Subject: Final Legislative Report

Dear Neighbor:

      The 60day Florida legislative session ended on April 30th. All community association bills were dumped into one final all encompassing bill 1184ER along with additional germane issues from several other bills and is now on the Governor’s desk to be signed into law.

      Under trying conditions and against formidable odds, CCFJ under the leadership and direction of our President Jan Bergemann with our alliance partners and the many Florida homeowners who chose to get involved and waged an unwavering battle for meaningful reform we achieved about 25% of our overall objectives. 

       The passage of these bills was the broadest reform of Condo and HOA laws since the 1995 session of the legislature. 

       Condos under the sponsorship of Congressman Robaina faired much better than HOAs did, but in a May 2nd E-mail from Congressman Robaina he assured me that he will continue to support our cause and help us (HOA’s) in future legislative efforts. We have many new friends in the Florida Legislature who turned out to support our cause.

             While condos will get some kind of enforcement of existing laws through the ombudsman's office, HOAs will not. Homeowners associations however did get lots of new regulations, many are good, but HOAs are still left to fight expensive legal battles by themselves. The arbitration provisions added to the HOA statute, much praised by the industry stakeholders, will do very little to reduce the high legal fees. It is a throwback from the condo statute that didn’t work for them. This system only works if the parties are willing to work together in good faith, an oxymoron when it comes to conflict. Why should something work for homeowners that didn't work for condo-owners?

      We need to watch how the ombudsman's office added to the condo statute will develop. It's important for the future, which individual is assigned as the ombudsman and how the problems with the DBPR will be resolved. We fought to have the Governor make this decision. It's now up to him to help the condo-owners by appointing the right person!

       And it is imperative that we finally find a solution to solve the puzzle of how many homeowners' associations and how many HOA homes we have in Florida. Can you believe this one? The State doesn’t know! This is an excuse used against regulation since 1994, and was used again this year. Where there is a will, there is a way. Other states have solved the puzzle, so can Florida, unless it’s just a convenient excuse to avoid government regulation for HOAs?

       As you already know from my previous memo, Florida statute FS720 is the statute that applies to HOAs and FS 718 applies to Condos. Up until now FS720 was 14 pages long. After the passage of the 2004 legislation it looks like its going to be a 73 page statute, close to the size of FS718 because much of what was in FS718 has been carried over into FS720 (for example the dispute resolution process with the DBPR).

       Now let’s look at the details. First we have a new structure for FS720: The statute has been repackaged into 4 parts and the old and new sections are now chapters:
          Part I: Powers; Duties; Responsibilities - Old sections   .301-.312
          Part II: Covenant Revitalization - New sections .401-.405
          Part III: Rights & Obligations of Developers - New section .501
          Part IV: Disclosures Prior To Sales - New sections .602-.602
            (Statute transferred from 689.26 & 689.265)

Note: Disclosure was one of our areas of accomplishment. New buyers are going to have more data to help them decide before they buy into an HOA and they will be made aware they are waiving their Florida Homestead protection along with some of their other rights. They will know that the covenant they are signing is a non-negotiable binding contract. They will also get to review the financial posture of the association and any assessments they may be forced to pay in the near future.

       Since we live in an established community and most of us don’t plan to move, the only sections of the statute that are of interest to us are in Part I. This part also contains all the existing and unchanged statutes that I provided you a copy of in my December 28, 2003 memo. I took the liberty to truncate and summarize the 2004 changes to FS720. If you’re interested in all the details, you’ll have to read the 73 pages of the revised statute.

- 720.301 - DEFINITIONS (We have 2 new definitions. That is where HOA disputes are going to be resolved. It’s a beginning. Now HOA members will at least have a place to turn to when they have disagreements. If you’re lucky it will cost you hundreds instead of thousands to get resolution. If not then you’ll also have to go and spend the thousands. Before the judge sent you to arbitration. Now arbitration will send you to the judge! What we at CCFJ contend is that homeowners should not have to pay anything to have the law enforced, that’s the State’s job. That is why we are going to continue to push for a regulatory agency with enforcement powers. You don’t need mediation or arbitration when you can prove the law is being broken. I’ve provided the complete text of this section under 720.311 DISPUTE RESOLUTION. 

The two added definitions are:

"Department" means the Department of Business and Professional Regulation.
"Division" means the Division of Florida Land Sales, Condominiums, and Mobile Homes in the Department of Business and Professional Regulation. Below are the other changes of interest in part I of FS720:

-720.303 –(2) BOARD MEETINGS
-Members have the right to attend all meetings of the board and to speak 
-Notice are to be provided to parcel owners and members of all board meetings
-Written notice of any meeting at which special assessments within 14 days of meeting.
 -If 20 percent of the total voting interests petition the board to address an item of business, the board shall at its next regular board meeting or at a special meeting of the board, but not later than 60 days after the receipt of the petition, take the petitioned item up. 
-Each member shall have the right to speak for at least 3minutes on each matter placed on the agenda by petition.

-720.303 (4) OFFICIAL RECORDS
-Adds a copy of the disclosure summary described in s. 720.601. 
-All other written records of the association not specifically included in the foregoing, which are related to the operation of the association. 

-720.303 (5) INSPECTION AND COPYING OF RECORDS
-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 25 pages.
-The association may adopt reasonable written rules governing the frequency, time, location, notice, records to be inspected, and manner of inspections, but may not impose a requirement that a parcel owner demonstrate any proper purpose for the inspection, state any reason for the inspection, or limit a parcel owner's right to inspect records to less than one 8-hour business day per month. The association may charge up to 50 cents per page for copies made on the association's photocopier. If the association does not have a photocopy machine available where the records are 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 the actual cost of copying.

-720.303 (7) FINANCIAL REPORTING
-An association with total annual revenues of at least $200,000, but less than $400,000, shall prepare reviewed financial statements

-720.303 (10) RECALL OF DIRECTORS.
 (New comprehensive section. Partial reprint here because it is lengthy.)
 - Regardless of any provision to the contrary contained in the governing documents, control, any member of the board or directors may be recalled and removed from office with or without cause by a majority of the total voting interests. 
-Board directors may be recalled by an agreement in writing or by written ballot without a membership meeting. 

-720.303 SLAPP
-SLAPP suits are prohibited. This legislation was drafted to protect the right of parcel owners to exercise their rights to instruct their representatives and petition for redress of grievances before the various governmental entities of this state. The Legislature recognizes that "Strategic Lawsuits Against Public Participation" or "SLAPP" suits, as they are typically called, have occurred when members are sued by their HOAs for “blowing the whistle”. Therefore, the Legislature finds and declares that prohibiting such against parcel owners who address matters concerning their homeowners' association will preserve this fundamental state policy, preserve the constitutional rights of parcel owners, and assure the continuation of representative government in this state. It is the intent of the Legislature that such lawsuits be expeditiously disposed of by the courts. Treble damages can be awarded for violation and Homeowners' associations may not expend association funds in prosecuting a SLAPP suit against a parcel owner.

-FLAG DISPLAY Any homeowner may display one portable, 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 4 1/2 feet by 6 feet, which represents the United States Army, Navy, Air Force, Marine Corps, or Coast Guard, regardless of any declaration rules or requirements dealing with flags or decorations.

-ACCESS RAMPS Any parcel owner may construct an access ramp if a resident or occupant of the parcel has a medical necessity or disability that requires a ramp for egress and ingress

- 720.305 Obligations of Members
-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 non- prevailing party as determined by the court. This change is a very important one for associations like ours that have such a provision. See page 15 of our covenant where it states “Any fine levied against an owner shall be deemed an assessment” and we all know that unpaid assessments can and do lead to foreclosure. So this one is a biggie 

- 720.3055 – New section on CONTRACTS too detailed to cover here.
Contracts for products and services; in writing; bids; exceptions

-720.306 Meetings of members; voting and election procedures; amendments. 
 (5) NOTICE OF MEETINGS.
-Notice to members of all member meetings, 
(6) RIGHT TO SPEAK
-Members and parcel owners have the right to attend all membership meetings and to speak at any meeting with reference to all items opened for discussion or included on the agenda. 

-720.306 (9) ELECTION DISPUTES
Any election dispute between a member and an association must be submitted to 
mandatory binding arbitration with the division. Such proceedings shall be conducted in the manner provided by s.718.1255 and the procedural rules adopted by the division.

-720.311 DISPUTE RESOLUTION [Printed in its entirety]
      (1) The filing of any petition for mediation or arbitration provided for in this section shall toll the applicable statute of limitations. Any recall dispute filed with the department pursuant to s. 720.303(10) shall be conducted by the department in accordance with the provisions of FS 718.1255 and 718.112(2)(j) and the rules adopted by the division. In addition, the department shall conduct mandatory binding arbitration of election disputes between a member and an association pursuant to s. 718.1255 and rules adopted by the division. Neither election disputes nor recall disputes are eligible for mediation; these disputes shall be arbitrated by the department. At the conclusion of the proceeding, the department shall charge the parties a fee in an amount adequate to cover all costs and expenses incurred by the department in conducting the proceeding. Initially, the petitioner shall remit a filing fee of at least $200 to the department. The fees paid to the department shall become a recoverable cost in the arbitration proceeding and the prevailing party in an arbitration proceeding shall recover its reasonable costs and attorney's fees in an amount found reasonable by the arbitrator. The department shall adopt rules to effectuate the purposes of this section. 

        (2)(a) Disputes between an association and a parcel owner regarding use of or changes to the parcel or the common areas and other covenant enforcement disputes, disputes regarding amendments to the association documents, disputes regarding meetings of the board and committees appointed by the board, membership meetings not including election meetings, and access to the official records of the association shall be filed with the department for mandatory mediation before the dispute is filed in court. Mediation proceedings must be conducted in accordance with the applicable Florida Rules of Civil Procedure, and these proceedings are privileged and confidential to the same extent as court-ordered mediation. An arbitrator or judge may not consider any information or evidence arising from the mediation proceeding except in a proceeding to impose sanctions for failure to attend a mediation session. Persons who are not parties to the dispute may not attend the mediation conference without the consent of all parties, except for counsel for the parties and a corporate representative designated by the association. When mediation is attended by a quorum of the board, such mediation is not a board meeting for purposes of notice and participation set forth in s. 720.303. The department shall conduct the proceedings through the use of department mediators or refer the disputes to private mediators who have been duly certified by the department as provided in paragraph (c). The parties shall share the costs of mediation equally, including the fee charged by the mediator, if any, unless the parties agree otherwise. If a department mediator is used, the department may charge such fee as is necessary to pay expenses of the mediation, including, but not limited to, the salary and benefits of the mediator and any travel expenses incurred. The petitioner shall initially file with the department upon filing the disputes, a filing fee of $200, which shall be used to defray the costs of the mediation. At the conclusion of the mediation, the department shall charge to the parties, to be shared equally unless otherwise agreed by the parties, such further fees as are necessary to fully reimburse the department for all expenses incurred in the mediation.

      (b) If mediation as described in paragraph (a) is not successful in resolving all issues between the parties, the parties may file the unresolved dispute in a court of competent jurisdiction or elect to enter into binding or nonbinding arbitration pursuant to the procedures set forth in FS 718.1255 and rules adopted by the division, with the arbitration proceeding to be conducted by a department arbitrator or by a private arbitrator certified   proceedings following an unsuccessful mediation, any party may file the dispute in court. A final order resulting from nonbinding arbitration is final and enforceable in the courts if a complaint for trial de novo is not filed in a court of competent jurisdiction within 30 days after entry of the order. 

         (c) The department shall develop a certification and training program for private mediators and private arbitrators which shall emphasize experience and expertise in the area of the operation of community associations. A mediator or arbitrator shall be certified by the department only if he or she has attended at least 20 hours of training in mediation or arbitration, as appropriate, and only if the applicant has mediated or arbitrated at least 10 disputes involving community associations within 5 years prior to the date of the application, or has mediated or arbitrated 10 disputes in any area within 5 years prior to the date of application and has completed 20 hours of training in community association disputes. In order to be certified by the department, any mediator must also be certified by the Florida Supreme Court. The department may conduct the training and certification program within the department or may contract with an outside vendor to perform the training or certification. The expenses of operating the training and certification and training program shall be paid by the moneys and filing fees generated by the arbitration of recall and election disputes and by the mediation of those disputes referred to in this subsection and by the training fees. 

        (d) The mediation procedures provided by this subsection may be used by a Florida corporation responsible for the operation of a community in which the voting members are parcel owners or their representatives, in which membership in the corporation is not a mandatory condition of parcel ownership, or which is not authorized to impose an assessment that may become a lien on the parcel.

        (3) The department shall develop an education program to assist homeowners, associations, board members, and managers in understanding and increasing awareness of the operation of homeowners' associations pursuant to chapter 720 and in understanding the use of alternative dispute resolution techniques in resolving disputes between parcel owners and associations or between owners. Such education program may include the development of pamphlets and other written instructional guides, the holding of classes and meetings by department employees or outside vendors, as the department determines, and the creation and maintenance of a website containing instructional materials. The expenses of operating the education program shall be initially paid by the moneys and filing fees generated by the arbitration of recall and election disputes and by the mediation of those disputes referred to in this subsection.

       If you took the time to read all of this, congratulations you are in the elite minority of less than 1% of informed Florida HOA members and I’ve kept my promise to keep you informed.

                                  Best Wishes
                                                                 Your Neighbor
                                                                  Val Lucier