H679   --  Condominiums and Homeowners' Associations
H679    GENERAL BILL by Gardiner; (CO-SPONSORS) Altman; Nelson (Compare H 0995,
S 2084, S 2086)
Community Associations; Specifies that requirements relating to
acquisition & maintenance of adequate insurance apply to all residential
condominiums; revises & provides provisions relating to condominium &
condominium owner insurance coverage; authorizes condominium association
or group of associations to provide adequate hazard insurance through
self-insurance fund; revises meeting requirements, etc. EFFECTIVE DATE:
07/01/2008.
01/22/08 HOUSE Filed
01/27/08 HOUSE Referred to Safety & Security Council; Policy & Budget
                  Council
02/21/08 HOUSE Referred to Courts (SS) by Safety & Security Council

1
A bill to be entitled
2 An act relating to community associations; amending s.
3 514.011, F.S.; providing a definition; amending s.
4 514.0115, F.S.; providing specified supervision and
5 regulation exemptions for homeowners' association swimming
6 pools; amending s. 515.25, F.S.; conforming a cross-
7 reference; amending s. 718.111, F.S.; specifying that
8 requirements relating to acquisition and maintenance of
9 adequate insurance apply to all residential condominiums;
10 revising and providing provisions relating to condominium
11 and condominium owner insurance coverage; authorizing an
12 association or group of associations to provide adequate
13 hazard insurance through a self-insurance fund; requiring
14 associations to exercise best efforts to obtain and
15 maintain certain kinds of insurance; providing coverage
16 requirements for policies entered into after a specified
17 date; requiring owners to provide evidence of a currently
18 effective policy of hazard and liability insurance upon
19 request by the association; specifying responsibility for
20 reconstruction work under specified circumstances;
21 specifying common expense responsibilities of the
22 association and owners; providing for unit owner access to
23 association records; prohibiting unit owners from
24 accessing certain personal identifying information of
25 other unit owners and persons residing in units; amending
26 s. 718.112, F.S.; requiring meetings of the board of
27 administration to be conducted using generally accepted
28 parliamentary procedures; requiring the board to hold
29 special meetings upon a petition of a specified amount of
30 the total voting interests or to take up the petitioned
31 items at the next regular meeting; providing members with
32 the right to speak at such meetings under certain
33 circumstances; providing location requirements for all
34 unit owner meetings; revising budget requirements;
35 amending s. 718.115, F.S.; providing certain expenses to
36 be included as common expenses; amending s. 718.116, F.S.;
37 providing requirements for claims of lien filed on or
38 after a specified date; providing notice requirements;
39 requiring certain advance notice to pay estimated
40 nonemergency special assessments; creating s. 718.1265,
41 F.S.; authorizing a condominium association board to
42 exercise specified emergency powers when a state of
43 emergency is declared; providing limitations; amending s.
44 718.3025, F.S.; deleting a requirement specifying a
45 minimum number of personnel to be employed by a party
46 contracting to provide maintenance or management services;
47 providing requirements for certain contracts between a
48 party contracting to provide maintenance or management
49 services and an association; amending s. 718.3026, F.S.;
50 providing an expiration threshold for certain associations
51 opting out of requirements relating to contracts for
52 products and services following a vote by the unit owners;
53 amending s. 718.303, F.S.; requiring hearings to levy
54 fines to be held before a committee of unit owners who are
55 not members of the board or persons residing in a board
56 member's household; amending s. 718.5012, F.S.; removing a
57 requirement for the ombudsman to develop certain policies
58 and procedures; requiring direct assistance; amending s.
59 718.503, F.S.; providing that prospective purchasers are
60 entitled to a governance form provided by the seller and
61 prepared by the division; requiring the governance form to
62 include specified information; amending s. 720.303, F.S.;
63 revising provisions relating to homeowners' association
64 board meetings, inspection and copying of records, reserve
65 accounts of budgets, and financial reporting requirements;
66 prohibiting salary or compensation of certain association
67 personnel; providing exceptions; amending s. 720.305,
68 F.S.; providing for an association to recover certain
69 costs and expenses in certain actions; revising a lien
70 restriction; amending s. 720.306, F.S.; revising certain
71 meeting notice requirements; providing absentee ballot
72 voting requirements; requiring newly elected members of a
73 board of directors to make certain certifications in
74 writing to the association; providing for disqualification
75 for failure to make such certifications; requiring an
76 association to retain such certifications for a certain
77 time; specifying repercussions for certain unexcused
78 absences; amending s. 720.307, F.S.; authorizing the board
79 of directors of an association to levy assessments on
80 unimproved parcels under certain circumstances; amending
81 s. 720.3075, F.S.; specifying an additional prohibited
82 clause in association documents; amending s. 720.308,
83 F.S.; revising certain cash funding requirements; amending
84 s. 720.3085, F.S.; revising mailing requirements for a
85 written notice or demand for past due assessments;
86 providing requirements for certain foreclosure actions;
87 amending s. 720.401, F.S.; revising certain prospective
88 parcel owner disclosure summary requirements; providing an
89 effective date.
90
91 Be It Enacted by the Legislature of the State of Florida:
92
93      Section 1.  Section 514.011, Florida Statutes, is amended
94 to read:
95      514.011  Definitions.--As used in this chapter:
96      (1)  "Department" means the Department of Health.
97      (2)  "Homeowners' association" means a homeowners'
98 association as defined in s. 720.301.
99      (3)(5)  "Portable pool" means a pool or spa, and related
100 equipment systems of any kind, which is designed or intended to
101 be movable from location to location.
102      (4)(3)  "Private pool" means a facility used only by an
103 individual, family, or living unit members and their guests
104 which does not serve any type of cooperative housing or joint
105 tenancy of five or more living units.
106      (5)(4)  "Public bathing place" means a body of water,
107 natural or modified by humans, for swimming, diving, and
108 recreational bathing, together with adjacent shoreline or land
109 area, buildings, equipment, and appurtenances pertaining
110 thereto, used by consent of the owner or owners and held out to
111 the public by any person or public body, irrespective of whether
112 a fee is charged for the use thereof. The bathing water areas of
113 public bathing places include, but are not limited to, lakes,
114 ponds, rivers, streams, artificial impoundments, and waters
115 along the coastal and intracoastal beaches and shores of the
116 state.
117      (6)(2)  "Public swimming pool" or "public pool" means a
118 watertight structure of concrete, masonry, or other approved
119 materials which is located either indoors or outdoors, used for
120 bathing or swimming by humans, and filled with a filtered and
121 disinfected water supply, together with buildings,
122 appurtenances, and equipment used in connection therewith. A
123 public swimming pool or public pool shall mean a conventional
124 pool, spa-type pool, wading pool, special purpose pool, or water
125 recreation attraction, to which admission may be gained with or
126 without payment of a fee and includes, but is not limited to,
127 pools operated by or serving camps, churches, cities, counties,
128 day care centers, group home facilities for eight or more
129 clients, health spas, institutions, parks, state agencies,
130 schools, subdivisions, or the cooperative living-type projects
131 of five or more living units, such as apartments,
132 boardinghouses, hotels, mobile home parks, motels, recreational
133 vehicle parks, and townhouses.
134      Section 2.  Subsection (2) of section 514.0115, Florida
135 Statutes, is amended to read:
136      514.0115  Exemptions from supervision or regulation;
137 variances.--
138      (2)(a)  Pools serving no more than 32 homeowners'
139 association, condominium, or cooperative units which are not
140 operated as a public lodging establishment shall be exempt from
141 supervision under this chapter, except for water quality.
142      (b)  Pools serving homeowners', condominium, or cooperative
143 associations of more than 32 units and whose recorded documents
144 prohibit the rental or sublease of the units for periods of less
145 than 60 days are exempt from supervision under this chapter,
146 except that the homeowners' association or condominium or
147 cooperative owner or association must file applications with the
148 department and obtain construction plans approval and receive an
149 initial operating permit. The department shall inspect the
150 swimming pools at such places annually, at the fee set forth in
151 s. 514.033(3), or upon request by a unit owner, to determine
152 compliance with department rules relating to water quality and
153 lifesaving equipment. The department may not require compliance
154 with rules relating to swimming pool lifeguard standards.
155      Section 3.  Subsection (9) of section 515.25, Florida
156 Statutes, is amended to read:
157      515.25  Definitions.--As used in this chapter, the term:
158      (9)  "Public swimming pool" means a swimming pool, as
159 defined in s. 514.011(6)(2), which is operated, with or without
160 charge, for the use of the general public; however, the term
161 does not include a swimming pool located on the grounds of a
162 private residence.
163      Section 4.  Subsection (11), paragraphs (b) and (c) of
164 subsection (12), and subsection (13) of section 718.111, Florida
165 Statutes, are amended to read:
166      718.111  The association.--
167      (11)  INSURANCE.--In order to protect the safety, health,
168 and welfare of the people of the State of Florida and to ensure
169 consistency in the provision of insurance coverage to
170 condominiums and their unit owners, this subsection shall be
171 paragraphs (a), (b), and (c) are deemed to apply to every
172 residential condominium in the state, regardless of the date of
173 its declaration of condominium. It is the intent of the
174 Legislature to encourage lower or stable insurance premiums for
175 associations described in this section.
176      (a)  Adequate hazard insurance, regardless of any
177 requirement in the declaration of condominium for coverage by
178 the association for "full insurable value," "replacement cost,"
179 or the like, shall be based upon the replacement cost of the
180 property to be insured as determined by an independent insurance
181 appraisal or update of a prior appraisal. The full insurable
182 value shall be determined not less frequently than every 36
183 months.
184      1.  An association or group of associations may provide
185 adequate hazard insurance through a self-insurance fund that
186 complies with the requirements of ss. 624.460-624.488.
187      2.  The association may also provide adequate hazard
188 insurance coverage, individually, or for a group of no fewer
189 than three communities created and operating under this chapter,
190 chapter 719, chapter 720, or chapter 721, by obtaining and
191 maintaining for the communities insurance coverage sufficient to
192 cover an amount equal to the probable maximum loss for the
193 communities for a 250-year windstorm event provided that such
194 probable maximum loss must be determined through the use of a
195 competent model that has been accepted by the Florida Commission
196 on Hurricane Loss Projection Methodology.
197      3.  In determining the adequate hazard insurance coverage,
198 the association may consider deductibles as determined by this
199 subsection.
200      (b)  If the association is developer controlled, the
201 association shall exercise best efforts to obtain and maintain
202 such insurance. Failure to obtain and maintain adequate hazard
203 insurance during any period of developer control shall
204 constitute a breach of fiduciary responsibility by the
205 developer-appointed members of the board of directors of the
206 association, unless such members can show that despite such
207 failure, they have made their best efforts.
208      (c)  Policies may include deductibles as determined by the
209 board.
210      1.  The deductibles shall be consistent with industry
211 standards and prevailing practices for communities of like size
212 and age, having similar construction and facilities in the
213 locale where the condominium property is situated.
214      2.  The deductibles may be based upon available funds,
215 including reserve accounts or predetermined assessment authority
216 at the time that the insurance is obtained.
217      3.  The board shall establish the level of deductibles
218 based upon the level of available funds and predetermined
219 assessment authority at a meeting of the board which shall be
220 open to all unit owners in the manner set forth in s.
221 718.112(2)(e). The notice of such meeting shall state the
222 proposed deductible and the available funds and the assessment
223 authority relied upon by the board and shall estimate any
224 potential assessment amount against each unit, if any. The
225 meeting described in this subparagraph may be held in
226 conjunction with a meeting to consider the proposed budget or an
227 amendment thereto.
228      (d)  A unit-owner-controlled association operating a
229 residential condominium shall use its best efforts to obtain and
230 maintain adequate insurance to protect the association, the
231 association property, the common elements, and the condominium
232 property required to be insured by the association pursuant to
233 this subsection.
234      (e)  The declaration of condominium as originally recorded,
235 or amended pursuant to procedures provided therein, may require
236 that condominium property consisting of freestanding buildings
237 where there is no more than one building in or on such unit need
238 not be insured by the association if the declaration requires
239 the unit owner to obtain adequate insurance for the condominium
240 property. An association may also obtain and maintain liability
241 insurance for directors and officers, insurance for the benefit
242 of association employees, and flood insurance for common
243 elements, association property, and units.
244      (f)  Every hazard insurance policy issued or renewed on or
245 after January 1, 2009, to protect the condominium shall provide
246 primary coverage for:
247      1.  All portions of the condominium property as originally
248 installed or replacement of like kind and quality, in accordance
249 with the original plans and specifications.
250      2.  All alterations or additions made to the condominium
251 property or association property pursuant to s. 718.113(2).
252      3.  The coverage shall exclude all personal property within
253 the unit or limited common elements, floor, wall, and ceiling
254 coverings, electrical fixtures, appliances, water heaters, water
255 filters, built-in cabinets and countertops, and window
256 treatments, including curtains, drapes, blinds, hardware, and
257 similar window treatment components or replacements of any of
258 the foregoing.
259
260 This paragraph is intended to establish the property or casualty
261 insuring responsibilities of the association and those of the
262 individual unit owner and do not serve to broaden or extend the
263 perils of coverage afforded by any insurance contract provided
264 to the individual unit owner.
265      (g)  Every hazard insurance policy issued or renewed on or
266 after January 1, 2009, to an individual unit owner shall provide
267 that the coverage afforded by such policy is excess over the
268 amount recoverable under any other policy covering the same
269 property and shall include special assessment coverage of not
270 less than $2,000 per occurrence. Each insurance policy issued to
271 an individual unit owner providing such coverage shall be
272 without rights of subrogation against the condominium
273 association that operates the condominium in which such unit
274 owner's unit is located.
275      1.  All improvements or additions to the condominium
276 property that benefit less than all unit owners shall be insured
277 by the unit owner or owners having the use thereof, or may be
278 insured by the association at the cost and expense of the unit
279 owners having the use thereof.
280      2.  The association shall require each owner to provide
281 evidence of a currently effective policy of hazard and liability
282 insurance upon request, but not more frequently than annually.
283 Upon the failure of an owner to provide a certificate of
284 insurance issued by an insurer approved to write such insurance
285 in the state within 30 days of a written request, the
286 association shall be entitled but shall not be obligated to
287 purchase a policy of insurance on behalf of an owner, and the
288 cost thereof, together with reconstruction costs undertaken by
289 the association, which are the responsibility of the unit owner
290 may be collected in the manner provided for collection of
291 assessments in s. 718.116.
292      3.  All reconstruction work after a casualty loss shall be
293 undertaken by the association except as otherwise permitted
294 herein. A unit owner may undertake reconstruction work on
295 portions of the unit with the prior written consent of the board
296 of administration, which may be conditioned upon the approval of
297 the repair methods, the qualifications of the proposed
298 contractor, and the contract that is used for that purpose. A
299 unit owner shall obtain all required governmental permits and
300 approvals prior to commencing reconstruction.
301      4.  Unit owners shall be responsible for the cost of
302 reconstruction of any portions of the condominium property for
303 which the unit owner is required to carry casualty insurance,
304 and any such reconstruction work undertaken by the association
305 shall be chargeable to the unit and enforceable as an assessment
306 pursuant to s. 718.116. The association is hereby designated as
307 an additional named insured and loss payee on all casualty
308 insurance policies issued to unit owners in the condominium
309 operated by the association.
310      5.  A multicondominium association may elect, by a majority
311 vote of the collective members of the condominiums operated by
312 the association, to operate such condominiums as a single
313 condominium for purposes of insurance matters, including, but
314 not limited to, the purchase of the hazard insurance required by
315 this section and the apportionment of deductibles and damages in
316 excess of coverage. The election to aggregate the treatment of
317 insurance premiums, deductibles, and excess damages shall be
318 treated as an amendment to the declaration of all condominiums
319 operated by the association, and the costs of insurance shall be
320 stated in the association budget. The amendments shall be
321 recorded as required by s. 718.110.
322      (h)  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      (i)  The association has the authority to amend the
333 declaration of condominium, without regard to any requirement
334 for mortgagee approval of amendments affecting insurance
335 requirements, to conform the declaration of condominium to the
336 coverage requirements of this subsection.
337      (j)  Any portion of the condominium property that the
338 association is required to insure against casualty loss pursuant
339 to paragraph (f) that is damaged by casualty shall be
340 reconstructed, repaired, or replaced, as necessary, by the
341 association as a common expense. All hazard insurance
342 deductibles, uninsured losses, and other damages in excess of
343 hazard insurance coverage under the hazard insurance policies
344 maintained by the association shall be a common expense of the
345 condominium, however:
346      1.  A unit owner shall be responsible for the costs of
347 repair or replacement of any portion of the condominium property
348 not paid for by insurance proceeds, when such damage is caused
349 by intentional conduct, negligence, or failure to comply with
350 the terms of the declaration or the rules of the association by
351 a unit owner, the members of his or her family, unit occupants,
352 tenants, guests, or invitees, and without compromise of the
353 subrogation rights of any insurer as set forth in paragraph (g).
354      2.  The provisions of subparagraph 1. regarding the
355 financial responsibility of a unit owner for the costs of
356 repairing or replacing other portions of the condominium
357 property also applies to the costs of repair or replacement of
358 personal property of other unit owners or the association, as
359 well as other property, whether real or personal, that the unit
360 owners are required to insure under paragraph (g).
361      3.  To the extent the cost of repair or reconstruction for
362 which the unit owner is responsible under this paragraph is
363 reimbursed to the association by insurance proceeds, and, to the
364 extent the association has collected the cost of such repair or
365 reconstruction from the unit owner, the association shall
366 reimburse the unit owner without the waiver of any rights of
367 subrogation.
368      4.  The association shall not be obligated to pay for
369 repair or reconstruction or repairs of casualty losses as a
370 common expense where the casualty losses were known or should
371 have been known to a unit owner and were not reported to the
372 association until after the insurance claim of the association
373 for that casualty has been settled and resolved with finality or
374 is considered untimely filed by the insurer and denied on that
375 basis.
376      (k)  An association may, upon the approval of a majority of
377 the total voting interests in the association, opt out of the
378 provisions in paragraph (j) for the allocation of repair or
379 reconstruction expenses and allocate repair or reconstruction
380 expenses in the manner provided in the declaration as originally
381 recorded or as amended. Such vote may be approved by the voting
382 interests of the association without regard to any mortgagee
383 consent requirements.
384      (l)  In a multicondominium association that has not
385 consolidated its financial operations under subsection (6), any
386 condominium operated by the association may opt out of the
387 provisions of paragraph (j) with the approval of a majority of
388 the total voting interests in that condominium. Such vote may be
389 approved by the voting interests without regard to any mortgagee
390 consent requirements.
391      (m)  Any association or condominium voting to opt out of
392 the guidelines for repair or reconstruction expenses in
393 paragraph (j) must record a notice setting forth the date of the
394 opt out vote and the official records book and page at which the
395 declaration is recorded. The opt out shall be effective upon the
396 date of recording of the notice in the public records by the
397 association. An association that has voted to opt out of
398 paragraph (j) may reverse that decision by the same vote
399 required under paragraphs (k) and (l), and notice thereof shall
400 be recorded in the official records.
401      (n)  The association shall not be obligated to pay for any
402 reconstruction or repair expenses due to casualty loss to any
403 improvements installed by a current or former owner of the unit
404 or by the developer where the improvement benefits only the unit
405 for which it was installed and is not part of the standard
406 improvements installed by the developer on all units as part of
407 original construction, whether or not such improvement is
408 located within the unit, except to the extent of any insurance
409 recovery specifically for any such improvements. Therefore, the
410 Legislature requires a report to be prepared by the Office of
411 Insurance Regulation of the Department of Financial Services for
412 publication 18 months from the effective date of this act,
413 evaluating premium increases or decreases for associations, unit
414 owner premium increases or decreases, recommended changes to
415 better define common areas, or any other information the Office
416 of Insurance Regulation deems appropriate.
417      (a)  A unit-owner controlled association operating a
418 residential condominium shall use its best efforts to obtain and
419 maintain adequate insurance to protect the association, the
420 association property, the common elements, and the condominium
421 property required to be insured by the association pursuant to
422 paragraph (b). If the association is developer controlled, the
423 association shall exercise due diligence to obtain and maintain
424 such insurance. Failure to obtain and maintain adequate
425 insurance during any period of developer control shall
426 constitute a breach of fiduciary responsibility by the
427 developer-appointed members of the board of directors of the
428 association, unless said members can show that despite such
429 failure, they have exercised due diligence. The declaration of
430 condominium as originally recorded, or amended pursuant to
431 procedures provided therein, may require that condominium
432 property consisting of freestanding buildings where there is no
433 more than one building in or on such unit need not be insured by
434 the association if the declaration requires the unit owner to
435 obtain adequate insurance for the condominium property. An
436 association may also obtain and maintain liability insurance for
437 directors and officers, insurance for the benefit of association
438 employees, and flood insurance for common elements, association
439 property, and units. Adequate insurance, regardless of any
440 requirement in the declaration of condominium for coverage by
441 the association for "full insurable value," "replacement cost,"
442 or the like, may include reasonable deductibles as determined by
443 the board based upon available funds or predetermined assessment
444 authority at the time that the insurance is obtained.
445      1.  Windstorm insurance coverage for a group of no fewer
446 than three communities created and operating under this chapter,
447 chapter 719, chapter 720, or chapter 721 may be obtained and
448 maintained for the communities if the insurance coverage is
449 sufficient to cover an amount equal to the probable maximum loss
450 for the communities for a 250-year windstorm event. Such
451 probable maximum loss must be determined through the use of a
452 competent model that has been accepted by the Florida Commission
453 on Hurricane Loss Projection Methodology. Such insurance
454 coverage is deemed adequate windstorm insurance for the purposes
455 of this section.
456      2.  An association or group of associations may self-insure
457 against claims against the association, the association
458 property, and the condominium property required to be insured by
459 an association, upon compliance with the applicable provisions
460 of ss. 624.460-624.488, which shall be considered adequate
461 insurance for the purposes of this section. A copy of each
462 policy of insurance in effect shall be made available for
463 inspection by unit owners at reasonable times.
464      (b)  Every hazard insurance policy issued or renewed on or
465 after January 1, 2004, to protect the condominium shall provide
466 primary coverage for:
467      1.  All portions of the condominium property located
468 outside the units;
469      2.  The condominium property located inside the units as
470 such property was initially installed, or replacements thereof
471 of like kind and quality and in accordance with the original
472 plans and specifications or, if the original plans and
473 specifications are not available, as they existed at the time
474 the unit was initially conveyed; and
475      3.  All portions of the condominium property for which the
476 declaration of condominium requires coverage by the association.
477
478 Anything to the contrary notwithstanding, the terms "condominium
479 property," "building," "improvements," "insurable improvements,"
480 "common elements," "association property," or any other term
481 found in the declaration of condominium which defines the scope
482 of property or casualty insurance that a condominium association
483 must obtain shall exclude all floor, wall, and ceiling
484 coverings, electrical fixtures, appliances, air conditioner or
485 heating equipment, water heaters, water filters, built-in
486 cabinets and countertops, and window treatments, including
487 curtains, drapes, blinds, hardware, and similar window treatment
488 components, or replacements of any of the foregoing which are
489 located within the boundaries of a unit and serve only one unit
490 and all air conditioning compressors that service only an
491 individual unit, whether or not located within the unit
492 boundaries. The foregoing is intended to establish the property
493 or casualty insuring responsibilities of the association and
494 those of the individual unit owner and do not serve to broaden
495 or extend the perils of coverage afforded by any insurance
496 contract provided to the individual unit owner. Beginning
497 January 1, 2004, the association shall have the authority to
498 amend the declaration of condominium, without regard to any
499 requirement for mortgagee approval of amendments affecting
500 insurance requirements, to conform the declaration of
501 condominium to the coverage requirements of this section.
502      (c)  Every hazard insurance policy issued or renewed on or
503 after January 1, 2004, to an individual unit owner shall provide
504 that the coverage afforded by such policy is excess over the
505 amount recoverable under any other policy covering the same
506 property. Each insurance policy issued to an individual unit
507 owner providing such coverage shall be without rights of
508 subrogation against the condominium associ