THE HORROR DEREGULATION BILL

PCB BCAS 11-01

NOW AMENDED BILL HB 5005 

An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc.

Published Saturday, March 19, 2011

 

Over the years I have seen many bad bills, but this bill really is by far the worst I have ever seen. No matter who wrote that bill -- in a hurry -- forgot to switch on his/her brain before engaging the key-pad. Last year's S1196, written by the usual suspects, was badly worded, but I suspect that was done on purpose to increase the billing hours of the attorneys behind the bill.

 

S1196 contained a lot of vague language, language that still haunts associations and owners. But this bill -- PCB BCAS 11-01, as presented to the House Business and Consumer Affairs Subcommittee, is more or less an insult to the intelligence of every decent legislator. This bill was clearly thrown together, without even considering the contradictions in the bill itself.

 

How do you like FS 718.501 being amended from line 449 - 610, but on Lines 4337 - 4338 the whole provision is repealed? So, what is it? Author couldn't make up his/her mind?

 

What is really in the so-called DEREGULATION BILL PCB BCAS 11-01 that will affect Florida's owners owning property in mandatory community associations?

 

In short: It Dissolves the Division of Florida Condominiums, Timeshares and Mobile Homes and the Condo Ombudsman's Office. It removes Community Association Manager Licensing and Regulation and it totally removes what little enforcement there ever was of Florida statutes regarding community associations and community association managers.

 

Just look what this bill does to the RECALL PROVISIONS in the community association statutes. The author removed the provision of mandatory arbitration by the Division. The new wording plainly states: "At the meeting, the board shall certify the recall." That really makes it easy: Serve the board and they have to certify the recall -- no questions asked. And if they don't hold a meeting -- they are out as well - according to the statutes: "The recall shall be deemed effective!"

 

But if you need further help dealing with vacancies caused by recalls, don't despair -- help is on the way: A non-existent Division will adopt procedural rules! Good luck!

 

I'm not quite sure how this bill can create more jobs. It surely will destroy many jobs. Many government workers that were paid by trust funds -- not by the general tax fund -- will actually lose their jobs. In reality, this bill is an open invitation to every scam artist and fraudster from around the nation. It's an open invitation to rip off owners living in Florida's community associations. This bill removes as well the possibility of punishing the "bad guys." It will create lots of jobs for scam artists especially targeting our elderly, telling them: "Come to Florida. Let's get to work!"

 

It makes no sense to say that officers, directors, or managers can't accept kickbacks, but if they do nothing will happen to them (Line 3825 ff). Why mention it in the first place? 

 

Neither does it make sense if a paragraph of the statutes starts with: "Any person who knowingly or intentionally defaces or destroys accounting records required to be created and maintained ..." but ends with more or less saying -- if you destroy the records proving that you stole the money -- nothing will happen to you. So, go ahead! It's an open invitation for scumbags to destroy the proof of their wrongdoing (Line 3887 ff)

 

Dissolving the Division of Florida Condominiums, Timeshares, and Mobile Homes means that now all of Florida's community association disputes have to be handled by Florida Courts -- all added to court calendars that are already more cramped than judges can handle. We are talking here courts that are already overwhelmed and understaffed. Hopefully our esteemed legislators will consider in their budget debates that they will have to add lots of money to the budgets for courts for more judges and support staff -- or the amount of added cases from community associations will cause a total breakdown of our court system that is already stretched to full capacity. Where will they find this money?

 

This bill removes all the services and protections that were paid for by the so-called Condo Trust Fund, a fund this bill does repeal as well: FS 718.509 -- Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund. After our legislators have raided the TRUST FUND for many years, no wonder the trust in our politicians is at an all time low. Instead of staffing the agency properly to create the services and protection these owners have been paying for, the politicians now want to do without this easy source to raid? Actually, all associations should get a refund -- half of what they paid for the year 2011, since the services will stop at July 1, 2011. Why should anybody pay for services they don't receive?

ONLY IN TALLAHASSEE!

 


THE CONTENTS OF THE BILL

CODING: Words stricken are deletions; words underlined are additions.

 

DISSOLVING THE DIVISION OF FLORIDA CONDOMINIUM,

TIMESHARES, AND MOBILE HOMES

 

FS 20.165(2)

228 (d) Division of Florida Condominiums, Timeshares, and

229 Mobile Homes.

 

COMMUNITY ASSOCIATION MANAGER LICENSING + REGULATION

354 Section 8. Part VIII of chapter 468, Florida Statutes,

355 consisting of sections 468.431, 468.4315, 468.432, 468.433, 

356 468.4336, 468.4337, 468.4338, 468.435, 468.436, 468.4365, 

357 468.437, and 468.438, is repealed.

 

That’s CAM Regulation: Complete FS 468.431 - 438 -- Part VIII

 

FS 718 -- Condominiums

428 Section 11. Subsection (14) of section 718.111, Florida 

429 Statutes, is amended to read: 

430 718.111 The association.— 

431 (14) COMMINGLING.— All funds collected by an association 

432 shall be maintained separately in the association's name. For 

433 investment purposes only, reserve funds may be commingled with 

434 operating funds of the association. Commingled operating and 

435 reserve funds shall be accounted for separately, and a 

436 commingled account shall not, at any time, be less than the 

437 amount identified as reserve funds. This subsection does not 

438 prohibit a multicondominium association from commingling the 

439 operating funds of separate condominiums or the reserve funds of 

440 separate condominiums. Furthermore, for investment purposes 

441 only, a multicondominium association may commingle the operating 

442 funds of separate condominiums with the reserve funds of 

443 separate condominiums. A manager or business entity required to 

444 be licensed or registered under s. 468.432, or An agent, 

445 employee, officer, or director of an association, may shall not 

446 commingle any association funds with his or her funds or with 

447 the funds of any other condominium association or the funds of a 

448 community association as defined in s. 468.431.

 

From Line 449 - Line 610 FS 718.501 is amended --

but on Lines 4337 - 4338 the whole provision is repealed!

 

3775 718.103 Definitions.— As used in this chapter, the term:

3776 (17) "Division" means the Division of Florida

3777 Condominiums, Timeshares, and Mobile Homes of the Department of 

3778 Business and Professional Regulation.

3825 association and the unit owners. An officer, director, or

3826 manager may not solicit, offer to accept, or accept any thing or 

3827 service of value for which consideration has not been provided

3828 for his or her own benefit or that of his or her immediate

3829 family, from any person providing or proposing to provide goods

3830 or services to the association. Any such officer, director, or

3831 manager who knowingly so solicits, offers to accept, or accepts 

3832 any thing or service of value is subject to a civil penalty

3833 pursuant to s. 718.501(1)(d). However, this paragraph does not

 

Meaning kickbacks are not allowed, but accepting them carries no punishment!

 

3887 least 7 years. Any person who knowingly or intentionally defaces 

3888 or destroys accounting records required to be created and

3889 maintained by this chapter during the period for which such

3890 records are required to be maintained, or who knowingly or

3891 intentionally fails to create or maintain such records, with the 

3892 intent of causing harm to the association or one or more of its 

3893 members, is personally subject to a civil penalty pursuant to s. 

3894 718.501(1)(d). The accounting records must include, but are not

 

No punishment for people destroying records. (Repeat on Lines 3942 - 3949)

 

FS 718.112(2)(j) Recall of board members

4206 (j) Recall of board members.—Subject to the provisions of 

4207 s. 718.301, any member of the board of administration may be 

4208 recalled and removed from office with or without cause by the 

4209 vote or agreement in writing by a majority of all the voting 

4210 interests. A special meeting of the unit owners to recall a 

4211 member or members of the board of administration may be called 

4212 by 10 percent of the voting interests giving notice of the 

4213 meeting as required for a meeting of unit owners, and the notice 

4214 shall state the purpose of the meeting. Electronic transmission 

4215 may not be used as a method of giving notice of a meeting called 

4216 in whole or in part for this purpose. 

4217 1. If the recall is approved by a majority of all voting 

4218 interests by a vote at a meeting, the recall will be effective 

4219 as provided herein. The board shall duly notice and hold a board 

4220 meeting within 5 full business days of the adjournment of the 

4221 unit owner meeting to recall one or more board members. At the 

4222 meeting, the board shall either certify the recall, in which 

4223 case such member or members shall be recalled effective 

4224 immediately and shall turn over to the board within 5 full

4225 business days any and all records and property of the 

4226 association in their possession, or shall proceed as set forth 

4227 in subparagraph 3

4228 2. If the proposed recall is by an agreement in writing by 

4229 a majority of all voting interests, the agreement in writing or 

4230 a copy thereof shall be served on the association by certified 

4231 mail or by personal service in the manner authorized by chapter 

4232 48 and the Florida Rules of Civil Procedure. The board of 

4233 administration shall duly notice and hold a meeting of the board 

4234 within 5 full business days after receipt of the agreement in 

4235 writing. At the meeting, the board shall either certify the 

4236 written agreement to recall a member or members of the board, in 

4237 which case such member or members shall be recalled effective 

4238 immediately and shall turn over to the board within 5 full 

4239 business days any and all records and property of the 

4240 association in their possession, or proceed as described in 

4241 subparagraph 3.

4242 3. If the board determines not to certify the written

4243 agreement to recall a member or members of the board, or does

4244 not certify the recall by a vote at a meeting, the board shall, 

4245 within 5 full business days after the meeting, file with the

4246 division a petition for arbitration pursuant to the procedures

4247 in s. 718.1255. For the purposes of this section, the unit

4248 owners who voted at the meeting or who executed the agreement in 

4249 writing shall constitute one party under the petition for

4250 arbitration. If the arbitrator certifies the recall as to any

4251 member or members of the board, the recall will be effective

4252 upon mailing of the final order of arbitration to the

4253 association. If the association fails to comply with the order

4254 of the arbitrator, the division may take action pursuant to s.

4255 718.501. Any member or members so recalled shall deliver to the 

4256 board any and all records of the association in their possession 

4257 within 5 full business days of the effective date of the recall.

4258 3.4. If the board fails to duly notice and hold a board

4259 meeting within 5 full business days of service of an agreement 

4260 in writing or within 5 full business days of the adjournment of 

4261 the unit owner recall meeting, the recall shall be deemed 

4262 effective and the board members so recalled shall immediately 

4263 turn over to the board any and all records and property of the 

4264 association. 

4265 4.5. If a vacancy occurs on the board as a result of a 

4266 recall or removal and less than a majority of the board members 

4267 are removed, the vacancy may be filled by the affirmative vote 

4268 of a majority of the remaining directors, notwithstanding any 

4269 provision to the contrary contained in this subsection. If 

4270 vacancies occur on the board as a result of a recall and a 

4271 majority or more of the board members are removed, the vacancies 

4272 shall be filled in accordance with procedural rules to be 

4273 adopted by the division, which rules need not be consistent with 

4274 this subsection. The rules must provide procedures governing the 

4275 conduct of the recall election as well as the operation of the 

4276 association during the period after a recall but prior to the 

4277 recall election.

4278 (k) Arbitration.—There shall be a provision for mandatory

4279 nonbinding arbitration as provided for in s. 718.1255.

 NO MORE ALTERNATIVE DISPUTE RESOLUTION

4280 Section 158. Section 718.1255, Florida Statutes, is

4281 repealed.

Alternative dispute resolution; voluntary mediation; mandatory nonbinding arbitration; legislative findings.

 

FS 718.202 (1)

4295 purchaser a receipt for the deposit, upon request. In lieu of

4296 the foregoing, the division director has the discretion to

4297 accept other assurances, including, but not limited to, a surety 

4298 bond or an irrevocable letter of credit in an amount equal to

4298 the escrow requirements of this section. Default determinations

 

FS 718.202(10)

4319 (10) Nothing in this section shall be construed to require

4320 any filing with the division in the case of condominiums other

4321 than residential condominiums.

 

FS 718.301(2)

4332 by any unit owner if the association fails to do so. Upon

4333 election of the first unit owner other than the developer to the 

4334 board of administration, the developer shall forward to the

4335 division the name and mailing address of the unit owner board

4336 member.

 

NO MORE DIVISION -- NO MORE OMBUDSMAN

ALL REPEALED

 

4337 Section 161. Section 718.501, Florida Statutes, is

4338 repealed

Powers and duties of Division of Florida Land Sales, Condominiums, and Mobile Homes. 

  

4339 Section 162. Section 718.5011, Florida Statutes, is

4340 repealed.

Ombudsman; appointment; administration.

  

4341 Section 163. Section 718.5012, Florida Statutes, is

4342 repealed.

Ombudsman; powers and duties.

  

4343 Section 164. Section 718.5014, Florida Statutes, is

4344 repealed.

Ombudsman location.

    

4345 Section 165. Section 718.50151, Florida Statutes, is

4346 repealed.

Community Association Living Study Council; membership functions.

   

4347 Section 166. Section 718.50152, Florida Statutes, is

4348 repealed.

Offices.

   

4349 Section 167. Section 718.50153, Florida Statutes, is

4350 repealed

Payment of per diem, mileage, and other expenses to division employees.

   

4351 Section 168. Section 718.50154, Florida Statutes, is

4352 repealed.

Seal and authentication of records.

   

4353 Section 169. Section 718.50155, Florida Statutes, is

4354 repealed.

Service of process.

 

FS 718.503

4429 16. If the developer is required by state or local

4430 authorities to obtain acceptance or approval of any dock or

4431 marina facilities intended to serve the condominium, a copy of

4432 any such acceptance or approval acquired by the time of filing

4433 with the division under s. 718.502(1), or a statement that such 

4434 acceptance or approval has not been acquired or received.

 

 

FS 718.503(2)(a)

4450 seller a copy of a governance form. Such form shall be provided 

4451 by the division summarizing governance of condominium 

4452 associations. In addition to such other information as the 

4453 division considers helpful to a prospective purchaser in 

4454 understanding association governance, The governance form shall 

4455 address the following subjects:

 

FS 718.504

4497 718.504 Prospectus or offering circular.—Every developer 

4498 of a residential condominium which contains more than 20 

4499 residential units, or which is part of a group of residential 

4500 condominiums which will be served by property to be used in 

4501 common by unit owners of more than 20 residential units, shall 

4502 prepare a prospectus or offering circular and file it with the 

4503 Division of Florida Condominiums, Timeshares, and Mobile Homes

4504 prior to entering into an enforceable contract of purchase and 

4505 sale of any unit or lease of a unit for more than 5 years and 

4506 shall furnish a copy of the prospectus or offering circular to 

4507 each buyer. In addition to the prospectus or offering circular, 

4508 each buyer shall be furnished a separate page entitled 

4509 "Frequently Asked Questions and Answers," which shall be in 

4510 accordance with a format approved by the division and a copy

4511 the financial information required by s. 718.111. This page

4512 shall, in readable language, inform prospective purchasers 

4513 regarding their voting rights and unit use restrictions, 

4514 including restrictions on the leasing of a unit; shall indicate 

4515 whether and in what amount the unit owners or the association is 

4516 obligated to pay rent or land use fees for recreational or other 

4517 commonly used facilities; shall contain a statement identifying 

4518 that amount of assessment which, pursuant to the budget, would 

4519 be levied upon each unit type, exclusive of any special 

4520 assessments, and which shall further identify the basis upon 

4521 which assessments are levied, whether monthly, quarterly, or 

4522 otherwise; shall state and identify any court cases in which the 

4523 association is currently a party of record in which the 

4524 association may face liability in excess of $100,000; and which 

4525 shall further state whether membership in a recreational 

4526 facilities association is mandatory, and if so, shall identify 

4527 the fees currently charged per unit type. The division shall by 

4528 rule require such other disclosure as in its judgment will 

4529 assist prospective purchasers. The prospectus or offering 

4530 circular may include more than one condominium, although not all 

4531 such units are being offered for sale as of the date of the

4532 prospectus or offering circular. The prospectus or offering 

4533 circular must contain the following information:

 

4943 (e) Each budget for an association prepared by a developer 

4944 consistent with this subsection shall be prepared in good faith 

4945 and shall reflect accurate estimated amounts for the required 

4946 items in paragraph (c) at the time of the filing of the offering 

4947 circular with the division, and subsequent increased amounts of 

4948 any item included in the association's estimated budget that are 4948 beyond the control of the developer shall not be considered an

 

 

5013 (27) If the developer is required by state or local 

5014 authorities to obtain acceptance or approval of any dock or 

5014 marina facilities intended to serve the condominium, a copy of 

5015 any such acceptance or approval acquired by the time of filing 

5016 with the division under s. 718.502(1) or a statement that such 

5017 acceptance or approval has not been acquired or received.

 

718.509  Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund

5022 Section 173. Section 718.509, Florida Statutes, is 

5023 repealed.

 

FS 720 -- Homeowners' Associations

5961 Section 191. Paragraph (d) of subsection (10) of section 

5962 720.303, Florida Statutes, is amended to read:

5963 720.303 Association powers and duties; meetings of board; 

5964 official records; budgets; financial reporting; association 

5965 funds; recalls.— 

5966 (10) RECALL OF DIRECTORS.—

5967 (d) If the board determines not to certify the written 

5968 agreement or written ballots to recall a director or directors 

5969 of the board or does not certify the recall by a vote at a 

5970 meeting, the board shall, within 5 full business days after the 

5971 meeting, file with the department a petition for binding 

5972 arbitration pursuant to the applicable procedures in ss. 

5973 718.112(2)(j) and 718.1255 and the rules adopted thereunder. For 

5974 the purposes of this section, the members who voted at the 

5975 meeting or who executed the agreement in writing shall 

5976 constitute one party under the petition for arbitration. If the 

5977 arbitrator certifies the recall as to any director or directors 

5978 of the board, the recall will be effective upon mailing of the 

5979 final order of arbitration to the association. The director or 

5980 directors so recalled shall deliver to the board any and all 

5981 records of the association in their possession within 5 full 

5982 business days after the effective date of the recall. 

 

5983 Section 192. Subsection (9) of section 720.306, Florida 

5984 Statutes, is amended to read: 

5985 720.306 Meetings of members; voting and election 

5986 procedures; amendments.—

5987 (9) ELECTIONS AND BOARD VACANCIES.—Elections of directors 

5988 must be conducted in accordance with the procedures set forth in 

5989 the governing documents of the association. All members of the 

5990 association are eligible to serve on the board of directors, and 

5991 a member may nominate himself or herself as a candidate for the

5992 board at a meeting where the election is to be held or, if the 

5993 election process allows voting by absentee ballot, in advance of 

5994 the balloting. Except as otherwise provided in the governing 

5995 documents, boards of directors must be elected by a plurality of 

5996 the votes cast by eligible voters. Any election dispute between

5997 a member and an association must be submitted to mandatory

5998 binding arbitration with the division. Such proceedings must be 

5999 conducted in the manner provided by s. 718.1255 and the 

6000 procedural rules adopted by the division. Unless otherwise 

6001 provided in the bylaws, any vacancy occurring on the board 

6002 before the expiration of a term may be filled by an affirmative 

6003 vote of the majority of the remaining directors, even if the 

6004 remaining directors constitute less than a quorum, or by the 

6005 sole remaining director. In the alternative, a board may hold an 

6006 election to fill the vacancy, in which case the election 

6007 procedures must conform to the requirements of the governing 

6008 documents. Unless otherwise provided in the bylaws, a board 

6009 member appointed or elected under this section is appointed for 

6010 the unexpired term of the seat being filled. Filling vacancies 

6011 created by recall is governed by s. 720.303(10) and rules 

6012 adopted by the division.

 

6013 Section 193. Subsection (1) and paragraph (c) of 

6014 subsection (2) of section 720.311, Florida Statutes, are amended

6015 to read: 

6016 720.311 Dispute resolution.— 

6017 (1) The Legislature finds that alternative dispute 

6018 resolution has made progress in reducing court dockets and 

6019 trials and in offering a more efficient, cost-effective option 

6020 to litigation. The filing of any petition for arbitration or the 

6021 serving of a demand for presuit mediation as provided for in 

6022 this section shall toll the applicable statute of limitations. 

6023 Any recall dispute filed with the department pursuant to s. 

6024 720.303(10) shall be conducted by the department in accordance 

6025 with the provisions of ss. 718.112(2)(j) and 718.1255 and the 

6026 rules adopted by the division. In addition, the department shall 

6027 conduct mandatory binding arbitration of election disputes 

6028 between a member and an association pursuant to s. 718.1255 and 

6029 rules adopted by the division. Neither election disputes nor 

6030 recall disputes are eligible for presuit mediation; these 

6031 disputes shall be arbitrated by the department. At the 

6032 conclusion of the proceeding, the department shall charge the 

6033 parties a fee in an amount adequate to cover all costs and 

6034 expenses incurred by the department in conducting the 

6035 proceeding. Initially, the petitioner shall remit a filing fee 

6036 of at least $200 to the department. The fees paid to the 

6037 department shall become a recoverable cost in the arbitration 

6038 proceeding, and the prevailing party in an arbitration 

6039 proceeding shall recover its reasonable costs and attorney's 

6040 fees in an amount found reasonable by the arbitrator. The 

6041 department shall adopt rules to effectuate the purposes of this 

6042 section.

6043    (2)

6044    (c) If presuit mediation as described in paragraph (a) is 

6045 not successful in resolving all issues between the parties, the 

6046 parties may file the unresolved dispute in a court of competent 

6047 jurisdiction or elect to enter into binding or nonbinding 

6048 arbitration pursuant to the procedures set forth in s. 718.1255 

6049 and rules adopted by the division, with the arbitration 

6050 proceeding to be conducted by a department arbitrator or by a 

6051 private arbitrator certified by the department. If all parties 

6052 do not agree to arbitration proceedings following an 

6053 unsuccessful presuit mediation, any party may file the dispute 

6054 in court. A final order resulting from nonbinding arbitration is 

6055 final and enforceable in the courts if a complaint for trial de 

6056 novo is not filed in a court of competent jurisdiction within 30 

6057 days after entry of the order. As to any issue or dispute that 

6058 is not resolved at presuit mediation, and as to any issue that 

6059 is settled at presuit mediation but is thereafter subject to an 

6060 action seeking enforcement of the mediation settlement, the 

6061 prevailing party in any subsequent arbitration or litigation 

6062 proceeding shall be entitled to seek recovery of all costs and 

6063 attorney's fees incurred in the presuit mediation process.

 

FS 719 -- Co-Ops

Provisions in FS 719 similar to the provisions in FS 718 (condos) are amended or repealed 

 

FS 721 -- Timeshares

Provisions in FS 719 similar to FS 718 (References to Division) are amended or repealed.

 

FS 723 -- Mobile Home Parks

Provisions in FS 723 similar to FS 718 (References to Division) are amended or repealed.


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