Posted May 9, 2005
Pursuant to Section 718.5012(3) the
ombudsman makes the following legislative recommendations regarding Chapter 718
Florida Statutes.
718.110 Amendment of declaration; correction of
error or omission in declaration by circuit court.--
(1)(a) If the declaration fails to provide a
method of amendment, the declaration may be amended as to all matters except
those described in subsection (4) or subsection (8) if the amendment is approved
by the owners of not less than two-thirds of the units. Except as to those
matters described in subsection (4) or subsection (8), no declaration recorded
after April 1, 1992, shall require that amendments be approved by more than
four-fifths of the voting interests.
(b) No provision of the declaration shall be
revised or amended by reference to its title or number only. Proposals to amend
existing provisions of the declaration shall contain the full text of the
provision to be amended; new words shall be inserted in the text and underlined;
and words to be deleted shall be lined through with hyphens. However, if the
proposed change is so extensive that this procedure would hinder, rather than
assist, the understanding of the proposed amendment, it is not necessary to use
underlining and hyphens as indicators of words added or deleted, but, instead, a
notation must be inserted immediately preceding the proposed amendment in
substantially the following language: "Substantial rewording of
declaration. See provision _____ for present text."
(c) Nonmaterial errors or omissions in
the amendment process will not invalidate an otherwise properly promulgated
amendment.
(d)
Notice of a proposed amendment to the declaration shall be sent to the
unit owner by certified mail return receipt.
718.111 The
Association.---
(13)
FINANCIAL REPORTING.—
(d) If approved by a majority 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.
Such meeting and approval must occur prior to the end of the fiscal year and is
effective only for the fiscal year in which the vote is taken. With respect to
an association to which the developer has not turned over control of the
association, all unit owners, including the developer, may vote on issues
related to the preparation of financial reports for the first 2 fiscal years of
the association's operation, beginning with the fiscal year in which the
declaration is recorded. Thereafter, all unit owners except the developer may
vote on such issues until control is turned over to the association by the
developer. Under no circumstances may an association or
board of administration wave the financial reporting requirements of this
section for more than 2 years.
(15)
RECONSTRUCTION AFTER CASUALTY.
In the event the condominium
property and units are damaged after a casualty the board of administration
shall obtain reliable and detailed estimates of the cost necessary to repair and
replace the damaged property to substantially the same condition existing
immediately prior to the casualty and substantially in accordance with the
original plans and specifications of the condominium as soon as possible and not
later than sixty (60) days after the casualty. If the damage to the condominium
property exceeds fifty (50%) percent, the condominium may be terminated unless
seventy-five (75%) percent of the unit owners agree to reconstruction and repair
within ninety (90) days of the casualty.
The board of administration
shall engage the services of a registered architect and knowledgeable
construction specialists to prepare any necessary plans and specifications and
shall receive and approve bids for reconstruction, shall execute all necessary
contracts for restoration, shall arrange for disbursement of construction funds,
the approval of work, and all other matters pertaining to the repairs and
reconstruction required.
If the
proceeds of the hazard insurance policy maintained by the association pursuant
to section 718.111(11)(b) of this chapter is insufficient to pay the estimated
costs of reconstruction or at any time during reconstruction and repair,
assessments shall be made against all unit owners according to their share of
the common elements and expenses as set forth in the declaration of condominium.
Assessments
will be made against unit owners for damage to their units according to the cost
of reconstruction or repair of their respective units. The assessments shall be
levied and collected as all other assessments are provided for in this chapter.
718.112
Bylaws
(2)
REQUIRED PROVISIONS.
(a) Administration.--
1. The form of administration of the
association shall be described indicating the title of the officers and board of
administration and specifying the powers, duties, manner of selection and
removal, and compensation, if any, of officers and boards. In the absence of
such a provision, the board of administration shall be composed of five members,
except in the case of a condominium which has five or fewer units, in which case
in a not-for-profit corporation the board shall consist of not fewer than three
members. In the absence of provisions to the contrary in the bylaws, the board
of administration shall have a president, a secretary, and a treasurer, who
shall perform the duties of such officers customarily performed by officers of
corporations. Unless prohibited in the bylaws, the board of administration may
appoint other officers and grant them the duties it deems appropriate. Unless
otherwise provided in the bylaws, the officers shall serve without compensation
and at the pleasure of the board of administration. Unless otherwise provided in
the bylaws, the members of the board shall serve without compensation.
2. When a unit owner files a written inquiry by
certified mail with the board of administration, the board shall respond in
writing by certified mail return receipt to
the unit owner within 30 days of receipt of the inquiry. The board's response
shall either give a substantive response to the inquirer, notify the inquirer
that a legal opinion has been requested, or notify the inquirer that advice has
been requested from the division. If the board requests advice from the
division, the board shall, within 10 days of its receipt of the advice, provide
in writing a substantive response to the inquirer. If a legal opinion is
requested, the board shall, within 60 days after the receipt of the inquiry,
provide in writing a substantive response to the inquiry. The failure to provide
a substantive response to the inquiry as provided herein precludes the board
from recovering attorney's fees and costs in any subsequent litigation,
administrative proceeding, or arbitration arising out of the inquiry.
The association may through its board of administration adopt reasonable rules
and regulations regarding the frequency and manner of responding to unit owner
inquiries, one of which may be that the association is only obligated to respond
to one written inquiry per unit in any given 30-day period. In such a case, any
additional inquiry or inquiries must be responded to in the subsequent 30-day
period, or periods, as applicable.
(b)
Quorum; voting requirements; proxies.—
2. Except
as specifically otherwise provided herein, after January 1, 1992, unit owners
may not vote by general proxy, but may vote by limited proxies substantially
conforming to a limited proxy form adopted by the division. Limited proxies and
general proxies may be used to establish a quorum. Limited proxies shall be used
for votes taken to waive or reduce reserves in accordance with subparagraph
(f)2.; for votes taken to waive the financial reporting requirements of s.
718.111(13); for votes taken to amend the declaration pursuant to s. 718.110;
for votes taken to amend the articles of incorporation or bylaws pursuant to
this section; and for any other matter for which this chapter requires or
permits a vote of the unit owners. Except as provided
in paragraph (d), after January 1, 1992, no 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 nonsubstantive changes to items for
which a limited proxy is required and given. Notwithstanding the provisions of
this subparagraph, unit owners may vote in person at unit owner meetings.
Nothing contained herein shall limit the use of general proxies or require the
use of limited proxies for any agenda item or election at any meeting of a
timeshare condominium association.
(c)Board
of administration meetings.--Meetings of the board of administration at
which a quorum of the members is present shall be open to all unit owners. No
action shall be taken or resolution made without an open meeting of the board of
administration. Any unit owner may tape record or videotape meetings
of the board of administration. The right to attend such meetings includes the
right to speak at such meetings with reference to all designated agenda items.
The division shall adopt reasonable rules governing the tape recording and
videotaping of the meeting. The association may adopt written reasonable rules
governing the frequency, duration, and manner of unit owner statements. Adequate
notice of all meetings, which notice shall specifically incorporate an
identification of agenda items, shall be posted conspicuously on the condominium
property at least 48 continuous hours preceding the meeting except in an
emergency. Any item not included on the notice may be taken up on an emergency
basis by at least a majority plus one of the members of the board. Such
emergency action shall be noticed and ratified at the next regular meeting of
the board. However, written notice of any meeting at which nonemergency special
assessments, or at which amendment to rules regarding unit use, will be
considered shall be mailed, delivered, or electronically transmitted to the unit
owners and posted conspicuously on the condominium property 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
among the official records of the association. Upon notice to the unit owners,
the board shall by duly adopted rule designate a specific location on the
condominium property or association property upon which all notices of board
meetings shall be posted. If there is no condominium property or association
property upon which notices can be posted, notices of board meetings shall be
mailed, delivered, or electronically transmitted at least 14 days before the
meeting to the owner of each unit. In lieu of or in addition to the physical
posting of notice of any meeting of the board of administration on the
condominium property, 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 condominium association.
However, if broadcast notice is used in lieu of a notice posted physically on
the condominium property, the notice and agenda must be broadcast at least four
times every broadcast hour of each day that a posted notice is otherwise
required under this section. 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. Notice of any
meeting in which regular assessments against unit owners are to be considered
for any reason shall specifically contain a statement that assessments will be
considered and the nature, cost and breakdown
of any such assessments. Meetings of a committee to take final action on behalf
of the board or make recommendations to the board regarding the association
budget are subject to the provisions of this paragraph. Meetings of a committee
that does not take final action on behalf of the board or make recommendations
to the board regarding the association budget are subject to the provisions of
this section, unless those meetings are exempted from this section by the bylaws
of the association. Notwithstanding any other law, the requirement that board
meetings and committee meetings be open to the unit owners is inapplicable to
meetings between the board or a committee and the association's attorney, with
respect to proposed or pending litigation, when the meeting is held for the
purpose of seeking or rendering legal advice.
(d)
Unit owner meetings.—
1. There
shall be an annual meeting of the unit owners. Unless the bylaws provide
otherwise, a vacancy on the board caused by the expiration of a director's term
shall be filled by electing a new board member, and the election shall be by
secret ballot; however, if the number of vacancies equals or exceeds the number
of candidates, no election is required. If there is no provision in the bylaws
for terms of the members of the board, the terms of all members of the board
shall expire upon the election of their successors at the annual meeting. A
unit owner may not serve on the board as a director for more than two terms nor
longer than four years. A member may not serve as an officer of the corporation
for more that one term. Co-owners of a unit may not serve as members of the
board of administration during the same fiscal year. Any unit owner
desiring to be a candidate for board membership shall comply with subparagraph
3. 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.
8. 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
subparagraph 3. 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 paragraph (j) and rules adopted by the division.
Notwithstanding subparagraphs (b)2. and (d)3., an
association may, by the affirmative vote of a majority of the total voting
interests, provide for different voting and election procedures in its bylaws,
which vote may be by a proxy specifically delineating the different voting and
election procedures. The different voting and election procedures may provide
for elections to be conducted by limited or general proxy.
9.
Unit owners shall have the right to vote on items at the annual meeting
if a written request is made to place those items on the agenda for a vote by 10
percent or more of all voting interests at least 90 days before the date of the
annual meeting.
(f)
Annual budget.---
5.
A vote to provide for no reserves or percentage of reserves shall be made
at the annual meeting of the unit owners called under 718.112(2)(d). The
division shall adopt the form for the vote for no reserves and percentage of
reserves.
(g) Assessments.--The
manner of collecting from the unit owners their shares of the common expenses
shall be stated in the bylaws. Assessments shall be made against units not less
frequently than quarterly in an amount which is not less than that required to
provide funds in advance for payment of all of the anticipated current operating
expenses and for all of the unpaid operating expenses previously incurred.
Nothing in this paragraph shall preclude the right of an association to
accelerate assessments of an owner delinquent in payment of common expenses against
whom a lien has been filed. Accelerated assessments shall be due and
payable on the date after the claim
of lien is filed. Such accelerated assessments shall include the amounts due for
the remainder of the budget year in which the claim of lien was filed.
718.113
Maintenance; limitation upon improvement; display of flag; hurricane shutters.--
(5) Each
board of administration shall adopt hurricane shutter specifications for each
building within each condominium operated by the association which shall include
color, style, and other factors deemed relevant by the board. All specifications
adopted by the board shall comply with the applicable building code.
Notwithstanding any provision to the contrary in the condominium documents, if
approval is required by the documents, a board shall not refuse to approve the
installation or replacement of hurricane shutters conforming to the
specifications adopted by the board. The board may, subject to the provisions of
s. 718.3026, and the approval of a majority of voting interests of the
condominium, install hurricane shutters or hurricane
protection which complies with the applicable building code and may
maintain, repair, or replace such approved hurricane shutters, whether on or
within common elements, limited common elements, units, or association property.
However, where laminated glass or window film architecturally designed to
function as hurricane protection which complies with the applicable building
code has been installed, the board may not install hurricane shutters. The board
may operate shutters installed pursuant to this subsection without permission of
the unit owners only where such operation is necessary to preserve and protect
the condominium property and association property. The installation,
replacement, operation, repair, and maintenance of such shutters in accordance
with the procedures set forth herein shall not be deemed a material alteration
to the common elements or association property within the meaning of this
section.
718.115
Common expenses and common surplus.—
(1)(d) If so
provided in the declaration, the cost of a master antenna television system or
duly franchised cable television service obtained pursuant to a bulk contract for
basic service shall be deemed a common expense. If the declaration
does not provide for the cost of a master antenna television system or duly
franchised basic cable television service
obtained under a basic bulk contract as a
common expense, the board may enter into such a contract, and the cost of the
service will be a common expense but allocated on a per-unit basis rather than a
percentage basis if the declaration provides for other than an equal sharing of
common expenses, and any contract entered into before July 1, 1998, in which the
cost of the service is not equally divided among all unit owners, may be changed
by vote of a majority of the voting interests present at a regular or special
meeting of the association, to allocate the cost equally among all units. The
contract shall be for a term of not less than 2 years.
1. Any contract made
by the board after the effective date hereof for a community antenna system or
duly franchised basic cable television
service may be canceled by a majority of the voting interests present at the
next regular or special meeting of the association. Any member may make a motion
to cancel said contract, but if no motion is made or if such motion fails to
obtain the required majority at the next regular or special meeting, whichever
is sooner, following the making of the contract, then such contract shall be
deemed ratified for the term therein expressed.
718.116
Assessments; liability; lien and priority; interest; collection.—
(3)
Assessments and installments on them which are not paid when due bear interest
at the rate provided in the declaration, from the due date until paid. This rate
may not exceed the rate allowed by law, and, if no rate is provided in the
declaration, interest shall accrue at the rate of 18 percent per year. Also, if
the declaration or bylaws so provide, the association may charge an
administrative late fee in addition to such interest, in an amount not to exceed
the greater of $25 or 5 percent of each installment of the assessment for each
delinquent installment that the payment is late. Any payment received by an
association shall be applied first to any interest accrued by the association,
then to any administrative late fee, then to the
delinquent assessment, any costs and reasonable
attorney's fees incurred in collection, and then to any costs and
reasonable attorney's fees incurred in collection., the delinquent assessment.
The foregoing shall be applicable notwithstanding any restrictive endorsement,
designation, or instruction placed on or accompanying a payment. A late fee
shall not be subject to the provisions in chapter 687 or s. 718.303(3).
(5)(a)
The association has a lien on each condominium parcel to secure the
payment of assessments. No lien may be filed on a
condominium parcel before 30 days after service of a notice of intent to file a
lien has been served on the owner of the condominium parcel by certified mail or
by personal service in the manner authorized by chapter 48 and the Florida Rules
of Civil Procedure. Except as otherwise provided in subsection (1)
and as set forth below, the lien is effective from and shall relate back to the
recording of the original declaration of condominium, or, in the case of lien on
a parcel located in a phase condominium, the last to occur of the recording of
the original declaration or amendment thereto creating the parcel. However, as
to first mortgages of record, the lien is effective from and after recording of
a claim of lien in the public records of the county in which the condominium
parcel is located. Nothing in this subsection shall be construed to bestow upon
any lien, mortgage, or certified judgment of record on April 1, 1992, including
the lien for unpaid assessments created herein, a priority which, by law, the
lien, mortgage, or judgment did not have before that date.
(10) The specific purpose
or purposes and nature, costs and breakdown
of any special assessment approved in accordance with the condominium documents
shall be set forth in a written notice of such assessment sent or delivered to
each unit owner. The funds collected pursuant to a special assessment shall be
used only for the specific purpose or purposes set forth in such notice.
However, upon completion of such specific purpose or purposes, any excess funds
will be considered common surplus, and may, at the discretion of the board,
either be returned to the unit owners or applied as a credit toward future
assessments.
718.302 Agreements entered into by the
association.--
(1) Any grant or reservation made by a
declaration, lease, or other document, and any contract made by an association
prior to assumption of control of the association by unit owners other than the
developer, that provides for services, products,
operation, maintenance, or management of a condominium association or property
serving the unit owners of a condominium shall be fair and reasonable, and such
grant, reservation, or contract may be canceled by unit owners other than the
developer:
(a) If the association operates only one
condominium and the unit owners other than the developer have assumed control of
the association, or if unit owners other than the developer own not less than 75
percent of the voting interests in the condominium, the cancellation shall be by
concurrence of the owners of not less than 75 percent of the voting interests
other than the voting interests owned by the developer. If a grant, reservation,
or contract is so canceled and the unit owners other than the developer have not
assumed control of the association, the association shall make a new contract or
otherwise provide for maintenance, management, or operation in lieu of the
canceled obligation, at the direction of the owners of not less than a majority
of the voting interests in the condominium other than the voting interests owned
by the developer.
(b) If the association operates more than one
condominium and the unit owners other than the developer have not assumed
control of the association, and if unit owners other than the developer own at
least 75 percent of the voting interests in a condominium operated by the
association, any grant, reservation, or contract for maintenance, management, or
operation of buildings containing the units in that condominium or of
improvements used only by unit owners of that condominium may be canceled by
concurrence of the owners of at least 75 percent of the voting interests in the
condominium other than the voting interests owned by the developer. No grant,
reservation, or contract for maintenance, management, or operation of
recreational areas or any other property serving more than one condominium, and
operated by more than one association, may be canceled except pursuant to
paragraph (d).
(c) If the association operates more than one
condominium and the unit owners other than the developer have assumed control of
the association, the cancellation shall be by concurrence of the owners of not
less than 75 percent of the total number of voting interests in all condominiums
operated by the association other than the voting interests owned by the
developer.
(d) If the owners of units
in a condominium have the right to use property in common with owners of units
in other condominiums and those condominiums are operated by more than one
association, no grant, reservation, or contract for maintenance, management, or
operation of the property serving more than one condominium may be canceled
until unit owners other than the developer have assumed control of all of the
associations operating the condominiums that are to be served by the
recreational area or other property, after which cancellation may be effected by
concurrence of the owners of not less than 75 percent of the total number of
voting interests in those condominiums other than voting interests owned by the
developer.
718.3026 Contracts for products and services; in
writing; bids; exceptions.--Associations with less than 100 units may opt
out of the provisions of this section if two-thirds of the unit owners vote to
do so, which opt-out may be accomplished by a proxy specifically setting forth
the exception from this section.
(1) All contracts as further described herein
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, 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 on behalf of any
condominium operated by the association in the aggregate that exceeds 5 percent
of the total annual budget of the association, including reserves, the
association shall obtain competitive bids for the materials, equipment, or
services. Nothing contained herein shall be construed to require the association
to accept the lowest bid.
(2)(a)1. Notwithstanding the foregoing,
contracts with employees of the association, and contracts for attorney,
accountant, architect, community association manager, timeshare management firm,
engineering, and landscape architect services are not subject to the provisions
of this section.
2. A contract executed before January 1, 1992,
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 a condominium under a local government franchise agreement by a
franchise holder 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. A condominium whose declaration or bylaws provides 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 herein is intended to
limit the ability of an association to obtain needed products and services in an
emergency.
(c) This section shall 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 herein shall excuse a
party contracting to provide maintenance or management services from compliance
with s. 718.3025.
3. A contract by and between a service
provider and an association shall not be for a term in excess of three years and
shall not contain an automatic renewal clause.
4.
A contract for construction or repair of the property that exceeds 10
percent of the total annual budget of the association, including reserves,
should have the approval of an attorney hired by the association.
History.--s. 13, ch. 91-103; s. 5, ch. 91-426; s. 10, ch. 92-49; s. 44, ch.
95-274.
718.501
Powers and duties of Division of Florida Land Sales, Condominiums,
and Mobile Homes.—
(e) The division is
authorized to shall prepare and disseminate a prospectus and other
information to assist prospective owners, purchasers, lessees, and developers of
residential condominiums in assessing the rights, privileges, and duties
pertaining thereto.
(j) The
division shall provide training programs for condominium association board
members and unit owners.
718.5012
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:
(5) To monitor and review
procedures and disputes concerning condominium 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. The division shall process the
ombudsman’s recommendations and petitions in an expedited manner and defer to
his findings.
(9) Fifteen percent of the
total voting interests in a condominium association, or six unit owners,
whichever is greater, may petition the ombudsman to appoint an election monitor
to attend the annual meeting of the unit owners and conduct the election of
directors. The ombudsman shall appoint a division employee, a person or persons
specializing in condominium 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.
(10)
Any unit owner or association acting in good faith on the advice or opinion of
the office of the ombudsman shall be immune from any penalties or actions.
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