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.}

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.

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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. 

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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.

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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.

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 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

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.

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.

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 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

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 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.

(d) Nothing contained in this section shall excuse a party contracting to provide maintenance or management services from compliance with s. 720.309.

Section 17. Subsection (1) of section 720.306, Florida Statues, is amended to read: 

PAGE 18 OF 35                        CCFJ DRAFT TO AMEND FS 720 (HOA).                              OCTOBER 2005

720.306 Meetings of members; voting and election procedures; amendments.

(1)  QUORUM; AMENDMENTS.-

(a) In associations with 500 members or less the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 50 percent of the total voting interests present, in person or by proxy. In associations with more than 500 members the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 30 percent of the total voting interests present, in person or by proxy. In associations with more than 1000 members the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 20 percent of the total voting interests present, in person or by proxy. Decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interest of the association. present, in person or by limited proxy at a meeting at which a quorum has been attained.

(b) Unless otherwise required by law, and other than those matters set forth in paragraph (c), any governing document of an association shall only be amended by the affirmative vote of at least two-thirds (67%) of the voting interests of the association subject to the following:

(1) Each amendment to the covenants and restrictions that is offered for official recording must be submitted verbatim in its entirety, as contained within the covenants and restrictions .

(2) Within 12 months of enactment of this subsection all duly registered covenants and restrictions must be complete and in plain, easily understandable English.

(c) Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an An amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment. For purposes of this section, a change in quorum requirements is not an alteration of voting interests.

(d) Any amendment restricting owners' rights relating to the rental of homes applies only to parcel owners who consent to the amendment and parcel owners who purchase their parcels after the effective date of that amendment.

Section 18. Subsection (2) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(2) ANNUAL MEETING.--The association shall hold a meeting of its members annually for the transaction of any and all proper business at a time, date, and place stated in, or fixed in accordance with, the bylaws. The election of directors, if one is required to be held must be held at, or in conjunction with, the annual meeting. or as provided in the governing documents.

Section 19. Subsection (3) of section 720.306, Florida Statues, is amended to read:

PAGE 19 OF 35   CCFJ DRAFT TO AMEND FS 720 (HOA).       OCTOBER 2005

720.306 Meetings of members; voting and election procedures; amendments.

(3) SPECIAL MEETINGS.--Special meetings must be held when called by the board of directors or, unless a different percentage is stated in the governing documents, by at least 10 percent of the total voting interests of the association.  Business conducted at a special meeting is limited to the purposes described in the notice and the agenda of the meeting.

Section 20. Subsection (4) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(4) CONTENT OF NOTICE.--Unless law or the governing documents require otherwise, n Notice of an annual meeting need not must include a an agenda as well as a description of the purpose or purposes for which the meeting is called.  Notice of a special meeting must include a an agenda as well as a description of the purpose or purposes for which the meeting is called.

Section 21. Subsection (5) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(5) NOTICE OF MEETINGS.--The bylaws shall provide for giving notice to members of all member meetings, and if they do not do so shall be deemed to provide the following: The association shall give all parcel owners and members actual notice of all membership meetings, which shall be mailed, delivered, or electronically transmitted to the members not less than 14 days prior to the meeting.  Evidence of compliance with this 14-day notice shall be made by an affidavit executed by the person providing the notice and filed upon execution among the official records of the association. In addition to mailing, delivering, or electronically transmitting the notice of any meeting, the association may, by reasonable rule, adopt a procedure for conspicuously posting and repeatedly broadcasting the notice and the agenda on a closed-circuit cable television system serving the association.  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.

Section 22. Subsection (6) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

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manner of member and parcel owner statements, which rules must be consistent with this subsection.

Section 23. Subsection (7) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(7) ADJOURNMENT.--Unless the bylaws require otherwise,  a Adjournment of an annual or special meeting to a different date, time, or place must be announced at that meeting before an adjournment is taken, or notice must be given of the new date, time, or place pursuant to s. 720.303(2). Any business that might have been transacted on the original date of the meeting may be transacted at the adjourned meeting. If a new record date for the adjourned meeting is or must be fixed under ¹s. 617.0707, notice of the adjourned meeting must be given to persons who are entitled to vote and are members as of the new record date but were not members as of the previous record date.

Section 24. Subsection (8) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(8) Except as specifically otherwise provided herein, after January 1, 2007, parcel owners may not vote by general proxy, but may vote by limited proxies substantially conforming to a limited proxy form adopted by the ombudsman.  Limited proxies and general proxies may be used to establish a quorum.  After January 1, 2007, no proxy, limited or general, shall be used in the election of board members. General proxies may be used for other matters for which limited proxies are not required, and may also be used in voting for non-substantive changes to items for which a limited proxy is required and given. Notwithstanding the provisions of this subparagraph, parcel owners may vote in person at homeowners' meetings.

(a) The members have the right, unless otherwise provided in this subsection or in the governing documents, to vote in person or by limited proxy. To be valid, a limited proxy must be dated, must state the date, time, and place of the meeting for which it was given, and must be signed by the authorized person who executed the proxy. A limited proxy is effective only for the specific meeting for which it was originally given, as the meeting may lawfully be adjourned and reconvened from time to time, and automatically expires 90 60 days after the date of the meeting for which it was originally given. A proxy is revocable at any time at the pleasure of the person who executes it. If the proxy form expressly so provides, any proxy holder may appoint, in writing, a substitute to act in his or her place.

Section 25. Subsection (9) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(9) ELECTIONS

(a)  Elections

1. Members of the board shall be elected by written ballot or voting machine. Proxies

PAGE 21 OF 35   CCFJ DRAFT TO AMEND FS 720 (HOA).       OCTOBER 2005

shall in no event be used in electing the board, either in general elections or elections to fill vacancies caused by recall, resignation, or otherwise, unless otherwise provided in this chapter. Not less than 60 days before a scheduled election, the association shall mail, deliver, or electronically transmit, whether by separate association mailing or included in another association mailing, delivery, or transmission, including regularly published newsletters, to each parcel owner entitled to a vote, a first notice of the date of the election. Any homeowner or other eligible person desiring to be a candidate for the board must give written notice to the association not less than 40 days before a scheduled election. Together with the written notice and agenda as set forth in 720.306 the association shall mail, deliver, or electronically transmit a second notice of the election to all parcel owners entitled to vote therein, together with a ballot which shall list all candidates. Upon request of a candidate, the association shall include an information sheet, no larger than 8 1/2 inches by 11 inches, which must be furnished by the candidate not less than 35 days before the election, to be included with the mailing, delivery, or transmission of the ballot, with the costs of mailing, delivery, or electronic transmission and copying to be borne by the association. The association is not liable for the contents of the information sheets prepared by the candidates. In order to reduce costs, the association may print or duplicate the information sheets on both sides of the paper. The ombudsman shall by rule establish voting procedures consistent with the provisions contained herein, including rules establishing procedures for giving notice by electronic transmission and rules providing for the secrecy of ballots. Elections shall be decided by a plurality of those ballots cast. There shall be no quorum requirement; however, at least 20 percent of the eligible voters must cast a ballot in order to have a valid election of members of the board. No parcel owner shall permit any other person to vote his or her ballot, and any such ballots improperly cast shall be deemed invalid, provided any parcel owner who violates this provision may be fined by the association in accordance with s.720.305(2). A parcel owner who needs assistance in casting the ballot for the reasons stated in s. 101.051 may obtain assistance in casting the ballot. The regular election shall occur on the date of the annual meeting. Notwithstanding the provisions of this subparagraph, an election is not required unless more candidates file notices of intent to run or are nominated than board vacancies exist.

2. Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by the affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director. In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to the requirements of  s. 720.306(9)(1)(a) unless the association has opted out of the statutory election process, in which case the bylaws of the association control. Unless otherwise provided in the bylaws, a board member appointed or elected under this section shall fill the vacancy for the unexpired term of the seat being filled. Filling vacancies created by recall is governed by s. 720.303(10) and rules adopted by the division.

PAGE 22 OF 35   CCFJ DRAFT TO AMEND FS 720 (HOA).       OCTOBER 2005

election of directors. The ombudsman shall appoint a division employee, a person or persons specializing in homeowners’ association election monitoring, or an attorney licensed to practice in this state as the election monitor. All costs associated with the election monitoring process shall be paid by the association. The ombudsman shall adopt a rule establishing procedures for the appointment of election monitors and the scope and extent of the monitor's role in the election process.

(b) Terms, Eligibility of Candidates

1. The terms of all members of the board shall expire at the annual meeting. Members may stand for re-election.

2. Co-owners of a parcel may not serve as members of the board of administration at the same time.

3. After transition of control in a community, only members as defined in s. 720.301(1) shall be eligible as candidates for the board.

4. A person who has been convicted of any felony by any court of record in the United States and who has not had his or her right to vote restored pursuant to law in the jurisdiction of his or her residence is not eligible for board membership. The validity of an action by the board is not affected if it is later determined that a member of the board is ineligible for board membership due to having been convicted of a felony.  

Section 26. Subsection (10) of section 720.306, Florida Statues, is amended to read:

720.306 Meetings of members; voting and election procedures; amendments.

(10) RECORDING.--Any parcel owner may tape record or videotape electronically record any meetings of the board of directors and meetings of the members. The board of directors of the association may adopt reasonable rules governing the taping of meetings of the board and the membership. However, those rules may not restrict the parcel owners’ rights to electronically record the meeting using, but not limited to battery-operated or electrical equipment.

Section 27. 720.307, Florida Statues, is amended to read: 

720.307 Transition of association control in a community.--With respect to homeowners' associations:

(1) Members other than the developer are entitled to elect at least a majority of the members of the board of directors of the homeowners' association when the earlier of the following events occurs:

(a) Three months after 90 75 percent of the parcels in all phases of the community that will ultimately be operated by the homeowners' association have been conveyed to members; or

(b) Such other percentage of the parcels has been conveyed to members, or such other date or event has occurred, as is set forth in the governing documents in order to comply with the requirements of any governmentally chartered entity with regard to the mortgage financing of parcels.  For purposes of this section, the term "members other than the developer" shall not include builders, contractors, or others who purchase a parcel for the purpose of constructing improvements thereon for resale.

(2) The developer is entitled to elect at least one member of the board of directors of the homeowners' association as long as the developer holds for sale in

PAGE 23 OF 35   CCFJ DRAFT TO AMEND FS 720 (HOA).       OCTOBER 2005

the ordinary course of business at least 5 percent of the parcels in all phases of the community. After the developer relinquishes control of the homeowners' association, the developer may exercise the right to vote any developer-owned voting interests in the same manner as any other member, except for purposes of reacquiring control of the homeowners' association or selecting the majority of the members of the board of directors.

(3) Prior to transition of control, the developer or owner of all common 

areas shall convey the title to all common areas to the association immediately upon incorporation of the association. If additional common areas are acquired prior to transition of control and subject to the governing documents, title to those common areas shall also be immediately transferred to the association.

(3)  (4) At the time the members are entitled to elect at least a majority of the board of directors of the homeowners' association, the developer shall, at the developer's expense, within no more than 90 30 days deliver the following documents to the board:

(a) All deeds to common property owned by the association. or the developer.     

(b) The original of the association's declarations of covenants and restrictions.

(c) A certified copy of the articles of incorporation of the association.

(d) A copy of the bylaws.

(e) The minute books, including all minutes.

(f) The books and records of the association.

(g) Policies, rules, and regulations, if any, which have been adopted.

(h) Resignations of directors who are required to resign because the developer is required to relinquish control of the association.

(i) The financial records of the association from the date of incorporation through the date of turnover.

(j) All association funds and control thereof.

(k) All tangible property of the association.

(l) A copy of all contracts which may be in force with the association as one of the parties.

(m) A list of the names and addresses and telephone numbers of all contractors, subcontractors, or others in the current employ of the association.

(n) Any and all insurance policies in effect.

(o) Any permits issued to the association by governmental entities.

(p) Any and all warranties in effect.

(q) A roster of current homeowners and their addresses and telephone numbers and section and lot numbers.

(r) Employment and service contracts in effect.

(s) All other contracts and agreements in effect to which the association is a party.

(5) This section does not apply to a homeowners' association in existence on the effective date of this act, or to a homeowners' association, no matter when created, if such association is created in a community that is included in an effective development-of-regional-impact development order as of the effective date of this act, together with any approved modifications thereof.applies to any mandatory homeowners’ association existing under this act.

PAGE 24 OF 35   CCFJ DRAFT TO AMEND FS 720 (HOA).       OCTOBER 2005

Section  28. Section 720.3071 is created to read;

720.3071 Board member training. –

The division shall provide training programs for homeowners' association board members. Training shall be mandatory for newly elected board members and members currently serving on a board who have not previously voluntarily attended training.

Section 29. Section 720.3075, Florida Statutes, is amended to read:  

720.3075 Prohibited clauses in association documents.—

(1) It is declared that the public policy of this state prohibits the inclusion or enforcement of certain types of clauses in homeowners' association documents, including declaration of covenants, articles of incorporation, bylaws, or any other document of the association which binds members of the association, which either have the effect of or provide that:

(a) A developer has the unilateral ability and right to make changes to the homeowners' association documents after the transition of homeowners' association control in a community from the developer to the non developer members, as set forth in s. 720.307, have occurred.

(b) A homeowners' association is prohibited or restricted from filing a lawsuit against the developer, or the homeowners' association is otherwise effectively prohibited or restricted from bringing a lawsuit against the developer.

(c) After the transition of homeowners' association control in a community from the developer to the non developer members, as set forth in s. 720.307, has occurred, a developer is entitled to cast votes in an amount that exceeds one vote per residential lot.

(d) At the time of transition any clause in any mandatory homeowners’

association document shall not restrict or prevent the homeowners’

association from functioning, as provided by federal, state, and local laws and specifically by this chapter.

(e) At the time of transition any clause in any document may not prevent the homeowners’ association from amending any document as allowed according to Florida statutes.

Such clauses are declared null and void as against the public policy of this state.

(2) The public policy described in subsection (1) prohibits the inclusion or  enforcement of such clauses created on or after the effective date of s. 3, chapter 98-261, Laws of Florida. in any mandatory homeowners’ association documents, regardless of when created.

(3) Homeowners’ association documents, including declarations of covenants, articles of incorporation, or bylaws, may not preclude the display of one portable, removable United States flag by property owners. However, the flag must be displayed in a respectful manner, consistent with Title 36 U.S.C. chapter 10.

PAGE 25 OF 35            CCFJ DRAFT TO AMEND FS 720 (HOA).                OCTOBER 2005

of incorporation, or bylaws, entered after October 1, 2001, may not prohibit any property owner from implementing Xeriscape or Florida-friendly landscape, as defined in s. 373.185(1), on his or her land.  

Section 30. Section 720.3086, Florida Statutes, is amended to read:

720.3086 Financial report; audit; penalty; exclusivity.—  

(1)  In a residential subdivision in which the owners of lots or parcels must pay mandatory maintenance or amenity fees to the subdivision developer or to the owners of the common areas, recreational facilities, and other properties serving the lots or parcels, the developer or owner of such areas, facilities, or properties shall make public, within 60 days following the end of each fiscal year, a complete financial report of the actual, total receipts of mandatory maintenance or amenity fees received by it, and an itemized listing of the expenditures made by it from such fees, for that year. Such report shall be made public by mailing it to each lot or parcel owner in the subdivision, by publishing it in a publication regularly distributed within the subdivision, or by posting it in prominent locations in the subdivision.  Thereafter,  the developer or the owner of the common areas, recreational facilities, and other properties serving the lots or parcels shall mail the annual financial report, upon written request from a lot or parcel owner.

(2) Pursuant to this section, if the developer or the owner fails to provide the lot or parcel owner with the requested annual financial report within 30 days of delivery of such request to the developer or owner, the circuit court located in the same county as the principal office of the corporation (or its registered office, if no office exists in this state) summarily may order the corporation to furnish such financial report, upon application of the lot or parcel owner.  If the court orders the corporation to furnish the financial report, it shall also order the corporation to pay the lot or parcel owner’s costs, including reasonable attorney’s fees that have been incurred to obtain the order, and otherwise shall enforce the lot or parcel owner’s rights under this section.

(3) Lot or parcel owners shall have exclusive and vested rights fo r the use of such facilities unless the facilities have been dedicated for nonexclusive use by the lot or parcel owners.  Portions of governing documents that allow guests of the developer or facility owner the right to use the facility are hereby declared  void, as those portions of governing documents violate the rights to exclusive  use of the facilities by the lot or parcel owners and their guests.

This section does not apply to amounts paid to homeowners’ associations pursuant to chapter 617, chapter 718, chapter 719, chapter 721, or chapter 723, or to amounts paid to local governmental entities, including special districts.

Section 31. PART II, Section 720.401-720.402, Florida Statues, is amended to read:

 PART II; Powers and duties of the “Division,” Ombudsman Office, Advisory Council. Disclosure prior to sale of residential parcels; (ss. 720.401-720.402)

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Homeowners’ Associations, and Mobile Homes.

720.4011 Ombudsman; appointment; administration.

720.4012 Ombudsman; powers and duties.

720.4014 Ombudsman location.

720.4016 Advisory Council On Mandated Properties

720.401 720.402 Prospective purchasers subject to association membership requirement; disclosure required; covenants; assessments; contract cancellation.

720.402 720.4021 Publication of false and misleading information.

720.401 Powers and Duties of Division of Florida Land Sales, Condominiums, Homeowners’ Associations, and Mobile Homes.—

(1) The Division of Florida Land Sales, Condominiums, Homeowners’ Associations, and Mobile Homes of the Department of Business and Professional Regulation, referred to as the "Division" in this part, in addition to other powers and duties prescribed by chapter 498, has the power to enforce and ensure compliance with the provisions of this chapter and rules promulgated pursuant hereto relating to the development, construction, sale, lease, ownership, operation, and management of residential property. In performing its duties, the division has the following powers and duties:

(a) The division may make necessary public or private investigations within or outside this state to determine whether any person has violated this chapter or any rule or order hereunder, to aid in the enforcement of this chapter, or to aid in the adoption of rules or forms hereunder.

(b) The division may require or permit any person to file a statement in

writing, under oath or otherwise, as the division determines, as to the facts and circumstances concerning a matter to be investigated.

(c) For the purpose of any investigation under this chapter, the division director, ombudsman or any officer or employee designated by the division director or ombudsman may administer oaths or affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of any matter which is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts or any other matter reasonably calculated to lead to the discovery of material evidence. Upon the failure by a person to obey a subpoena or to answer questions propounded by the investigating officer and upon reasonable notice to all persons affected thereby, the division may apply to the circuit court for an order compelling compliance.

(d) Notwithstanding any remedies available to lot owners and associations, if the division has reasonable cause to believe that a violation of any provision of this chapter or rule promulgated pursuant hereto has occurred, the division may institute enforcement proceedings in its own name against any developer, association, officer, or member of the board of administration, or its assignees or agents, as follows:

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2.  The division may issue an order requiring the developer, association,

officer, or member of the board of administration, or its assignees or agents, to cease and desist from the unlawful practice and take such affirmative action as in the judgment of the division will carry out the purposes of this chapter. Such affirmative action may include, but is not limited to, an order requiring a developer to pay moneys determined to be owed to a homeowners’ association.

3.  The division may bring an action in circuit court on behalf of a class of

lot owners, lessees, or purchasers for declaratory relief, injunctive relief, or restitution. 

4.  The division may impose a civil penalty against a developer or 

association, or its assignee or agent for any violation of this chapter or a rule promulgated pursuant hereto. The division may impose a civil penalty individually against any officer or board member who willfully and knowingly violates a provision of this chapter, a rule adopted pursuant hereto, or a final order of the division. The term "willfully and knowingly" means that the division informed the officer or board member that his or her action or intended action violates this chapter, a rule adopted under this chapter, or a final order of the division and that the officer or board member refused to comply with the requirements of this chapter, a rule adopted under this chapter, or a final order of the division. The division, prior to initiating formal agency action under chapter 120, shall afford the officer or board member an opportunity to voluntarily comply with this chapter, a rule adopted under this chapter, or a final order of the division. An officer or board member who complies within 10 days is not subject to a civil penalty. A penalty may be imposed on the basis of each day of continuing violation, but in no event shall the penalty for any offense exceed $5,000. By January 1, 2007 the division shall adopt, by rule, penalty guidelines applicable to possible violations or to categories of violations of this chapter or rules adopted by the division. The guidelines must specify a meaningful range of civil penalties for each such violation of the statute and rules and must be based upon the harm caused by the violation, the repetition of the violation, and upon such other factors deemed relevant by the division. For example, the division may consider whether the violations were committed by a developer or owner- controlled association, the size of the association, and other factors. The guidelines must designate the possible mitigating or aggravating circumstances that justify a departure from the range of penalties provided by the rules. It is the legislative intent that minor violations be distinguished from those which endanger the health, safety, or welfare of residents or other persons and that such guidelines provide reasonable and meaningful notice to the public of likely penalties that may be imposed for proscribed conduct. This subsection does not limit the ability of the division to informally dispose of administrative actions or complaints by stipulation, agreed settlement, or consent order. All amounts collected shall be deposited with the Chief Financial Officer to the credit of the Division of Florida Land Sales, Condominiums, Homeowners’ Association, and Mobile Homes Trust Fund. If a developer fails to pay the civil penalty, the division shall thereupon issue an order directing that such developer cease and desist from further operation until such time as the civil penalty is paid, or may pursue enforcement of the penalty in a court of competent jurisdiction. If an association fails to pay the civil penalty, the division shall thereupon pursue enforcement in a court of competent jurisdiction, and the order imposing the civil

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penalty or the cease and desist order will not become effective until 20 days after the date of such order.  Any action commenced by the division shall be brought in the county in which the division has its executive offices or in the county where the violation occurred.

(e) The division is authorized to prepare and disseminate a prospectus and other information to assist prospective owners, purchasers, lessees, and developers of residential communities in assessing the rights, privileges, and duties pertaining thereto.

(f) The division has authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement and enforce the provisions of this chapter.

(g) The division shall establish procedures for providing notice to an

association when the division is considering the issuance of a declaratory statement with respect to the declaration of restrictions or any related document governing in such residential community.

(h) The division shall furnish each association which pays the fees required by paragraph (2)(a) a copy of this act, subsequent changes to this act on an annual basis, an amended version of this act as it becomes available from the Secretary of State's office and the rules promulgated pursuant thereto on an annual basis.

(i) The division shall annually provide each association with a summary of declaratory statements and formal legal opinions relating to the operations of residential communities which were rendered by the division during the previous year.

(j) The division shall provide training programs for residential association board members and lot owners.

(k) The division shall maintain a toll-free telephone number accessible to lot owners.

(l) The division shall develop a program to certify both volunteer and paid

mediators to provide mediation of disputes. The division shall provide, upon request, a list of such mediators to any association, lot owner, or other participant in arbitration proceedings under s. 720.311 requesting a copy of the list. The division shall include on the list of volunteer mediators only the names of persons who have received at least 20 hours of training in mediation techniques or who have mediated at least 20 disputes. In order to become initially certified by the division, paid mediators must be certified by the Supreme Court to mediate court cases in either county or circuit courts. However, the division may adopt, by rule, additional factors for the certification of paid mediators, which factors must be related to experience, education, or background. Any person initially certified as a paid mediator by the division must, in order to continue to be certified, comply with the factors or requirements imposed by rules adopted by the division.

(m) When a complaint is made, the division shall conduct its inquiry with

due regard to the interests of the affected parties. Within 30 days after receipt of a complaint, the division shall acknowledge the complaint in writing and notify the complainant whether the complaint is within the jurisdiction of the division and whether the division needs additional information from the complainant. The division shall conduct its investigation and shall take action upon the complaint within 90 days after receipt of the original complaint or of timely requested additional information.  However, the failure to complete the investigation within 90 days does not prevent the division from continuing the investigation, accepting or considering evidence obtained

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or received after 90 days, or taking administrative action if reasonable cause exists to believe that a violation of this chapter or a rule of the division has occurred. If an investigation is not completed within the time limits established in this paragraph, the division shall, on a monthly basis, notify the complainant in writing of the status of the investigation When reporting its action to the complainant, the division shall inform the complainant of any right to a hearing pursuant to ss. 120.569 and 120.57.

(2) Effective January 1, 2007, each homeowners’ association which administers more than ten (10) residential homes shall pay to the division an annual fee in the amount of $4 for each residence in communities administered by the association. If the fee is not paid by March 1, then the association shall be assessed a penalty of 10 percent of the amount due, and the association will not have standing to maintain or defend any action in the courts of this state until the amount due, plus any penalty is paid.  All fees shall be deposited in the Division of Florida Land Sales, Condominiums, Homeowners’ Association, and Mobile Homes Trust Fund as provided by law.

720.4011 Ombudsman; appointment; administration.—

(1) There is created an Office of the Mandated Properties Ombudsman, to be located for administrative purposes within the Division of Florida Land Sales, Condominiums, Homeowners’ Association, and Mobile Homes. The functions of the office shall be funded by the Division of Florida Land Sales, Condominiums, Homeowners’ Association, and Mobile Homes Trust Fund.  The ombudsman shall be a bureau chief of the division for administrative purposes, and the office shall be set within the division in the same manner as any other bureau is staffed and funded.

(2)The Governor shall appoint the ombudsman. The ombudsman must be an attorney admitted to practice before the Florida Supreme Court and shall serve at the pleasure of the Governor. A vacancy in the office shall be filled in the same manner as the original appointment. An officer or full-time employee of the ombudsman office may not actively engage in any other business or profession; serve as the representative of any political party, executive committee, or other governing body of a political party; serve as an executive, officer, or employee of a political party; receive remuneration for activities on behalf of any candidate for public office; or engage in soliciting votes or other activities on behalf of a candidate for public office. The ombudsman or any employee of his or her office may not become a candidate for election to public office unless he or she first resigns from his or her office or employment. 

720.4012 Ombudsman; powers and duties.—

The ombudsman shall have the powers that are necessary to carry out the duties of his or her office, including the following specific powers:

(1) To have access to and use of all files and records of the division

(2)  To employ professional and clerical staff as necessary for the efficient operation of the office.

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subject within the jurisdiction of the division. The ombudsman shall make recommendations he or she deems appropriate for legislation relative to division procedures, rules, jurisdiction, personnel, and functions.

(4) To act as liaison between the division, unit owners, boards of directors, board members, community association managers, and other affected parties. The ombudsman shall develop policies and procedures to assist unit owners, boards of directors, board members, community association managers, and other affected parties to understand their rights and responsibilities as set forth in this chapter and the documents governing their respective association. The ombudsman shall coordinate and assist in the preparation and adoption of educational and reference material, and shall endeavor to coordinate with private or volunteer providers of these services, so that the availability of these resources are made known to the largest possible audience.

(5) To monitor and review procedures and disputes concerning elections or meetings, including, but not limited to, recommending that the division pursue enforcement action in any manner where there is reasonable cause to believe that election misconduct has occurred.

(6) To make recommendations to the division for changes in rules and procedures

for the filing, investigation, and resolution of complaints filed by parcel owners, associations, and managers.

(7) To provide resources to assist members of boards of directors and officers of associations to carry out their powers and duties consistent with this chapter, division rules, and the documents governing the association.

(8)  To encourage and facilitate voluntary meetings with and between unit owners, boards of directors, board members, community association managers, and other

affected parties when the meetings may assist in resolving a dispute within a community association before a person submits a dispute for a formal or administrative remedy. It is the intent of the Legislature that the ombudsmen act as a neutral resource for both the rights and responsibilities of unit owners, associations, and board members.

(9) Fifteen percent of the total voting interests in homeowners’ association may petition the ombudsman to appoint an election monitor to attend the annual meeting of the owners and conduct the election of directors. The ombudsman shall appoint a division employee, a person or persons specializing in association election monitoring, or an attorney licensed to practice in this state as the election monitor. All costs associated with the election monitoring process shall be paid by the association. The division shall adopt a rule establishing procedures for the appointment of election monitors and the scope and extent of the monitor's role in the election process.

720.4014 Ombudsman location.—

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Governor.

720.4016 Advisory council; membership functions.—

(1) There is created the Advisory Council On Mandated Properties. The council shall consist of seven appointed members. Two members shall be appointed by the President of the Senate, two members shall be appointed by the Speaker of the House of Representatives, and three members shall be appointed by the Governor. At least one member that is appointed by the Governor, by the Senate President and by the Speaker of the House shall be a homeowners’ rights advocate and parcel owner. Members shall be appointed to 2-year terms; however, one of the persons initially appointed by the Governor, by the President of the Senate, and by the Speaker of the House of Representatives shall be appointed to a 1-year term. A member of the division, appointed by the Secretary, shall serve as an ex officio nonvoting member. The selection of council members shall be made in a manner that ensures a fair and balanced representation from the service-provider sector and consumer advocates with a substantial public record of endeavors on behalf of homeowners' rights and consumer interests.  The council shall be located within the division for administrative purposes.  Members of the council shall serve without compensation but are entitled to receive per diem and travel expenses pursuant to s. 112.061 while on official business. A vacancy on the Advisory Council shall be filled in the same manner as the original appointment.

(2) The functions of the advisory council shall be to:

(a)  Receive, from the public, input regarding issues of concern with respect to mandated communities and recommendations for changes in homeowners’ association laws. The issues that the council shall consider include, but are not limited to, the rights and responsibilities of the parcel owners in relation to the rights and responsibilities of the association.

(b) Review, evaluate, and advise the division concerning revisions and

adoption of rules affecting homeowners’ associations.

(c) Recommend improvements, if needed, in the education programs offered by the division.

(3) The council may elect a chair and vice chair and such other officers as it may deem advisable. The council shall meet at the call of its chair, at the request of a majority of its membership, at the request of the division, or at such times as it may prescribe. A majority of the members of the council shall constitute a quorum. Council action may be taken by vote of a majority of the voting members who are present at a meeting where there is a quorum.

720.402 Prospective purchasers subject to association membership requirement; disclosure required; covenants; assessments; contract cancellation.

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documents” which include: Articles of Incorporation, recorded deed restrictions, bylaws and rules and/or regulations adopted by the board of directors.  The disclosure summary must be in a form substantially similar to the following form:

DISCLOSURE SUMMARY

FOR

(NAME OF COMMUNITY)

1.  AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS' ASSOCIATION.

2.  THERE HAVE BEEN OR WILL BE THE PURCHASER/S HAS/HAVE BEEN PROVIDED A COPY OF THE RECORDED RESTRICTIVE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS RELATIVE TO THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY. 

AFFIRM OR DENY RECEIPT OR DOCUMENTS BY CHECKING

YES /box/ or NO /box/

3.  YOU WILL (OR WILL NOT) BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE ARE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $_____ PER _____. IN ADDITION, YOU WILL (OR WILL NOT) ALSO BE OBLIGATED TO PAY ANY SPECIAL

ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE ARE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $_____ PER _____.

4.  YOU MAY WILL BE OBLIGATED TO PAY SPECIAL ASSESSMENTS, AD VALOREM TAXES AND NON-AD VALOREM ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS AND TAXES ARE SUBJECT TO PERIODIC CHANGE.

5.  YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN AND JUDICIAL FORECLOSURE ON YOUR PROPERTY.

6.  THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS' ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $_____ PER _____.

7.  WHILE STILL IN CONTROL OF THE HOMEOWNERS’ ASSOCIATION, THE DEVELOPER MAY HAVE HAS THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS.

8.  THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER(S), YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

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THE COUNTY WHERE THE PROPERTY IS LOCATED. AND CAN BE OBTAINED FROM THE A PENALTY SHALL BE IMPOSED UPON THE DEVELOPER, SELLER OR AGENT OF THE SELLER IF A RECORDED COPY OF THE RESTRICTIVE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS ARE NOT PROVIDED BEFORE CONTRACT FOR SALE.

THE PURCHASER/S HAVE BEEN PROVIDED A COPY OF THE RESTRICTIVE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE CONTRACT FOR SALE.

YES /box/     NO /box/ 

DATE:                                                             DATE:

PURCHASER:                                              PURCHASER:

Full disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer or the agent for the owner.  Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until he has received and read the disclosure summary, recorded restrictive covenants and governing documents of the association required by this section.

(b) Each contract entered into for the sale of property with recorded restrictive covenants and governed by mandatory homeowners’ association covenants subject to disclosure required by this section must contain in conspicuous type a clause that states:

IF THE DISCLOSURE SUMMARY AND FULL DISCLOSURE OF THE RECORDED RESTRICTIVE COVENANTS AND GOVERNING DOCUMENTS OF THE ASSOCIATION, REQUIRED BY SECTION  720.4012 , FLORIDA STATUTES, HAVE NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 10 DAYS AFTER RECEIPT OF THE FULL DISCLOSURE. SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST.ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

(c) A certified copy of the publicly recorded governing documents must be provided to any prospective purchaser, any real estate agent, financial institution, title or closing company upon request.

(d) If the developer or the association willfully and knowingly fails to disclose material facts that negatively affect the value of the parcel purchased by an association member, the individual board members or developer shall be held liable under applicable federal and state civil and criminal statutes.

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498; and also does not apply if disclosure regarding the association is otherwise made in connection with the requirements of chapter 718, chapter 719, chapter 721, or chapter 723.

720.402 720.4021 Publication of false and misleading information..—

(1) Any person who, in reasonable reliance upon any material statement or information that is false or misleading and published by or under authority from the developer in advertising and promotional materials, including, but not limited to, a contract of ¹purchase, the declaration of covenants, exhibits to a declaration of covenants, brochures, and newspaper advertising, pays anything of value toward the purchase of a parcel in a community located in this state has a cause of action to rescind the contract or collect damages from the developer for his or her loss before the closing of the transaction. After the closing of the transaction, the purchaser has a cause of action against the developer for damages under this section from the time of closing until 1 year after the date upon which the last of the events described in paragraphs (a) through (d) occurs:

(a) The closing of the transaction;

(b) The issuance by the applicable governmental authority of a certificate of occupancy or other evidence of sufficient completion of construction of the purchaser's residence to allow lawful occupancy of the residence by the purchaser In counties or municipalities in which certificates of occupancy or other evidences of completion sufficient to allow lawful occupancy are not customarily issued, for the purpose of this section, evidence of lawful occupancy shall be deemed to be given or issued upon the date that such lawful occupancy of the residence may be allowed under prevailing applicable laws, ordinances, or statutes;

(c) The completion by the developer of the common areas and such recreational facilities, whether or not the same are common areas, which the developer is obligated to complete or provide under the terms of the written contract, governing documents, or written agreement for purchase or lease of the parcel; or

(d) In the event there is not a written contract or agreement for sale or lease of the parcel, then the completion by the developer of the common areas and such recreational facilities, whether or not they are common areas, which the developer would be obligated to complete under any rule of law applicable to the developer's obligation.  Under no circumstances may a cause of action created or recognized under this section survives for a period of more than 5 years after the closing of the transaction.

(2) In any action for relief under this section, the prevailing party may recover reasonable attorney's fees. A developer may not expend association funds in the defense of any suit under this section.

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CODING: Words stricken are deleted; words underlined are additions