PART
III
RIGHTS AND OBLIGATIONS OF
ASSOCIATION (ss. 718.301-718.303) |
718.301 Transfer
of association control.
718.302 Agreements
entered into by the association.
718.3025
Agreements for operation, maintenance, or management of condominiums; specific
requirements.
718.3026
Contracts for products and services; in writing; bids; exceptions.
718.303 Obligations
of owners; waiver; levy of fine against unit by association.
718.301
Transfer of association control.--
(1) When unit owners other than the developer own 15 percent
or more of the units in a condominium that will be operated ultimately
by an association, the unit owners other than the developer shall be entitled
to elect no less than one-third of the members of the board of administration
of the association. Unit owners other than the developer are entitled to
elect not less than a majority of the members of the board of administration
of an association:
(a) Three years after 50 percent of the units that will be operated
ultimately by the association have been conveyed to purchasers;
(b) Three months after 90 percent of the units that will be operated
ultimately by the association have been conveyed to purchasers;
(c) When all the units that will be operated ultimately by the
association have been completed, some of them have been conveyed to purchasers,
and none of the others are being offered for sale by the developer in the
ordinary course of business;
(d) When some of the units have been conveyed to purchasers and
none of the others are being constructed or offered for sale by the developer
in the ordinary course of business; or
(e) Seven years after recordation of the declaration of condominium;
or, in the case of an association which may ultimately operate more than
one condominium, 7 years after recordation of the declaration for the first
condominium it operates; or, in the case of an association operating a
phase condominium created pursuant to s. 718.403, 7 years after recordation
of the declaration creating the initial phase,
whichever occurs first. The developer is entitled to elect at least
one member of the board of administration of an association as long as
the developer holds for sale in the ordinary course of business at least
5 percent, in condominiums with fewer than 500 units, and 2 percent, in
condominiums with more than 500 units, of the units in a condominium operated
by the association. Following the time the developer relinquishes control
of the association, the developer may exercise the right to vote any developer-owned
units in the same manner as any other unit owner except for purposes of
reacquiring control of the association or selecting the majority members
of the board of administration.
(2) Within 75 days after the unit owners other than the developer
are entitled to elect a member or members of the board of administration
of an association, the association shall call, and give not less than 60
days' notice of an election for the members of the board of administration.
The election shall proceed as provided in s. 718.112(2)(d). The notice
may be given by any unit owner if the association fails to do so. Upon
election of the first unit owner other than the developer to the board
of administration, the developer shall forward to the division the name
and mailing address of the unit owner board member.
(3) If a developer holds units for sale in the ordinary course
of business, none of the following actions may be taken without approval
in writing by the developer:
(a) Assessment of the developer as a unit owner for capital improvements.
(b) Any action by the association that would be detrimental to
the sales of units by the developer. However, an increase in assessments
for common expenses without discrimination against the developer shall
not be deemed to be detrimental to the sales of units.
(4) At the time that unit owners other than the developer elect
a majority of the members of the board of administration of an association,
the developer shall relinquish control of the association, and the unit
owners shall accept control. Simultaneously, or for the purposes of paragraph
(c) not more than 90 days thereafter, the developer shall deliver to the
association, at the developer's expense, all property of the unit owners
and of the association which is held or controlled by the developer, including,
but not limited to, the following items, if applicable, as to each condominium
operated by the association:
(a)1. The original or a photocopy of the recorded declaration
of condominium and all amendments thereto. If a photocopy is provided,
it shall be certified by affidavit of the developer or an officer or agent
of the developer as being a complete copy of the actual recorded declaration.
2. A certified copy of the articles of incorporation of the association
or, if the association was created prior to the effective date of this
act and it is not incorporated, copies of the documents creating the association.
3. A copy of the bylaws.
4. The minute books, including all minutes, and other books and
records of the association, if any.
5. Any house rules and regulations which have been promulgated.
(b) Resignations of officers and members of the board of administration
who are required to resign because the developer is required to relinquish
control of the association.
(c) The financial records, including financial statements of
the association, and source documents from the incorporation of the association
through the date of turnover. The records shall be audited for the period
from the incorporation of the association or from the period covered by
the last audit, if an audit has been performed for each fiscal year since
incorporation, by an independent certified public accountant. All financial
statements shall be prepared in accordance with generally accepted accounting
principles and shall be audited in accordance with generally accepted auditing
standards, as prescribed by the Florida Board of Accountancy, pursuant
to chapter 473. The accountant performing the audit shall examine to the
extent necessary supporting documents and records, including the cash disbursements
and related paid invoices to determine if expenditures were for association
purposes and the billings, cash receipts, and related records to determine
that the developer was charged and paid the proper amounts of assessments.
(d) Association funds or control thereof.
(e) All tangible personal property that is property of the association,
which is represented by the developer to be part of the common elements
or which is ostensibly part of the common elements, and an inventory of
that property.
(f) A copy of the plans and specifications utilized in the construction
or remodeling of improvements and the supplying of equipment to the condominium
and in the construction and installation of all mechanical components serving
the improvements and the site with a certificate in affidavit form of the
developer or the developer's agent or an architect or engineer authorized
to practice in this state that such plans and specifications represent,
to the best of his or her knowledge and belief, the actual plans and specifications
utilized in the construction and improvement of the condominium property
and for the construction and installation of the mechanical components
serving the improvements. If the condominium property has been declared
a condominium more than 3 years after the completion of construction or
remodeling of the improvements, the requirements of this paragraph do not
apply.
(g) A list of the names and addresses, of which the developer
had knowledge at any time in the development of the condominium, of all
contractors, subcontractors, and suppliers utilized in the construction
or remodeling of the improvements and in the landscaping of the condominium
or association property.
(h) Insurance policies.
(i) Copies of any certificates of occupancy which may have been
issued for the condominium property.
(j) Any other permits applicable to the condominium property
which have been issued by governmental bodies and are in force or were
issued within 1 year prior to the date the unit owners other than the developer
take control of the association.
(k) All written warranties of the contractor, subcontractors,
suppliers, and manufacturers, if any, that are still effective.
(l) A roster of unit owners and their addresses and telephone
numbers, if known, as shown on the developer's records.
(m) Leases of the common elements and other leases to which the
association is a party.
(n) Employment contracts or service contracts in which the association
is one of the contracting parties or service contracts in which the association
or the unit owners have an obligation or responsibility, directly or indirectly,
to pay some or all of the fee or charge of the person or persons performing
the service.
(o) All other contracts to which the association is a party.
(5) If, during the period prior to the time that the developer
relinquishes control of the association pursuant to subsection (4), any
provision of the Condominium Act or any rule promulgated thereunder is
violated by the association, the developer is responsible for such violation
and is subject to the administrative action provided in this chapter for
such violation or violations and is liable for such violation or violations
to third parties. This subsection is intended to clarify existing law.
(6) The division has authority to adopt rules pursuant to the
Administrative Procedure Act to ensure the efficient and effective transition
from developer control of a condominium to the establishment of a unit-owner
controlled association.
718.302
Agreements entered into by the association.--
(1) Any grant or reservation made by a declaration, lease, or
other document, and any contract made by an association prior to assumption
of control of the association by unit owners other than the developer,
that provides for operation, maintenance, or management of a condominium
association or property serving the unit owners of a condominium shall
be fair and reasonable, and such grant, reservation, or contract may be
canceled by unit owners other than the developer:
(a) If the association operates only one condominium and the
unit owners other than the developer have assumed control of the association,
or if unit owners other than the developer own not less than 75 percent
of the voting interests in the condominium, the cancellation shall be by
concurrence of the owners of not less than 75 percent of the voting interests
other than the voting interests owned by the developer. If a grant, reservation,
or contract is so canceled and the unit owners other than the developer
have not assumed control of the association, the association shall make
a new contract or otherwise provide for maintenance, management, or operation
in lieu of the canceled obligation, at the direction of the owners of not
less than a majority of the voting interests in the condominium other than
the voting interests owned by the developer.
(b) If the association operates more than one condominium and
the unit owners other than the developer have not assumed control of the
association, and if unit owners other than the developer own at least 75
percent of the voting interests in a condominium operated by the association,
any grant, reservation, or contract for maintenance, management, or operation
of buildings containing the units in that condominium or of improvements
used only by unit owners of that condominium may be canceled by concurrence
of the owners of at least 75 percent of the voting interests in the condominium
other than the voting interests owned by the developer. No grant, reservation,
or contract for maintenance, management, or operation of recreational areas
or any other property serving more than one condominium, and operated by
more than one association, may be canceled except pursuant to paragraph
(d).
(c) If the association operates more than one condominium and
the unit owners other than the developer have assumed control of the association,
the cancellation shall be by concurrence of the owners of not less than
75 percent of the total number of voting interests in all condominiums
operated by the association other than the voting interests owned by the
developer.
(d) If the owners of units in a condominium have the right to
use property in common with owners of units in other condominiums and those
condominiums are operated by more than one association, no grant, reservation,
or contract for maintenance, management, or operation of the property serving
more than one condominium may be canceled until unit owners other than
the developer have assumed control of all of the associations operating
the condominiums that are to be served by the recreational area or other
property, after which cancellation may be effected by concurrence of the
owners of not less than 75 percent of the total number of voting interests
in those condominiums other than voting interests owned by the developer.
(2) Any grant or reservation made by a declaration, lease, or
other document, or any contract made by the developer or association prior
to the time when unit owners other than the developer elect a majority
of the board of administration, which grant, reservation, or contract requires
the association to purchase condominium property or to lease condominium
property to another party, shall be deemed ratified unless rejected by
a majority of the voting interests of unit owners other than the developer
within 18 months after unit owners other than the developer elect a majority
of the board of administration. This subsection does not apply to any grant
or reservation made by a declaration whereby persons other than the developer
or the developer's heirs, assigns, affiliates, directors, officers, or
employees are granted the right to use the condominium property, so long
as such persons are obligated to pay, at a minimum, a proportionate share
of the cost associated with such property.
(3) Any grant or reservation made by a declaration, lease, or
other document, and any contract made by an association, whether before
or after assumption of control of the association by unit owners other
than the developer, that provides for operation, maintenance, or management
of a condominium association or property serving the unit owners of a condominium
shall not be in conflict with the powers and duties of the association
or the rights of the unit owners as provided in this chapter. This subsection
is intended only as a clarification of existing law.
(4) Any grant or reservation made by a declaration, lease, or
other document, and any contract made by an association prior to assumption
of control of the association by unit owners other than the developer,
shall be fair and reasonable.
(5) It is declared that the public policy of this state prohibits
the inclusion or enforcement of escalation clauses in management contracts
for condominiums, and such clauses are hereby declared void for public
policy. For the purposes of this section, an escalation clause is any clause
in a condominium management contract which provides that the fee under
the contract shall increase at the same percentage rate as any nationally
recognized and conveniently available commodity or consumer price index.
(6) Any action to compel compliance with the provisions of this
section or of s. 718.301 may be brought pursuant to the summary procedure
provided for in s. 51.011. In any such action brought to compel compliance
with the provisions of s. 718.301, the prevailing party is entitled to
recover reasonable attorney's fees.
718.3025
Agreements for operation, maintenance, or management of condominiums; specific
requirements.--
(1) No written contract between a party contracting to provide
maintenance or management services and an association which contract provides
for operation, maintenance, or management of a condominium association
or property serving the unit owners of a condominium shall be valid or
enforceable unless the contract:
(a) Specifies the services, obligations, and responsibilities
of the party contracting to provide maintenance or management services
to the unit owners.
(b) Specifies those costs incurred in the performance of those
services, obligations, or responsibilities which are to be reimbursed by
the association to the party contracting to provide maintenance or management
services.
(c) Provides an indication of how often each service, obligation,
or responsibility is to be performed, whether stated for each service,
obligation, or responsibility or in categories thereof.
(d) Specifies a minimum number of personnel to be employed by
the party contracting to provide maintenance or management services for
the purpose of providing service to the association.
(e) Discloses any financial or ownership interest which the developer,
if the developer is in control of the association, holds with regard to
the party contracting to provide maintenance or management services.
(2) In any case in which the party contracting to provide maintenance
or management services fails to provide such services in accordance with
the contract, the association is authorized to procure such services from
some other party and shall be entitled to collect any fees or charges paid
for service performed by another party from the party contracting to provide
maintenance or management services.
(3) Any services or obligations not stated on the face of the
contract shall be unenforceable.
(4) Notwithstanding the fact that certain vendors contract with
associations to maintain equipment or property which is made available
to serve unit owners, it is the intent of the Legislature that this section
applies to contracts for maintenance or management services for which the
association pays compensation. This section does not apply to contracts
for services or property made available for the convenience of unit owners
by lessees or licensees of the association, such as coin-operated laundry,
food, soft drink, or telephone vendors; cable television operators; retail
store operators; businesses; restaurants; or similar vendors.
718.3026
Contracts for products and services; in writing; bids; exceptions.--
Associations with less than 100 units may opt out of the provisions
of this section if two-thirds of the unit owners vote to do so, which opt-out
may be accomplished by a proxy specifically setting forth the exception
from this section.
(1) All contracts as further described herein or any contract
that is not to be fully performed within 1 year after the making thereof,
for the purchase, lease, or renting of materials or equipment to be used
by the association in accomplishing its purposes under this chapter, and
all contracts for the provision of services, shall be in writing. If a
contract for the purchase, lease, or renting of materials or equipment,
or for the provision of services, requires payment by the association on
behalf of any condominium operated by the association in the aggregate
that exceeds 5 percent of the total annual budget of the association, including
reserves, the association shall obtain competitive bids for the materials,
equipment, or services. Nothing contained herein shall be construed to
require the association to accept the lowest bid.
(2)(a)1. Notwithstanding the foregoing, contracts with employees
of the association, and contracts for attorney, accountant, architect,
community association manager, timeshare management firm, engineering,
and landscape architect services are not subject to the provisions of this
section.
2. A contract executed before January 1, 1992, and any renewal
thereof, is not subject to the competitive bid requirements of this section.
If a contract was awarded under the competitive bid procedures of this
section, any renewal of that contract is not subject to such competitive
bid requirements if the contract contains a provision that allows the board
to cancel the contract on 30 days' notice. Materials, equipment, or services
provided to a condominium under a local government franchise agreement
by a franchise holder are not subject to the competitive bid requirements
of this section. A contract with a manager, if made by a competitive bid,
may be made for up to 3 years. A condominium whose declaration or bylaws
provides for competitive bidding for services may operate under the provisions
of that declaration or bylaws in lieu of this section if those provisions
are not less stringent than the requirements of this section.
(b) Nothing contained herein is intended to limit the ability
of an association to obtain needed products and services in an emergency.
(c) This section shall not apply if the business entity with
which the association desires to enter into a contract is the only source
of supply within the county serving the association.
(d) Nothing contained herein shall excuse a party contracting
to provide maintenance or management services from compliance with s. 718.3025.
718.303
Obligations of owners; waiver; levy of fine against unit by association.--
(1) Each unit owner, each tenant and other invitee, and each
association shall be governed by, and shall comply with the provisions
of, this chapter, the declaration, the documents creating the association,
and the association bylaws and the provisions thereof shall be deemed expressly
incorporated into any lease of a unit. Actions for damages or for injunctive
relief, or both, for failure to comply with these provisions may be brought
by the association or by a unit owner against:
(a) The association.
(b) A unit owner.
(c) Directors designated by the developer, for actions taken
by them prior to the time control of the association is assumed by unit
owners other than the developer.
(d) Any director who willfully and knowingly fails to comply
with these provisions.
(e) Any tenant leasing a unit, and any other invitee occupying
a unit.
The prevailing party in any such action or in any action in which the
purchaser claims a right of voidability based upon contractual provisions
as required in s. 718.503(1)(a) is entitled to recover reasonable attorney's
fees. A unit owner prevailing in an action between the association and
the unit owner under this section, in addition to recovering his or her
reasonable attorney's fees, may recover additional amounts as determined
by the court to be necessary to reimburse the unit owner for his or her
share of assessments levied by the association to fund its expenses of
the litigation. This relief does not exclude other remedies provided by
law. Actions arising under this subsection shall not be deemed to be
actions for specific performance.
(2) A provision of this chapter may not be waived if the waiver
would adversely affect the rights of a unit owner or the purpose of the
provision, except that unit owners or members of a board of administration
may waive notice of specific meetings in writing if provided by the bylaws.
Any instruction given in writing by a unit owner or purchaser to an escrow
agent may be relied upon by an escrow agent, whether or not such instruction
and the payment of funds thereunder might constitute a waiver of any provision
of this chapter.
(3) If the declaration or bylaws so provide, the association
may levy reasonable fines against a unit for the failure of the owner of
the unit, or its occupant, licensee, or invitee, to comply with any provision
of the declaration, the association bylaws, or reasonable rules of the
association. No fine will become a lien against a unit. No fine may exceed
$100 per violation. However, a fine may be levied on the basis of each
day of a continuing violation, with a single notice and opportunity for
hearing, provided that no such fine shall in the aggregate exceed $1,000.
No fine may be levied except after giving reasonable notice and opportunity
for a hearing to the unit owner and, if applicable, its licensee or invitee.
The hearing must be held before a committee of other unit owners. If the
committee does not agree with the fine, the fine may not be levied. The
provisions of this subsection do not apply to unoccupied units. |