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PROPOSED BILL DRAFT FS 720 cyber
citizens for justice, Inc. Draft to
amend Florida statutes 720 “homeowners’
associations” DECEMBER
2005
CODING:
Words 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.
PAGE 1
OF 35
CCFJ DRAFT TO AMEND FS 720 (HOA).
OCTOBER 2005
Section
2. Subsection (2) of section 720.301, Florida Statutes, 720.301
Definitions. – (2)
“Common area” means all real property within a community which is owned
or leased by an association (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, 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 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, 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, 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
PAGE 2 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005
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 Section
7. Subsection (10) of section 720.301, Florida Statutes, 720.301
Definitions. – As used in this
chapter, the term: but
is not limited to, a parcel owner
Section
8. Subsection (11) of section 720.301, Florida Statutes, 720.301
Definitions. – As used in this
chapter, the term:
Section
9. Subsections (14), (15) and (16) are added to section 720.301, 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
PAGE 3 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005
to
homeowners’ associations and deed restrictions created by developers of
Mandated Properties in residential communities,
the Legislature recognizes that it is
PAGE 4 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005
(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
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 (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 PAGE 6 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005
1(2) BOARD
MEETINGS.— {Footnote applicable to above subsection.}
3. Directors
may not vote by proxy or by secret ballot at board meetings.
PAGE 8 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 the right to speak for at
least 3 minutes on each matter placed on the agenda by 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 (3) MINUTES---Minutes
of all meetings of the members of an association (4) OFFICIAL
RECORDS.--The association shall maintain each of the (a) Copies
of any plans, specifications, permits, and warranties related to (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 (d) A
copy of (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 (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 (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. PAGE 9 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 (j)
The financial and accounting records of the association, kept according to good
accounting practices. All financial and accounting records 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 (5) INSPECTION
AND COPYING OF RECORDS.--The official records shall be maintained within the (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
PAGE 10 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 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 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
PAGE 11 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 $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 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; (c) If
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 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 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. PAGE 12 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 (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, (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 (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 2. When
the governing documents, including the declaration, articles of (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 5. The
agreement in writing or ballot shall list at least as many possible instrument may vote for as
many replacement candidates as there are directors subject to the recall. (c)1 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, (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. PAGE 14 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 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 (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 PAGE 15 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 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. (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 PAGE 16 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 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 (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) (a) A
(b) The
requirements of this subsection do not apply to the imposition of suspensions (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 (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 PAGE 17 OF 35 CCFJ DRAFT TO AMEND FS 720 (HOA). OCTOBER 2005 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 Section 16. Section
720.3055, Florida Statues, 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 (2)(a) 1. 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, (b) Nothing
contained in this section is intended to limit the ability of an (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. |