| 1 |
A bill to be entitled |
| 2 |
An act relating to real property;
amending s. 215.555, |
| 3 |
F.S.; redefining the term
"covered policy" for purposes of |
| 4 |
the Florida Hurricane Catastrophe Fund
to include |
| 5 |
commercial self-insurance funds;
amending s. 624.462, |
| 6 |
F.S.; providing that any applicant or
fund participant may |
| 7 |
select an agent of choice without
restriction by the fund; |
| 8 |
providing that a commercial
self-insurance fund shall be |
| 9 |
an insurer for the purpose of
assessments levied by the |
| 10 |
Florida Hurricane Catastrophe Fund or
Citizens Property |
| 11 |
Insurance Group; requiring the office
to establish the |
| 12 |
method for determining the inputted
premium that is |
| 13 |
subject to assessment; amending s.
718.103, F.S.; |
| 14 |
redefining the term "land";
amending s. 718.111, F.S.; |
| 15 |
specifying that requirements relating
to the acquisition |
| 16 |
and maintenance of adequate insurance
apply to all |
| 17 |
residential condominiums; amending s.
718.115, F.S.; |
| 18 |
providing that common expenses include
the costs of |
| 19 |
certain insurance or self-insurance;
amending s. 718.116, |
| 20 |
F.S.; requiring notice of special
assessments for certain |
| 21 |
insurance; amending s. 718.503, F.S.;
requiring additional |
| 22 |
disclosures in contracts for sale or
lease of residential |
| 23 |
units; requiring copies of budgets to
be furnished to |
| 24 |
buyers when a closing occurs more than
12 months after an |
| 25 |
offering circular is filed with the
state; amending s. |
| 26 |
718.504, F.S.; requiring certain
information relating to |
| 27 |
the budget to be included in the
offering circular; |
| 28 |
requiring that an association budget
be prepared in good |
| 29 |
faith; amending s. 718.616, F.S.;
requiring that certain |
| 30 |
disclosures be compiled in a report;
revising the items |
| 31 |
required to be disclosed; requiring
supplemental reports |
| 32 |
in certain situations; amending s.
718.618, F.S.; revising |
| 33 |
certain requirements for reserve
accounts; revising the |
| 34 |
method of computing the amounts
required to fund |
| 35 |
additional converter reserve accounts;
deleting references |
| 36 |
to specific items that are covered by
an implied warranty |
| 37 |
of fitness in the absence of reserve
accounts; requiring |
| 38 |
that a developer disclose in a
contract of sale compliance |
| 39 |
with certain obligations regarding the
maintenance of |
| 40 |
improvements; amending s. 719.104, F.S.;
providing for |
| 41 |
cooperative associations and similar
organizations to |
| 42 |
acquire and maintain windstorm
insurance; amending s. |
| 43 |
719.107, F.S.; providing that common
expenses include |
| 44 |
costs of certain insurance; amending
s. 719.108, F.S.; |
| 45 |
providing for notice of special
assessments levied in |
| 46 |
conjunction with certain insurance;
amending s. 719.503, |
| 47 |
F.S.; requiring additional disclosures
in contracts for |
| 48 |
sale or lease of residential units;
requiring copies of |
| 49 |
budgets to be furnished to buyers when
a closing occurs |
| 50 |
more than 12 months after an offering
circular is filed |
| 51 |
with the state; amending s. 719.504,
F.S.; requiring |
| 52 |
certain information relating to the
budget to be included |
| 53 |
in the offering circular; requiring
that an association |
| 54 |
budget be prepared in good faith;
amending s. 720.303, |
| 55 |
F.S.; providing for homeowners'
associations to acquire |
| 56 |
and maintain windstorm insurance;
amending s. 720.308, |
| 57 |
F.S.; providing for homeowners'
associations to levy |
| 58 |
assessments for insurance; providing
an effective date. |
| 59 |
|
| 60 |
Be It Enacted by the Legislature of
the State of Florida: |
| 61 |
|
| 62 |
Section
1. Paragraph (c) of subsection (2) of section |
| 63 |
215.555, Florida Statutes, as amended
by section 2 of chapter |
| 64 |
2007-1, Laws of Florida, is amended to
read: |
| 65 |
215.555 Florida
Hurricane Catastrophe Fund.-- |
| 66 |
(2) DEFINITIONS.--As
used in this section: |
| 67 |
(c) "Covered
policy" means any insurance policy covering |
| 68 |
residential property in this state,
including, but not limited |
| 69 |
to, any homeowner's, mobile home
owner's, farm owner's, |
| 70 |
condominium association, condominium
unit owner's, tenant's, or |
| 71 |
apartment building policy, or any
other policy covering a |
| 72 |
residential structure or its contents
issued by any authorized |
| 73 |
insurer, including a
commercial self-insurance fund holding a |
| 74 |
certificate of
authority issued by the Office of Insurance |
| 75 |
Regulation
under s. 624.462, the Citizens Property Insurance |
| 76 |
Corporation, and any joint
underwriting association or similar |
| 77 |
entity created under
pursuant to law. The term
"covered policy" |
| 78 |
includes any collateral protection
insurance policy covering |
| 79 |
personal residences which protects
both the borrower's and the |
| 80 |
lender's financial interests, in an
amount at least equal to the |
| 81 |
coverage for the dwelling in place
under the lapsed homeowner's |
| 82 |
policy, if such policy can be
accurately reported as required in |
| 83 |
subsection (5). Additionally, covered
policies include policies |
| 84 |
covering the peril of wind removed
from the Florida Residential |
| 85 |
Property and Casualty Joint
Underwriting Association or from the |
| 86 |
Citizens Property Insurance
Corporation, created under pursuant |
| 87 |
to s. 627.351(6), or from the
Florida Windstorm Underwriting |
| 88 |
Association, created under
pursuant to s. 627.351(2), by an |
| 89 |
authorized insurer under the terms and
conditions of an executed |
| 90 |
assumption agreement between the
authorized insurer and such |
| 91 |
association or Citizens Property
Insurance Corporation. Each |
| 92 |
assumption agreement between the
association and such authorized |
| 93 |
insurer or Citizens Property Insurance
Corporation must be |
| 94 |
approved by the Office of Insurance
Regulation before prior
to |
| 95 |
the effective date of the assumption,
and the Office of |
| 96 |
Insurance Regulation must provide
written notification to the |
| 97 |
board within 15 working days after
such approval. "Covered |
| 98 |
policy" does not include any
policy that excludes wind coverage |
| 99 |
or hurricane coverage or any
reinsurance agreement and does not |
| 100 |
include any policy otherwise meeting
this definition which is |
| 101 |
issued by a surplus lines insurer or a
reinsurer. All commercial |
| 102 |
residential excess policies and all
deductible buy-back policies |
| 103 |
that, based on sound actuarial
principles, require individual |
| 104 |
ratemaking shall be excluded by rule
if the actuarial soundness |
| 105 |
of the fund is not jeopardized. For
this purpose, the term |
| 106 |
"excess policy" means a
policy that provides insurance |
| 107 |
protection for large commercial
property risks and that provides |
| 108 |
a layer of coverage above a primary
layer insured by another |
| 109 |
insurer. |
| 110 |
Section
2. Subsections (2) and (5) of section 624.462, |
| 111 |
Florida Statutes, as amended, by
section 12 of chapter 2007-1, |
| 112 |
Laws of Florida, are amended to read: |
| 113 |
624.462 Commercial
self-insurance funds.-- |
| 114 |
(2) As
used in ss. 624.460-624.488, "commercial self- |
| 115 |
insurance fund" or
"fund" means a group of members, operating |
| 116 |
individually and collectively through
a trust or corporation, |
| 117 |
that must be: |
| 118 |
(a) Established
by: |
| 119 |
1. A
not-for-profit trade association, industry |
| 120 |
association, or professional
association of employers or |
| 121 |
professionals which has a constitution
or bylaws, which is |
| 122 |
incorporated under the laws of this
state, and which has been |
| 123 |
organized for purposes other than that
of obtaining or providing |
| 124 |
insurance and operated in good faith
for a continuous period of |
| 125 |
1 year; |
| 126 |
2. A
self-insurance trust fund organized pursuant to s. |
| 127 |
627.357 and maintained in good faith
for a continuous period of |
| 128 |
1 year for purposes other than that of
obtaining or providing |
| 129 |
insurance pursuant to this section.
Each member of a commercial |
| 130 |
self-insurance trust fund established
pursuant to this |
| 131 |
subsection must maintain membership in
the self-insurance trust |
| 132 |
fund organized pursuant to s. 627.357; |
| 133 |
3. A
group of 10 or more health care providers, as defined |
| 134 |
in s. 627.351(4)(h), for purposes of
providing medical |
| 135 |
malpractice coverage; or |
| 136 |
4. A
not-for-profit group comprised of one or more |
| 137 |
community associations responsible for
operating at least 50 |
| 138 |
residential parcels or units created
and operating under chapter |
| 139 |
718, chapter 719, chapter 720, chapter
721, or chapter 723 which |
| 140 |
restricts its membership to community
associations only and |
| 141 |
which has been organized and
maintained in good faith for the |
| 142 |
purpose of pooling and spreading the
liabilities of its group |
| 143 |
members relating to property or
casualty risk or surety |
| 144 |
insurance which,
in accordance with applicable provisions of |
| 145 |
part I of chapter
626, appoints resident general lines agents |
| 146 |
only, and which
does not prevent, impede, or restrict any |
| 147 |
applicant or fund
participant from maintaining or selecting an |
| 148 |
agent of choice.
The fund may not refuse to appoint the agent of |
| 149 |
record for any fund
applicant or fund member and may not favor |
| 150 |
one or more such
appointed agents over other appointed agents. |
| 151 |
(b)1. In
the case of funds established pursuant to |
| 152 |
subparagraph (a)2. or subparagraph
(a)4., operated pursuant to a |
| 153 |
trust agreement by a board of trustees
which shall have complete |
| 154 |
fiscal control over the fund and which
shall be responsible for |
| 155 |
all operations of the fund. The
majority of the trustees shall |
| 156 |
be owners, partners, officers,
directors, or employees of one or |
| 157 |
more members of the fund. The
trustees shall have the authority |
| 158 |
to approve applications of members for
participation in the fund |
| 159 |
and to contract with an authorized
administrator or servicing |
| 160 |
company to administer the day-to-day
affairs of the fund. |
| 161 |
2. In
the case of funds established pursuant to |
| 162 |
subparagraph (a)1. or subparagraph
(a)3., operated pursuant to a |
| 163 |
trust agreement by a board of trustees
or as a corporation by a |
| 164 |
board of directors which board shall: |
| 165 |
a. Be
responsible to members of the fund or beneficiaries |
| 166 |
of the trust or policyholders of the
corporation; |
| 167 |
b. Appoint
independent certified public accountants, legal |
| 168 |
counsel, actuaries, and investment
advisers as needed; |
| 169 |
c. Approve
payment of dividends to members; |
| 170 |
d. Approve
changes in corporate structure; and |
| 171 |
e. Have
the authority to contract with an administrator |
| 172 |
authorized under s. 626.88 to
administer the day-to-day affairs |
| 173 |
of the fund including, but not limited
to, marketing, |
| 174 |
underwriting, billing, collection,
claims administration, safety |
| 175 |
and loss prevention, reinsurance,
policy issuance, accounting, |
| 176 |
regulatory reporting, and general
administration. The fees or |
| 177 |
compensation for services under such
contract shall be |
| 178 |
comparable to the costs for similar
services incurred by |
| 179 |
insurers writing the same lines of
insurance, or where available |
| 180 |
such expenses as filed by boards,
bureaus, and associations |
| 181 |
designated by insurers to file such
data. A majority of the |
| 182 |
trustees or directors shall be owners,
partners, officers, |
| 183 |
directors, or employees of one or more
members of the fund. |
| 184 |
(5) A
commercial self-insurance fund created
under |
| 185 |
subparagraph
(2)(a)4. shall be an insurer for the purpose of any |
| 186 |
assessments levied
by the Florida Hurricane Catastrophe Fund as |
| 187 |
provided under s.
215.555 or by the Citizens Property Insurance |
| 188 |
Corporation as
provided under s. 627.351(6)(b)3. The office |
| 189 |
shall establish the
method for determining the imputed premium |
| 190 |
that is
subject to any such assessment. must
participate in the |
| 191 |
Florida
Self-Insurance Fund Guaranty Association. |
| 192 |
Section
3. Subsection (18) of section 718.103, Florida |
| 193 |
Statutes, is amended to read: |
| 194 |
718.103 Definitions.--As
used in this chapter, the term: |
| 195 |
(18) "Land"
means the surface of a legally described |
| 196 |
parcel of real property and includes,
unless otherwise specified |
| 197 |
in the declaration and whether
separate from or including such |
| 198 |
surface, airspace lying above and
subterranean space lying below |
| 199 |
such surface. However, if so defined
in the declaration, the |
| 200 |
term "land" may mean all or
any portion of the airspace or |
| 201 |
subterranean space between two legally
identifiable elevations |
| 202 |
and may exclude the surface of a
parcel of real property and may |
| 203 |
mean any combination of the foregoing,
whether or not |
| 204 |
contiguous,
or may mean a condominium unit. |
| 205 |
Section
4. Subsection (11) of section 718.111, Florida |
| 206 |
Statutes, as amended by section 37 of
chapter 2007-1, Laws of |
| 207 |
Florida, is amended to read: |
| 208 |
718.111 The
association.-- |
| 209 |
(11) INSURANCE.--In
order to protect the safety, health, |
| 210 |
and welfare of the people of the State
of Florida and to ensure |
| 211 |
consistency in the provision of
insurance coverage to |
| 212 |
condominiums and their unit owners,
paragraphs (a), (b), and (c) |
| 213 |
are deemed to apply to every
residential condominium in the |
| 214 |
state, regardless of the date of its
declaration of condominium. |
| 215 |
It is the intent of the Legislature to
encourage lower or stable |
| 216 |
insurance premiums for associations
described in this section. |
| 217 |
Therefore, the Legislature requires a
report to be prepared by |
| 218 |
the Office of Insurance Regulation of
the Department of |
| 219 |
Financial Services for publication 18
months from the effective |
| 220 |
date of this act, evaluating premium
increases or decreases for |
| 221 |
associations, unit owner premium
increases or decreases, |
| 222 |
recommended changes to better define
common areas, or any other |
| 223 |
information the Office of Insurance
Regulation deems |
| 224 |
appropriate. |
| 225 |
(a) A
unit-owner controlled association operating a |
| 226 |
residential condominium shall use its
best efforts to obtain and |
| 227 |
maintain adequate insurance to protect
the association, the |
| 228 |
association property, the common
elements, and the condominium |
| 229 |
property required to be insured by the
association pursuant to |
| 230 |
paragraph (b). If the association is
developer controlled, the |
| 231 |
association shall exercise due
diligence to obtain and maintain |
| 232 |
such insurance. Failure to obtain and
maintain adequate |
| 233 |
insurance during any period of
developer control shall |
| 234 |
constitute a breach of fiduciary
responsibility by the |
| 235 |
developer-appointed members of the
board of directors of the |
| 236 |
association, unless said members can
show that despite such |
| 237 |
failure, they have exercised due
diligence. The declaration of |
| 238 |
condominium as originally recorded, or
amended pursuant to |
| 239 |
procedures provided therein, may
require that condominium |
| 240 |
property consisting of freestanding
buildings where there is no |
| 241 |
more than one building in or on such
unit need not be insured by |
| 242 |
the association if the declaration
requires the unit owner to |
| 243 |
obtain adequate insurance for the
condominium property. An |
| 244 |
association may also obtain and
maintain liability insurance for |
| 245 |
directors and officers, insurance for
the benefit of association |
| 246 |
employees, and flood insurance for
common elements, association |
| 247 |
property, and units. Adequate
insurance, regardless of any |
| 248 |
requirement in the declaration of
condominium for coverage by |
| 249 |
the association for "full
insurable value," "replacement cost," |
| 250 |
or the like, may include reasonable
deductibles as determined by |
| 251 |
the board based upon available funds
or predetermined assessment |
| 252 |
authority at the time that the
insurance is obtained. |
| 253 |
1. Windstorm
insurance coverage for a group of no fewer |
| 254 |
than three communities created and
operating under this chapter, |
| 255 |
chapter 719, chapter 720, or chapter
721 may be obtained and |
| 256 |
maintained for the communities if the
insurance coverage is |
| 257 |
sufficient to cover an amount equal to
the probable maximum loss |
| 258 |
for the communities for a 250-year
windstorm event. Such |
| 259 |
probable maximum loss must be
determined through the use of a |
| 260 |
competent model that has been accepted
by the Florida Commission |
| 261 |
on Hurricane Loss Projection
Methodology. Such insurance |
| 262 |
coverage is deemed adequate windstorm
insurance for the purposes |
| 263 |
of this section. |
| 264 |
2. An
association or group of associations may self-insure |
| 265 |
against claims against the
association, the association |
| 266 |
property, and the condominium property
required to be insured by |
| 267 |
an association, upon compliance with
the applicable provisions |
| 268 |
of ss. 624.460-624.488, which shall be
considered adequate |
| 269 |
insurance for the purposes of this
section. A copy of each |
| 270 |
policy of insurance in effect shall be
made available for |
| 271 |
inspection by unit owners at
reasonable times. |
| 272 |
(b) Every
hazard insurance policy issued or renewed on or |
| 273 |
after January 1, 2004, to protect the
condominium shall provide |
| 274 |
primary coverage for: |
| 275 |
1. All
portions of the condominium property located |
| 276 |
outside the units; |
| 277 |
2. The
condominium property located inside the units as |
| 278 |
such property was initially installed,
or replacements thereof |
| 279 |
of like kind and quality and in
accordance with the original |
| 280 |
plans and specifications or, if the
original plans and |
| 281 |
specifications are not available, as
they existed at the time |
| 282 |
the unit was initially conveyed; and |
| 283 |
3. All
portions of the condominium property for which the |
| 284 |
declaration of condominium requires
coverage by the association. |
| 285 |
|
| 286 |
Anything to the contrary
notwithstanding, the terms "condominium |
| 287 |
property," "building,"
"improvements," "insurable improvements," |
| 288 |
"common elements,"
"association property," or any other term |
| 289 |
found in the declaration of
condominium which defines the scope |
| 290 |
of property or casualty insurance that
a condominium association |
| 291 |
must obtain shall exclude all floor,
wall, and ceiling |
| 292 |
coverings, electrical fixtures,
appliances, air conditioner or |
| 293 |
heating equipment, water heaters,
water filters, built-in |
| 294 |
cabinets and countertops, and window
treatments, including |
| 295 |
curtains, drapes, blinds, hardware,
and similar window treatment |
| 296 |
components, or replacements of any of
the foregoing which are |
| 297 |
located within the boundaries of a
unit and serve only one unit |
| 298 |
and all air conditioning compressors
that service only an |
| 299 |
individual unit, whether or not
located within the unit |
| 300 |
boundaries. The foregoing is intended
to establish the property |
| 301 |
or casualty insuring responsibilities
of the association and |
| 302 |
those of the individual unit owner and
do not serve to broaden |
| 303 |
or extend the perils of coverage
afforded by any insurance |
| 304 |
contract provided to the individual
unit owner. Beginning |
| 305 |
January 1, 2004, the association shall
have the authority to |
| 306 |
amend the declaration of condominium,
without regard to any |
| 307 |
requirement for mortgagee approval of
amendments affecting |
| 308 |
insurance requirements, to conform the
declaration of |
| 309 |
condominium to the coverage
requirements of this section. |
| 310 |
(c) Every
hazard insurance policy issued or renewed on or |
| 311 |
after January 1, 2004, to an
individual unit owner shall provide |
| 312 |
that the coverage afforded by such
policy is excess over the |
| 313 |
amount recoverable under any other
policy covering the same |
| 314 |
property. Each insurance policy issued
to an individual unit |
| 315 |
owner providing such coverage shall be
without rights of |
| 316 |
subrogation against the condominium
association that operates |
| 317 |
the condominium in which such unit
owner's unit is located. All |
| 318 |
real or personal property located
within the boundaries of the |
| 319 |
unit owner's unit which is excluded
from the coverage to be |
| 320 |
provided by the association as set
forth in paragraph (b) shall |
| 321 |
be insured by the individual unit
owner. |
| 322 |
(d) The
association shall obtain and maintain adequate |
| 323 |
insurance or fidelity bonding of all
persons who control or |
| 324 |
disburse funds of the association. The
insurance policy or |
| 325 |
fidelity bond must cover the maximum
funds that will be in the |
| 326 |
custody of the association or its
management agent at any one |
| 327 |
time. As used in this paragraph, the
term "persons who control |
| 328 |
or disburse funds of the
association" includes, but is not |
| 329 |
limited to, those individuals
authorized to sign checks and the |
| 330 |
president, secretary, and treasurer of
the association. The |
| 331 |
association shall bear the cost of
bonding. |
| 332 |
Section
5. Present paragraph (f) of subsection (1) of |
| 333 |
section 718.115, Florida Statutes, is
redesignated as paragraph |
| 334 |
(g), and a new paragraph (f) is added
to that subsection, to |
| 335 |
read: |
| 336 |
718.115 Common
expenses and common surplus.-- |
| 337 |
(1) |
| 338 |
(f) Common
expenses include the costs of insurance |
| 339 |
acquired by the
association under the authority of s. |
| 340 |
718.111(11),
including costs and contingent expenses required to |
| 341 |
participate in a
self-insurance fund authorized and approved |
| 342 |
pursuant to s.
624.462. |
| 343 |
Section
6. Subsection (10) of section 718.116, Florida |
| 344 |
Statutes, is amended to read: |
| 345 |
718.116 Assessments;
liability; lien and priority; |
| 346 |
interest; collection.-- |
| 347 |
(10) The
specific purpose or purposes of any special |
| 348 |
assessment,
including any contingent special assessment levied |
| 349 |
in conjunction with
the purchase of an insurance policy |
| 350 |
authorized by
s. 718.111(11), approved in accordance with the |
| 351 |
condominium documents shall be set
forth in a written notice of |
| 352 |
such assessment sent or delivered to
each unit owner. The funds |
| 353 |
collected pursuant to a special
assessment shall be used only |
| 354 |
for the specific purpose or purposes
set forth in such notice. |
| 355 |
However, upon completion of such
specific purpose or purposes, |
| 356 |
any excess funds will be considered
common surplus, and may, at |
| 357 |
the discretion of the board, either be
returned to the unit |
| 358 |
owners or applied as a credit toward
future assessments. |
| 359 |
Section
7. Paragraph (a) of subsection (1) of section |
| 360 |
718.503, Florida Statutes, is amended,
and paragraph (c) is |
| 361 |
added to that subsection, to read: |
| 362 |
718.503 Developer
disclosure prior to sale; nondeveloper |
| 363 |
unit owner disclosure prior to sale;
voidability.-- |
| 364 |
(1) DEVELOPER
DISCLOSURE.-- |
| 365 |
(a) Contents
of contracts.--Any contract for the sale of a |
| 366 |
residential unit or a lease thereof
for an unexpired term of |
| 367 |
more than 5 years shall: |
| 368 |
1. Contain
the following legend in conspicuous type: THIS |
| 369 |
AGREEMENT IS VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE OF |
| 370 |
THE BUYER'S INTENTION TO CANCEL WITHIN
15 DAYS AFTER THE DATE OF |
| 371 |
EXECUTION OF THIS AGREEMENT BY THE
BUYER, AND RECEIPT BY BUYER |
| 372 |
OF ALL OF THE ITEMS REQUIRED TO BE
DELIVERED TO HIM OR HER BY |
| 373 |
THE DEVELOPER UNDER SECTION 718.503,
FLORIDA STATUTES. THIS |
| 374 |
AGREEMENT IS ALSO VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE |
| 375 |
OF THE BUYER'S INTENTION TO CANCEL
WITHIN 15 DAYS AFTER THE DATE |
| 376 |
OF RECEIPT FROM THE DEVELOPER OF ANY
AMENDMENT WHICH MATERIALLY |
| 377 |
ALTERS OR MODIFIES THE OFFERING IN A
MANNER THAT IS ADVERSE TO |
| 378 |
THE BUYER. ANY PURPORTED WAIVER OF
THESE VOIDABILITY RIGHTS |
| 379 |
SHALL BE OF NO EFFECT. BUYER MAY
EXTEND THE TIME FOR CLOSING FOR |
| 380 |
A PERIOD OF NOT MORE THAN 15 DAYS
AFTER THE BUYER HAS RECEIVED |
| 381 |
ALL OF THE ITEMS REQUIRED. BUYER'S
RIGHT TO VOID THIS AGREEMENT |
| 382 |
SHALL TERMINATE AT CLOSING. FIGURES
CONTAINED IN ANY BUDGET |
| 383 |
DELIVERED TO THE BUYER PREPARED IN
ACCORDANCE WITH THE |
| 384 |
CONDOMINIUM ACT ARE ESTIMATES ONLY
AND REPRESENT AN |
| 385 |
APPROXIMATION OF FUTURE EXPENSES
BASED ON FACTS AND |
| 386 |
CIRCUMSTANCES EXISTING AT THE TIME
OF THE PREPARATION OF THE |
| 387 |
BUDGET BY THE DEVELOPER. ACTUAL
COSTS OF SUCH ITEMS MAY EXCEED |
| 388 |
THE ESTIMATED COSTS. SUCH CHANGES
IN COST DO NOT CONSTITUTE |
| 389 |
MATERIAL ADVERSE CHANGES IN THE
OFFERING. |
| 390 |
2. Contain
the following caveat in conspicuous type on the |
| 391 |
first page of the contract: ORAL
REPRESENTATIONS CANNOT BE |
| 392 |
RELIED UPON AS CORRECTLY STATING THE
REPRESENTATIONS OF THE |
| 393 |
DEVELOPER. FOR CORRECT
REPRESENTATIONS, REFERENCE SHOULD BE MADE |
| 394 |
TO THIS CONTRACT AND THE DOCUMENTS
REQUIRED BY SECTION 718.503, |
| 395 |
FLORIDA STATUTES, TO BE FURNISHED BY A
DEVELOPER TO A BUYER OR |
| 396 |
LESSEE. |
| 397 |
3. If
the unit has been occupied by someone other than the |
| 398 |
buyer, contain a statement that the
unit has been occupied. |
| 399 |
4. If
the contract is for the sale or transfer of a unit |
| 400 |
subject to a lease, include as an
exhibit a copy of the executed |
| 401 |
lease and shall contain within the
text in conspicuous type: THE |
| 402 |
UNIT IS SUBJECT TO A LEASE (OR
SUBLEASE). |
| 403 |
5. If
the contract is for the lease of a unit for a term |
| 404 |
of 5 years or more, include as an
exhibit a copy of the proposed |
| 405 |
lease. |
| 406 |
6. If
the contract is for the sale or lease of a unit that |
| 407 |
is subject to a lien for rent payable
under a lease of a |
| 408 |
recreational facility or other
commonly used facility, contain |
| 409 |
within the text the following
statement in conspicuous type: |
| 410 |
THIS CONTRACT IS FOR THE TRANSFER OF A
UNIT THAT IS SUBJECT TO A |
| 411 |
LIEN FOR RENT PAYABLE UNDER A LEASE OF
COMMONLY USED FACILITIES. |
| 412 |
FAILURE TO PAY RENT MAY RESULT IN
FORECLOSURE OF THE LIEN. |
| 413 |
7. State
the name and address of the escrow agent required |
| 414 |
by s. 718.202 and state that the
purchaser may obtain a receipt |
| 415 |
for his or her deposit from the escrow
agent upon request. |
| 416 |
8. If
the contract is for the sale or transfer of a unit |
| 417 |
in a condominium in which timeshare
estates have been or may be |
| 418 |
created, contain within the text in
conspicuous type: UNITS IN |
| 419 |
THIS CONDOMINIUM ARE SUBJECT TO
TIMESHARE ESTATES. The contract |
| 420 |
for the sale of a fee interest in a
timeshare estate shall also |
| 421 |
contain, in conspicuous type, the
following: FOR THE PURPOSE OF |
| 422 |
AD VALOREM TAXES OR SPECIAL
ASSESSMENTS LEVIED BY TAXING |
| 423 |
AUTHORITIES AGAINST A FEE INTEREST IN
A TIMESHARE ESTATE, THE |
| 424 |
MANAGING ENTITY IS GENERALLY
CONSIDERED THE TAXPAYER UNDER |
| 425 |
FLORIDA LAW. YOU HAVE THE RIGHT TO
CHALLENGE AN ASSESSMENT BY A |
| 426 |
TAXING AUTHORITY RELATING TO YOUR
TIMESHARE ESTATE PURSUANT TO |
| 427 |
THE PROVISIONS OF CHAPTER 194, FLORIDA
STATUTES. |
| 428 |
(c) Subsequent
estimates; when provided.--If the closing |
| 429 |
on a contract
occurs more than 12 months after the filing of the |
| 430 |
offering circular
with the division, the developer shall provide |
| 431 |
a copy of the
current estimated operating budget of the |
| 432 |
association to the
buyer at closing, which shall not be |
| 433 |
considered an
amendment that modifies the offering provided any |
| 434 |
changes to the
association's budget from the budget given to the |
| 435 |
buyer at the time
of contract signing were the result of matters |
| 436 |
beyond the
developer's control. Changes in budgets of any master |
| 437 |
association,
recreation association, or club and similar budgets |
| 438 |
for entities other
than the association shall likewise not be |
| 439 |
considered
amendments that modify the offering. It is the intent |
| 440 |
of this paragraph
to clarify existing law. |
| 441 |
Section
8. Present paragraph (d) of subsection (21) of |
| 442 |
section 718.504, Florida Statutes, is
redesignated as paragraph |
| 443 |
(f), and new paragraphs (d) and (e)
are added to that |
| 444 |
subsection, to read: |
| 445 |
718.504 Prospectus
or offering circular.--Every developer |
| 446 |
of a residential condominium which
contains more than 20 |
| 447 |
residential units, or which is part of
a group of residential |
| 448 |
condominiums which will be served by
property to be used in |
| 449 |
common by unit owners of more than 20
residential units, shall |
| 450 |
prepare a prospectus or offering
circular and file it with the |
| 451 |
Division of Florida Land Sales,
Condominiums, and Mobile Homes |
| 452 |
prior to entering into an enforceable
contract of purchase and |
| 453 |
sale of any unit or lease of a unit
for more than 5 years and |
| 454 |
shall furnish a copy of the prospectus
or offering circular to |
| 455 |
each buyer. In addition to the
prospectus or offering circular, |
| 456 |
each buyer shall be furnished a
separate page entitled |
| 457 |
"Frequently Asked Questions and
Answers," which shall be in |
| 458 |
accordance with a format approved by
the division and a copy of |
| 459 |
the financial information required by
s. 718.111. This page |
| 460 |
shall, in readable language, inform
prospective purchasers |
| 461 |
regarding their voting rights and unit
use restrictions, |
| 462 |
including restrictions on the leasing
of a unit; shall indicate |
| 463 |
whether and in what amount the unit
owners or the association is |
| 464 |
obligated to pay rent or land use fees
for recreational or other |
| 465 |
commonly used facilities; shall
contain a statement identifying |
| 466 |
that amount of assessment which,
pursuant to the budget, would |
| 467 |
be levied upon each unit type,
exclusive of any special |
| 468 |
assessments, and which shall further
identify the basis upon |
| 469 |
which assessments are levied, whether
monthly, quarterly, or |
| 470 |
otherwise; shall state and identify
any court cases in which the |
| 471 |
association is currently a party of
record in which the |
| 472 |
association may face liability in
excess of $100,000; and which |
| 473 |
shall further state whether membership
in a recreational |
| 474 |
facilities association is mandatory,
and if so, shall identify |
| 475 |
the fees currently charged per unit
type. The division shall by |
| 476 |
rule require such other disclosure as
in its judgment will |
| 477 |
assist prospective purchasers. The
prospectus or offering |
| 478 |
circular may include more than one
condominium, although not all |
| 479 |
such units are being offered for sale
as of the date of the |
| 480 |
prospectus or offering circular. The
prospectus or offering |
| 481 |
circular must contain the following
information: |
| 482 |
(21) An
estimated operating budget for the condominium and |
| 483 |
the association, and a schedule of the
unit owner's expenses |
| 484 |
shall be attached as an exhibit and
shall contain the following |
| 485 |
information: |
| 486 |
(d) The
following statement in conspicuous type: THE |
| 487 |
BUDGET CONTAINED IN
THIS OFFERING CIRCULAR HAS BEEN PREPARED IN |
| 488 |
ACCORDANCE WITH THE
CONDOMINIUM ACT AND IS A GOOD FAITH ESTIMATE |
| 489 |
ONLY AND REPRESENTS
AN APPROXIMATION OF FUTURE EXPENSES BASED ON |
| 490 |
FACTS AND
CIRCUMSTANCES EXISTING AT THE TIME OF ITS PREPARATION. |
| 491 |
ACTUAL COSTS OF
SUCH ITEMS MAY EXCEED THE ESTIMATED COSTS. SUCH |
| 492 |
CHANGES IN COST DO
NOT CONSTITUTE MATERIAL ADVERSE CHANGES IN |
| 493 |
THE OFFERING. |
| 494 |
(e) Each
budget for an association prepared by a developer |
| 495 |
consistent with
this subsection shall be prepared in good faith |
| 496 |
and shall reflect
accurate estimated amounts for the required |
| 497 |
items in paragraph
(c) at the time of the filing of the offering |
| 498 |
circular with the
division, and subsequent increased amounts of |
| 499 |
any item included
in the association's estimated budget that are |
| 500 |
beyond the control
of the developer shall not be considered an |
| 501 |
amendment that
would give rise to rescission rights set forth in |
| 502 |
s. 718.503(1)(a) or
(b), nor shall such increases modify, void, |
| 503 |
or otherwise affect
any guarantee of the developer contained in |
| 504 |
the offering
circular or any purchase contract. It is the intent |
| 505 |
of this paragraph
to clarify existing law. |
| 506 |
Section
9. Section 718.616, Florida Statutes, is amended |
| 507 |
to read: |
| 508 |
718.616 Disclosure
of condition of building and estimated |
| 509 |
replacement costs and notification of
municipalities.-- |
| 510 |
(1) Each
developer of a residential condominium created by |
| 511 |
converting existing, previously
occupied improvements to such |
| 512 |
form of ownership shall prepare
a report that discloses disclose |
| 513 |
the condition of the improvements and
the condition of certain |
| 514 |
components and their current estimated
replacement costs as of |
| 515 |
the date of the
report. |
| 516 |
(2) The
following information shall be stated concerning |
| 517 |
the improvements: |
| 518 |
(a) The
date and type of construction. |
| 519 |
(b) The
prior use. |
| 520 |
(c) Whether
there is termite damage or infestation and |
| 521 |
whether the termite damage or
infestation, if any, has been |
| 522 |
properly treated. The statement shall
be substantiated by |
| 523 |
including, as an exhibit, an
inspection report by a certified |
| 524 |
pest control operator. |
| 525 |
(3)(a) Disclosure
of condition shall be made for each of |
| 526 |
the following components that the
existing improvements may |
| 527 |
include: |
| 528 |
1. Roof. |
| 529 |
2. Structure. |
| 530 |
3. Fireproofing
and Fire protection systems. |
| 531 |
4. Elevators. |
| 532 |
5. Heating
and cooling systems. |
| 533 |
6. Plumbing. |
| 534 |
7. Electrical
systems. |
| 535 |
8. Swimming
pool. |
| 536 |
9. Seawalls,
pilings, and docks. |
| 537 |
10. Pavement
and concrete, including roadways, walkways, |
| 538 |
and parking
areas. |
| 539 |
11. Drainage
systems. |
| 540 |
12. Irrigation
systems. |
| 541 |
(b) For
each component, the following information shall be |
| 542 |
disclosed and substantiated by
attaching a copy of a certificate |
| 543 |
under seal of an architect or engineer
authorized to practice in |
| 544 |
this state: |
| 545 |
1. The
age of the component as of the date |