New rules for condo, homeowner

and community associations

Article Courtesy of The Naples Daily News

By Ilene Stackel

Published July 8, 2008 

Though Gov. Charlie Crist vetoed legislation that would have enabled homeowner associations to cut back on pool inspections, he did approve a number of bills that amend laws governing condo, homeowner and community associations.

In short, association bullies can no longer terrorize a member.

Katzman Garfinkel law partner Donna Berger, who also heads the Community Advocacy Network, a lobbying arm for the law firm’s community association clients, explained changes that became law on July 1:

-- Amendments to laws governed by the Division of Florida Condominiums, Timeshares and Mobile Homes (“division”) became law last week, starting with a name change for hired, outside community managers. Now, such a company will be called a Community Association Management Firm. The division will also create and administer Regulatory Council of Community Association Managers.

That group would recommend changes to community association law and offer educational programs by the division.

-- Now a firm serving as a community association management company must be properly licensed if it manages more than 10 units or has an association budget greater than $100,000. The firm must designate one person from the management company to respond to all division inquiries. Management companies will be subject to discipline if they do not disclose financial interests in outside businesses that get work from — or sell products to — the association.

-- The Condo Act requires association officers and directors — who usually own units — to financially and legally act in the best interest of the entire association. Directors are limited to one-year terms unless the bylaws provide for staggered terms not to exceed two years; and only if the majority of owners approve the staggered terms.

-- If the condominium consists of more than 10 units, co-owners may not serve as members of the board at the same time; any unit owners desiring to run for the board must submit a signed form provided by the division which certifies that he or she has read and understands to the best of their ability the governing documents of the association, condominium act and administrative rules.

This form must be sent out with the 60-day first notice of the annual meeting and election and must be returned by the candidates not less than 35 days prior to the election.

-- Any board member delinquent for more than 90 days in assessments is ineligible for board membership and is automatically removed from office; any convicted felon who has not had his or her civil rights restored for at least five years before the date of the board election is ineligible for board candidacy; any director or officer charged with felony theft or embezzlement of association funds is automatically removed from office and shall be reinstated for the remainder of the term only if that person is found not guilty.

-- The following emergency powers kick in only if the governor declares a state of emergency: The ability to conduct meetings without satisfying the notice requirements; cancel and reschedule meetings; name assistant directors or officers; relocate the principal office of the association; mitigate further damages; use reserve funds without a membership vote; declare building and/or units uninhabitable and order a mandatory evacuation (and would not be held liable if owners or occupants choose to stay;) contract on behalf of unit owners; levy special assessments without a vote of the membership; borrow money to fund emergency repairs.

-- Any officer or director who has a financial interest in any company doing business with the association must disclose that relationship — noting in the minutes of association’s records. A board member with a disclosed financial interests may be counted for quorum purposes but may not vote on the contract ratification.

-- Accounting records cannot be intentionally defaced or destroyed, and if so, the offender faces recall or removal as an officer or director, and could be subject to civil penalties.

-- A developer turnover inspection report is now an official association record. Such records must be retained for at least seven years, and must be located within 45 miles of the condominium, or in the county where the condominium is located.

-- Unit owners’ social security numbers, driver license numbers or credit card numbers are exempt from inspection requests.

-- Developers must prepare a Turnover Inspection Report that is sealed by an architect or engineer, including analysis for roof, structure, electrical systems, plumbing, and other specific items that can be paid for out of association financial reserves.

-- A majority of the unit owners may authorize the board to implement a “Mandatory Hurricane Shutter Program” that would enable the association to install shutters or other hurricane protection that comply with the applicable building code. Those costs shall be considered a common expense of the condominium. Previously installed shutters would not be removed by the association if those protections are compliant with existing building codes. However, any unit owner that has already installed hurricane shutters will receive credit for the assessed costs of the association’s common expenses.

-- Financial reporting requirements now must include specific disclosure regarding reserves and whether such funds are sufficient to prevent a special assessment; cash receipts and expenditures reports may be used instead of an annual audited financial report if a majority of the membership approves at a properly noticed meeting.

-- Any unit owned by the association has no voting rights; all member meetings must be held within 45 miles of the condominium; unit owners may display on the mantle or frame of the unit’s door a religious object not to exceed 3 inches wide, 6 inches high, and 1.5 Inches deep.

-- Now prohibited: lawsuit where members are sued by individuals, business entities, or government as a result of that owner’s appearance and presentation before a governmental body on matters related to the association. That means that if you own a condo, don’t like what the association or a contractor is doing and complain, they cannot turn around and sue you.

Any member sued in such a manner may move to dismiss, and if successful, the court may award actual damages, and may award triple damages along with attorney’s fees. In addition, association funds may not be used to prosecute that kind of lawsuit against an owner.

-- All parcel or unit owners may display one portable, removable official U.S. or Florida flag; and one portable, removal official Army, Navy, Air Force, Marine Corps, Coast Guard or Prisoner of War-Missing in Action flag. A freestanding flagpole can not be taller than 20 feet.