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

  1                      A bill to be entitled
  2         An act relating to condominiums; creating s.
  3         718.3027, F.S.; requiring prelitigation
  4         disclosure to and approval by owners; requiring
  5         a disclosure; providing that a prelitigation
  6         disclosure is not admissible in evidence;
  7         amending s. 718.301, F.S.; providing for the
  8         effect of actions taken by members of the board
  9         of administration of an association; amending
10         s. 718.503, F.S.; providing requirements for
11         developer disclosure in certain contracts for
12         the sale or lease of a residential unit;
13         amending s. 718.506, F.S.; abrogating the right
14         to a cause of action against a developer for an
15         oral representation or information that is not
16         in certain required developer's promotional
17         materials; providing an effective date.
18  
19  Be It Enacted by the Legislature of the State of Florida:
20  
21         Section 1.  Section 718.3027, Florida Statutes, is
22  created to read:
23         718.3027  Prelitigation disclosure to and approval by
24  owners.--
25         (1)  Before commencing litigation against any party in
26  the name of the association involving amounts in controversy
27  in excess of $100,000 and not involving a dispute that relates
28  to title to a unit or common element or the levy or collection
29  of a fee or assessment or that is governed by s. 718.1255, the
30  association must furnish to each owner, other than the
31  developer, a separate document entitled "Litigation Disclosure

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 1  Notice." The division shall, by rule, establish a standard
 2  format for the Litigation Disclosure Notice.
 3         (2)  A Litigation Disclosure Notice must inform each
 4  owner other than the developer of the basis for the
 5  association's contemplated litigation or adversarial
 6  proceeding; the professional qualifications of the person
 7  making the allegations supporting the association's claim; the
 8  response of the adverse party to the allegations and whether
 9  the adverse party has refused or offered to perform remedial
10  work; the efforts made to mediate or resolve the claim; the
11  projected attorney's fees, expert fees, and other costs to the
12  association of the proposed litigation; the association's
13  probability of success in the litigation; the association's
14  probability of collecting a judgment resulting from the
15  litigation; and the probability of association liability for
16  attorney's fees and costs associated with the litigation.
17         (3)  Litigation based upon the matter described in the
18  Litigation Disclosure Notice may not be commenced unless
19  approved in advance by a majority of the owners other than the
20  developer, or by the greater number of the owners other than
21  the developer which is required by the declaration of the
22  condominium operated by the association. At any meeting of
23  unit owners regarding the proposed litigation, the adverse
24  party may be excluded from the meeting and the adverse party's
25  units do not count against the quorum requirement. At any
26  meeting of the board of administration, a director nominated
27  or appointed by the developer, if the developer is an adverse
28  party, may be excluded from the meeting and the seat does not
29  count against the quorum requirement.
30         (4)  The Litigation Disclosure Notice must carry the
31  following legend, in conspicuous type on the top of the first

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 1  page: THIS DOCUMENT HAS BEEN PREPARED BY THE ASSOCIATION AND
 2  ITS ATTORNEYS IN ANTICIPATION OF LITIGATION, AND IS A
 3  PROTECTED LAWYER-CLIENT COMMUNICATION.
 4         (5)  A Litigation Disclosure Notice is confidential,
 5  exempt from discovery by a developer, and inadmissible in any
 6  trial or hearing. A unit owner may not waive the
 7  confidentiality of a Litigation Disclosure Notice. The
 8  confidentiality of a Litigation Disclosure Notice may be
 9  waived only by the board of administration of the association.
10         Section 2.  Present subsection (6) of section 718.301 ,
11  Florida Statutes, is redesignated as subsection (7), and a new
12  subsection (6) is added to that section, to read:
13         718.301  Transfer of association control.--
14         (6)  Actions taken by members of the board of
15  administration designated by the developer are considered
16  actions taken by the developer, and the developer is
17  responsible to the association and its members for all such
18  actions.
19         Section 3.  Paragraph (a) of subsection (1) of section
20  718.503, Florida Statutes, is amended to read:
21         718.503  Developer disclosure prior to sale;
22  nondeveloper unit owner disclosure prior to sale;
23  voidability.--
24         (1)  DEVELOPER DISCLOSURE.--
25         (a)  Contents of contracts.--Any contract for the sale
26  of a residential unit or a lease thereof for an unexpired term
27  of more than 5 years shall:
28         1.  Contain the following legend in conspicuous type:
29  THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN
30  NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER
31  THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND

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 1  RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED
 2  TO HIM OR HER BY THE DEVELOPER UNDER SECTION 718.503, FLORIDA
 3  STATUTES.  THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY
 4  DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL
 5  WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OR
 6  ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE 
     OFFERING
 7  IN A MANNER THAT IS ADVERSE TO THE BUYER.  ANY PURPORTED
 8  WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT.
 9  BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE 10  THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS
11  REQUIRED.  BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL
12  TERMINATE AT CLOSING.
13         2.  Contain the following caveat in conspicuous type on
14  the first page of the contract:  ORAL REPRESENTATIONS CANNOT
15  BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF
      THE
16  DEVELOPER.  FOR CORRECT REPRESENTATIONS, REFERENCE
      SHOULD BE
17  MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY 
       SECTION
18  718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A
19  BUYER OR LESSEE. A PURCHASER HAS NO CLAIM OR CAUSE OF
      ACTION
20  AGAINST THE DEVELOPER FOR THE PURCHASER'S RELIANCE ON ORAL
21  REPRESENTATIONS OR INFORMATION NOT CONTAINED IN THIS
       CONTRACT
22  OR IN THE PROSPECTUS.  A PURCHASER MAY MAKE A CLAIM OR
23  INSTITUTE A CAUSE OF ACTION AGAINST THE DEVELOPER ONLY FOR
      THE
24  PURCHASER'S RELIANCE ON THE TERMS OF THIS CONTRACT OR ON
25  MATTERS SET FORTH IN THE PROSPECTUS.
26         3.  If the unit has been occupied by someone other than
27  the buyer, contain a statement that the unit has been
28  occupied.
29         4.  If the contract is for the sale or transfer of a
30  unit subject to a lease, include as an exhibit a copy of the
31  executed lease and shall contain within the text in

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 1  conspicuous type:  THE UNIT IS SUBJECT TO A LEASE (OR
 2  SUBLEASE).
 3         5.  If the contract is for the lease of a unit for a
 4  term of 5 years or more, include as an exhibit a copy of the
 5  proposed lease.
 6         6.  If the contract is for the sale or lease of a unit
 7  that is subject to a lien for rent payable under a lease of a
 8  recreational facility or other commonly used facility, contain
 9  within the text the following statement in conspicuous type:
10  THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT IS SUBJECT TO
11  A LIEN FOR RENT PAYABLE UNDER A LEASE OF COMMONLY USED
12  FACILITIES. FAILURE TO PAY RENT MAY RESULT IN FORECLOSURE OF
13  THE LIEN.
14         7.  State the name and address of the escrow agent
15  required by s. 718.202 and state that the purchaser may obtain
16  a receipt for his or her deposit from the escrow agent upon
17  request.
18         8.  If the contract is for the sale or transfer of a
19  unit in a condominium in which timeshare estates have been or
20  may be created, contain within the text in conspicuous type:
21  UNITS IN THIS CONDOMINIUM ARE SUBJECT TO TIMESHARE ESTATES.
22  The contract for the sale of a fee interest in a timeshare
23  estate shall also contain, in conspicuous type, the following:
24  FOR THE PURPOSE OF AD VALOREM TAXES OR SPECIAL 
      ASSESSMENTS
25  LEVIED BY TAXING AUTHORITIES AGAINST A FEE INTEREST IN A
26  TIMESHARE ESTATE, THE MANAGING ENTITY IS GENERALLY
       CONSIDERED
27  THE TAXPAYER UNDER FLORIDA LAW.  YOU HAVE THE RIGHT TO
28  CHALLENGE AN ASSESSMENT BY A TAXING AUTHORITY RELATING TO 
       YOUR
29  TIMESHARE ESTATE PURSUANT TO THE PROVISIONS OF CHAPTER 194,
30  FLORIDA STATUTES.
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 1         Section 4.  Subsection (3) is added to section 718.506,
 2  Florida Statutes, to read:
 3         718.506  Publication of false and misleading
 4  information.--
 5         (3)  A person has no cause of action against a
 6  developer for any oral representation or information that is
 7  not contained in the developer's advertising and promotional
 8  materials, including, but not limited to, a prospectus, the
 9  items required as exhibits to a prospectus, brochures, or
10  newspaper advertising.
11         Section 5.  This act shall take effect July 1, 2004.
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13            *****************************************
14                          SENATE SUMMARY
15    Requires prelitigation disclosure to and approval by
         condominium owners. Requires a disclosure. Provides that
16    a prelitigation disclosure is not admissible in evidence.
        Provides for the effect of actions taken by members of
17    the board of administration of an association. Provides
         requirements for developer disclosure in certain
18    contracts for the sale or lease of a residential unit.
         Abrogates the right to a cause of action against a
19    developer for an oral representation or information that
        is not in certain required developer's promotional
20    materials.
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CODING: Words stricken are deletions; words underlined are additions.