H391    GENERAL BILL by Domino (Compare S 0546)(S 2530)
Community Associations; provides for revival of certain declarations
that have extinguished; requires holder of recorded mortgage on
condominium unit that requires consent or joinder of mortgagee to
amendment to provide certain info. to condominium association; requires
notice re proposed amendments to mortgagees; revises governing
provisions re corporations not for profit that operate residential
homeowners' associations, etc. Amends Ch. 720, 718.110; creates 712.11.
EFFECTIVE DATE: 07/01/2006 except as otherwise provided.

• 11/14/05 HOUSE Filed

• Civil Justice Committee --- On agenda for: 01/25/06 9:30 AM 
  Favorable With Committee Substitute (final action) 

• Judiciary Appropriations Committee 

• Justice Council 

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

1	The Judiciary Appropriations Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	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.
102
103	Be It Enacted by the Legislature of the State of Florida:
104
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
436	DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES
437	AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS.
438	OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO THE
439	PROVISIONS OF SECTION 720.303(6), FLORIDA STATUTES, UPON THE
440	APPROVAL OF NOT LESS THAN A MAJORITY OF THE TOTAL VOTING
441	INTERESTS 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.
498
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.
705
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.
787	(2)  GUARANTEES OF COMMON EXPENSES.--
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.
819	(4)  CASH FUNDING REQUIREMENTS DURING GUARANTEE.--The cash
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.
842	(5)  CALCULATION OF GUARANTOR'S FINAL OBLIGATION.--The
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:
933
934	STATUTORY OFFER TO PARTICIPATE IN PRESUIT MEDIATION
935
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:
941
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.)
945
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.
958
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.
979
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.
990
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:
1002
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.)
1007
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.
1014
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.
1035
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.
1054
1055	Should you wish, you may also elect to waive presuit
1056	mediation so that this matter may proceed directly to
1057	court.
1058
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.
1064
1065	_____________________
1066	_____________________
1067
1068	RESPONDING PARTY: CHOOSE ONLY ONE OF THE TWO OPTIONS
1069	BELOW. YOUR SIGNATURE INDICATES YOUR AGREEMENT TO THAT
1070	CHOICE.
1071
1072	AGREEMENT TO MEDIATE
1073
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:
1077
1078	(List acceptable mediator or mediators.)
1079
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.
1083
1084	_______________________
1085	Signature of responding party #1
1086
1087	_______________________
1088	Signature of responding party #2 (if applicable)(if
1089	property is owned by more than one person, all owners
1090	must sign)
1091
1092	WAIVER OF MEDIATION
1093
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.
1098
1099	__________________________
1100	Signature of responding party #1
1101
1102	___________________________
1103	Signature of responding party #2 (if applicable)(if
1104	property is owned by more than one person, all owners
1105	must sign)
1106
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
1221	act, this act shall take effect July 1, 2006.