETINGS.--A meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. All meetings of the board must be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. Notices of all board meetings, including the agendas, must be posted in a conspicuous place in the community at least 48 hours in advance of a meeting, except in an emergency. In the alternative, if notice is not posted in a conspicuous place in the community, notice of each board meeting, including the agenda, must be mailed or delivered to each member at least 7 days before the meeting, except in an emergency. Notwithstanding this general specific notice requirement, for communities with more than 100 members, the bylaws may provide for a reasonable alternative to posting or mailing of notice for each board meeting, including publication of notice, provision of a schedule of board meetings, or the conspicuous posting and repeated broadcasting of the notice, and the agenda, on a closed-circuit cable television system serving the homeowners' association. However, if broadcast notice is used in lieu of a notice posted physically in the community, the notice and the agenda must be broadcast at least four times every broadcast hour of each day that a posted notice is otherwise required. When broadcast notice is provided, the notice the agenda must be broadcast in a manner and for a sufficient continuous length of time so as to allow an average reader to observe the notice and read and comprehend the entire content of the notice and the agenda. The bylaws or amended bylaws may provide for giving notice by electronic transmission in a manner authorized by law for meetings of the board of directors, committee meetings requiring notice under this section, and annual and special meetings of the members; however, a member must consent in writing to receiving notice by electronic transmission. An assessment may not be levied at a board meeting unless a written notice of the meeting is provided to all members at least 14 days before the meeting, which notice includes a statement that assessments will be considered at the meeting and the nature of the assessments. Rules that regulate the use of parcels in the community may not be adopted, amended, or revoked at a board meeting unless a written meeting notice is provided to all members at least 14 days before the meeting, which notice includes a statement that changes to the rules regarding the use of parcels will be considered at the meeting. Directors may not vote by proxy or by

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secret ballot at board meetings, except that secret ballots may be used in the election of officers. This subsection also applies to the meetings of any committee or other similar body, when a final decision will be made regarding the expenditure of association funds, and to any body vested with the power to approve or disapprove architectural decisions with respect to a specific parcel of residential property owned by a member of the community.           

2. An assessment may not be levied at a board meeting unless a written notice of the meeting is provided to all members at least 14 days before the meeting, which notice includes a statement that assessments will be considered at the meeting and the nature of the assessments. Written notice of any meeting at which special assessments will be considered or at which rules that regulate the use of parcels in the community may be adopted, amended, or revoked must be mailed, delivered, or electronically transmitted to the members and parcel owners and posted conspicuously on the property or broadcast on closed-circuit cable television not less than 14 days before the meeting. A written notice concerning changes to the rules that regulate the use of parcels in the community must include a statement that changes to the rules regarding the use of parcels will be considered at the meeting. 

Section 13. Subsection (2) of section 720.304, Florida Statutes, is amended to read:    

720.304 Right of owners to peaceably assemble; display of flag; SLAPP suits prohibited---

(2) Any homeowner may display one portable, stationary or removable United States flag or official flag of the State of Florida in a respectful manner, and on Armed Forces Day, Memorial Day, Flag Day, Independence Day, and Veterans Day may display in a respectful manner portable, removable official flags, not larger than 41/2 feet by 6 feet, which represent the United States Army, Navy, Air Force, Marine Corps, or Coast Guard, from a free standing, portable, removable or telescoping flagpole not to exceed 20' (twenty feet) in the front, rear or side yard regardless of any declaration rules or requirements dealing with flags or decorations.

Section 14. Subsection (6) of section 720.304, Florida Statues, is amended to read:

 

720.304 Right of owners to peaceably assemble; display of flag; SLAPP suits prohibited –

(6) Any parcel owner may display a sign of reasonable size provided by a contractor for security services within 10 feet of any entrance to the home. The sign shall not exceed 18” high by 18” wide and the bottom of the sign shall be no higher than 24” from the ground elevation within the permitted area of installation.  Other specifications may be approved by the association, but in no case shall the specifications be less than authorized by this section.

Section 15. Section 720.305, Florida Statues, is amended to read:

720.305 Obligations of members; remedies at law or in equity; levy of fines and suspension of use rights; failure to fill sufficient number of vacancies on board of directors to constitute a quorum; appointment of receiver upon petition of any member.

(1) Each member and the member's tenants, guests, and invitees, and each

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association, are governed by, and must comply with, this chapter, the governing documents of the community, and the rules of the association. Actions at law or in equity, or both, to redress alleged failure or refusal to comply with these provisions may be brought by the association or by any member against:

(a) The association;

(b) A member;

(c) Any director or officer of an association who willfully and knowingly or otherwise fails to comply with these provisions; and

(d) Any tenants, guests, or invitees occupying a parcel or using the common areas.  The prevailing party in any such litigation is entitled to recover reasonable attorney's fees and costs. This section does not deprive any person of any other available right or remedy.

(2) If the governing documents so provide, an An association may not suspend, for a reasonable period of time, the rights of a member or a member's tenants, guests, or invitees, or both, to use common areas and facilities. and may levy reasonable fines, not to exceed $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied on the basis of each day of a continuing violation, with a single notice and opportunity for hearing, except that no such fine shall exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine shall not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to collect its reasonable attorney's fees and costs from the nonprevailing party as determined by the court

(a) A fine or suspension may not be imposed without notice of at least 14 days to the person sought to be fined or suspended and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. If the committee, by majority vote, does not approve a proposed fine or suspension, it may not be imposed.

(b) The requirements of this subsection do not apply to the imposition of suspensions or fines upon any member because of the failure of the member to pay assessments or other charges when due. if such action is authorized by the governing documents.

(c) Suspension of common-area-use rights shall not impair the right of an owner or tenant of a parcel to have vehicular and pedestrian ingress to and egress from the parcel, including, but not limited to, the right to park.

(3) If the governing documents so provide, an association may suspend the voting rights of a member for the nonpayment of regular annual assessments that are delinquent in excess of 90 days.

(3) If an association fails to fill vacancies on the board of directors sufficient to constitute a quorum in accordance with the bylaws, any member may apply to the circuit court that has jurisdiction over the community served by the association for the appointment of a receiver to manage the affairs of the association. At least 30 days before applying to the circuit court, the member shall mail to the association, by certified or registered mail, and post, in a conspicuous place on the property of the community served by the association, a notice describing the intended action, giving the association 30 days to fill the vacancies. If during such time the association fails

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to fill a sufficient number of vacancies so that a quorum can be assembled, the member may proceed with the petition. If a receiver is appointed, the homeowners' association shall be responsible for the salary of the receiver, court costs, attorney's fees, and all other expenses of the receivership. The receiver has all the powers and duties of a duly constituted board of directors and shall serve until the association fills a sufficient number of vacancies on the board so that a quorum can be assembled.

Section 16. Section 720.3055, Florida Statues, is amended to read:

720.3055 Contracts for products and services; in writing; bids; exceptions.—

(1) All contracts as further described in this section or any contract that is not to be fully performed within 1 year after the making thereof for the purchase, lease, or renting of materials or equipment to be used by the association in accomplishing its purposes under this chapter or the governing documents, and all contracts for the provision of services shall be in writing. If a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, requires payment by the association that exceeds 10 percent of the total annual budget of the association, including reserves, the association must obtain competitive bids for the materials, equipment, or services. Nothing contained in this section shall be construed to require the association to accept the lowest bid.      

(2)(a) 1.  Notwithstanding the foregoing, c Contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, engineering, and landscape architect services are not subject to the provisions of this section.

2.  A contract executed before October 1, 2004, and any renewal thereof, is not subject to the competitive bid requirements of this section. If a contract was awarded under the competitive bid procedures of this section, any renewal of that contract is not subject to such competitive bid requirements if the contract contains a provision that allows the board to cancel the contract on 30 days' notice. Materials, equipment, or services provided to an association under a local government franchise agreement by a franchise holder or a manager are not subject to the competitive bid requirements of this section. A contract with a manager, if made by a competitive bid, may be made for up to 3 years and must contain a 30-day termination clause. An association whose declaration or bylaws provide for competitive bidding for services may operate under the provisions of that declaration or bylaws in lieu of this section if those provisions are not less stringent than the requirements of this section

(b) Nothing contained in this section is intended to limit the ability of an association to obtain needed products and services in an emergency.

(c) This section does not apply if the business entity with which the association desires to enter into a contract is the only source of supply within the county serving the association.