Senate 0902: Relating to Community Associations [EPCC]

05/02/07 SENATE Ordered enrolled -  SJ 00875

S902     GENERAL BILL/CS/CS by Judiciary; Regulated Industries; Jones  (Similar
  CS/H 0433, Compare H 1365, CS/H 1373, CS/CS/S 2816)
  Community Associations [EPCC]; provides for revival of certain covenants
 that have lapsed; prohibits local governments from limiting access of
  certain persons to beaches adjacent to or adjoining condominium
  property; requires association to provide certain information to
  prospective purchasers or lienholders; provides for architectural
  control covenants & parcel owner improvements; revises provisions re
  dispute resolution, etc. Amends FS.  EFFECTIVE DATE: 07/01/2007 except
  as otherwise provided.
  01/25/07 SENATE Filed
  02/08/07 SENATE Referred to Regulated Industries; Community Affairs;
  03/02/07 SENATE On Committee agenda-- Regulated Industries, 03/07/07, 9:30
                  am, 110-S
  03/06/07 SENATE Introduced, referred to Regulated Industries; Community
                  Affairs; Judiciary -SJ 00054; On Committee agenda-- Regulated
                  Industries, 03/07/07, 9:30 am, 110-S
  03/07/07 SENATE CS by Regulated Industries; YEAS  10  NAYS  0 -SJ 00134; CS
                  read 1st time on 03/15/07 -SJ 00163
  03/09/07 SENATE Pending reference review under Rule 4.7(2) -SJ 00134
  03/12/07 SENATE Now in Community Affairs; On Committee agenda-- Community
                  Affairs, 03/14/07, 1:30 pm, 412-K
  03/14/07 SENATE Favorable by Community Affairs; YEAS  10  NAYS  0 -SJ 00173
  03/15/07 SENATE Now in Judiciary -SJ 00173
  04/12/07 SENATE On Committee agenda-- Judiciary, 04/17/07, 2:00 pm, 110-S
  04/17/07 SENATE CS/CS by- Judiciary; YEAS  11  NAYS  0 -SJ 00440; CS read 1st
                  time on 04/18/07 -SJ 00443
  04/18/07 SENATE Pending reference review -under Rule 4.7(2); Placed on
                  Calendar, on 2nd reading -SJ 00440
  04/26/07 SENATE Placed on Special Order Calendar; Read 2nd time -SJ 05833
  04/27/07 SENATE Read 3rd time -SJ 00637; CS passed; YEAS  35  NAYS  1
                  -SJ 00638; Immediately certified -SJ 00638
  04/27/07 HOUSE  In Messages
  05/01/07 HOUSE  Received, referred to Calendar -HJ 00948
  05/02/07 HOUSE  Placed on Special Order Calendar; Substituted for CS/HB 433
                  -HJ 00996; Read 2nd and 3rd times -HJ 00996; CS passed;
                  YEAS  115  NAYS  0 -HJ 00996
  05/02/07 SENATE Ordered enrolled -SJ 00875

CODING: Words stricken are deletions; words underlined are additions.
  2         An act relating to community associations;
  3         creating s. 712.11, F.S.; providing for the
  4         revival of certain covenants that have lapsed;
  5         amending s. 718.106, F.S.; prohibiting local
  6         governments from limiting the access of certain
  7         persons to beaches adjacent to or adjoining
  8         condominium property; providing an exception;

  9         amending s. 718.110, F.S.; revising provisions
10         relating to the amendment of declarations;
11         providing legislative findings and a finding of
12         compelling state interest; providing criteria
13         for consent to an amendment; requiring notice
14         regarding proposed amendments to mortgagees;
15         providing criteria for notification; providing
16         for voiding certain amendments; amending s.
17         718.114, F.S.; providing that certain
18         leaseholds, memberships, or other possessory or
19         use interests shall be considered a material
20         alteration or substantial addition to certain
21         real property; amending s. 718.404, F.S.;
22         providing retroactive application of provisions
23         relating to mixed-use condominiums; amending s.
24         719.103, F.S.; providing a definition; amending
25         s. 719.507, F.S.; prohibiting laws, ordinances,
26         or regulations that apply only to improvements
27         that are or may be subjected to an equity club
28         form of ownership; amending s. 720.302, F.S.;
29         revising governing provisions relating to
30         corporations that operate residential
31         homeowners' associations; amending s. 720.303,

 1         F.S.; revising application to include certain
 2         meetings; requiring the association to provide
 3         certain information to prospective purchasers
 4         or lienholders; authorizing the association to
 5         charge a reasonable fee for providing certain
 6         information; requiring the budget to provide
 7         for annual operating expenses; authorizing the
 8         budget to include reserve accounts for capital
 9         expenditures and deferred maintenance;
10         providing a formula for calculating the amount
11         to be reserved; authorizing the association to
12         adjust replacement reserve assessments
13         annually; authorizing the developer to vote to
14         waive the reserves or reduce the funding of
15         reserves for a certain period; revising
16         provisions relating to financial reporting;
17         revising time periods in which the association
18         must complete its reporting; repealing s.
19         720.303(2), F.S., as amended, relating to board
20         meetings, to remove conflicting versions of
21         that subsection; creating s. 720.3035, F.S.;
22         providing for architectural control covenants
23         and parcel owner improvements; authorizing the
24         review and approval of plans and
25         specifications; providing limitations;
26         providing rights and privileges for parcel
27         owners as set forth in the declaration of
28         covenants; amending s. 720.305, F.S.; providing
29         that, where a member is entitled to collect
30         attorney's fees against the association, the
31         member may also recover additional amounts as


 1         determined by the court; amending s. 720.306,
 2         F.S.; providing that certain mergers or
 3         consolidations of an association shall not be
 4         considered a material or adverse alteration of
 5         the proportionate voting interest appurtenant
 6         to a parcel; amending s. 720.307, F.S.;
 7         requiring developers to deliver financial
 8         records to the board in any transition of
 9         association control to members; requiring
10         certain information to be included in the
11         records and for the records to be prepared in a
12         specified manner; amending s. 720.308, F.S.;
13         providing circumstances under which a guarantee
14         of common expenses shall be effective;
15         providing for approval of the guarantee by
16         association members; providing for a guarantee
17         period and extension thereof; requiring the
18         stated dollar amount of the guarantee to be an
19         exact dollar amount for each parcel identified
20         in the declaration; providing payments required
21         from the guarantor to be determined in a
22         certain manner; providing a formula to
23         determine the guarantor's total financial
24         obligation to the association; providing that
25         certain expenses incurred in the production of
26         certain revenues shall not be included in the
27         operating expenses; amending s. 720.311, F.S.;
28         revising provisions relating to dispute
29         resolution; providing that the filing of any
30         petition for arbitration or the serving of an
31         offer for presuit mediation shall toll the


 1         applicable statute of limitations; providing
 2         that certain disputes between an association
 3         and a parcel owner shall be subject to presui
 4         mediation; revising provisions to conform;
 5         providing that temporary injunctive relief may
 6         be sought in certain disputes subject to
 7         presuit mediation; authorizing the court to
 8         refer the parties to mediation under certain
 9         circumstances; requiring the aggrieved party to
10         serve on the responding party a written offer
11         to participate in presuit mediation; providing
12         a form for such offer; providing that service
13         of the offer is effected by the sending of such
14         an offer in a certain manner; providing that
15         the prevailing party in any subsequent
16         arbitration or litigation proceedings is
17         entitled to seek recovery of all costs and
18         attorney's fees incurred in the presuit
19         mediation process; requiring the mediator or
20         arbitrator to meet certain certification
21         requirements; removing a requirement relating
22         to development of an education program to
23         increase awareness of the operation of
24         homeowners' associations and the use of
25         alternative dispute resolution techniques;
26         providing effective dates.
28  Be It Enacted by the Legislature of the State of Florida:
30         Section 1.  Section 712.11, Florida Statutes, is
31  created to read:

1         712.11  Covenant revitalization.--A homeowners'
 2  association not otherwise subject to chapter 720 may use the
 3  procedures set forth in ss. 720.403-720.407 to revive
 4  covenants that have lapsed under the terms of this chapter.

 5         Section 2.  Subsection (5) is added to section 718.106,
 6  Florida Statutes, to read:
 7         718.106  Condominium parcels; appurtenances; possession
 8  and enjoyment.--
 9         (5)  A local government may not adopt an ordinance or
10  regulation that prohibits condominium unit owners or their
11  guests, licensees, or invitees from pedestrian access to a
12  public beach contiguous to a condominium property, except
13  where necessary to protect public health, safety, or natural
14  resources. This subsection does not prohibit a governmental
15  entity from enacting regulations governing activities taking
16  place on the beach.
17         Section 3.  Effective October 1, 2007, subsection (11)
18  of section 718.110, Florida Statutes, is amended to read:
19         718.110  Amendment of declaration; correction of error
20  or omission in declaration by circuit court.--
21         (11)  The Legislature finds that the procurement of
22  mortgagee consent to amendments that do not affect the rights
23  or interests of mortgagees is an unreasonable and substantial
24  logistical and financial burden on the unit owners and that
25  there is a compelling state interest in enabling the members
26  of a condominium association to approve amendments to the
27  condominium documents through legal means. Accordingly, and
28  notwithstanding any provision to the contrary contained in
29  this section:
30         (a)  As to any mortgage recorded on or after October 1,
31  2007, any provision in the declaration, articles of
 1  incorporation, or bylaws that requires recorded after April 1
 2  1992, may not require the consent or joinder of some or all
 3  mortgagees of units or any other portion of the condominium
 4  property to or in amendments to the declaration, articles of
 5  incorporation, or bylaws or for any other matter shall be
 6  enforceable only as to the following matters: unless the
 7  requirement is limited to amendments materially affecting the
 8  rights or interests of the mortgagees, or as otherwise
 9  required by the Federal National Mortgage Association or the
10  Federal Home Loan Mortgage Corporation, and unless the
11  requirement provides that such consent may not be unreasonably
12  withheld. It shall be presumed that, except as to
13         1.  Those matters described in subsections (4) and
14  (8).,
15         2.  Amendments to the declaration, articles of
16  incorporation, or bylaws that adversely affect the priority of
17  the mortgagee's lien or the mortgagee's rights to foreclose
18  its lien or that otherwise materially affect the rights and
19  interests of the mortgagees.
20         (b)  As to mortgages recorded before October 1, 2007,
21  any existing provisions in the declaration, articles of
22  incorporation, or bylaws requiring mortgagee consent shall be
23  enforceable.
24         (c)  In securing consent or joinder, the association
25  shall be entitled to rely upon the public records to identify
26  the holders of outstanding mortgages. The association may use
27  the address provided in the original recorded mortgage
28  document, unless there is a different address for the holder
29  of the mortgage in a recorded assignment or modification of
30  the mortgage, which recorded assignment or modification must
31  reference the official records book and page on which the

 1  original mortgage was recorded. Once the association has
 2  identified the recorded mortgages of record, the association
 3  shall, in writing, request of each unit owner whose unit is
 4  encumbered by a mortgage of record any information the owner
 5  has in his or her possession regarding the name and address of
 6  the person to whom mortgage payments are currently being made.
 7  Notice shall be sent to such person if the address provided in
 8  the original recorded mortgage document is different from the
 9  name and address of the mortgagee or assignee of the mortgage
10  as shown by the public record. The association shall be deemed
11  to have complied with this requirement by making the written
12  request of the unit owners required under this paragraph. Any
13  notices required to be sent to the mortgagees under this
14  paragraph shall be sent to all available addresses provided to
15  the association.
16         (d)  Any notice to the mortgagees required under
17  paragraph (c) may be sent by a method that establishes proof
18  of delivery, and any mortgagee who fails to respond within 60
19  days after the date of mailing shall be deemed to have
20  consented to the amendment.
21         (e)  For those amendments requiring mortgagee consent
22  on or after October 1, 2007, do not materially affect the
23  rights or interests of mortgagees. in the event mortgagee
24  consent is provided other than by properly recorded joinder,
25  such consent shall be evidenced by affidavit of the
26  association recorded in the public records of the county where
27  the declaration is recorded. Any amendment adopted without the
28  required consent of a mortgagee shall be voidable only by a
29  mortgagee who was entitled to notice and an opportunity to
30  consent. An action to void an amendment shall be subject to
31  the statute of limitations beginning 5 years after the date of
 1  discovery as to the amendments described in subparagraphs
 2  (a)1. and 2. and 5 years after the date of recordation of the
 3  certificate of amendment for all other amendments. This
 4  provision shall apply to all mortgages, regardless of the date
 5  of recordation of the mortgage
 6         (f)  Notwithstanding the provisions of this section,
 7  any amendment or amendments to conform a declaration of
 8  condominium to the insurance coverage provisions in s.
 9  718.111(11) may be made as provided in that section.
10         Section 4.  Section 718.114, Florida Statutes, is
11  amended to read:
12         718.114  Association powers.--An association has the
13  power to enter into agreements, to acquire leaseholds,
14  memberships, and other possessory or use interests in lands or
15  facilities such as country clubs, golf courses, marinas, and
16  other recreational facilities. It has this power whether or
17  not the lands or facilities are contiguous to the lands of the
18  condominium, if they are intended to provide enjoyment,
19  recreation, or other use or benefit to the unit owners. All of
20  these leaseholds, memberships, and other possessory or use
21  interests existing or created at the time of recording the
22  declaration must be stated and fully described in the
23  declaration. Subsequent to the recording of the declaration,
24  agreements acquiring these leaseholds, memberships, or other
25  possessory or use interests not entered into within 12 months
26  following the recording of the declaration shall be considered
27  a material alteration or substantial addition to the real
28  property that is association property, and the association may
29  not acquire or enter into agreements acquiring these
30  leaseholds, memberships, or other possessory or use interests
31  except as authorized by the declaration as provided in s.
 1  718.113. The declaration may provide that the rental,
 2  membership fees, operations, replacements, and other expenses
 3  are common expenses and may impose covenants and restrictions
 4  concerning their use and may contain other provisions not
 5  inconsistent with this chapter. A condominium association may
 6  conduct bingo games as provided in s. 849.0931.
 7         Section 5.  Subsections (1) and (2) of section 718.404,
 8  Florida Statutes, are amended to read:
 9         718.404  Mixed-use condominiums.--When a condominium
10  consists of both residential and commercial units, the
11  following provisions shall apply:
12         (1)  The condominium documents shall not provide that
13  the owner of any commercial unit shall have the authority to
14  veto amendments to the declaration, articles of incorporation,
15  bylaws, or rules or regulations of the association. This
16  subsection shall apply retroactively as a remedial measure.
17         (2)  Subject to s. 718.301, where the number of
18  residential units in the condominium equals or exceeds 50
19  percent of the total units operated by the association, owners
20  of the residential units shall be entitled to vote for a
21  majority of the seats on the board of administration. This
22  subsection shall apply retroactively as a remedial measure.
23         Section 6.  Subsections (18) through (27) of section
24  719.103, Florida Statutes, are renumbered as subsections (19)
25  through (28), respectively, and a new subsection (18) is added
26  to that section to read:
27         719.103  Definitions.--As used in this chapter:
28         (18)  "Equity facilities club" means a club comprised
29  of recreational facilities in which proprietary membership
30  interests are sold to individuals, which membership interests
31  entitle the individuals to use certain physical facilities
 1  owned by the equity club. Such physical facilities do not
 2  include a residential unit or accommodation. For purposes of
 3  this definition, the term "accommodation" shall include, but
 4  is not limited to, any apartment, residential cooperative
 5  unit, residential condominium unit, cabin, lodge, hotel or
 6  motel room, or other accommodation designed for overnight
 7  occupancy for one or more individuals.
 8         Section 7.  Section 719.507, Florida Statutes, is
 9  amended to read:
10         719.507  Zoning and building laws, ordinances, and
11  regulations.--All laws, ordinances, and regulations concerning
12  buildings or zoning shall be construed and applied with
13  reference to the nature and use of such property, without
14  regard to the form of ownership. No law, ordinance, or
15  regulation shall establish any requirement concerning the use,
16  location, placement, or construction of buildings or other
17  improvements which are, or may thereafter be, subjected to the
18  cooperative or equity facilities club form of ownership,
19  unless such requirement shall be equally applicable to all
20  buildings and improvements of the same kind not then, or
21  thereafter to be, subjected to the cooperative or equity
22  facilities club form of ownership. This section does not apply
23  if the owner in fee of any land enters into and records a
24  covenant that existing improvements or improvements to be
25  constructed shall not be converted to the cooperative form of
26  residential ownership prior to 5 years after the later of the
27  date of the covenant or completion date of the improvements.
28  Such covenant shall be entered into with the governing body of
29  the municipality in which the land is located or, if the land
30  is not located in a municipality, with the governing body of
31  the county in which the land is located.
 1         Section 8.  Subsections (4) and (5) of section 720.302,
 2  Florida Statutes, are amended to read:
 3         720.302  Purposes, scope, and application.--
 4         (4)  This chapter does not apply to any association
 5  that is subject to regulation under chapter 718, chapter 719,
 6  or chapter 721; or to any nonmandatory association formed
 7  under chapter 723, except to the extent that a provision of
 8  chapter 718, chapter 719, or chapter 721 is expressly
 9  incorporated into this chapter for the purpose of regulating
10  homeowners' associations.
11         (5)  Unless expressly stated to the contrary,
12  corporations not for profit that operate residential
13  homeowners' associations in this state shall be governed by
14  and subject to chapter 607, if the association was
15  incorporated under that chapter, or to chapter 617, if the
16  association was incorporated under that chapter, and this
17  chapter. This subsection is intended to clarify existing law.
18         Section 9.  Subsections (2), (6), and (7) of section
19  720.303, Florida Statutes, are amended, and paragraph (d) is
20  added to subsection (5) of that section, to read:
21         720.303  Association powers and duties; meetings of
22  board; official records; budgets; financial reporting;
23  association funds; recalls.--
24         (2)  BOARD MEETINGS.--
25         (a)  A meeting of the board of directors of an
26  association occurs whenever a quorum of the board gathers to
27  conduct association business. All meetings of the board must
28  be open to all members except for meetings between the board
29  and its attorney with respect to proposed or pending
30  litigation where the contents of the discussion would
31  otherwise be governed by the attorney-client privilege. The

 1  provisions of this subsection shall also apply to the meetings
 2  of any committee or other similar body when a final decision
 3  will be made regarding the expenditure of association funds
 4  and to meetings of any body vested with the power to approve
 5  or disapprove architectural decisions with respect to a
 6  specific parcel of residential property owned by a member of
 7  the community.
 8         (b)  Members have the right to attend all meetings of
 9  the board and to speak on any matter placed on the agenda by
10  petition of the voting interests for at least 3 minutes. The
11  association may adopt written reasonable rules expanding the
12  right of members to speak and governing the frequency,
13  duration, and other manner of member statements, which rules
14  must be consistent with this paragraph and may include a
15  sign-up sheet for members wishing to speak. Notwithstanding
16  any other law, the requirement that board meetings and
17  committee meetings be open to the members is inapplicable to
18  meetings between the board or a committee and the
19  association's attorney, with respect to meetings of the board
20  held for the purpose of discussing personnel matters.
21         (c)  The bylaws shall provide for giving notice to
22  parcel owners and members of all board meetings and, if they
23  do not do so, shall be deemed to provide the following:
24         1.  Notices of all board meetings must be posted in a
25  conspicuous place in the community at least 48 hours in
26  advance of a meeting, except in an emergency.  In the
27  alternative, if notice is not posted in a conspicuous place in
28  the community, notice of each board meeting must be mailed or
29  delivered to each member at least 7 days before the meeting,
30  except in an emergency. Notwithstanding this general notice
31  requirement, for communities with more than 100 members, the
 1  bylaws may provide for a reasonable alternative to posting or
 2  mailing of notice for each board meeting, including
 3  publication of notice, provision of a schedule of board
 4  meetings, or the conspicuous posting and repeated broadcasting
 5  of the notice on a closed-circuit cable television system
 6  serving the homeowners' association. However, if broadcast
 7  notice is used in lieu of a notice posted physically in the
 8  community, the notice must be broadcast at least four times
 9  every broadcast hour of each day that a posted notice is
10  otherwise required. When broadcast notice is provided, the
11  notice and agenda must be broadcast in a manner and for a
12  sufficient continuous length of time so as to allow an average
13  reader to observe the notice and read and comprehend th
14  entire content of the notice and the agenda. The bylaws or
15  amended bylaws may provide for giving notice by electronic
16  transmission in a manner authorized by law for meetings of the
17  board of directors, committee meetings requiring notice under
18  this section, and annual and special meetings of the members;
19  however, a member must consent in writing to receiving notice
20  by electronic transmission.
21         2.  An assessment may not be levied at a board meeting
22  unless the notice of the meeting includes a statement that
23  assessments will be considered and the nature of the
24  assessments. Written notice of any meeting at which special
25  assessments will be considered or at which amendments to rules
26  regarding parcel use will be considered must be mailed,
27  delivered, or electronically transmitted to the members and
28  parcel owners and posted conspicuously on the property or
29  broadcast on closed-circuit cable television not less than 14
30  days before the meeting.
 1         3.  Directors may not vote by proxy or by secret ballot
 2  at board meetings, except that secret ballots may be used in
 3  the election of officers. This subsection also applies to the
 4  meetings of any committee or other similar body, when a final
 5  decision will be made regarding the expenditure of associatio
 6  funds, and to any body vested with the power to approve or
 7  disapprove architectural decisions with respect to a specific
 8  parcel of residential property owned by a member of the
 9  community.
10         (d)  If 20 percent of the total voting interests
11  petition the board to address an item of business, the board
12  shall at its next regular board meeting or at a special
13  meeting of the board, but not later than 60 days after the
14  receipt of the petition, take the petitioned item up on an
15  agenda. The board shall give all members notice of the meetin
16  at which the petitioned item shall be addressed in accordance
17  with the 14-day notice requirement pursuant to subparagraph
18  (c)2. Each member shall have the right to speak for at least 3
19  minutes on each matter placed on the agenda by petition,
20  provided that the member signs the sign-up sheet, if one is
21  provided, or submits a written request to speak prior to the
22  meeting. Other than addressing the petitioned item at the
23  meeting, the board is not obligated to take any other action
24  requested by the petition
25         (5)  INSPECTION AND COPYING OF RECORDS.--The official
26  records shall be maintained within the state and must be open
27  to inspection and available for photocopying by members or
28  their authorized agents at reasonable times and places within
29  10 business days after receipt of a written request for
30  access. This subsection may be complied with by having a copy
31  of the official records available for inspection or copying in
 1  the community. If the association has a photocopy machine
 2  available where the records are maintained, it must provide
 3  parcel owners with copies on request during the inspection if
 4  the entire request is limited to no more than 25 pages.
 5         (d)  The association or its authorized agent is not
 6  required to provide a prospective purchaser or lienholder with
 7  information about the residential subdivision or the
 8  association other than information or documents required by
 9  this chapter to be made available or disclosed. The
10  association or its authorized agent may charge a reasonable
11  fee to the prospective purchaser or lienholder or the current
12  parcel owner or member for providing good faith responses to
13  requests for information by or on behalf of a prospective
14  purchaser or lienholder, other than that required by law, if
15  the fee does not exceed $150 plus the reasonable cost of
16  photocopying and any attorney's fees incurred by the
17  association in connection with the response.
18         (6)  BUDGETS.--
19         (a)  The association shall prepare an annual budget
20  that sets out the annual operating expenses. The budget must
21  reflect the estimated revenues and expenses for that year and
22  the estimated surplus or deficit as of the end of the current
23  year. The budget must set out separately all fees or charges
24  paid for by the association for recreational amenities,
25  whether owned by the association, the developer, or another
26  person. The association shall provide each member with a copy
27  of the annual budget or a written notice that a copy of the
28  budget is available upon request at no charge to the member.
29  The copy must be provided to the member within the time limits
30  set forth in subsection (5).
 1         (b)  In addition to annual operating expenses, the
 2  budget may include reserve accounts for capital expenditures
 3  and deferred maintenance for which the association is
 4  responsible to the extent that the governing documents do not
 5  limit increases in assessments, including reserves. If the
 6  budget of the association includes reserve accounts, such
 7  reserves shall be determined, maintained, and waived in the
 8  manner provided in this subsection. Once an association
 9  provides for reserve accounts in the budget, the association
10  shall thereafter determine, maintain, and waive reserves in
11  compliance with this subsection.
12         (c)  If the budget of the association does not provide
13  for reserve accounts governed by this subsection and the
14  association is responsible for the repair and maintenance of
15  capital improvements that may result in a special assessment
16  if reserves are not provided, each financial report for the
17  preceding fiscal year required by subsection (7) shall contain
18  the following statement in conspicuous type: THE BUDGET OF THE
25         (d)  An association shall be deemed to have provided
26  for reserve accounts when reserve accounts have been initially
27  established by the developer or when the membership of the
28  association affirmatively elects to provide for reserves. If
29  reserve accounts are not initially provided for by the
30  developer, the membership of the association may elect to do
31  so upon the affirmative approval of not less than a majority
 1  of the total voting interests of the association. Such
 2  approval may be attained by vote of the members at a dul
 3  called meeting of the membership or upon a written consent
 4  executed by not less than a majority of the total voting
 5  interests in the community. The approval action of the
 6  membership shall state that reserve accounts shall be provided
 7  for in the budget and designate the components for which the
 8  reserve accounts are to be established. Upon approval by the
 9  membership, the board of directors shall provide for the
10  required reserve accounts for inclusion in the budget in the
11  next fiscal year following the approval and in each year
12  thereafter. Once established as provided in this subsection,
13  the reserve accounts shall be funded or maintained or shall
14  have their funding waived in the manner provided in paragraph
15  (f).
16         (e)  The amount to be reserved in any account
17  established shall be computed by means of a formula that is
18  based upon estimated remaining useful life and estimated
19  replacement cost or deferred maintenance expense of each
20  reserve item. The association may adjust replacement reserve
21  assessments annually to take into account any changes in
22  estimates of cost or useful life of a reserve item.
23         (f)  Once a reserve account or reserve accounts are
24  established, the membership of the association, upon a
25  majority vote at a meeting at which a quorum is present, may
26  provide for no reserves or less reserves than required by this
27  section. If a meeting of the unit owners has been called to
28  determine whether to waive or reduce the funding of reserves
29  and no such result is achieved or a quorum is not present, the
30  reserves as included in the budget shall go into effect. After
31  the turnover, the developer may vote its voting interest to
 1  waive or reduce the funding of reserves. Any vote taken
 2  pursuant to this subsection to waive or reduce reserves shall
 3  be applicable only to one budget year.
 4         (g)  Funding formulas for reserves authorized by this
 5  section shall be based on either a separate analysis of each
 6  of the required assets or a pooled analysis of two or more of
 7  the required assets.
 8         1.  If the association maintains separate reserve
 9  accounts for each of the required assets, the amount of the
10  contribution to each reserve account shall be the sum of the
11  following two calculations:
12         a.  The total amount necessary, if any, to bring a
13  negative component balance to zero.
14         b.  The total estimated deferred maintenance expense or
15  estimated replacement cost of the reserve component less the
16  estimated balance of the reserve component as of the beginning
17  of the period for which the budget will be in effect. The
18  remainder, if greater than zero, shall be divided by the
19  estimated remaining useful life of the component.
21  The formula may be adjusted each year for changes in estimates
22  and deferred maintenance performed during the year and may
23  include factors such as inflation and earnings on invested
24  funds.
25         2.  If the association maintains a pooled account of
26  two or more of the required reserve assets, the amount of the
27  contribution to the pooled reserve account as disclosed on the
28  proposed budget shall not be less than that required to ensure
29  that the balance on hand at the beginning of the period for
30  which the budget will go into effect plus the projected annual
31  cash inflows over the remaining estimated useful life of all
 1  of the assets that make up the reserve pool are equal to or
 2  greater than the projected annual cash outflows over the
 3  remaining estimated useful lives of all of the assets that
 4  make up the reserve pool, based on the current reserve
 5  analysis. The projected annual cash inflows may include
 6  estimated earnings from investment of principal. The reserve
 7  funding formula shall not include any type of balloon
 8  payments.
 9         (h)  Reserve funds and any interest accruing thereon
10  shall remain in the reserve account or accounts and shall be
11  used only for authorized reserve expenditures unless their use
12  for other purposes is approved in advance by a majority vote
13  at a meeting at which a quorum is present. Prior to turnover
14  of control of an association by a developer to parcel owners,
15  the developer-controlled association shall not vote to use
16  reserves for purposes other than those for which they were
17  intended without the approval of a majority of all
18  nondeveloper voting interests voting in person or by limited
19  proxy at a duly called meeting of the association.
20         (7)  FINANCIAL REPORTING.--Within 90 days after the end
21  of the fiscal year, or annually on the date provided in the
22  bylaws, the association shall prepare and complete, or
23  contract with a third party for the preparation and completion
24  of, a financial report for the preceding fiscal year. Within
25  21 days after the final financial report is completed by the
26  association or received from the third party, but not later
27  than 120 days after the end of the fiscal year or other date
28  as provided in the bylaws, the association shall prepare an
29  annual financial report within 60 days after the close of the
30  fiscal year. The association shall, within the time limits set
31  forth in subsection (5), provide each member with a copy of
 1  the annual financial report or a written notice that a copy of
 2  the financial report is available upon request at no charge to
 3  the member. Financial reports shall be prepared as follows:
 4         (a)  An association that meets the criteria of this
 5  paragraph shall prepare or cause to be prepared a complete set
 6  of financial statements in accordance with generally accepted
 7  accounting principles as adopted by the Board of Accountancy.
 8  The financial statements shall be based upon the association's
 9  total annual revenues, as follows:
10         1.  An association with total annual revenues of
11  $100,000 or more, but less than $200,000, shall prepare
12  compiled financial statements.
13         2.  An association with total annual revenues of at
14  least $200,000, but less than $400,000, shall prepare reviewed
15  financial statements.
16         3.  An association with total annual revenues of
17  $400,000 or more shall prepare audited financial statements.
18         (b)1.  An association with total annual revenues of
19  less than $100,000 shall prepare a report of cash receipts and
20  expenditures.
21         2.  An association in a community of fewer than 50
22  parcels, regardless of the association's annual revenues, may
23  prepare a report of cash receipts and expenditures in lieu of
24  financial statements required by paragraph (a) unless the
25  governing documents provide otherwise.
26         3.  A report of cash receipts and disbursement must
27  disclose the amount of receipts by accounts and receipt
28  classifications and the amount of expenses by accounts and
29  expense classifications, including, but not limited to, the
30  following, as applicable: costs for security, professional,
31  and management fees and expenses; taxes; costs for recreation
 1  facilities; expenses for refuse collection and utility
 2  services; expenses for lawn care; costs for building
 3  maintenance and repair; insurance costs; administration and
 4  salary expenses; and reserves if maintained by the
 5  association.
 6         (c)  If 20 percent of the parcel owners petition the
 7  board for a level of financial reporting higher than that
 8  required by this section, the association shall duly notice
 9  and hold a meeting of members within 30 days of receipt of the
10  petition for the purpose of voting on raising the level of
11  reporting for that fiscal year. Upon approval of a majority of
12  the total voting interests of the parcel owners, the
13  association shall prepare or cause to be prepared, shall amend
14  the budget or adopt a special assessment to pay for the
15  financial report regardless of any provision to the contrary
16  in the governing documents, and shall provide within 90 days
17  of the meeting or the end of the fiscal year, whichever occurs
18  later:
19         1.  Compiled, reviewed, or audited financial
20  statements, if the association is otherwise required to
21  prepare a report of cash receipts and expenditures;
22         2.  Reviewed or audited financial statements, if the
23  association is otherwise required to prepare compiled
24  financial statements; or
25         3.  Audited financial statements if the association is
26  otherwise required to prepare reviewed financial statements.
27         (d)  If approved by a majority of the voting interests
28  present at a properly called meeting of the association, an
29  association may prepare or cause to be prepared:
30         1.  A report of cash receipts and expenditures in lieu
31  of a compiled, reviewed, or audited financial statement;
 1         2.  A report of cash receipts and expenditures or a
 2  compiled financial statement in lieu of a reviewed or audited
 3  financial statement; or
 4         3.  A report of cash receipts and expenditures, a
 5  compiled financial statement, or a reviewed financial
 6  statement in lieu of an audited financial statement.
 7         Section 10.  Subsection (2) of section 720.303, Florida
 8  Statutes, as amended by section 2 of chapter 2004-345 and
 9  section 15 of chapter 2004-353, Laws of Florida, is repealed.
10         Section 11.  Section 720.3035, Florida Statutes, is
11  created to read:
12         720.3035  Architectural control covenants; parcel owner
13  improvements; rights and privileges.--
14         (1)  The authority of an association or any
15  architectural, construction improvement, or other such similar
16  committee of an association to review and approve plans and
17  specifications for the location, size, type, or appearance of
18  any structure or other improvement on a parcel, or to enforce
19  standards for the external appearance of any structure or
20  improvement located on a parcel, shall be permitted only to
21  the extent that the authority is specifically stated or
22  reasonably inferred as to such location, size, type, or
23  appearance in the declaration of covenants or other published
24  guidelines and standards authorized by the declaration of
25  covenants.
26         (2)  If the declaration of covenants or other published
27  guidelines and standards authorized by the declaration of
28  covenants provides options for the use of material, the size
29  of the structure or improvement, the design of the structure
30  or improvement, or the location of the structure or
31  improvement on the parcel, neither the association nor any
 1  architectural, construction improvement, or other such similar
 2  committee of the association shall restrict the right of a
 3  parcel owner to select from the options provided in the
 4  declaration of covenants or other published guidelines and
 5  standards authorized by the declaration of covenants.
 6         (3)  Unless otherwise specifically stated in the
 7  declaration of covenants or other published guidelines and
 8  standards authorized by the declaration of covenants, each
 9  parcel shall be deemed to have only one front for purposes of
10  determining the required front setback even if the parcel is
11  bounded by a roadway or other easement on more than one side.
12  When the declaration of covenants or other published
13  guidelines and standards authorized by the declaration of
14  covenants do not provide for specific setback limitations, the
15  applicable county or municipal setback limitations shall
16  apply, and neither the association nor any architectural,
17  construction improvement, or other such similar committee of
18  the association shall enforce or attempt to enforce any
19  setback limitation that is inconsistent with the applicable
20  county or municipal standard or standards.
21         (4)  Each parcel owner shall be entitled to the rights
22  and privileges set forth in the declaration of covenants or
23  other published guidelines and standards authorized by the
24  declaration of covenants concerning the architectural use of
25  the parcel, and the construction of permitted structures and
26  improvements on the parcel and such rights and privileges
27  shall not be unreasonably infringed upon or impaired by the
28  association or any architectural, construction improvement, o
29  other such similar committee of the association. If the
30  association or any architectural, construction improvement, or
31  other such similar committee of the association should
 1  unreasonably, knowingly, and willfully infringe upon or impair
 2  the rights and privileges set forth in the declaration of
 3  covenants or other published guidelines and standards
 4  authorized by the declaration of covenants, the adversely
 5  affected parcel owner shall be entitled to recover damages
 6  caused by such infringement or impairment, including any costs
 7  and reasonable attorney's fees incurred in preserving or
 8  restoring the rights and privileges of the parcel owner set
 9  forth in the declaration of covenants or other published
10  guidelines and standards authorized by the declaration of
11  covenants.
12         (5)  Neither the association nor any architectural,
13  construction improvement, or other such similar committee of
14  the association shall enforce any policy or restriction that
15  is inconsistent with the rights and privileges of a parcel
16  owner set forth in the declaration of covenants or other
17  published guidelines and standards authorized by the
18  declaration of covenants, whether uniformly applied or not.
19  Neither the association nor any architectural, construction
20  improvement, or other such similar committee of the
21  association may rely upon a policy or restriction that is
22  inconsistent with the declaration of covenants or other
23  published guidelines and standards authorized by the
24  declaration of covenants, whether uniformly applied or not, in
25  defense of any action taken in the name of or on behalf of the
26  association against a parcel owner.
27         Section 12.  Subsection (1) of section 720.305, Florida
28  Statutes, is amended to read:
29         720.305  Obligations of members; remedies at law or in
30  equity; levy of fines and suspension of use rights; failure to
31  fill sufficient number of vacancies on board of directors to
 1  constitute a quorum; appointment of receiver upon petition of
 2  any member.--
 3         (1)  Each member and the member's tenants, guests, and
 4  invitees, and each association, are governed by, and must
 5  comply with, this chapter, the governing documents of the
 6  community, and the rules of the association. Actions at law or
 7  in equity, or both, to redress alleged failure or refusal to
 8  comply with these provisions may be brought by the association
 9  or by any member against:
10         (a)  The association;
11         (b)  A member;
12         (c)  Any director or officer of an association who
13  willfully and knowingly fails to comply with these provisions;
14  and
15         (d)  Any tenants, guests, or invitees occupying a
16  parcel or using the common areas.
18  The prevailing party in any such litigation is entitled to
19  recover reasonable attorney's fees and costs. A member
20  prevailing in an action between the association and the member
21  under this section, in addition to recovering his or her
22  reasonable attorney's fees, may recover additional amounts as
23  determined by the court to be necessary to reimburse the
24  member for his or her share of assessments levied by the
25  association to fund its expenses of the litigation. This
26  relief does not exclude other remedies provided by law. This
27  section does not deprive any person of any other available
28  right or remedy.
29         Section 13.  Paragraph (c) of subsection (1) of section
30  720.306, Florida Statutes, is amended to read:
 1         720.306  Meetings of members; voting and election
 2  procedures; amendments.--
 3         (1)  QUORUM; AMENDMENTS.--
 4         (c)  Unless otherwise provided in the governing
 5  documents as originally recorded or permitted by this chapter
 6  or chapter 617, an amendment may not materially and adversely
 7  alter the proportionate voting interest appurtenant to a
 8  parcel or increase the proportion or percentage by which a
 9  parcel shares in the common expenses of the association unless
10  the record parcel owner and all record owners of liens on the
11  parcels join in the execution of the amendment. For purposes
12  of this section, a change in quorum requirements is not an
13  alteration of voting interests. The merger or consolidation of
14  one or more associations under a plan of merger or
15  consolidation under chapter 607 or chapter 617 shall not be
16  considered a material or adverse alteration of the
17  proportionate voting interest appurtenant to a parcel.
18         Section 14.  Paragraph (t) is added to subsection (3)
19  of section 720.307, Florida Statutes, to read:
20         720.307  Transition of association control in 
21  community.--With respect to homeowners' associations:
22         (3)  At the time the members are entitled to elect at
23  least a majority of the board of directors of the homeowners'
24  association, the developer shall, at the developer's expense,
25  within no more than 90 days deliver the following documents to
26  the board:
27         (t)  The financial records, including financial
28  statements of the association, and source documents from the
29  incorporation of the association through the date of turnover.
30  The records shall be audited by an independent certified
31  public accountant for the period from the incorporation of the
 1  association or from the period covered by the last audit, if
 2  an audit has been performed for each fiscal year since
 3  incorporation. All financial statements shall be prepared in
 4  accordance with generally accepted accounting principles and
 5  shall be audited in accordance with generally accepted
 6  auditing standards, as prescribed by the Board of Accountancy,
 7  pursuant to chapter 473. The certified public accountant
 8  performing the audit shall examine to the extent necessary
 9  supporting documents and records, including the cash
10  disbursements and related paid invoices to determine if
11  expenditures were for association purposes and the billings,
12  cash receipts, and related records of the association to
13  determine that the developer was charged and paid the proper
14  amounts of assessments. This paragraph applies to associations
15  with a date of incorporation after December 31, 2007.
16         Section 15.  Section 720.308, Florida Statutes, is
17  amended to read:
18         720.308  Assessments and charges.--
19         (1)  ASSESSMENTS.--For any community created after
20  October 1, 1995, the governing documents must describe the
21  manner in which expenses are shared and specify the member's
22  proportional share thereof. Assessments levied pursuant to the
23  annual budget or special assessment must be in the member's
24  proportional share of expenses as described in the governing
25  document, which share may be different among classes of
26  parcels based upon the state of development thereof, levels of
27  services received by the applicable members, or other relevant
28  factors. While the developer is in control of the homeowners'
29  association, it may be excused from payment of its share of
30  the operating expenses and assessments related to its parcels
31  for any period of time for which the developer has, in the
 1  declaration, obligated itself to pay any operating expenses
 2  incurred that exceed the assessments receivable from other
 3  members and other income of the association. This section does
 4  not apply to an association, no matter when created, if the
 5  association is created in a community that is included in an
 6  effective development-of-regional-impact development order as
 7  of the effective date of this act, together with any approved
 8  modifications thereto.

10         (a)  Establishment of a guarantee.--If a guarantee of
11  the assessments of parcel owners is not included in the
12  purchase contracts or declaration, any agreement establishing
13  a guarantee shall only be effective upon the approval of a
14  majority of the voting interests of the members other than the
15  developer. Approval shall be expressed at a meeting of the
16  members voting in person or by limited proxy or by agreement
17  in writing without a meeting if provided in the bylaws. Such
18  guarantee must meet the requirements of this section.
19         (b)  Guarantee period.--The period of time for the
20  guarantee shall be indicated by a specific beginning and
21  ending date or event.
22         1.  The ending date or event shall be the same for all
23  of the members of an association, including members in
24  different phases of the development.
25         2.  The guarantee may provide for different intervals
26  of time during a guarantee period with different dollar
27  amounts for each such interval.
28         3.  The guarantee may provide that after the initial
29  stated period, the developer has an option to extend the
30  guarantee for one or more additional stated periods. The
31  extension of a guarantee is limited to extending the ending
 1  date or event; therefore, the developer does not have the
 2  option of changing the level of assessments guaranteed.
 3         (3)  MAXIMUM LEVEL OF ASSESSMENTS.--The stated dollar
 4  amount of the guarantee shall be an exact dollar amount for
 5  each parcel identified in the declaration. Regardless of the
 6  stated dollar amount of the guarantee, assessments charged to
 7  a member shall not exceed the maximum obligation of the member
 8  based on the total amount of the adopted budget and the
 9  member's proportionate share of the expenses as described in
10  the governing documents.
12  cash payments required from the guarantor during the guarantee
13  period shall be determined as follows:
14         (a)  If at any time during the guarantee period the
15  funds collected from member assessments at the guaranteed
16  level and other revenues collected by the association are not
17  sufficient to provide payment, on a timely basis, of all
18  assessments, including the full funding of the reserves unless
19  properly waived, the guarantor shall advance sufficient cash
20  to the association at the time such payments are due.
21         (b)  Expenses incurred in the production of
22  nonassessment revenues, not in excess of the nonassessment
23  revenues, shall not be included in the assessments. If the
24  expenses attributable to nonassessment revenues exceed
25  nonassessment revenues, only the excess expenses must be
26  funded by the guarantor. Interest earned on the investment of
27  association funds may be used to pay the income tax expense
28  incurred as a result of the investment; such expense shall not
29  be charged to the guarantor; and the net investment income
30  shall be retained by the association. Each such
31  nonassessment-revenue-generating activity shall be considered
 1  separately. Any portion of the parcel assessment which is
 2  budgeted for designated capital contributions of the
 3  association shall not be used to pay operating expenses.
 5  guarantor's total financial obligation to the association at
 6  the end of the guarantee period shall be determined on the
 7  accrual basis using the following formula: the guarantor shall
 8  pay any deficits that exceed the guaranteed amount, less the
 9  total regular periodic assessments earned by the association
10  from the members other than the guarantor during the guarantee
11  period regardless of whether the actual level charged was less
12  than the maximum guaranteed amount.
13         (6)  EXPENSES.--Expenses incurred in the production of
14  nonassessment revenues, not in excess of the nonassessment
15  revenues, shall not be included in the operating expenses. If
16  the expenses attributable to nonassessment revenues exceed
17  nonassessment revenues, only the excess expenses must be
18  funded by the guarantor. Interest earned on the investment of
19  association funds may be used to pay the income tax expense
20  incurred as a result of the investment; such expense shall not
21  be charged to the guarantor; and the net investment income
22  shall be retained by the association. Each such
23  nonassessment-revenue-generating activity shall be considered
24  separately. Any portion of the parcel assessment which is
25  budgeted for designated capital contributions of the
26  association shall not be used to pay operating expenses.

27         Section 16.  Section 720.311, Florida Statutes, is
28  amended to read:

29         720.311  Dispute resolution.--
30         (1)  The Legislature finds that alternative dispute
31  resolution has made progress in reducing court dockets and
 1  trials and in offering a more efficient, cost-effective option
 2  to litigation. The filing of any petition for mediation or
 3  arbitration or the serving of a demand for presuit mediation
 4  as provided for in this section shall toll the applicable
 5  statute of limitations. Any recall dispute filed with the
 6  department pursuant to s. 720.303(10) shall be conducted by
 7  the department in accordance with the provisions of ss.
 8  718.112(2)(j) and 718.1255 and the rules adopted by the
 9  division. In addition, the department shall conduct mandatory
10  binding arbitration of election disputes between a member and
11  an association pursuant to s. 718.1255 and rules adopted by
12  the division. Neither election disputes nor recall disputes
13  are eligible for presuit mediation; these disputes shall be
14  arbitrated by the department. At the conclusion of the
15  proceeding, the department shall charge the parties a fee in
16  an amount adequate to cover all costs and expenses incurred by
17  the department in conducting the proceeding. Initially, the
18  petitioner shall remit a filing fee of at least $200 to the
19  department. The fees paid to the department shall become a
20  recoverable cost in the arbitration proceeding, and the
21  prevailing party in an arbitration proceeding shall recover
22  its reasonable costs and attorney's fees in an amount found
23  reasonable by the arbitrator. The department shall adopt rules
24  to effectuate the purposes of this section.
25         (2)(a)  Disputes between an association and a parcel
26  owner regarding use of or changes to the parcel or the common
27  areas and other covenant enforcement disputes, disputes
28  regarding amendments to the association documents, disputes
29  regarding meetings of the board and committees appointed by
30  the board, membership meetings not including election
31  meetings, and access to the official records of the

 1  association shall be the subject of a demand filed with the
 2  department for presuit mandatory mediation served by an
 3  aggrieved party before the dispute is filed in court. Presuit
 4  mediation proceedings must be conducted in accordance with the
 5  applicable Florida Rules of Civil Procedure, and these
 6  proceedings are privileged and confidential to the same extent
 7  as court-ordered mediation. Disputes subject to presuit
 8  mediation under this section shall not include the collection
 9  of any assessment, fine, or other financial obligation,
10  including attorney's fees and costs, claimed to be due or any
11  action to enforce a prior mediation settlement agreement
12  between the parties. Also, in any dispute subject to presuit
13  mediation under this section where emergency relief is
14  required, a motion for temporary injunctive relief may be
15  filed with the court without first complying with the presuit
16  mediation requirements of this section. After any issues
17  regarding emergency or temporary relief are resolved, the
18  court may either refer the parties to a mediation program
19  administered by the courts or require mediation under this
20  section. An arbitrator or judge may not consider any
21  information or evidence arising from the presuit mediation
22  proceeding except in a proceeding to impose sanctions for
23  failure to attend a presuit mediation session or to enforce a
24  mediated settlement agreement. Persons who are not parties to
25  the dispute may not attend the presuit mediation conference
26  without the consent of all parties, except for counsel for the
27  parties and a corporate representative designated by the
28  association. When mediation is attended by a quorum of the
29  board, such mediation is not a board meeting for purposes of
30  notice and participation set forth in s. 720.303. An aggrieved
31  party shall serve on the responding party a written demand to

participate in presuit mediation in substantially the
 2  following form:
 6         The alleged aggrieved party,__________________,
 7         hereby demands that _________________, as the
 8         responding party, engage in mandatory presuit
 9         mediation in connection with the following
10         disputes, which by statute are of a type that
11         are subject to presuit mediation:
13         (List specific nature of the dispute or
14         disputes to be mediated and the authority
15         supporting a finding of a violation as to each
16         dispute.)
19         this demand to resolve the dispute through
20         presuit mediation is required before a lawsuit
21         can be filed concerning the dispute. Pursuant
22         to the statute, the parties are required to
23         engage in presuit mediation with a neutral
24         third-party mediator in order to attempt to
25         resolve this dispute without court action, and
26         the aggrieved party demands that you likewise
27         agree to this process. If you fail to
28         participate in the mediation process, suit may
29         be brought against you without further warning.

1         The process of mediation involves a supervised
 2         negotiation process in which a trained, neutral
 3         third-party mediator meets with both parties
 4         and assists them in exploring possible
 5         opportunities for resolving part or all of the
 6         dispute. By agreeing to participate in presuit
 7         mediation, you are not bound in any way to
 8         change your position. Furthermore, the mediator
 9         has no authority to make any decisions in this
10         matter or to determine who is right or wrong
11         and merely acts as a facilitator to ensure that
12         each party understands the position of the
13         other party and that all options for reasonable
14         settlement are fully explored.
16         If an agreement is reached, it shall be reduced
17         to writing and becomes a binding and
18         enforceable commitment of the parties. A
19         resolution of one or more disputes in this
20         fashion avoids the need to litigate these
21         issues in court. The failure to reach an
22         agreement, or the failure of a party to
23         participate in the process, results in the
24         mediator declaring an impasse in the mediation,
25         after which the aggrieved party may proceed to
26         court on all outstanding, unsettled disputes.
27         If you have failed or refused to participate in
28         the entire mediation process, you will not be
29         entitled to recover attorney's fees, even if
30         you prevail.

1         The aggrieved party has selected and hereby
 2         lists five certified mediators who we believe
 3         to be neutral and qualified to mediate the
 4         dispute. You have the right to select any one
 5         of these mediators. The fact that one party may
 6         be familiar with one or more of the listed
 7         mediators does not mean that the mediator
 8         cannot act as a neutral and impartial
 9         facilitator. Any mediator who cannot act in
10         this capacity is required ethically to decline
11         to accept engagement. The mediators that we
12         suggest, and their current hourly rates, are as
13         follows:
15         (List the names, addresses, telephone numbers,
16         and hourly rates of the mediators. Other
17         pertinent information about the background of
18         the mediators may be included as an
19         attachment.)
21         You may contact the offices of these mediators
22         to confirm that the listed mediators will be
23         neutral and will not show any favoritism toward
24         either party. The Florida Supreme Court can
25         provide you a list of certified mediators.
27         Unless otherwise agreed by the parties, section
28         720.311(2)(b), Florida Statutes, requires that
29         the parties share the costs of presuit
30         mediation equally, including the fee charged by
31         the mediator. An average mediation may require

1         three to four hours of the mediator's time,
 2         including some preparation time, and the
 3         parties would need to share equally the
 4         mediator's fees as well as their own attorney's
 5         fees if they choose to employ an attorney in
 6         connection with the mediation. However, use of
 7         an attorney is not required and is at the
 8         option of each party. The mediators may require
 9         the advance payment of some or all of the
10         anticipated fees. The aggrieved party hereby
11         agrees to pay or prepay one-half of the
12         mediator's estimated fees and to forward this
13         amount or such other reasonable advance
14         deposits as the mediator requires for this
15         purpose. Any funds deposited will be returned
16         to you if these are in excess of your share of
17         the fees incurred.
19         To begin your participation in presuit
20         mediation to try to resolve the dispute and
21         avoid further legal action, please sign below
22         and clearly indicate which mediator is
23         acceptable to you. We will then ask the
24         mediator to schedule a mutually convenient time
25         and place for the mediation conference to be
26         held. The mediation conference must be held
27         within ninety (90) days of this date, unless
28         extended by mutual written agreement. In the
29         event that you fail to respond within 20 days
30         from the date of this letter, or if you fail to
31         agree to at least one of the mediators that we

 1         have suggested or to pay or prepay to the
 2         mediator one-half of the costs involved, the
 3         aggrieved party will be authorized to proceed
 4         with the filing of a lawsuit against you
 5         without further notice and may seek an award of
 6         attorney's fees or costs incurred in attempting
 7         to obtain mediation.
 9         Therefore, please give this matter your
10         immediate attention. By law, your response must
11         be mailed by certified mail, return receipt
12         requested, and by first-class mail to the
13         address shown on this demand.
15         _____________________
16         _____________________
21                   AGREEMENT TO MEDIATE
23         The undersigned hereby agrees to participate in
24         presuit mediation and agrees to attend a
25         mediation conducted by the following mediator
26         or mediators who are listed above as someone
27         who would be acceptable to mediate this
28         dispute:
30         (List acceptable mediator or mediators.)
 1         I/we further agree to pay or prepay one-half of
 2         the mediator's fees and to forward such advance
 3         deposits as the mediator may require for this
 4         purpose.
 6         _______________________
 7         Signature of responding party #1
 9         _______________________
10         Telephone contact information
12         _______________________
13         Signature and telephone contact information of
14         responding party #2 (if applicable)(if property
15         is owned by more than one person, all owners
16         must sign)
18         (b)  Service of the statutory demand to participate in
19  presuit mediation shall be effected by sending a letter in
20  substantial conformity with the above form by certified mail,
21  return receipt requested, with an additional copy being sent
22  by regular first-class mail, to the address of the responding
23  party as it last appears on the books and records of the
24  association. The responding party has 20 days from the date of
25  the mailing of the statutory demand to serve a response to the
26  aggrieved party in writing. The response shall be served by
27  certified mail, return receipt requested, with an additional
28  copy being sent by regular first-class mail, to the address
29  shown on the statutory demand. Notwithstanding the foregoing,
30  once the parties have agreed on a mediator, the mediator may
31  reschedule the mediation for a date and time mutually

 1  convenient to the parties. The department shall conduct the
 2  proceedings through the use of department mediators or refer
 3  the disputes to private mediators who have been duly certified
 4  by the department as provided in paragraph (c). The parties
 5  shall share the costs of presuit mediation equally, including
 6  the fee charged by the mediator, if any, unless the parties
 7  agree otherwise, and the mediator may require advance payment
 8  of its reasonable fees and costs. The failure of any party to
 9  respond to a demand or response, to agree upon a mediator, to
10  make payment of fees and costs within the time established by
11  the mediator, or to appear for a scheduled mediation session
12  without the approval of the mediator, shall constitute the
13  failure or refusal to participate in the mediation process and
14  shall operate as an impasse in the presuit mediation by such
15  party, entitling the other party to proceed in court and to
16  seek an award of the costs and fees associated with the
17  mediation. Additionally, notwithstanding the provisions of any
18  other law or document, persons who fail or refuse to
19  participate in the entire mediation process may not recover
20  attorney's fees and costs in subsequent litigation relating to
21  the dispute. If any presuit mediation session cannot be
22  scheduled and conducted within 90 days after the offer to
23  participate in mediation was filed, an impasse shall be deemed
24  to have occurred unless both parties agree to extend this
25  deadline. If a department mediator is used, the department may
26  charge such fee as is necessary to pay expenses of the
27  mediation, including, but not limited to, the salary and
28  benefits of the mediator and any travel expenses incurred. The
29  petitioner shall initially file with the department upon
30  filing the disputes, a filing fee of $200, which shall be used
31  to defray the costs of the mediation. At the conclusion of the

mediation, the department shall charge to the parties, to be
 2  shared equally unless otherwise agreed by the parties, such
 3  further fees as are necessary to fully reimburse the
 4  department for all expenses incurred in the mediation.
 5         (c)(b)  If presuit mediation as described in paragraph
 6  (a) is not successful in resolving all issues between the
 7  parties, the parties may file the unresolved dispute in a
 8  court of competent jurisdiction or elect to enter into binding
 9  or nonbinding arbitration pursuant to the procedures set forth
10  in s. 718.1255 and rules adopted by the division, with the
11  arbitration proceeding to be conducted by a department
12  arbitrator or by a private arbitrator certified by the
13  department. If all parties do not agree to arbitration
14  proceedings following an unsuccessful presuit mediation, any
15  party may file the dispute in court. A final order resulting
16  from nonbinding arbitration is final and enforceable in the
17  courts if a complaint for trial de novo is not filed in a
18  court of competent jurisdiction within 30 days after entry of
19  the order. As to any issue or dispute that is not resolved at
20  presuit mediation, and as to any issue that is settled at
21  presuit mediation but is thereafter subject to an action
22  seeking enforcement of the mediation settlement, the
23  prevailing party in any subsequent arbitration or litigation
24  proceeding shall be entitled to seek recovery of all costs and
25  attorney's fees incurred in the presuit mediation process.
26         (d)(c)  The department shall develop a certification
27  and training program for private mediators and private
28  arbitrators which shall emphasize experience and expertise in
29  the area of the operation of community associations. A
30  mediator or arbitrator shall be authorized to conduct
31  mediation or arbitration under this section certified by the

department only if he or she has been certified as a circuit
 2  court civil mediator or arbitrator, respectively, pursuant to
 3  the requirements established attended at least 20 hours of
 4  training in mediation or arbitration, as appropriate, and only
 5  if the applicant has mediated or arbitrated at least 10
 6  disputes involving community associations within 5 years prior
 7  to the date of the application, or has mediated or arbitrated
 8  10 disputes in any area within 5 years prior to the date of
 9  application and has completed 20 hours of training in
10  community association disputes. In order to be certified by
11  the department, any mediator must also be certified by the
12  Florida Supreme Court. Settlement agreements resulting from
13  mediation shall not have precedential value in proceedings
14  involving parties other than those participating in the
15  mediation to support either a claim or defense in other
16  disputes. The department may conduct the training and
17  certification program within the department or may contract
18  with an outside vendor to perform the training or
19  certification. The expenses of operating the training and
20  certification and training program shall be paid by the moneys
21  and filing fees generated by the arbitration of recall and
22  election disputes and by the mediation of those disputes
23  referred to in this subsection and by the training fees.
24         (e)(d)  The presuit mediation procedures provided by
25  this subsection may be used by a Florida corporation
26  responsible for the operation of a community in which the
27  voting members are parcel owners or their representatives, in
28  which membership in the corporation is not a mandatory
29  condition of parcel ownership, or which is not authorized to
30  impose an assessment that may become a lien on the parcel.

1         (3)  The department shall develop an education program
 2  to assist homeowners, associations, board members, and
 3  managers in understanding and increasing awareness of the
 4  operation of homeowners' associations pursuant to this chapter
 5  and in understanding the use of alternative dispute resolution
 6  techniques in resolving disputes between parcel owners and
 7  associations or between owners. Such education program may
 8  include the development of pamphlets and other written
 9  instructional guides, the holding of classes and meetings by
10  department employees or outside vendors, as the department
11  determines, and the creation and maintenance of a website
12  containing instructional materials. The expenses of operating
13  the education program shall be initially paid by the moneys
14  and filing fees generated by the arbitration of recall and
15  election disputes and by the mediation of those disputes
16  referred to in this subsection.

17         Section 17.  Except as otherwise expressly provided in
18  this act, this act shall take effect July 1, 2007.
CODING: Words stricken are deletions; words underlined are additions.