HB 391
Relating to Community Associations

 H391    GENERAL BILL by Domino (CS by Judiciary Appropriations (FC)) (Compare  H 0839, H 0957, S 0546, S 2358, S 2530)
Community Associations; provides for revival of certain covenants that
have lapsed; prohibits local ordinances that limit access of certain
persons to beaches that adjoin condominiums; requires association to
provide certain information to prospective purchasers or lienholders;
provides for architectural control covenants & parcel owner
improvements; revises provisions re dispute resolution, etc. Amends FS.
EFFECTIVE DATE: 07/01/2006 except as otherwise provided.
11/14/05 HOUSE Filed
12/23/05 HOUSE Referred to Civil Justice (JC); Justice Appropriations (FC);
                  Justice Council
12/30/05 HOUSE Original reference(s) removed: Justice Appropriations (FC);
                  Referred to- Civil Justice (JC); Judiciary Appropriations
                  (FC); Justice Council
01/13/06 HOUSE On Committee agenda-- Civil Justice (JC), 01/25/06, 9:30 am,
01/25/06 HOUSE Favorable with CS amendment by Civil Justice (JC); YEAS 6
                  NAYS 0
02/06/06 HOUSE Pending review of CS under Rule 6.3(b); Now in Judiciary
                  Appropriations (FC)
03/07/06 HOUSE Introduced, referred to Civil Justice (JC); Justice
                  Appropriations (FC); Justice Council -HJ 00037; Original
                  reference(s) removed: Justice Appropriations (FC) -HJ 00132;
                  Referred to- Civil Justice (JC); Judiciary Appropriations
                  (FC); Justice Council -HJ 00132; 


                  Civil Justice Committee --- On agenda for: 01/25/06 9:30 AM 
                  Favorable With Committee Substitute (final action)
; YEAS 6 NAYS 0 -

                  HJ  00138;
                  Pending review of CS under Rule 6.3(b); Now in Judiciary
                  Appropriations (FC) -HJ 00138
03/31/06 HOUSE On Committee agenda-- Judiciary Appropriations (FC),
                  04/04/06, 4:00 pm Or Upon Adjournment of the Fiscal Council,
04/04/06 HOUSE Favorable with CS amendment by Judiciary Appropriations (FC);
                  YEAS 4 NAYS 0
04/10/06 HOUSE Pending review of CS under Rule 6.3(b); Now in Justice

CODING: Words stricken are deletions; words underlined are additions. 
1 The Judiciary Appropriations Committee recommends the following:
3      Council/Committee Substitute
4      Remove the entire bill and insert:
A bill to be entitled
6 An act relating to community associations; creating s.
7 712.11, F.S.; providing for the revival of certain
8 covenants that have lapsed; amending s. 718.106, F.S.;
9 prohibiting local ordinances that limit the access of
10 certain persons to beaches that adjoin condominiums;
11 amending s. 718.110, F.S.; revising provisions relating to
12 the amendment of declarations; providing legislative
13 findings and a finding of compelling state interest;
14 providing criteria for consent to an amendment; requiring
15 notice regarding proposed amendments to mortgagees;
16 providing criteria for notification; providing for voiding
17 certain amendments; amending s. 718.112, F.S.; revising
18 the implementation date for retrofitting of common areas
19 with a sprinkler system; amending s. 718.114, F.S.;
20 providing that certain leaseholds, memberships, or other
21 possessory or use interests shall be considered a material
22 alteration or substantial addition to certain real
23 property; amending s. 718.404, F.S.; providing retroactive
24 application of provisions relating to mixed-use
25 condominiums; amending s. 719.103, F.S.; providing a
26 definition; amending s. 719.507, F.S.; prohibiting laws,
27 ordinances, or regulations that apply only to improvements
28 that are or may be subjected to an equity club form of
29 ownership; amending s. 720.302, F.S.; revising governing
30 provisions relating to corporations that operate
31 residential homeowners' associations; amending s. 720.303,
32 F.S.; revising application to include certain meetings;
33 requiring the association to provide certain information
34 to prospective purchasers or lienholders; authorizing the
35 association to charge a reasonable fee for providing
36 certain information; requiring the budget to provide for
37 annual operating expenses; authorizing the budget to
38 include reserve accounts for capital expenditures and
39 deferred maintenance; providing a formula for calculating
40 the amount to be reserved; authorizing the association to
41 adjust replacement reserve assessments annually;
42 authorizing the developer to vote to waive the reserves or
43 reduce the funding of reserves for a certain period;
44 revising provisions relating to financial reporting;
45 revising time periods in which the association must
46 complete its reporting; repealing s. 720.303(2), F.S., as
47 amended, relating to board meetings, to remove conflicting
48 versions of that subsection; creating s. 720.3035, F.S.;
49 providing for architectural control covenants and parcel
50 owner improvements; authorizing the review and approval of
51 plans and specifications; providing limitations; providing
52 rights and privileges for parcel owners as set forth in
53 the declaration of covenants; amending s. 720.305, F.S.;
54 providing that, where a member is entitled to collect
55 attorney's fees against the association, the member may
56 also recover additional amounts as determined by the
57 court; amending s. 720.306, F.S.; providing that certain
58 mergers or consolidations of an association shall not be
59 considered a material or adverse alteration of the
60 proportionate voting interest appurtenant to a parcel;
61 amending s. 720.307, F.S.; requiring developers to deliver
62 financial records to the board in any transition of
63 association control to members; requiring certain
64 information to be included in the records and for the
65 records to be prepared in a specified manner; amending s.
66 720.308, F.S.; providing circumstances under which a
67 guarantee of common expenses shall be effective; providing
68 for approval of the guarantee by association members;
69 providing for a guarantee period and extension thereof;
70 requiring the stated dollar amount of the guarantee to be
71 an exact dollar amount for each parcel identified in the
72 declaration; providing payments required from the
73 guarantor to be determined in a certain manner; providing
74 a formula to determine the guarantor's total financial
75 obligation to the association; providing that certain
76 expenses incurred in the production of certain revenues
77 shall not be included in the operating expenses; amending
78 s. 720.311, F.S.; revising provisions relating to dispute
79 resolution; providing that the filing of any petition for
80 arbitration or the serving of an offer for presuit
81 mediation shall toll the applicable statute of
82 limitations; providing that certain disputes between an
83 association and a parcel owner shall be subject to presuit
84 mediation; revising provisions to conform; providing that
85 temporary injunctive relief may be sought in certain
86 disputes subject to presuit mediation; authorizing the
87 court to refer the parties to mediation under certain
88 circumstances; requiring the aggrieved party to serve on
89 the responding party a written offer to participate in
90 presuit mediation; providing a form for such offer;
91 providing that service of the offer is effected by the
92 sending of such an offer in a certain manner; providing
93 that the prevailing party in any subsequent arbitration or
94 litigation proceedings is entitled to seek recovery of all
95 costs and attorney's fees incurred in the presuit
96 mediation process; requiring the mediator or arbitrator to
97 meet certain certification requirements; removing a
98 requirement relating to development of an education
99 program to increase awareness of the operation of
100 homeowners' associations and the use of alternative
101 dispute resolution techniques; providing effective dates.
103 Be It Enacted by the Legislature of the State of Florida:
105      Section 1.  Section 712.11, Florida Statutes, is created to
106 read:
107      712.11  Covenant revitalization.--A homeowners' association
108 not otherwise subject to chapter 720 may use the procedures set
109 forth in ss. 720.403-720.407 to revive covenants that have
110 lapsed under the terms of this chapter.
111      Section 2.  Subsection (5) is added to section 718.106,
112 Florida Statutes, to read:
113      718.106  Condominium parcels; appurtenances; possession and
114 enjoyment.--
115      (5)  A local ordinance or regulation may not establish any
116 limitation on the ability of unit owners or an association to
117 permit guests, licensees, members, or invitees to use or access
118 their units or common elements for the purpose of accessing a
119 public beach or private beach adjacent to the condominium.
120      Section 3.  Effective October 1, 2006, subsection (11) of
121 section 718.110, Florida Statutes, is amended to read:
122      718.110  Amendment of declaration; correction of error or
123 omission in declaration by circuit court.--
124      (11)  The Legislature finds that the procurement of
125 mortgagee consent to amendments that do not affect the rights or
126 interests of mortgagees is an unreasonable and substantial
127 logistical and financial burden on the unit owners and that
128 there is a compelling state interest in enabling the members of
129 a condominium association to approve amendments to the
130 condominium documents through legal means. Accordingly, and
131 notwithstanding any provision to the contrary contained in this
132 section:
133      (a)  As to any mortgage recorded on or after October 1,
134 2006, any provision in the declaration, articles of
135 incorporation, or bylaws that requires recorded after April 1,
136 1992, may not require the consent or joinder of some or all
137 mortgagees of units or any other portion of the condominium
138 property to or in amendments to the declaration, articles of
139 incorporation, or bylaws or for any other matter shall be
140 enforceable only as to the following matters: unless the
141 requirement is limited to amendments materially affecting the
142 rights or interests of the mortgagees, or as otherwise required
143 by the Federal National Mortgage Association or the Federal Home
144 Loan Mortgage Corporation, and unless the requirement provides
145 that such consent may not be unreasonably withheld. It shall be
146 presumed that, except as to
147      1.  Those matters described in subsections (4) and (8).,
148      2.  Amendments to the declaration, articles of
149 incorporation, or bylaws that adversely affect the priority of
150 the mortgagee's lien or the mortgagee's rights to foreclose its
151 lien or that otherwise materially affect the rights and
152 interests of the mortgagees.
153      (b)  As to mortgages recorded before October 1, 2006, any
154 existing provisions in the declaration, articles of
155 incorporation, or bylaws requiring mortgagee consent shall be
156 enforceable.
157      (c)  In securing consent or joinder, the association shall
158 be entitled to rely upon the public records to identify the
159 holders of outstanding mortgages. The association may use the
160 address provided in the original recorded mortgage document,
161 unless there is a different address for the holder of the
162 mortgage in a recorded assignment or modification of the
163 mortgage, which recorded assignment or modification must
164 reference the official records book and page on which the
165 original mortgage was recorded. Once the association has
166 identified the recorded mortgages of record, the association
167 shall, in writing, request of each unit owner whose unit is
168 encumbered by a mortgage of record any information the owner has
169 in his or her possession regarding the name and address of the
170 person to whom mortgage payments are currently being made.
171 Notice shall be sent to such person if the address provided in
172 the original recorded mortgage document is different from the
173 name and address of the mortgagee or assignee of the mortgage as
174 shown by the public record. The association shall be deemed to
175 have complied with this requirement by making the written
176 request of the unit owners required under this paragraph. Any
177 notices required to be sent to the mortgagees under this
178 paragraph shall be sent to all available addresses provided to
179 the association.
180      (d)  Any notice to the mortgagees required under paragraph
181 (c) may be sent by a method that establishes proof of delivery,
182 and any mortgagee who fails to respond within 60 days after the
183 date of mailing shall be deemed to have consented to the
184 amendment.
185      (e)  For those amendments requiring mortgagee consent on or
186 after October 1, 2006, do not materially affect the rights or
187 interests of mortgagees. in the event mortgagee consent is
188 provided other than by properly recorded joinder, such consent
189 shall be evidenced by affidavit of the association recorded in
190 the public records of the county where the declaration is
191 recorded. Any amendment adopted without the required consent of
192 a mortgagee shall be voidable only by a mortgagee who was
193 entitled to notice and an opportunity to consent. An action to
194 void an amendment shall be subject to the statute of limitations
195 beginning 5 years from the date of discovery as to the
196 amendments described in subparagraph (a)2. and 5 years from the
197 date of recordation of the certificate of amendment for all
198 other amendments. This provision shall apply to all mortgages,
199 regardless of the date of recordation of the mortgage.
200      Section 4.  Paragraph (l) of subsection (2) of section
201 718.112, Florida Statutes, is amended to read:
202      718.112  Bylaws.--
203      (2)  REQUIRED PROVISIONS.--The bylaws shall provide for the
204 following and, if they do not do so, shall be deemed to include
205 the following:
206      (l)  Certificate of compliance.--There shall be a provision
207 that a certificate of compliance from a licensed electrical
208 contractor or electrician may be accepted by the association's
209 board as evidence of compliance of the condominium units with
210 the applicable fire and life safety code. Notwithstanding the
211 provisions of chapter 633 or of any other code, statute,
212 ordinance, administrative rule, or regulation, or any
213 interpretation of the foregoing, an association, condominium, or
214 unit owner is not obligated to retrofit the common elements or
215 units of a residential condominium with a fire sprinkler system
216 or other engineered lifesafety system in a building that has
217 been certified for occupancy by the applicable governmental
218 entity, if the unit owners have voted to forego such
219 retrofitting and engineered lifesafety system by the affirmative
220 vote of two-thirds of all voting interests in the affected
221 condominium. However, a condominium association may not vote to
222 forego the retrofitting with a fire sprinkler system of common
223 areas in a high-rise building. For purposes of this subsection,
224 the term "high-rise building" means a building that is greater
225 than 75 feet in height where the building height is measured
226 from the lowest level of fire department access to the floor of
227 the highest occupiable story. For purposes of this subsection,
228 the term "common areas" means any enclosed hallway, corridor,
229 lobby, stairwell, or entryway. In no event shall the local
230 authority having jurisdiction require completion of retrofitting
231 of common areas with a sprinkler system before the end of 2025
232 2014.
233      1.  A vote to forego retrofitting may be obtained by
234 limited proxy or by a ballot personally cast at a duly called
235 membership meeting, or by execution of a written consent by the
236 member, and shall be effective upon the recording of a
237 certificate attesting to such vote in the public records of the
238 county where the condominium is located. The association shall
239 mail, hand deliver, or electronically transmit to each unit
240 owner written notice at least 14 days prior to such membership
241 meeting in which the vote to forego retrofitting of the required
242 fire sprinkler system is to take place. Within 30 days after the
243 association's opt-out vote, notice of the results of the opt-out
244 vote shall be mailed, hand delivered, or electronically
245 transmitted to all unit owners. Evidence of compliance with this
246 30-day notice shall be made by an affidavit executed by the
247 person providing the notice and filed among the official records
248 of the association. After such notice is provided to each owner,
249 a copy of such notice shall be provided by the current owner to
250 a new owner prior to closing and shall be provided by a unit
251 owner to a renter prior to signing a lease.
252      2.  As part of the information collected annually from
253 condominiums, the division shall require condominium
254 associations to report the membership vote and recording of a
255 certificate under this subsection and, if retrofitting has been
256 undertaken, the per-unit cost of such work. The division shall
257 annually report to the Division of State Fire Marshal of the
258 Department of Financial Services the number of condominiums that
259 have elected to forego retrofitting.
260      Section 5.  Section 718.114, Florida Statutes, is amended
261 to read:
262      718.114  Association powers.--An association has the power
263 to enter into agreements, to acquire leaseholds, memberships,
264 and other possessory or use interests in lands or facilities
265 such as country clubs, golf courses, marinas, and other
266 recreational facilities. It has this power whether or not the
267 lands or facilities are contiguous to the lands of the
268 condominium, if they are intended to provide enjoyment,
269 recreation, or other use or benefit to the unit owners. All of
270 these leaseholds, memberships, and other possessory or use
271 interests existing or created at the time of recording the
272 declaration must be stated and fully described in the
273 declaration. Subsequent to the recording of the declaration,
274 agreements acquiring these leaseholds, memberships, or other
275 possessory or use interests not entered into within 12 months
276 following the recording of the declaration shall be considered a
277 material alteration or substantial addition to the real property
278 that is association property, and the association may not
279 acquire or enter into agreements acquiring these leaseholds,
280 memberships, or other possessory or use interests except as
281 authorized by the declaration as provided in s. 718.113. The
282 declaration may provide that the rental, membership fees,
283 operations, replacements, and other expenses are common expenses
284 and may impose covenants and restrictions concerning their use
285 and may contain other provisions not inconsistent with this
286 chapter. A condominium association may conduct bingo games as
287 provided in s. 849.0931.
288      Section 6.  Subsections (1) and (2) of section 718.404,
289 Florida Statutes, are amended to read:
290      718.404  Mixed-use condominiums.--When a condominium
291 consists of both residential and commercial units, the following
292 provisions shall apply:
293      (1)  The condominium documents shall not provide that the
294 owner of any commercial unit shall have the authority to veto
295 amendments to the declaration, articles of incorporation,
296 bylaws, or rules or regulations of the association. This
297 subsection shall apply retroactively as a remedial measure.
298      (2)  Subject to s. 718.301, where the number of residential
299 units in the condominium equals or exceeds 50 percent of the
300 total units operated by the association, owners of the
301 residential units shall be entitled to vote for a majority of
302 the seats on the board of administration. This subsection shall
303 apply retroactively as a remedial measure.
304      Section 7.  Subsections (18) through (27) of section
305 719.103, Florida Statutes, are renumbered as subsections (19)
306 through (28), respectively, and a new subsection (18) is added
307 to that section to read:
308      719.103  Definitions.--As used in this chapter:
309      (18)  "Equity facilities club" means a club comprised of
310 recreational facilities in which proprietary membership
311 interests are sold to individuals, which membership interests
312 entitle the individuals to use certain physical facilities owned
313 by the equity club. Such physical facilities do not include a
314 residential unit or accommodation. For purposes of this
315 definition, the term "accommodation" shall include, but is not
316 limited to, any apartment, residential cooperative unit,
317 residential condominium unit, cabin, lodge, hotel or motel room,
318 or any other accommodation designed for overnight occupancy for
319 one or more individuals.
320      Section 8.  Section 719.507, Florida Statutes, is amended
321 to read:
322      719.507  Zoning and building laws, ordinances, and
323 regulations.--All laws, ordinances, and regulations concerning
324 buildings or zoning shall be construed and applied with
325 reference to the nature and use of such property, without regard
326 to the form of ownership. No law, ordinance, or regulation shall
327 establish any requirement concerning the use, location,
328 placement, or construction of buildings or other improvements
329 which are, or may thereafter be, subjected to the cooperative or
330 equity facilities club form of ownership, unless such
331 requirement shall be equally applicable to all buildings and
332 improvements of the same kind not then, or thereafter to be,
333 subjected to the cooperative or equity facilities club form of
334 ownership. This section does not apply if the owner in fee of
335 any land enters into and records a covenant that existing
336 improvements or improvements to be constructed shall not be
337 converted to the cooperative form of residential ownership prior
338 to 5 years after the later of the date of the covenant or
339 completion date of the improvements. Such covenant shall be
340 entered into with the governing body of the municipality in
341 which the land is located or, if the land is not located in a
342 municipality, with the governing body of the county in which the
343 land is located.
344      Section 9.  Subsections (4) and (5) of section 720.302,
345 Florida Statutes, are amended to read:
346      720.302  Purposes, scope, and application.--
347      (4)  This chapter does not apply to any association that is
348 subject to regulation under chapter 718, chapter 719, or chapter
349 721; or to any nonmandatory association formed under chapter
350 723, except to the extent that a provision of chapter 718,
351 chapter 719, or chapter 721 is expressly incorporated into this
352 chapter for the purpose of regulating homeowners' associations.
353      (5)  Unless expressly stated to the contrary, corporations
354 not for profit that operate residential homeowners' associations
355 in this state shall be governed by and subject to chapter 607,
356 if the association was incorporated under that chapter, or to
357 chapter 617, if the association was incorporated under that
358 chapter, and this chapter. This subsection is intended to
359 clarify existing law.
360      Section 10.  Paragraph (a) of subsection (2), subsection
361 (6), and subsection (7) of section 720.303, Florida Statutes, as
362 amended by section 18 of chapter 2004-345 and section 135 of
363 chapter 2005-2, Laws of Florida, are amended, and paragraph (d)
364 is added to subsection (5) of that section, to read:
365      720.303  Association powers and duties; meetings of board;
366 official records; budgets; financial reporting; association
367 funds; recalls.--
368      (2)  BOARD MEETINGS.--
369      (a)  A meeting of the board of directors of an association
370 occurs whenever a quorum of the board gathers to conduct
371 association business. All meetings of the board must be open to
372 all members except for meetings between the board and its
373 attorney with respect to proposed or pending litigation where
374 the contents of the discussion would otherwise be governed by
375 the attorney-client privilege. The provisions of this subsection
376 shall also apply to the meetings of any committee or other
377 similar body when a final decision will be made regarding the
378 expenditure of association funds and to meetings of any body
379 vested with the power to approve or disapprove architectural
380 decisions with respect to a specific parcel of residential
381 property owned by a member of the community.
382      (5)  INSPECTION AND COPYING OF RECORDS.--The official
383 records shall be maintained within the state and must be open to
384 inspection and available for photocopying by members or their
385 authorized agents at reasonable times and places within 10
386 business days after receipt of a written request for access.
387 This subsection may be complied with by having a copy of the
388 official records available for inspection or copying in the
389 community. If the association has a photocopy machine available
390 where the records are maintained, it must provide parcel owners
391 with copies on request during the inspection if the entire
392 request is limited to no more than 25 pages.
393      (d)  The association or its authorized agent is not
394 required to provide a prospective purchaser or lienholder with
395 information about the residential subdivision or the association
396 other than information or documents required by this chapter to
397 be made available or disclosed. The association or its
398 authorized agent may charge a reasonable fee to the prospective
399 purchaser or lienholder or the current parcel owner or member
400 for providing good faith responses to requests for information
401 by or on behalf of a prospective purchaser or lienholder, other
402 than that required by law, if the fee does not exceed $50 plus
403 the reasonable cost of photocopying and any attorney's fees
404 incurred by the association in connection with the response.
405      (6)  BUDGETS.--
406      (a)  The association shall prepare an annual budget that
407 sets out the annual operating expenses. The budget must reflect
408 the estimated revenues and expenses for that year and the
409 estimated surplus or deficit as of the end of the current year.
410 The budget must set out separately all fees or charges paid for
411 by the association for recreational amenities, whether owned by
412 the association, the developer, or another person. The
413 association shall provide each member with a copy of the annual
414 budget or a written notice that a copy of the budget is
415 available upon request at no charge to the member. The copy must
416 be provided to the member within the time limits set forth in
417 subsection (5).
418      (b)  In addition to annual operating expenses, the budget
419 may include reserve accounts for capital expenditures and
420 deferred maintenance for which the association is responsible to
421 the extent that the governing documents do not limit increases
422 in assessments, including reserves. If the budget of the
423 association includes reserve accounts, such reserves shall be
424 determined, maintained, and waived in the manner provided in
425 this subsection. Once an association provides for reserve
426 accounts in the budget, the association shall thereafter
427 determine, maintain, and waive reserves in compliance with the
428 provisions of this subsection.
429      (c)  If the budget of the association does not provide for
430 reserve accounts governed by this subsection and the association
431 is responsible for the repair and maintenance of capital
432 improvements that may result in a special assessment if reserves
433 are not provided, each financial report for the preceding fiscal
434 year required by subsection (7) shall contain the following
435 statement in conspicuous type: THE BUDGET OF THE ASSOCIATION
442      (d)  An association shall be deemed to have provided for
443 reserve accounts when reserve accounts have been initially
444 established by the developer or when the membership of the
445 association affirmatively elects to provide for reserves. If
446 reserve accounts are not initially provided for by the
447 developer, the membership of the association may elect to do so
448 upon the affirmative approval of not less than a majority of the
449 total voting interests of the association. Such approval may be
450 attained by vote of the members at a duly called meeting of the
451 membership or upon a written consent executed by not less than a
452 majority of the total voting interests in the community. The
453 approval action of the membership shall state that reserve
454 accounts shall be provided for in the budget and designate the
455 components for which the reserve accounts are to be established.
456 Upon approval by the membership, the board of directors shall
457 provide for the required reserve accounts for inclusion in the
458 budget in the next fiscal year following the approval and in
459 each year thereafter. Once established as provided in this
460 subsection, the reserve accounts shall be funded or maintained
461 or shall have their funding waived in the manner provided in
462 paragraph (f).
463      (e)  The amount to be reserved in any account established
464 shall be computed by means of a formula that is based upon
465 estimated remaining useful life and estimated replacement cost
466 or deferred maintenance expense of each reserve item. The
467 association may adjust replacement reserve assessments annually
468 to take into account any changes in estimates of cost or useful
469 life of a reserve item.
470      (f)  Once a reserve account or reserve accounts are
471 established, the membership of the association, upon a majority
472 vote at a meeting at which a quorum is present, may provide for
473 no reserves or less reserves than required by this section. If a
474 meeting of the unit owners has been called to determine whether
475 to waive or reduce the funding of reserves and no such result is
476 achieved or a quorum is not present, the reserves as included in
477 the budget shall go into effect. After the turnover, the
478 developer may vote its voting interest to waive or reduce the
479 funding of reserves. Any vote taken pursuant to this subsection
480 to waive or reduce reserves shall be applicable only to one
481 budget year.
482      (g)  Funding formulas for reserves authorized by this
483 section shall be based on either a separate analysis of each of
484 the required assets or a pooled analysis of two or more of the
485 required assets.
486      1.  If the association maintains separate reserve accounts
487 for each of the required assets, the amount of the contribution
488 to each reserve account shall be the sum of the following two
489 calculations:
490      a.  The total amount necessary, if any, to bring a negative
491 component balance to zero.
492      b.  The total estimated deferred maintenance expense or
493 estimated replacement cost of the reserve component less the
494 estimated balance of the reserve component as of the beginning
495 of the period for which the budget will be in effect. The
496 remainder, if greater than zero, shall be divided by the
497 estimated remaining useful life of the component.
499 The formula may be adjusted each year for changes in estimates
500 and deferred maintenance performed during the year and may
501 include factors such as inflation and earnings on invested
502 funds.
503      2.  If the association maintains a pooled account of two or
504 more of the required reserve assets, the amount of the
505 contribution to the pooled reserve account as disclosed on the
506 proposed budget shall not be less than that required to ensure
507 that the balance on hand at the beginning of the period for
508 which the budget will go into effect plus the projected annual
509 cash inflows over the remaining estimated useful life of all of
510 the assets that make up the reserve pool are equal to or greater
511 than the projected annual cash outflows over the remaining
512 estimated useful lives of all of the assets that make up the
513 reserve pool, based on the current reserve analysis. The
514 projected annual cash inflows may include estimated earnings
515 from investment of principal. The reserve funding formula shall
516 not include any type of balloon payments.
517      (h)  Reserve funds and any interest accruing thereon shall
518 remain in the reserve account or accounts and shall be used only
519 for authorized reserve expenditures unless their use for other
520 purposes is approved in advance by a majority vote at a meeting
521 at which a quorum is present. Prior to turnover of control of an
522 association by a developer to parcel owners, the developer-
523 controlled association shall not vote to use reserves for
524 purposes other than those for which they were intended without
525 the approval of a majority of all nondeveloper voting interests
526 voting in person or by limited proxy at a duly called meeting of
527 the association.
528      (7)  FINANCIAL REPORTING.--Within 90 days after the end of
529 the fiscal year, or annually on the date provided in the bylaws,
530 the association shall prepare and complete, or contract with a
531 third party for the preparation and completion of, a financial
532 report for the preceding fiscal year. Within 21 days after the
533 final financial report is completed by the association or
534 received from the third party, but not later than 120 days after
535 the end of the fiscal year or other date as provided in the
536 bylaws, the association shall prepare an annual financial report
537 within 60 days after the close of the fiscal year. The
538 association shall, within the time limits set forth in
539 subsection (5), provide each member with a copy of the annual
540 financial report or a written notice that a copy of the
541 financial report is available upon request at no charge to the
542 member. Financial reports shall be prepared as follows:
543      (a)  An association that meets the criteria of this
544 paragraph shall prepare or cause to be prepared a complete set
545 of financial statements in accordance with generally accepted
546 accounting principles as adopted by the Board of Accountancy.
547 The financial statements shall be based upon the association's
548 total annual revenues, as follows:
549      1.  An association with total annual revenues of $100,000
550 or more, but less than $200,000, shall prepare compiled
551 financial statements.
552      2.  An association with total annual revenues of at least
553 $200,000, but less than $400,000, shall prepare reviewed
554 financial statements.
555      3.  An association with total annual revenues of $400,000
556 or more shall prepare audited financial statements.
557      (b)1.  An association with total annual revenues of less
558 than $100,000 shall prepare a report of cash receipts and
559 expenditures.
560      2.  An association in a community of fewer than 50 parcels,
561 regardless of the association's annual revenues, may prepare a
562 report of cash receipts and expenditures in lieu of financial
563 statements required by paragraph (a) unless the governing
564 documents provide otherwise.
565      3.  A report of cash receipts and disbursement must
566 disclose the amount of receipts by accounts and receipt
567 classifications and the amount of expenses by accounts and
568 expense classifications, including, but not limited to, the
569 following, as applicable: costs for security, professional, and
570 management fees and expenses; taxes; costs for recreation
571 facilities; expenses for refuse collection and utility services;
572 expenses for lawn care; costs for building maintenance and
573 repair; insurance costs; administration and salary expenses; and
574 reserves if maintained by the association.
575      (c)  If 20 percent of the parcel owners petition the board
576 for a level of financial reporting higher than that required by
577 this section, the association shall duly notice and hold a
578 meeting of members within 30 days of receipt of the petition for
579 the purpose of voting on raising the level of reporting for that
580 fiscal year. Upon approval of a majority of the total voting
581 interests of the parcel owners, the association shall prepare or
582 cause to be prepared, shall amend the budget or adopt a special
583 assessment to pay for the financial report regardless of any
584 provision to the contrary in the governing documents, and shall
585 provide within 90 days of the meeting or the end of the fiscal
586 year, whichever occurs later:
587      1.  Compiled, reviewed, or audited financial statements, if
588 the association is otherwise required to prepare a report of
589 cash receipts and expenditures;
590      2.  Reviewed or audited financial statements, if the
591 association is otherwise required to prepare compiled financial
592 statements; or
593      3.  Audited financial statements if the association is
594 otherwise required to prepare reviewed financial statements.
595      (d)  If approved by a majority of the voting interests
596 present at a properly called meeting of the association, an
597 association may prepare or cause to be prepared:
598      1.  A report of cash receipts and expenditures in lieu of a
599 compiled, reviewed, or audited financial statement;
600      2.  A report of cash receipts and expenditures or a
601 compiled financial statement in lieu of a reviewed or audited
602 financial statement; or
603      3.  A report of cash receipts and expenditures, a compiled
604 financial statement, or a reviewed financial statement in lieu
605 of an audited financial statement.
606      Section 11.  Subsection (2) of section 720.303, Florida
607 Statutes, as amended by section 2 of chapter 2004-345 and
608 section 15 of chapter 2004-353, Laws of Florida, is repealed.
609      Section 12.  Section 720.3035, Florida Statutes, is created
610 to read:
611      720.3035  Architectural control covenants; parcel owner
612 improvements; rights and privileges.--
613      (1)  The authority of an association or any architectural,
614 construction improvement, or other such similar committee of an
615 association to review and approve plans and specifications for
616 the location, size, type, or appearance of any structure or
617 other improvement on a parcel, or to enforce standards for the
618 external appearance of any structure or improvement located on a
619 parcel, shall only be permitted to the extent that the authority
620 is specifically stated or reasonably inferred as to such
621 location, size, type, or appearance in the declaration of
622 covenants or other published guidelines and standards authorized
623 by the declaration of covenants.
624      (2)  If the declaration of covenants or other published
625 guidelines and standards authorized by the declaration of
626 covenants provides options for the use of material, the size of
627 the structure or improvement, the design of the structure or
628 improvement, or the location of the structure or improvement on
629 the parcel, neither the association nor any architectural,
630 construction improvement, or other such similar committee of the
631 association shall restrict the right of a parcel owner to select
632 from the options provided in the declaration of covenants or
633 other published guidelines and standards authorized by the
634 declaration of covenants.
635      (3)  Unless otherwise specifically stated in the
636 declaration of covenants or other published guidelines and
637 standards authorized by the declaration of covenants, each
638 parcel shall be deemed to have only one front for purposes of
639 determining the required front setback even if the parcel is
640 bounded by a roadway or other easement on more than one side.
641 When the declaration of covenants or other published guidelines
642 and standards authorized by the declaration of covenants do not
643 provide for specific setback limitations, the applicable county
644 or municipal setback limitations shall apply, and neither the
645 association nor any architectural, construction improvement, or
646 other such similar committee of the association shall enforce or
647 attempt to enforce any setback limitation that is inconsistent
648 with the applicable county or municipal standard or standards.
649      (4)  Each parcel owner shall be entitled to the rights and
650 privileges set forth in the declaration of covenants or other
651 published guidelines and standards authorized by the declaration
652 of covenants concerning the use of the parcel, and the
653 construction of permitted structures and improvements on the
654 parcel and such rights and privileges shall not be unreasonably
655 infringed upon or impaired by the association or any
656 architectural, construction improvement, or other such similar
657 committee of the association. If the association or any
658 architectural, construction improvement, or other such similar
659 committee of the association should knowingly and willfully
660 infringe upon or impair the rights and privileges set forth in
661 the declaration of covenants or other published guidelines and
662 standards authorized by the declaration of covenants, the
663 adversely affected parcel owner shall be entitled to recover
664 damages caused by such infringement or impairment, including any
665 costs and reasonable attorney's fees incurred in preserving or
666 restoring the rights and privileges of the parcel owner set
667 forth in the declaration of covenants or other published
668 guidelines and standards authorized by the declaration of
669 covenants.
670      (5)  Neither the association nor any architectural,
671 construction improvement, or other such similar committee of the
672 association shall enforce any policy or restriction that is
673 inconsistent with the rights and privileges of a parcel owner
674 set forth in the declaration of covenants or other published
675 guidelines and standards authorized by the declaration of
676 covenants, whether uniformly applied or not. Neither the
677 association nor any architectural, construction improvement, or
678 other such similar committee of the association may rely upon a
679 policy or restriction that is inconsistent with the declaration
680 of covenants or other published guidelines and standards
681 authorized by the declaration of covenants, whether uniformly
682 applied or not, in defense of any action taken in the name of or
683 on behalf of the association against a parcel owner.
684      Section 13.  Subsection (1) of section 720.305, Florida
685 Statutes, is amended to read:
686      720.305  Obligations of members; remedies at law or in
687 equity; levy of fines and suspension of use rights; failure to
688 fill sufficient number of vacancies on board of directors to
689 constitute a quorum; appointment of receiver upon petition of
690 any member.--
691      (1)  Each member and the member's tenants, guests, and
692 invitees, and each association, are governed by, and must comply
693 with, this chapter, the governing documents of the community,
694 and the rules of the association. Actions at law or in equity,
695 or both, to redress alleged failure or refusal to comply with
696 these provisions may be brought by the association or by any
697 member against:
698      (a)  The association;
699      (b)  A member;
700      (c)  Any director or officer of an association who
701 willfully and knowingly fails to comply with these provisions;
702 and
703      (d)  Any tenants, guests, or invitees occupying a parcel or
704 using the common areas.
706 The prevailing party in any such litigation is entitled to
707 recover reasonable attorney's fees and costs. A member
708 prevailing in an action between the association and the member
709 under this section, in addition to recovering his or her
710 reasonable attorney's fees, may recover additional amounts as
711 determined by the court to be necessary to reimburse the member
712 for his or her share of assessments levied by the association to
713 fund its expenses of the litigation. This relief does not
714 exclude other remedies provided by law. This section does not
715 deprive any person of any other available right or remedy.
716      Section 14.  Paragraph (c) of subsection (1) of section
717 720.306, Florida Statutes, is amended to read:
718      720.306  Meetings of members; voting and election
719 procedures; amendments.--
720      (1)  QUORUM; AMENDMENTS.--
721      (c)  Unless otherwise provided in the governing documents
722 as originally recorded or permitted by this chapter or chapter
723 617, an amendment may not materially and adversely alter the
724 proportionate voting interest appurtenant to a parcel or
725 increase the proportion or percentage by which a parcel shares
726 in the common expenses of the association unless the record
727 parcel owner and all record owners of liens on the parcels join
728 in the execution of the amendment. For purposes of this section,
729 a change in quorum requirements is not an alteration of voting
730 interests. The merger or consolidation of one or more
731 associations under a plan of merger or consolidation under
732 chapter 607 or chapter 617 shall not be considered a material or
733 adverse alteration of the proportionate voting interest
734 appurtenant to a parcel.
735      Section 15.  Paragraph (t) is added to subsection (3) of
736 section 720.307, Florida Statutes, to read:
737      720.307  Transition of association control in a
738 community.--With respect to homeowners' associations:
739      (3)  At the time the members are entitled to elect at least
740 a majority of the board of directors of the homeowners'
741 association, the developer shall, at the developer's expense,
742 within no more than 90 days deliver the following documents to
743 the board:
744      (t)  The financial records, including financial statements
745 of the association, and source documents from the incorporation
746 of the association through the date of turnover. The records
747 shall be audited by an independent certified public accountant
748 for the period from the incorporation of the association or from
749 the period covered by the last audit, if an audit has been
750 performed for each fiscal year since incorporation. All
751 financial statements shall be prepared in accordance with
752 generally accepted accounting principles and shall be audited in
753 accordance with generally accepted auditing standards, as
754 prescribed by the Board of Accountancy, pursuant to chapter 473.
755 The certified public accountant performing the audit shall
756 examine to the extent necessary supporting documents and
757 records, including the cash disbursements and related paid
758 invoices to determine if expenditures were for association
759 purposes and the billings, cash receipts, and related records of
760 the association to determine that the developer was charged and
761 paid the proper amounts of assessments. This paragraph applies
762 to associations with a date of incorporation after December 31,
763 2006.
764      Section 16.  Section 720.308, Florida Statutes, is amended
765 to read:
766      720.308  Assessments and charges.--
767      (1)  ASSESSMENTS.--For any community created after October
768 1, 1995, the governing documents must describe the manner in
769 which expenses are shared and specify the member's proportional
770 share thereof. Assessments levied pursuant to the annual budget
771 or special assessment must be in the member's proportional share
772 of expenses as described in the governing document, which share
773 may be different among classes of parcels based upon the state
774 of development thereof, levels of services received by the
775 applicable members, or other relevant factors. While the
776 developer is in control of the homeowners' association, it may
777 be excused from payment of its share of the operating expenses
778 and assessments related to its parcels for any period of time
779 for which the developer has, in the declaration, obligated
780 itself to pay any operating expenses incurred that exceed the
781 assessments receivable from other members and other income of
782 the association. This section does not apply to an association,
783 no matter when created, if the association is created in a
784 community that is included in an effective development-of-
785 regional-impact development order as of the effective date of
786 this act, together with any approved modifications thereto.
788      (a)  Establishment of a guarantee.--If a guarantee of the
789 assessments of parcel owners is not included in the purchase
790 contracts or declaration, any agreement establishing a guarantee
791 shall only be effective upon the approval of a majority of the
792 voting interests of the members other than the developer.
793 Approval shall be expressed at a meeting of the members voting
794 in person or by limited proxy or by agreement in writing without
795 a meeting if provided in the bylaws. Such guarantee shall meet
796 the requirements of this section.
797      (b)  Guarantee period.--The period of time for the
798 guarantee shall be indicated by a specific beginning and ending
799 date or event.
800      1.  The ending date or event shall be the same for all of
801 the members of an association, including members in different
802 phases of the development.
803      2.  The guarantee may provide for different intervals of
804 time during a guarantee period with different dollar amounts for
805 each such interval.
806      3.  The guarantee may provide that after the initial stated
807 period, the developer has an option to extend the guarantee for
808 one or more additional stated periods. The extension of a
809 guarantee is limited to extending the ending date or event;
810 therefore, the developer does not have the option of changing
811 the level of assessments guaranteed.
812      (3)  MAXIMUM LEVEL OF ASSESSMENTS.--The stated dollar
813 amount of the guarantee shall be an exact dollar amount for each
814 parcel identified in the declaration. Regardless of the stated
815 dollar amount of the guarantee, assessments charged to a member
816 shall not exceed the maximum obligation of the member based on
817 the total amount of the adopted budget and the member's
818 proportionate ownership share of the common elements.
820 payments required from the guarantor during the guarantee period
821 shall be determined as follows:
822      (a)  If at any time during the guarantee period the funds
823 collected from member assessments at the guaranteed level and
824 other revenues collected by the association are not sufficient
825 to provide payment, on a timely basis, of all assessments,
826 including the full funding of the reserves unless properly
827 waived, the guarantor shall advance sufficient cash to the
828 association at the time such payments are due.
829      (b)  Expenses incurred in the production of nonassessment
830 revenues, not in excess of the nonassessment revenues, shall not
831 be included in the assessments. If the expenses attributable to
832 nonassessment revenues exceed nonassessment revenues, only the
833 excess expenses must be funded by the guarantor. Interest earned
834 on the investment of association funds may be used to pay the
835 income tax expense incurred as a result of the investment; such
836 expense shall not be charged to the guarantor; and the net
837 investment income shall be retained by the association. Each
838 such nonassessment-revenue-generating activity shall be
839 considered separately. Any portion of the parcel assessment that
840 is budgeted for designated capital contributions of the
841 association shall not be used to pay operating expenses.
843 guarantor's total financial obligation to the association at the
844 end of the guarantee period shall be determined on the accrual
845 basis using the following formula: the guarantor shall pay any
846 deficits that exceed the guaranteed amount, less the total
847 regular periodic assessments earned by the association from the
848 members other than the guarantor during the guarantee period
849 regardless of whether the actual level charged was less than the
850 maximum guaranteed amount.
851      (6)  EXPENSES.--Expenses incurred in the production of
852 nonassessment revenues, not in excess of the nonassessment
853 revenues, shall not be included in the operating expenses. If
854 the expenses attributable to nonassessment revenues exceed
855 nonassessment revenues, only the excess expenses must be funded
856 by the guarantor. Interest earned on the investment of
857 association funds may be used to pay the income tax expense
858 incurred as a result of the investment; such expense shall not
859 be charged to the guarantor; and the net investment income shall
860 be retained by the association. Each such nonassessment-revenue-
861 generating activity shall be considered separately. Any portion
862 of the parcel assessment that is budgeted for designated capital
863 contributions of the association shall not be used to pay
864 operating expenses.
865      Section 17.  Section 720.311, Florida Statutes, is amended
866 to read:
867      720.311  Dispute resolution.--
868      (1)  The Legislature finds that alternative dispute
869 resolution has made progress in reducing court dockets and
870 trials and in offering a more efficient, cost-effective option
871 to litigation. The filing of any petition for mediation or
872 arbitration or the serving of an offer for presuit mediation as
873 provided for in this section shall toll the applicable statute
874 of limitations. Any recall dispute filed with the department
875 pursuant to s. 720.303(10) shall be conducted by the department
876 in accordance with the provisions of ss. 718.112(2)(j) and
877 718.1255 and the rules adopted by the division. In addition, the
878 department shall conduct mandatory binding arbitration of
879 election disputes between a member and an association pursuant
880 to s. 718.1255 and rules adopted by the division. Neither
881 election disputes nor recall disputes are eligible for presuit
882 mediation; these disputes shall be arbitrated by the department.
883 At the conclusion of the proceeding, the department shall charge
884 the parties a fee in an amount adequate to cover all costs and
885 expenses incurred by the department in conducting the
886 proceeding. Initially, the petitioner shall remit a filing fee
887 of at least $200 to the department. The fees paid to the
888 department shall become a recoverable cost in the arbitration
889 proceeding, and the prevailing party in an arbitration
890 proceeding shall recover its reasonable costs and attorney's
891 fees in an amount found reasonable by the arbitrator. The
892 department shall adopt rules to effectuate the purposes of this
893 section.
894      (2)(a)  Disputes between an association and a parcel owner
895 regarding use of or changes to the parcel or the common areas
896 and other covenant enforcement disputes, disputes regarding
897 amendments to the association documents, disputes regarding
898 meetings of the board and committees appointed by the board,
899 membership meetings not including election meetings, and access
900 to the official records of the association shall be the subject
901 of an offer filed with the department for presuit mandatory
902 mediation served by an aggrieved party before the dispute is
903 filed in court. Presuit mediation proceedings must be conducted
904 in accordance with the applicable Florida Rules of Civil
905 Procedure, and these proceedings are privileged and confidential
906 to the same extent as court-ordered mediation. Disputes subject
907 to presuit mediation under this section shall not include the
908 collection of any assessment, fine, or other financial
909 obligation, including attorney's fees and costs, claimed to be
910 due or any action to enforce a prior mediation settlement
911 agreement between the parties. Also, in any dispute subject to
912 presuit mediation under this section where emergency relief is
913 required, a motion for temporary injunctive relief may be filed
914 with the court without first complying with the presuit
915 mediation requirements of this section. After any issues
916 regarding emergency or temporary relief are resolved, the court
917 may either refer the parties to a mediation program administered
918 by the courts or require mediation under this section. An
919 arbitrator or judge may not consider any information or evidence
920 arising from the presuit mediation proceeding except in a
921 proceeding to impose sanctions for failure to attend a presuit
922 mediation session or with the parties' agreement in a proceeding
923 seeking to enforce the agreement. Persons who are not parties to
924 the dispute may not attend the presuit mediation conference
925 without the consent of all parties, except for counsel for the
926 parties and a corporate representative designated by the
927 association. When mediation is attended by a quorum of the
928 board, such mediation is not a board meeting for purposes of
929 notice and participation set forth in s. 720.303. An aggrieved
930 party shall serve on the responding party a written offer to
931 participate in presuit mediation in substantially the following
932 form:
936 The alleged aggrieved party,__________________, hereby
937 offers to _________________, as the responding party,
938 to enter into presuit mediation in connection with the
939 following dispute, which by statute is of a type that
940 is subject to presuit mediation:
942 (List specific nature of the dispute or disputes to be
943 mediated and the authority supporting a finding of a
944 violation as to each dispute.)
946 Pursuant to section 720.311, Florida Statutes, this
947 offer to resolve the dispute through presuit mediation
948 is required before a lawsuit can be filed concerning
949 the dispute. Pursuant to the statute, the aggrieved
950 party is hereby offering to engage in presuit
951 mediation with a neutral third-party mediator in order
952 to attempt to resolve this dispute without court
953 action, and the aggrieved party demands that you
954 likewise agree to this process. If you fail to agree
955 to presuit mediation, or if you agree and later fail
956 to follow through with your agreement to mediate, suit
957 may be brought against you without further warning.
959 The process of mediation involves a supervised
960 negotiation process in which a trained, neutral third-
961 party mediator meets with both parties and assists
962 them in exploring possible opportunities for resolving
963 part or all of the dispute. The mediation process is a
964 voluntary one. By agreeing to participate in presuit
965 mediation, you are not bound in any way to change your
966 position or to enter into any type of agreement.
967 Furthermore, the mediator has no authority to make any
968 decisions in this matter or to determine who is right
969 or wrong and merely acts as a facilitator to ensure
970 that each party understands the position of the other
971 party and that all reasonable settlement options are
972 fully explored. All mediation communications are
973 confidential under the Mediation Confidentiality and
974 Privilege Act pursuant to sections 44.401-44.406,
975 Florida Statutes, and a mediation participant may not
976 disclose a mediation communication to a person other
977 than a mediation participant or a participant's
978 counsel.
980 If an agreement is reached, it shall be reduced to
981 writing and becomes a binding and enforceable
982 commitment of the parties. A resolution of one or more
983 disputes in this fashion avoids the need to litigate
984 these issues in court. The failure to reach an
985 agreement, or the failure of a party to participate in
986 the process, results in the mediator's declaring an
987 impasse in the mediation, after which the aggrieved
988 party may proceed to court on all outstanding,
989 unsettled disputes.
991 The aggrieved party has selected and hereby lists
992 three certified mediators who we believe to be neutral
993 and qualified to mediate the dispute. You have the
994 right to select any one of these mediators. The fact
995 that one party may be familiar with one or more of the
996 listed mediators does not mean that the mediator
997 cannot act as a neutral and impartial facilitator. Any
998 mediator who cannot act in this capacity ethically
999 must decline to accept engagement. The mediators that
1000 we suggest, and their current hourly rates, are as
1001 follows:
1003 (List the names, addresses, telephone numbers, and
1004 hourly rates of the mediators. Other pertinent
1005 information about the background of the mediators may
1006 be included as an attachment.)
1008 You may contact the offices of these mediators to
1009 confirm that the listed mediators will be neutral and
1010 will not show any favoritism toward either party. The
1011 names of certified mediators may be found through the
1012 office of the clerk of the circuit court for this
1013 circuit.
1015 If you agree to participate in the presuit mediation
1016 process, the statute requires that each party is to
1017 pay one-half of the costs and fees involved in the
1018 presuit mediation process unless otherwise agreed by
1019 all parties. An average mediation may require 3 to 4
1020 hours of the mediator's time, including some
1021 preparation time, and each party would need to pay
1022 one-half of the mediator's fees as well as his or her
1023 own attorney's fees if he or she chooses to employ an
1024 attorney in connection with the mediation. However,
1025 use of an attorney is not required and is at the
1026 option of each party. The mediator may require the
1027 advance payment of some or all of the anticipated
1028 fees. The aggrieved party hereby agrees to pay or
1029 prepay one-half of the mediator's estimated fees and
1030 to forward this amount or such other reasonable
1031 advance deposits as the mediator may require for this
1032 purpose. Any funds deposited will be returned to you
1033 if these are in excess of your share of the fees
1034 incurred.
1036 If you agree to participate in presuit mediation in
1037 order to attempt to resolve the dispute and thereby
1038 avoid further legal action, please sign below and
1039 clearly indicate which mediator is acceptable to you.
1040 We will then ask the mediator to schedule a mutually
1041 convenient time and place for the mediation conference
1042 to be held. The mediation conference must be held
1043 within 90 days after the date of this letter unless
1044 extended by mutual written agreement. In the event
1045 that you fail to respond within 20 days after the date
1046 of this letter, or if you fail to agree to at least
1047 one of the mediators that we have suggested and to pay
1048 or prepay to the mediator one-half of the costs
1049 involved, the aggrieved party will be authorized to
1050 proceed with the filing of a lawsuit against you
1051 without further notice and may seek an award of
1052 attorney's fees or costs incurred in attempting to
1053 obtain mediation.
1055 Should you wish, you may also elect to waive presuit
1056 mediation so that this matter may proceed directly to
1057 court.
1059 Therefore, please give this matter your immediate
1060 attention. By law, your response must be mailed by
1061 certified mail, return receipt requested, with an
1062 additional copy being sent by regular first-class mail
1063 to the address shown on this offer.
1065 _____________________
1066 _____________________
1070 CHOICE.
1074 The undersigned hereby agrees to participate in
1075 presuit mediation and agrees to the following mediator
1076 or mediators as acceptable to mediate this dispute:
1078 (List acceptable mediator or mediators.)
1080 I/We further agree to pay or prepay one-half of the
1081 mediator's fees and to forward such advance deposits
1082 as the mediator may require for this purpose.
1084 _______________________
1085 Signature of responding party #1
1087 _______________________
1088 Signature of responding party #2 (if applicable)(if
1089 property is owned by more than one person, all owners
1090 must sign)
1094 The undersigned hereby waives the right to participate
1095 in presuit mediation of the dispute listed above and
1096 agrees to allow the aggrieved party to proceed in
1097 court on such matters.
1099 __________________________
1100 Signature of responding party #1
1102 ___________________________
1103 Signature of responding party #2 (if applicable)(if
1104 property is owned by more than one person, all owners
1105 must sign)
1107      (b)  Service of the statutory offer to participate in
1108 presuit mediation shall be effected by sending a letter in
1109 substantial conformity with the above form by certified mail,
1110 return receipt requested, with an additional copy being sent by
1111 regular first-class mail, to the address of the responding party
1112 as it last appears on the books and records of the association.
1113 The responding party shall have 20 days from the date of the
1114 mailing of the statutory offer to serve a response to the
1115 aggrieved party in writing. The response shall be served by
1116 certified mail, return receipt requested, with an additional
1117 copy being sent by regular first-class mail, to the address
1118 shown on the statutory offer. In the alternative, the responding
1119 party may waive mediation in writing. Notwithstanding the
1120 foregoing, once the parties have agreed on a mediator, the
1121 mediator may reschedule the mediation for a date and time
1122 mutually convenient to the parties. The department shall conduct
1123 the proceedings through the use of department mediators or refer
1124 the disputes to private mediators who have been duly certified
1125 by the department as provided in paragraph (c). The parties
1126 shall share the costs of presuit mediation equally, including
1127 the fee charged by the mediator, if any, unless the parties
1128 agree otherwise, and the mediator may require advance payment of
1129 its reasonable fees and costs. The failure of any party to
1130 respond to a demand or response, to agree upon a mediator, to
1131 make payment of fees and costs within the time established by
1132 the mediator, or to appear for a scheduled mediation session
1133 shall operate as an impasse in the presuit mediation by such
1134 party, entitling the other party to proceed in court and to seek
1135 an award of the costs and fees associated with the mediation.
1136 Additionally, if any presuit mediation session cannot be
1137 scheduled and conducted within 90 days after the offer to
1138 participate in mediation was filed, an impasse shall be deemed
1139 to have occurred unless both parties agree to extend this
1140 deadline. If a department mediator is used, the department may
1141 charge such fee as is necessary to pay expenses of the
1142 mediation, including, but not limited to, the salary and
1143 benefits of the mediator and any travel expenses incurred. The
1144 petitioner shall initially file with the department upon filing
1145 the disputes, a filing fee of $200, which shall be used to
1146 defray the costs of the mediation. At the conclusion of the
1147 mediation, the department shall charge to the parties, to be
1148 shared equally unless otherwise agreed by the parties, such
1149 further fees as are necessary to fully reimburse the department
1150 for all expenses incurred in the mediation.
1151      (c)(b)  If presuit mediation as described in paragraph (a)
1152 is not successful in resolving all issues between the parties,
1153 the parties may file the unresolved dispute in a court of
1154 competent jurisdiction or elect to enter into binding or
1155 nonbinding arbitration pursuant to the procedures set forth in
1156 s. 718.1255 and rules adopted by the division, with the
1157 arbitration proceeding to be conducted by a department
1158 arbitrator or by a private arbitrator certified by the
1159 department. If all parties do not agree to arbitration
1160 proceedings following an unsuccessful presuit mediation, any
1161 party may file the dispute in court. A final order resulting
1162 from nonbinding arbitration is final and enforceable in the
1163 courts if a complaint for trial de novo is not filed in a court
1164 of competent jurisdiction within 30 days after entry of the
1165 order. As to any issue or dispute that is not resolved at
1166 presuit mediation, and as to any issue that is settled at
1167 presuit mediation but is thereafter subject to an action seeking
1168 enforcement of the mediation settlement, the prevailing party in
1169 any subsequent arbitration or litigation proceeding shall be
1170 entitled to seek recovery of all costs and attorney's fees
1171 incurred in the presuit mediation process.
1172      (d)(c)  The department shall develop a certification and
1173 training program for private mediators and private arbitrators
1174 which shall emphasize experience and expertise in the area of
1175 the operation of community associations. A mediator or
1176 arbitrator shall be certified to conduct mediation or
1177 arbitration under this section by the department only if he or
1178 she has been certified as a circuit court civil mediator or
1179 arbitrator, respectively, pursuant to the requirements
1180 established attended at least 20 hours of training in mediation
1181 or arbitration, as appropriate, and only if the applicant has
1182 mediated or arbitrated at least 10 disputes involving community
1183 associations within 5 years prior to the date of the
1184 application, or has mediated or arbitrated 10 disputes in any
1185 area within 5 years prior to the date of application and has
1186 completed 20 hours of training in community association
1187 disputes. In order to be certified by the department, any
1188 mediator must also be certified by the Florida Supreme Court.
1189 The department may conduct the training and certification
1190 program within the department or may contract with an outside
1191 vendor to perform the training or certification. The expenses of
1192 operating the training and certification and training program
1193 shall be paid by the moneys and filing fees generated by the
1194 arbitration of recall and election disputes and by the mediation
1195 of those disputes referred to in this subsection and by the
1196 training fees.
1197      (e)(d)  The presuit mediation procedures provided by this
1198 subsection may be used by a Florida corporation responsible for
1199 the operation of a community in which the voting members are
1200 parcel owners or their representatives, in which membership in
1201 the corporation is not a mandatory condition of parcel
1202 ownership, or which is not authorized to impose an assessment
1203 that may become a lien on the parcel.
1204      (3)  The department shall develop an education program to
1205 assist homeowners, associations, board members, and managers in
1206 understanding and increasing awareness of the operation of
1207 homeowners' associations pursuant to this chapter and in
1208 understanding the use of alternative dispute resolution
1209 techniques in resolving disputes between parcel owners and
1210 associations or between owners. Such education program may
1211 include the development of pamphlets and other written
1212 instructional guides, the holding of classes and meetings by
1213 department employees or outside vendors, as the department
1214 determines, and the creation and maintenance of a website
1215 containing instructional materials. The expenses of operating
1216 the education program shall be initially paid by the moneys and
1217 filing fees generated by the arbitration of recall and election
1218 disputes and by the mediation of those disputes referred to in
1219 this subsection.
1220      Section 18.  Except as otherwise expressly provided in this

act, this act shall take effect July 1, 2006.

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