Senate 2816: Relating to Community Associations CS for CS |
S2816 GENERAL BILL/CS/CS by
Community Affairs; Regulated Industries; Villalobos (Similar CS/H 1373, Compare CS/H 0433, CS/CS/S 0902) Community Associations [EPCC]; revises required contents of condominium declaration; provides authorization for condominium associations to access units for specified purposes; revises procedures used in preparing association's annual financial report; prohibits associations from restricting use of hurricane shutters in certain circumstances, etc. Amends Chs. 718, 720. EFFECTIVE DATE: 07/01/2007. 03/05/07 SENATE Filed 03/20/07 SENATE Introduced, referred to Regulated Industries; Community Affairs; Judiciary; General Government Appropriations -SJ 00196 04/11/07 SENATE On Committee agenda-- Regulated Industries, 04/16/07, 1:30 pm, 110-S 04/16/07 SENATE CS by Regulated Industries; YEAS 7 NAYS 2 -SJ 00439; CS read 1st time on 04/18/07 -SJ 00453 04/18/07 SENATE Pending reference review under Rule 4.7(2); Now in Community Affairs -SJ 00439 04/19/07 SENATE On Committee agenda-- Community Affairs, 04/24/07, 1:45 pm, 412-K 04/24/07 SENATE CS/CS by Community Affairs; YEAS 7 NAYS 0 -SJ 00545; CS read 1st time on 04/25/07 -SJ 00563 04/25/07 SENATE Pending reference review under Rule 4.7(2) 04/26/07 SENATE Now in Judiciary -SJ 00545 Florida Senate - 2007 CS for CS for SB 2816 By the Committees on Community Affairs; Regulated Industries; and Senator Villalobos 578-2666-07 1 A bill to be entitled 2 An act relating to community associations; 3 amending s. 718.104, F.S.; revising required 4 contents of a condominium declaration; amending 5 s. 718.110, F.S.; requiring that notice of 6 proposed amendments be provided to unit owners; 7 amending s. 718.111, F.S.; providing 8 authorization for condominium associations to 9 access units for specified purposes; requiring 10 that official records of the association be 11 made available at certain locations; providing 12 that certain records may not be accessible to 13 unit owners; removing the requirement that the 14 association's annual financial report be 15 provided only to unit owners providing a 16 written request for the report; restricting a 17 condominium association from waiving a 18 financial report for more than 2 years; 19 providing duties for condominium boards of 20 administration in the event of certain 21 casualties; providing that certain assessments 22 may be made against unit owners under certain 23 conditions; amending s. 718.112, F.S.; 24 authorizing the board or membership to 25 determine the composition of the board of 26 administration under certain circumstances; 27 requiring members of the board of 28 administration to be unit owners, absent 29 provisions indicating board member 30 requirements; requiring the board to respond to 31 certain inquiries by certified mail, return
Page 1 1 receipt requested; authorizing a condominium 2 association to respond only twice every 30 days 3 to unit owner inquiries; providing board of 4 administration and unit owners' meeting 5 requirements; requiring the board to address 6 certain agenda items proposed by a petition of 7 20 percent of the unit owners; revising notice 8 procedures; revising the terms of office and 9 reelection of the members of a condominium 10 association board; providing that certain 11 persons providing notice of a meeting must 12 provide an affidavit affirming that the notices 13 were delivered; authorizing the association's 14 representative to provide certain notices; 15 providing for the securing of ballots; revising 16 procedures relating to the filling of a vacancy 17 on the board; removing a provision allowing an 18 association to provide for different voting and 19 election procedures in its bylaws; providing 20 unit owners with the right to have items placed 21 on the agenda of the annual meeting and voted 22 upon under certain conditions; requiring the 23 association to prepare an annual budget of 24 estimated revenues and expenses; requiring the 25 budget to include reserve accounts for certain 26 purposes; requiring that certain ballot 27 statements contain certain statements; 28 requiring a vote to provide for no reserves or 29 percentage of reserves to be made at certain 30 times; authorizing the association to use 31 reserve funds for nonscheduled purposes under Page 2 1 certain conditions; prohibiting the board from 2 applying for or accepting certain loans or 3 lines of credit; requiring that common expenses 4 be paid by the developer during a specified 5 time; requiring that assessments be made 6 against units on a quarter-annual or more 7 frequent basis; providing that certain 8 provisions may not preclude the right of an 9 association to accelerate assessments of 10 certain owners delinquent in payment of common 11 expenses; providing that accelerated 12 assessments are due and payable after the claim 13 of lien is filed; revising assessment 14 requirements; deleting the requirement that the 15 bylaws include an element for mandatory 16 nonbinding arbitration; amending s. 718.113, 17 F.S.; requiring boards of administration to 18 adopt or restate hurricane shutter 19 specifications yearly at the annual meeting; 20 authorizing the board to install hurricane 21 protection that complies with the applicable 22 building code; requiring the board to have the 23 condominium buildings periodically inspected 24 for structural and electrical soundness by a 25 professional engineer or professional architect 26 registered in the state; requiring the 27 inspector to provide a report to the 28 association and unit owners; prohibiting the 29 board from prohibiting the display of certain 30 religious items on the front-door area of a 31 unit; creating s. 718.1224, F.S.; prohibiting Page 3 1 certain lawsuits arising from unit owners' 2 appearances and presentations before a 3 governmental entity; providing a definition; 4 providing for award of damages and attorney's 5 fees; amending s. 718.1255, F.S.; requiring the 6 division to promptly refer certain cases to 7 mediation; creating s. 718.1257, F.S.; 8 providing that condominium unit owners and 9 renters have the right to own a companion 10 animal and to have that animal live with them 11 under specified conditions; amending s. 12 718.302, F.S.; conforming provisions; amending 13 s. 718.3025, F.S.; providing requirements for 14 certain contracts between a party contracting 15 to provide maintenance or management services 16 and an association; amending s. 718.3026, F.S.; 17 providing that certain contracts between a 18 service provider and an association may not be 19 for a term in excess of 3 years and may not 20 contain an automatic renewal clause; requiring 21 that certain contracts for construction occur 22 under the advisement of an attorney; amending 23 s. 718.303, F.S.; requiring hearings to levy 24 fines to be held before a committee of unit 25 owners who are not members of the board; 26 requiring that persons subject to certain 27 actions be notified of their violations in a 28 certain manner; providing a timeframe within 29 which a person must respond; authorizing the 30 budget to include reserve accounts for capital 31 expenditures and deferred maintenance; Page 4 1 providing a formula for calculating the amount 2 to be reserved; authorizing the association to 3 adjust replacement reserve assessments 4 annually; authorizing the developer to vote to 5 waive the reserves or reduce the funding of 6 reserves for a certain period; revising 7 provisions relating to financial reporting; 8 revising time periods in which the association 9 must complete its reporting; amending s. 10 718.404, F.S.; providing for retroactive 11 application of certain provisions; amending s. 12 718.501, F.S.; requiring the division to 13 prepare and disseminate a prospectus and other 14 information for use by owners, purchasers, 15 lessees, and developers of residential 16 condominiums; providing that the board member 17 training provided by the division shall be 18 provided in conjunction with recommendations by 19 the ombudsman; providing powers and duties of 20 the division with respect to association 21 violations; requiring associations to provide 22 certain notice and to participate in certain 23 educational training; amending s. 718.5011, 24 F.S.; restricting location of the Office of the 25 Condominium Ombudsman; providing that the 26 ombudsman shall exercise his or her 27 policymaking and other functions independently 28 of the Department of Business and Professional 29 Regulation and without approval or control of 30 the department; requiring the department to 31 render administrative support for certain Page 5 1 matters; requiring that revenues collected by 2 the department for the Office of the 3 Condominium Ombudsman be deposited in a 4 separate fund or account under specified 5 conditions; amending s. 718.5012, F.S.; 6 removing requirements that the ombudsman 7 develop certain policies and procedures; 8 providing additional powers and duties of the 9 ombudsman; amending s. 718.504,F.S.; revising 10 and providing information to be contained in 11 the condominium prospectus or offering 12 circular; amending s. 720.303, F.S.; revising 13 procedures used in preparing the association's 14 annual financial report; amending s. 720.307, 15 F.S., relating to transition of association 16 control in a community; revising criteria with 17 respect to election of members to the board of 18 directors; requiring certain developers and 19 owners to convey title to all common areas 20 prior to turnover; revising requirements for 21 turnover of documents; requiring that certain 22 information be included in the records and that 23 the records be prepared in a specified manner; 24 revising application to include certain 25 associations; amending s. 720.3075, F.S.; 26 prohibiting associations from restricting the 27 use of hurricane shutters in certain 28 circumstances; requiring a developer who rents 29 or leases any unsold units in a condominium to 30 pay all monthly maintenance fees on those units 31 to the association as if the units were owned Page 6 1 by individual owners; providing an effective 2 date. 3 4 Be It Enacted by the Legislature of the State of Florida: 5 6 Section 1. Paragraph (f) of subsection (4) of section 7 718.104, Florida Statutes, is amended to read: 8 718.104 Creation of condominiums; contents of 9 declaration.--Every condominium created in this state shall be 10 created pursuant to this chapter. 11 (4) The declaration must contain or provide for the 12 following matters: 13 (f) The undivided share of ownership of the common 14 elements and common surplus of the condominium that is 15 appurtenant to each unit stated as a percentage or a fraction 16 of the whole. In the declaration of condominium for 17
residential condominiums created after April 1, 2007 18 ownership share of the common elements assigned to each 19
residential unit shall be based 20 footage of each residential unit in uniform relationship to 21 the total square footage of each other residential unit in the 22
condominium 23 Section 2. Paragraph (d) is added to subsection (1) of 24 section 718.110, Florida Statutes, to read: 25 718.110 Amendment of declaration; correction of error 26 or omission in declaration by circuit court.-- 27 (1) 28 (d) Notice of a proposed amendment to the declaration 29 shall be sent to the unit owner by certified mail. 30 Section 3. Subsection (5), paragraph (b) of subsection 31 (7), paragraphs (b) and (c) of subsection (12), and subsection Page 7 1 (13) of section 718.111, Florida Statutes, are amended, and 2 subsection (15) is added to that section, to read: 3 718.111 The association.-- 4 (5) RIGHT OF ACCESS TO UNITS.--The association has the 5 irrevocable right of access to each unit during reasonable 6 hours, when necessary for the maintenance, repair, or 7 replacement of any common elements or of any portion of a unit 8 to be maintained by the association pursuant to the 9 declaration or as necessary to prevent damage to the common 10 elements or to a unit or units. Except in cases of emergency, 11 the association must give the unit owner 24 hours' advance 12 written notice of intent to access the unit. 13 (7) TITLE TO PROPERTY.-- 14
(b) Subject to the provisions of s. 718.112(2) 15 association, through its board, has the limited power to 16 convey a portion of the common elements to a condemning 17 authority for the purposes of providing utility easements, 18 right-of-way expansion, or other public purposes, whether 19 negotiated or as a result of eminent domain proceedings. 20 (12) OFFICIAL RECORDS.-- 21 (b) The official records of the association shall be 22 maintained with the state, the records of the association 23 shall be made available to a unit owner, at a location within 24 the county in which the condominium property is located, 25 within 5 working days after receipt of written request by the 26 board or its designee. This paragraph may be complied with by 27 having a copy of the official records of the association 28 available for inspection or copying on the condominium 29 property or association property. 30 (c) The official records of the association are open 31 to inspection by any association member or the authorized Page 8 1 representative of such member at all reasonable times. The 2 right to inspect the records includes the right to make or 3 obtain copies, at the reasonable expense, if any, of the 4 association member. The association may adopt reasonable rules 5 regarding the frequency, time, location, notice, and manner of 6 record inspections and copying. The failure of an association 7 to provide the records within 10 working days after receipt of 8 a written request shall create a rebuttable presumption that 9 the association willfully failed to comply with this 10 paragraph. A unit owner who is denied access to official 11 records is entitled to the actual damages or minimum damages 12 for the association's willful failure to comply with this 13 paragraph. The minimum damages shall be $50 per calendar day 14 up to 10 days, the calculation to begin on the 11th working 15 day after receipt of the written request. The failure to 16 permit inspection of the association records as provided 17 herein entitles any person prevailing in an enforcement action 18 to recover reasonable attorney's fees from the person in 19 control of the records who, directly or indirectly, knowingly 20 denied access to the records for inspection. The association 21 shall maintain an adequate number of copies of the 22 declaration, articles of incorporation, bylaws, and rules, and 23 all amendments to each of the foregoing, as well as the 24 question and answer sheet provided for in s. 718.504 and 25 year-end financial information required in this section on the 26 condominium property to ensure their availability to unit 27 owners and prospective purchasers, and may charge its actual 28 costs for preparing and furnishing these documents to those 29 requesting the same. Notwithstanding the provisions of this 30 paragraph, the following records shall not be accessible to 31 unit owners: Page 9 1 1. Any record protected by the lawyer-client privilege 2 as described in s. 90.502; and any record protected by the 3 work-product privilege, including any record prepared by an 4 association attorney or prepared at the attorney's express 5 direction; which reflects a mental impression, conclusion, 6 litigation strategy, or legal theory of the attorney or the 7 association, and which was prepared exclusively for civil or 8 criminal litigation or for adversarial administrative 9 proceedings, or which was prepared in anticipation of imminent 10 civil or criminal litigation or imminent adversarial 11 administrative proceedings until the conclusion of the 12 litigation or adversarial administrative proceedings. 13 2. Information obtained by an association in 14 connection with the approval of the lease, sale, or other 15 transfer of a unit. 16 3. Medical records of unit owners. 17 4. Social security numbers, driver's license numbers, 18 credit card numbers, and other personal identifying 19 information of unit owners, occupants, or tenants. 20 (13) FINANCIAL REPORTING.--Within 90 days after the 21 end of the fiscal year, or annually on a date provided in the 22 bylaws, the association shall prepare and complete, or 23 contract for the preparation and completion of, a financial 24 report for the preceding fiscal year. Within 21 days after 25 the final financial report is completed by the association or 26 received from the third party, but not later than 120 days 27 after the end of the fiscal year or other date as provided in 28 the bylaws, the association shall mail to each unit owner at 29 the address last furnished to the association by the unit 30 owner, or hand deliver to each unit owner, a copy of the 31 financial report or a notice that a copy of the financial Page 10 1 report will
be mailed or hand delivered to the unit owner 2
without charge
3 4 uniform accounting principles and standards to be used by all 5 associations and shall adopt rules addressing financial 6 reporting requirements for multicondominium associations. In 7 adopting such rules, the division shall consider the number of 8 members and annual revenues of an association. Financial 9 reports shall be prepared as follows: 10 (a) An association that meets the criteria of this 11 paragraph shall prepare or cause to be prepared a complete set 12 of financial statements in accordance with generally accepted 13 accounting principles. The financial statements shall be based 14 upon the association's total annual revenues, as follows: 15 1. An association with total annual revenues of 16 $100,000 or more, but less than $200,000, shall prepare 17 compiled financial statements. 18 2. An association with total annual revenues of at 19 least $200,000, but less than $400,000, shall prepare reviewed 20 financial statements. 21 3. An association with total annual revenues of 22 $400,000 or more shall prepare audited financial statements. 23 (b)1. An association with total annual revenues of 24 less than $100,000 shall prepare a report of cash receipts and 25 expenditures. 26 2. An association which operates less than 50 units, 27 regardless of the association's annual revenues, shall prepare 28 a report of cash receipts and expenditures in lieu of 29 financial statements required by paragraph (a). 30 3. A report of cash receipts and disbursements must 31 disclose the amount of receipts by accounts and receipt Page 11 1 classifications and the amount of expenses by accounts and 2 expense classifications, including, but not limited to, the 3 following, as applicable: costs for security, professional and 4 management fees and expenses, taxes, costs for recreation 5 facilities, expenses for refuse collection and utility 6 services, expenses for lawn care, costs for building 7 maintenance and repair, insurance costs, administration and 8 salary expenses, and reserves accumulated and expended for 9 capital expenditures, deferred maintenance, and any other 0 category for which the association maintains reserves. 11 (c) An association may prepare or cause to be 12 prepared, without a meeting of or approval by the unit owners: 13 1. Compiled, reviewed, or audited financial 14 statements, if the association is required to prepare a report 15 of cash receipts and expenditures; 16 2. Reviewed or audited financial statements, if the 17 association is required to prepare compiled financial 18 statements; or 19 3. Audited financial statements if the association is 20 required to prepare reviewed financial statements. 21 (d) If approved by a majority of the voting interests 22 present at a properly called meeting of the association, an 23 association may prepare or cause to be prepared: 24 1. A report of cash receipts and expenditures in lieu 25 of a compiled, reviewed, or audited financial statement; 26 2. A report of cash receipts and expenditures or a 27 compiled financial statement in lieu of a reviewed or audited 28 financial statement; or 29 3. A report of cash receipts and expenditures, a 30 compiled financial statement, or a reviewed financial 31 statement in lieu of an audited financial statement. Page 12 1 2 Such meeting and approval must occur prior to the end of the 3 fiscal year and is effective only for the fiscal year in which 4 the vote is taken. With respect to an association to which the 5 developer has not turned over control of the association, all 6 unit owners, including the developer, may vote on issues 7 related to the preparation of financial reports for the first 8 2 fiscal years of the association's operation, beginning with 9 the fiscal year in which the declaration is recorded. 10 Thereafter, all unit owners except the developer may vote on 11 such issues until control is turned over to the association by 12 the developer. An association or board of administration may 13 not waive the financial reporting requirements of this section 14 for more than 2 consecutive years. 15 (15) RECONSTRUCTION AFTER CASUALTY.-- 16 (a) If the condominium property and units are damaged 17 after a casualty, the board of administration shall obtain 18 reliable and detailed estimates of the cost necessary to 19 repair and replace the damaged property to substantially the 20 same condition existing immediately before the casualty and 21 substantially in accordance with the original plans and 22 specifications of the condominium as soon as possible and not 23 later than 60 days after the casualty. If the damage to the 24 condominium property exceeds 50 percent of the property's 25 value, the condominium may be terminated unless 75 percent of 26 the unit owners agree to reconstruction and repair within 90 27 days after the casualty. 28 (b) The board of administration shall engage the 29 services of a registered architect and knowledgeable 30 construction specialists to prepare any necessary plans and 31 specifications and shall receive and approve bids for Page 13 1 reconstruction, execute all necessary contracts for 2 restoration, and arrange for disbursement of construction 3 funds, the approval of work, and all other matters pertaining 4 to the repairs and reconstruction required. 5 (c) If the proceeds of the hazard insurance policy 6 maintained by the association under paragraph (11)(b) are 7 insufficient to pay the estimated costs of reconstruction or 8 at any time during reconstruction and repair, assessments 9 shall be made against all unit owners according to their share 10 of the common elements and expenses as set forth in the 11 declaration of condominium. 12 (d) Assessments shall be made against unit owners for 13 damage to their units according to the cost of reconstruction 14 or repair of their respective units. The assessments shall be 15 levied and collected as all other assessments are provided for 16 in this chapter. 17 Section 4. Subsection (2) of section 718.112, Florida 18 Statutes, is amended to read: 19 718.112 Bylaws.-- 20 (2) REQUIRED PROVISIONS.--The bylaws of the 21 association shall provide for the following and, if they do 22 not do so, shall be deemed to include the following: 23 (a) Administration.-- 24 1. The form of administration of the association shall 25 be described indicating the title of the officers and board of 26 administration and specifying the powers, duties, manner of 27 selection and removal, and compensation, if any, of officers 28 and boards. In the absence of such a provision or 29 determination by the board or membership, the board of 30 administration shall be composed of five members who are unit 31 owners, except in the case of a condominium which has five or Page 14 1 fewer units, in which case in a not-for-profit corporation the 2 board shall consist of not fewer than three members who are 3 unit owners. In the absence of provisions to the contrary in 4 the bylaws, the board of administration shall have a 5 president, a secretary, and a treasurer, who shall perform the 6 duties of such officers customarily performed by officers of 7 corporations. Unless prohibited in the bylaws, the board of 8 administration may appoint other officers and grant them the 9 duties it deems appropriate. Unless otherwise provided in the 10 bylaws, the officers shall serve without compensation and at 11 the pleasure of the board of administration. Unless otherwise 12 provided in the bylaws, the members of the board shall serve 13 without compensation. 14 2. When a unit owner files a written inquiry by 15 certified mail with the board of administration, the board 16 shall respond in writing by certified mail, return receipt 17 requested, to
the unit owner within 30 days after 18 of the inquiry. The board's response shall either give a 19 substantive response to the inquirer, notify the inquirer that 20 a legal opinion has been requested, or notify the inquirer 21 that advice has been requested from the division. If the board 22 requests advice from the division, the board shall, within 10 23 days after 24 certified mail a substantive response to the inquirer. If a 25 legal opinion is requested, the board shall, within 60 days 26 after the receipt of the inquiry, provide in writing by 27 certified mail a substantive response to the inquiry. The 28 failure to provide a substantive response to the inquiry as 29 provided herein precludes the board from recovering attorney's 30 fees and costs in any subsequent litigation, administrative 31 proceeding, or arbitration arising out of the inquiry. The Page 15 1 association may through its board of administration adopt 2 reasonable rules and regulations regarding the frequency and 3 manner of responding to unit owner inquiries, one of which may 4 be that the association is only obligated to respond to two 5
6 period. In such a case, any additional inquiry or inquiries 7 must be responded to in the subsequent 30-day period, or 8 periods, as applicable. 9 (b) Quorum; voting requirements; proxies.-- 10 1. Unless a lower number is provided in the bylaws, 11 the percentage of voting interests required to constitute a 12 quorum at a meeting of the members shall be a majority of the 13 voting interests. Unless otherwise provided in this chapter 14 or in the declaration, articles of incorporation, or bylaws, 15 and except as provided in subparagraph (d)3., decisions shall 16 be made by owners of a majority of the voting interests 17 represented at a meeting at which a quorum is present. 18 2. Except as specifically otherwise provided herein, 19 after January 1, 1992, unit owners may not vote by general 20 proxy, but may vote by limited proxies substantially 21 conforming to a limited proxy form adopted by the division. 22 Limited proxies and general proxies may be used to establish a 23 quorum. Limited proxies shall be used for votes taken to waive 24 or reduce reserves in accordance with subparagraph (f)2.; for 25 votes taken to waive the financial reporting requirements of 26 s. 718.111(13); for votes taken to amend the declaration 27 pursuant to s. 718.110; for votes taken to amend the articles 28 of incorporation or bylaws pursuant to this section; and for 29 any other matter for which this chapter requires or permits a 30 vote of the unit owners. A 31 Page 16 1 not
2 proxies may be used for other matters for which limited 3 proxies are not required, and may also be used in voting for 4 nonsubstantive changes to items for which a limited proxy is 5 required and given. Notwithstanding the provisions of this 6 subparagraph, unit owners may vote in person at unit owner 7 meetings. Nothing contained herein shall limit the use of 8 general proxies or require the use of limited proxies for any 9 agenda item or election at any meeting of a timeshare 10 condominium association. 11 3. Any proxy given shall be effective only for the 12 specific meeting for which originally given and any lawfully 13 adjourned meetings thereof. In no event shall any proxy be 14 valid for a period longer than 90 days after the date of the 15 first meeting for which it was given. Every proxy is 16 revocable at any time at the pleasure of the unit owner 17 executing it. 18 4. A member of the board of administration or a 19 committee may submit in writing his or her agreement or 20 disagreement with any action taken at a meeting that the 21 member did not attend. This agreement or disagreement may not 22 be used as a vote for or against the action taken and may not 23 be used for the purposes of creating a quorum. 24 5. When any of the board or committee members meet by 25 telephone conference, those board or committee members 26 attending by telephone conference may be counted toward 27 obtaining a quorum and may vote by telephone. A telephone 28 speaker must be used so that the conversation of those board 29 or committee members attending by telephone may be heard by 30 the board or committee members attending in person as well as 31 by any unit owners present at a meeting. Page 17 1 (c) Board of administration meetings.--Meetings of the 2 board of administration at which a quorum of the members is 3 present shall be open to all unit owners. The board of 4 administration shall address agenda items proposed by a 5 petition of 20 percent of the unit owners submitted at least 6 48 hours before the meeting date, in time for the directors to 7 study and understand the agenda items, and in time to post the 8 updated agenda before the meeting. A unit owner's facsimile 9 signature constitutes the unit owner's original signature in 10 any matter under this chapter that requires the unit owner's 11 signature. Correspondence from the board of administration to 12 unit owners shall be accomplished by the same, or a more 13 secure, delivery method that is as secure as certified mail, 14 return receipt requested, except as otherwise provided in this 15 paragraph. Any unit owner may tape record or videotape 16 meetings of the board of administration. The right to attend 17 such meetings includes the right to speak at such meetings 18 with reference to all designated agenda items. The division 19 shall adopt reasonable rules governing the tape recording and 20 videotaping of the meeting. The association may adopt written 21 reasonable rules governing the frequency, duration, and manner 22 of unit owner statements. Adequate notice of all meetings, 23 which notice shall specifically incorporate an identification 24 of agenda items, shall be posted conspicuously on the 25 condominium property at least 48 continuous hours preceding 26 the meeting except in an emergency. Any item not included on 27 the notice may be taken up on an emergency basis by at least a 28 majority plus one of the members of the board or by a petition 29 of 20 percent of the unit owners. Such emergency action shall 30 be noticed and ratified at the next regular meeting of the 31 board. However, written notice of any meeting at which Page 18 1 nonemergency special assessments, or at which amendment to 2 rules regarding unit use, will be considered shall be mailed, 3 delivered, or electronically transmitted to the unit owners 4 and posted conspicuously on the condominium property not less 5 than 14 days prior to the meeting. Evidence of compliance with 6 this 14-day notice shall be made by an affidavit executed by 7 the person providing the notice and filed among the official 8 records of the association. Upon notice to the unit owners, 9 the board shall by duly adopted rule designate a specific 10 location on the condominium property or association property 11 upon which all notices of board meetings shall be posted. If 12 there is no condominium property or association property upon 13 which notices can be posted, notices of board meetings shall 14 be mailed, delivered, or electronically transmitted at least 15 14 days before the meeting to the owner of each unit. In lieu 16 of or in addition to the physical posting of notice of any 17 meeting of the board of administration on the condominium 18 property, the association may, by reasonable rule, adopt a 19 procedure for conspicuously posting and repeatedly 20 broadcasting the notice and the agenda on a closed-circuit 21 cable television system serving the condominium association. 22 However, if broadcast notice is used in lieu of a notice 23 posted physically on the condominium property, the notice and 24 agenda must be broadcast at least four times every broadcast 25 hour of each day that a posted notice is otherwise required 26 under this section. When broadcast notice is provided, the 27 notice and agenda must be broadcast in a manner and for a 28 sufficient continuous length of time so as to allow an average 29 reader to observe the notice and read and comprehend the 30 entire content of the notice and the agenda. Notice of any 31 meeting in which regular or special assessments against unit Page 19 1 owners are to be considered for any reason shall specifically 2 state
3 and specify the nature, cost, and breakdown of any such 4 assessments. Meetings of a committee to take final action on 5 behalf of the board or make recommendations to the board 6 regarding the association budget are subject to the provisions 7 of this paragraph. Meetings of a committee that does not take 8 final action on behalf of the board or make recommendations to 9 the board regarding the association budget are subject to the 10 provisions of this section, unless those meetings are exempted 11 from this section by the bylaws of the association. 12 Notwithstanding any other law, the requirement that board 13 meetings and committee meetings be open to the unit owners is 14 inapplicable to meetings between the board or a committee and 15 the association's attorney, with respect to proposed or 16 pending litigation, when the meeting is held for the purpose 17 of seeking or rendering legal advice. 18 (d) Unit owner meetings.-- 19 1. There shall be an annual meeting of the unit 20 owners. Unless the bylaws provide otherwise, a vacancy on the 21 board caused by the expiration of a director's term shall be 22 filled by electing a new board member, and the election shall 23 be by secret ballot; however, if the number of vacancies 24 equals or exceeds the number of candidates, no election is 25 required. If there is no provision in the bylaws for terms of 26 the members of the board, the terms of all members of the 27 board shall expire upon the election of their successors at 28 the annual meeting. Any unit owner desiring to be a candidate 29 for board membership shall comply with subparagraph 3. The 30 only prohibition against eligibility for board membership 31 shall be for a person who has been convicted of any felony by Page 20 1 any court of record in the United States and who has not had 2 his or her right to vote restored pursuant to law in the 3 jurisdiction of his or her residence 4 5 affected if it is later determined that a member of the board 6 is ineligible for board membership due to having been 7 convicted of a felony. 8 2. The bylaws shall provide the method of calling 9 meetings of unit owners, including annual meetings. Written 10 notice, which notice must include an agenda, shall be mailed, 11 hand delivered, or electronically transmitted to each unit 12 owner at least 14 days prior to the annual meeting and shall 13 be posted in a conspicuous place on the condominium property 14 at least 14 continuous days preceding the annual meeting. Upon 15 notice to the unit owners, the board shall by duly adopted 16 rule designate a specific location on the condominium property 17 or association property upon which all notices of unit owner 18 meetings shall be posted; however, if there is no condominium 19 property or association property upon which notices can be 20 posted, this requirement does not apply. In lieu of or in 21 addition to the physical posting of notice of any meeting of 22 the unit owners on the condominium property, the association 23 may, by reasonable rule, adopt a procedure for conspicuously 24 posting and repeatedly broadcasting the notice and the agenda 25 on a closed-circuit cable television system serving the 26 condominium association. However, if broadcast notice is used 27 in lieu of a notice posted physically on the condominium 28 property, the notice and agenda must be broadcast at least 29 four times every broadcast hour of each day that a posted 30 notice is otherwise required under this section. When 31 broadcast notice is provided, the notice and agenda must be Page 21 1 broadcast in a manner and for a sufficient continuous length 2 of time so as to allow an average reader to observe the notice 3 and read and comprehend the entire content of the notice and 4 the agenda. Unless a unit owner waives in writing the right to 5 receive notice of the annual meeting, such notice shall be 6 hand delivered, mailed, or electronically transmitted to each 7 unit owner. Notice for meetings and notice for all other 8 purposes shall be mailed to each unit owner at the address 9 last furnished to the association by the unit owner, or hand 10 delivered to each unit owner. However, if a unit is owned by 11 more than one person, the association shall provide notice, 12 for meetings and all other purposes, to that one address which 13 the developer initially identifies for that purpose and 14 thereafter as one or more of the owners of the unit shall so 15 advise the association in writing, or if no address is given 16 or the owners of the unit do not agree, to the address 17 provided on the deed of record. An officer of the association, 18 or the manager or other person providing the first notice of 19 the association meeting, and the second notice as provided for 20 in subparagraph 3., shall provide an affidavit or United 21 States Postal Service certificate of mailing, to be included 22 in the official records of the association affirming that the 23 notices were 24 accordance with this provision. 25 3. The members of the board shall be elected by 26 written ballot or voting machine. Proxies shall in no event be 27 used in electing the board, either in general elections or 28 elections to fill vacancies caused by recall, resignation, or 29 otherwise, unless otherwise provided in this chapter. Not less 0 than 60 days before a scheduled election, the association or 31 its representative shall mail, deliver, or electronically Page 22 1 transmit, whether by separate association mailing or included 2 in another association mailing, delivery, or transmission, 3 including regularly published newsletters, to each unit owner 4 entitled to a vote, a first notice of the date of the 5 election. Any unit owner or other eligible person desiring to 6 be a candidate for the board must give written notice to the 7 association or its representative not less than 40 days before 8 a scheduled election. Together with the written notice and 9 agenda as set forth in subparagraph 2., the association or its 10 representative shall mail, deliver, or electronically transmit 11 a second notice of the election to all unit owners entitled to 12 vote therein, together with a ballot which shall list all 13 candidates. Upon request of a candidate, the association or 14 its representative shall include an information sheet, no 15 larger than 8 1/2 inches by 11 inches, which must be 16 furnished by the candidate not less than 35 days before the 17 election, to be included with the mailing, delivery, or 18 transmission of the ballot, with the costs of mailing, 19 delivery, or electronic transmission and copying to be borne 20 by the association. The association or its representative is 21 not liable for the contents of the information sheets prepared 22 by the candidates. In order to reduce costs, the association 23 may print or duplicate the information sheets on both sides of 24 the paper. The division shall by rule establish voting 25 procedures consistent with the provisions contained herein, 26 including rules establishing procedures for giving notice by 27 electronic transmission and rules providing for the secrecy of 28 ballots. All ballot envelopes must be placed in a locked or 29 sealed ballot drop box immediately upon receipt, and the box 30 may not be opened in advance of the election meeting. 31 Elections shall be decided by a plurality of those ballots Page 23 1 cast. There shall be no quorum requirement; however, at least 2 20 percent of the eligible voters must cast a ballot in order 3 to have a valid election of members of the board. No unit 4 owner shall permit any other person to vote his or her ballot, 5 and any such ballots improperly cast shall be deemed invalid, 6 provided any unit owner who violates this provision may be 7 fined by the association in accordance with s. 718.303. A unit 8 owner who needs assistance in casting the ballot for the 9 reasons stated in s. 101.051 may obtain assistance in casting 10 the ballot. The regular election shall occur on the date of 11 the annual meeting. The provisions of this subparagraph shall 12 not apply to timeshare condominium associations. 13 Notwithstanding the provisions of this subparagraph, an 14 election is not required unless more candidates file notices 15 of intent to run or are nominated than board vacancies exist. 16 4. Any approval by unit owners called for by this 17 chapter or the applicable declaration or bylaws, including, 18 but not limited to, the approval requirement in s. 718.111(8), 19 shall be made at a duly noticed meeting of unit owners and 20 shall be subject to all requirements of this chapter or the 21 applicable condominium documents relating to unit owner 22 decisionmaking, except that unit owners may take action by 23 written agreement, without meetings, on matters for which 24 action by written agreement without meetings is expressly 25 allowed by the applicable bylaws or declaration or any statute 26 that provides for such action. 27 5. Unit owners may waive notice of specific meetings 28 if allowed by the applicable bylaws or declaration or any 29 statute. If authorized by the bylaws, notice of meetings of 30 the board of administration, unit owner meetings, except unit 31 owner meetings called to recall board members under paragraph Page 24 1 (j), and committee meetings may be given by electronic 2 transmission to unit owners who consent to receive notice by 3 electronic transmission. 4 6. Unit owners shall have the right to participate in 5 meetings of unit owners with reference to all designated 6 agenda items. However, the association may adopt reasonable 7 rules governing the frequency, duration, and manner of unit 8 owner participation. 9 7. Any unit owner may tape record or videotape a 10 meeting of the unit owners subject to reasonable rules adopted 11 by the division. 12 8. Unless otherwise provided in the bylaws, any 13 vacancy occurring on the board before the expiration of a term 14 may be filled by the affirmative vote of the majority of the 15 remaining directors, even if the remaining directors 16 constitute less than a quorum, or by the sole remaining 17 director. In the alternative, a board may hold an election to 18 fill the vacancy, in which case the election procedures must 19 conform
to the requirements of subparagraph 3. 20 21 22 otherwise provided in the bylaws, a board member appointed or 23 elected under this section shall fill the vacancy for the 24 unexpired term of the seat being filled. Filling vacancies 25 created by recall is governed by paragraph (j) and rules 26 adopted by the division. 27 9. Unit owners have the right to have items not 28 related to the budget placed on the agenda of the annual 29 meeting and voted upon if a written request is made to the 30 board of administration by 20 percent or more of all voting 31 Page 25 1 interests at least 90 days before the date of the annual 2 meeting. 3 4 5 6
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12 (e) Budget meeting.-- 13 1. Any meeting at which a proposed annual budget of an 14 association will be considered by the board or unit owners 15 shall be open to all unit owners. At least 14 days prior to 16 such a meeting, the board shall hand deliver to each unit 17 owner, mail to each unit owner at the address last furnished 18 to the association by the unit owner, or electronically 19 transmit to the location furnished by the unit owner for that 20 purpose a notice of such meeting and a copy of the proposed 21 annual budget. An officer or manager of the association, or 22 other person providing notice of such meeting, shall execute 23 an affidavit evidencing compliance with such notice 24 requirement, and such affidavit shall be filed among the 25 official records of the association. 26 2.a. If a board adopts in any fiscal year an annual 27 budget which requires assessments against unit owners which 28 exceed 115 percent of assessments for the preceding fiscal 29 year, the board shall conduct a special meeting of the unit 30 owners to consider a substitute budget if the board receives, 31 within 21 days after adoption of the annual budget, a written Page 26 1 request for a special meeting from at least 10 percent of all 2 voting interests. The special meeting shall be conducted 3 within 60 days after adoption of the annual budget. At least 4 14 days prior to such special meeting, the board shall hand 5 deliver to each unit owner, or mail to each unit owner at the 6 address last furnished to the association, a notice of the 7 meeting. An officer or manager of the association, or other 8 person providing notice of such meeting shall execute an 9 affidavit evidencing compliance with this notice requirement, 10 and such affidavit shall be filed among the official records 11 of the association. Unit owners may consider and adopt a 12 substitute budget at the special meeting. A substitute budget 13 is adopted if approved by a majority of all voting interests 14 unless the bylaws require adoption by a greater percentage of 15 voting interests. If there is not a quorum at the special 16 meeting or a substitute budget is not adopted, the annual 17 budget previously adopted by the board shall take effect as 18 scheduled. 19 b. Any determination of whether assessments exceed 115 20 percent of assessments for the prior fiscal year shall exclude 21 any authorized provision for reasonable reserves for repair or 22 replacement of the condominium property, anticipated expenses 23 of the association which the board does not expect to be 24 incurred on a regular or annual basis, or assessments for 25 betterments to the condominium property. 26 c. If the developer controls the board, assessments 27 shall not exceed 115 percent of assessments for the prior 28 fiscal year unless approved by a majority of all voting 29 interests. 30 (f) Annual budget.-- 31 Page 27 1. The association shall prepare an annual budget of 2 the estimated revenues and expenses. The adopted budget of the 3 previous fiscal year shall remain in effect until the 4 association has adopted a new budget for the current fiscal 5 year. The proposed annual budget of estimated revenues and 6
7 budgeted by accounts and expense classifications, including, 8 if applicable, but not limited to, those expenses listed in s. 9 718.504(21). A multicondominium association shall adopt a 10 separate budget of common expenses for each condominium the 11 association operates and shall adopt a separate budget of 12 common expenses for the association. In addition, if the 13 association maintains limited common elements with the cost to 14 be shared only by those entitled to use the limited common 15 elements as provided for in s. 718.113(1), the budget or a 16 schedule attached thereto shall show amounts budgeted 17 therefor. If, after turnover of control of the association to 18 the unit owners, any of the expenses listed in s. 718.504(21) 19 are not applicable, they need not be listed. 20 2. In addition to annual operating expenses, the 21 budget shall include reserve accounts for capital expenditures 22 and deferred maintenance. These accounts shall include, but 23 are not limited to, structural repairs, roof replacement, 24 building painting, and pavement resurfacing, regardless of the 25 amount of deferred maintenance expense or replacement cost, 26 and for any other item for which the deferred maintenance 27 expense or replacement cost exceeds $10,000. The amount to be 28 reserved shall be computed by means of a formula which is 29 based upon estimated remaining useful life and estimated 30 replacement cost or deferred maintenance expense of each 31 reserve item. The association may adjust replacement reserve Page 28 1 assessments annually to take into account any changes in 2 estimates or extension of the useful life of a reserve item 3 caused by deferred maintenance. This subsection does not apply 4 to an adopted budget in which the members of an association 5 have determined, by a majority vote at a duly called meeting 6 of the association, to provide no reserves or less reserves 7 than required by this subsection. However, prior to turnover 8 of control of an association by a developer to unit owners 9 other than a developer pursuant to s. 718.301, the developer 10 may vote to waive the reserves or reduce the funding of 11 reserves for the first 2 fiscal years of the association's 12 operation, beginning with the fiscal year in which the initial 13 declaration is recorded, after which time reserves may be 14 waived or reduced only upon the vote of a majority of all 15 nondeveloper voting interests voting in person or by limited 16 proxy at a duly called meeting of the association. If a 17 meeting of the unit owners has been called to determine 18 whether to waive or reduce the funding of reserves, and no 19 such result is achieved or a quorum is not attained, the 20 reserves as included in the budget shall go into effect. After 21 the turnover, the developer may vote its voting interest to 22 waive or reduce the funding of reserves. 23 3. Reserve funds and any interest accruing thereon 24 shall remain in the reserve account or accounts, and shall be 25 used only for authorized reserve expenditures unless their use 26 for other purposes is approved in advance by a majority vote 27 at a duly called meeting of the association. Prior to turnover 28 of control of an association by a developer to unit owners 29 other than the developer pursuant to s. 718.301, the 30 developer-controlled association shall not vote to use 31 reserves for purposes other than that for which they were Page 29 1 intended without the approval of a majority of all 2 nondeveloper voting interests, voting in person or by limited 3 proxy at a duly called meeting of the association. 4 4. The only voting interests which are eligible to 5 vote on questions that involve waiving or reducing the funding 6 of reserves, or using existing reserve funds for purposes 7 other than purposes for which the reserves were intended, are 8 the voting interests of the units subject to assessment to 9 fund the reserves in question. The face of all ballots that 10 involve questions relating to waiving or reducing the funding 11 of reserves, or using existing reserve funds for purposes 12 other than purposes for which the reserves were intended, must 13 contain the following statement in capitalized, bold letters 14 in a font size larger than any other used on the face of the 15 ballot: WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING 16 ALTERNATE USES OF EXISTING RESERVES, MAY RESULT IN UNIT OWNER 17 LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS 18 REGARDING THOSE RESERVE ITEMS. 19 5. A vote to provide for no reserves or a percentage 20 of reserves shall be made at the annual meeting of the unit 21 owners called under paragraph (d). 22 6. Notwithstanding subparagraph 3., the association 23 after turnover of control of the association may, in case of a 24 catastrophic event, use reserve funds for nonscheduled 25 purposes to mitigate further damage to units or common 26 elements or to make the condominium accessible for repairs. 27 7. Except in cases of emergency, or unless otherwise 28 provided for in the bylaws or approved by a vote of a majority 29 of the unit owners in advance, the board of administration may 30 not apply for or accept a loan or line of credit in an amount 31 Page 30 1 that exceeds 10 percent of the association's annual budget for 2 the current year. 3 (g) Assessments.--After the declaration has been 4 recorded, and until such time as the association has been 5 created, all common expenses shall be paid by the developer. 6 Assessments shall be levied in an amount determined by the 7 adopted budget or an authorized special assessment. The manner 8 of collecting from the unit owners their shares of the common 9 expenses shall be stated in the bylaws. Assessments shall be 10 made against units on a quarter-annual, or more frequent, 11 basis 12 not less than that required to provide funds in advance for 13 payment of all of the anticipated current operating expenses 14 and for all of the unpaid operating expenses previously 15 incurred. 16 the right of an association to accelerate assessments of an 17 owner delinquent in payment of common expenses against whom a 18 lien has been filed. Accelerated assessments shall be due and 19 payable after 20 accelerated assessments shall include the amounts due for the 21 remainder of the budget year in which the claim of lien was 22 filed. 23 (h) Amendment of bylaws.-- 24 1. The method by which the bylaws may be amended 25 consistent with the provisions of this chapter shall be 26 stated. If the bylaws fail to provide a method of amendment, 27 the bylaws may be amended if the amendment is approved by the 28 owners of not less than two-thirds of the voting interests. 29 2. No bylaw shall be revised or amended by reference 30 to its title or number only. Proposals to amend existing 31 bylaws shall contain the full text of the bylaws to be Page 31 1 amended; new words shall be inserted in the text underlined, 2 and words to be deleted shall be lined through with hyphens. 3 However, if the proposed change is so extensive that this 4 procedure would hinder, rather than assist, the understanding 5 of the proposed amendment, it is not necessary to use 6 underlining and hyphens as indicators of words added or 7 deleted, but, instead, a notation must be inserted immediately 8 preceding the proposed amendment in substantially the 9 following language: "Substantial rewording of bylaw. See 10 bylaw .... for present text." 11 3. Nonmaterial errors or omissions in the bylaw 12 process will not invalidate an otherwise properly promulgated 13 amendment. 14 (i) Transfer fees.--No charge shall be made by the 15 association or any body thereof in connection with the sale, 16 mortgage, lease, sublease, or other transfer of a unit unless 17 the association is required to approve such transfer and a fee 18 for such approval is provided for in the declaration, 19 articles, or bylaws. Any such fee may be preset, but in no 20 event may such fee exceed $100 per applicant other than 21 husband/wife or parent/dependent child, which are considered 22 one applicant. However, if the lease or sublease is a renewal 23 of a lease or sublease with the same lessee or sublessee, no 24 charge shall be made. The foregoing notwithstanding, an 25 association may, if the authority to do so appears in the 26 declaration or bylaws, require that a prospective lessee place 27 a security deposit, in an amount not to exceed the equivalent 28 of 1 month's rent, into an escrow account maintained by the 29 association. The security deposit shall protect against 30 damages to the common elements or association property. 31 Payment of interest, claims against the deposit, refunds, and Page 32 1 disputes under this paragraph shall be handled in the same 2 fashion as provided in part II of chapter 83. 3 (j) Recall of board members.--Subject to the 4 provisions of s. 718.301, any member of the board of 5 administration may be recalled and removed from office with or 6 without cause by the vote or agreement in writing by a 7 majority of all the voting interests. A special meeting of the 8 unit owners to recall a member or members of the board of 9 administration may be called by 10 percent of the voting 10 interests giving notice of the meeting as required for a 11 meeting of unit owners, and the notice shall state the purpose 12 of the meeting. Electronic transmission may not be used as a 13 method of giving notice of a meeting called in whole or in 14 part for this purpose. 15 1. If the recall is approved by a majority of all 16 voting interests by a vote at a meeting, the recall will be 17 effective as provided herein. The board shall duly notice and 18 hold a board meeting within 5 full business days of the 19 adjournment of the unit owner meeting to recall one or more 20 board members. At the meeting, the board shall either certify 21 the recall, in which case such member or members shall be 22 recalled effective immediately and shall turn over to the 23 board within 5 full business days any and all records and 24 property of the association in their possession, or shall 25 proceed as set forth in subparagraph 3. 26 2. If the proposed recall is by an agreement in 27 writing by a majority of all voting interests, the agreement 28 in writing or a copy thereof shall be served on the 29 association by certified mail or by personal service in the 30 manner authorized by chapter 48 and the Florida Rules of Civil 31 Procedure. The board of administration shall duly notice and Page 33 1 hold a meeting of the board within 5 full business days after 2 receipt of the agreement in writing. At the meeting, the board 3 shall either certify the written agreement to recall a member 4 or members of the board, in which case such member or members 5 shall be recalled effective immediately and shall turn over to 6 the board within 5 full business days any and all records and 7 property of the association in their possession, or proceed as 8 described in subparagraph 3. 9 3. If the board determines not to certify the written 10 agreement to recall a member or members of the board, or does 11 not certify the recall by a vote at a meeting, the board 12 shall, within 5 full business days after the meeting, file 13 with the division a petition for arbitration pursuant to the 14 procedures in s. 718.1255. For the purposes of this section, 15 the unit owners who voted at the meeting or who executed the 16 agreement in writing shall constitute one party under the 17 petition for arbitration. If the arbitrator certifies the 18 recall as to any member or members of the board, the recall 19 will be effective upon mailing of the final order of 20 arbitration to the association. If the association fails to 21 comply with the order of the arbitrator, the division may take 22 action pursuant to s. 718.501. Any member or members so 23 recalled shall deliver to the board any and all records of the 24 association in their possession within 5 full business days of 25 the effective date of the recall. 26 4. If the board fails to duly notice and hold a board 27 meeting within 5 full business days of service of an agreement 28 in writing or within 5 full business days of the adjournment 29 of the unit owner recall meeting, the recall shall be deemed 30 effective and the board members so recalled shall immediately 31 Page 34 1 turn over to the board any and all records and property of the 2 association. 3 5. If a vacancy occurs on the board as a result of a 4 recall and less than a majority of the board members are 5 removed, the vacancy may be filled by the affirmative vote of 6 a majority of the remaining directors, notwithstanding any 7 provision to the contrary contained in this subsection. If 8 vacancies occur on the board as a result of a recall and a 9 majority or more of the board members are removed, the 10 vacancies shall be filled in accordance with procedural rules 11 to be adopted by the division, which rules need not be 12 consistent with this subsection. The rules must provide 13 procedures governing the conduct of the recall election as 14 well as the operation of the association during the period 15 after a recall but prior to the recall election. 16 17
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19 (k) 20 provision that a certificate of compliance from a licensed 21 electrical contractor or electrician may be accepted by the 22 association's board as evidence of compliance of the 23 condominium units with the applicable fire and life safety 24 code. Notwithstanding the provisions of chapter 633 or of any 25 other code, statute, ordinance, administrative rule, or 26 regulation, or any interpretation of the foregoing, an 27 association, condominium, or unit owner is not obligated to 28 retrofit the common elements or units of a residential 29 condominium with a fire sprinkler system or other engineered 30 lifesafety system in a building that has been certified for 31 occupancy by the applicable governmental entity, if the unit Page 35 1 owners have voted to forego such retrofitting and engineered 2 lifesafety system by the affirmative vote of two-thirds of all 3 voting interests in the affected condominium. However, a 4 condominium association may not vote to forego the 5 retrofitting with a fire sprinkler system of common areas in a 6 high-rise building. For purposes of this subsection, the term 7 "high-rise building" means a building that is greater than 75 8 feet in height where the building height is measured from the 9 lowest level of fire department access to the floor of the 10 highest occupiable story. For purposes of this subsection, the 11 term "common areas" means any enclosed hallway, corridor, 12 lobby, stairwell, or entryway. In no event shall the local 13 authority having jurisdiction require completion of 14 retrofitting of common areas with a sprinkler system before 15 the end of 2014. 16 1. A vote to forego retrofitting may be obtained by 17 limited proxy or by a ballot personally cast at a duly called 18 membership meeting, or by execution of a written consent by 19 the member, and shall be effective upon the recording of a 20 certificate attesting to such vote in the public records of 21 the county where the condominium is located. The association 22 shall mail, hand deliver, or electronically transmit to each 23 unit owner written notice at least 14 days prior to such 24 membership meeting in which the vote to forego retrofitting of 25 the required fire sprinkler system is to take place. Within 30 26 days after the association's opt-out vote, notice of the 27 results of the opt-out vote shall be mailed, hand delivered, 28 or electronically transmitted to all unit owners. Evidence of 29 compliance with this 30-day notice shall be made by an 30 affidavit executed by the person providing the notice and 31 filed among the official records of the association. After Page 36 1 such notice is provided to each owner, a copy of such notice 2 shall be provided by the current owner to a new owner prior to 3 closing and shall be provided by a unit owner to a renter 4 prior to signing a lease. 5 2. As part of the information collected annually from 6 condominiums, the division shall require condominium 7 associations to report the membership vote and recording of a 8 certificate under this subsection and, if retrofitting has 9 been undertaken, the per-unit cost of such work. The division 10 shall annually report to the Division of State Fire Marshal of 11 the Department of Financial Services the number of 12 condominiums that have elected to forego retrofitting. 13 (l) 14 1. With respect to condominiums created on or after 15 October 1, 1994, the bylaws shall include a provision granting 16 the association a limited power to convey a portion of the 17 common elements to a condemning authority for the purpose of 18 providing utility easements, right-of-way expansion, or other 19 public purposes, whether negotiated or as a result of eminent 20 domain proceedings. 21 2. In any case where the bylaws are silent as to the 22 association's power to convey common elements as described in 23 subparagraph 1., the bylaws shall be deemed to include the 24 provision described in subparagraph 1. 25 Section 5. Section 718.113, Florida Statutes, is 26 amended to read: 27 718.113 Maintenance; limitation upon improvement; 28 display of flag; display of religious decorations; hurricane 29 shutters.-- 30 (1) Maintenance of the common elements is the 31 responsibility of the association. The declaration may provide Page 37 1 that certain limited common elements shall be maintained by 2 those entitled to use the limited common elements or that the 3 association shall provide the
maintenance 4 5 the limited common elements. If the maintenance is to be by 6 the association at the expense of only those entitled to use 7 the limited common elements, the declaration shall describe in 8 detail the method of apportioning such costs among those 9 entitled to use the limited common elements, and the 10 association may use the provisions of s. 718.116 to enforce 11 payment of the shares of such costs by the unit owners 12 entitled to use the limited common elements. 13 (2)(a) Except as otherwise provided in this section, 14 there shall be no material alteration or substantial additions 15 to the common elements or to real property which is 16 association property, except in a manner provided in the 17 declaration as originally recorded or as amended under the 18 procedures provided therein. If the declaration as originally 19 recorded or as amended under the procedures provided therein 20 does not specify the procedure for approval of material 21 alterations or substantial additions, 75 percent of the total 22 voting interests of the association must approve the 23 alterations or additions. 24 (b) There shall not be any material alteration of, or 25 substantial addition to, the common elements of any 26 condominium operated by a multicondominium association unless 27 approved in the manner provided in the declaration of the 28 affected condominium or condominiums as originally recorded or 29 as amended under the procedures provided therein. If a 30 declaration as originally recorded or as amended under the 31 procedures provided therein does not specify a procedure for Page 38 1 approving such an alteration or addition, the approval of 75 2 percent of the total voting interests of each affected 3 condominium is required. This subsection does not prohibit a 4 provision in any declaration, articles of incorporation, or 5 bylaws as originally recorded or as amended under the 6 procedures provided therein requiring the approval of unit 7 owners in any condominium operated by the same association or 8 requiring board approval before a material alteration or 9 substantial addition to the common elements is permitted. This 10 paragraph is intended to clarify existing law and applies to 11 associations existing on the effective date of this act. 12 (c) There shall not be any material alteration or 13 substantial addition made to association real property 14 operated by a multicondominium association, except as provided 15 in the declaration, articles of incorporation, or bylaws as 16 originally recorded or as amended under the procedures 17 provided therein. If the declaration, articles of 18 incorporation, or bylaws as originally recorded or as amended 19 under the procedures provided therein do not specify the 20 procedure for approving an alteration or addition to 21 association real property, the approval of 75 percent of the 22 total voting interests of the association is required. This 23 paragraph is intended to clarify existing law and applies to 24 associations existing on the effective date of this act. 25 (3) A unit owner shall not do anything within his or 26 her unit or on the common elements which would adversely 27 affect the safety or soundness of the common elements or any 28 portion of the association property or condominium property 29 which is to be maintained by the association. 30 (4) Any unit owner may display one portable, removable 31 United States flag in a respectful way and, on Armed Forces Page 39 1 Day, Memorial Day, Flag Day, Independence Day, and Veterans 2 Day, may display in a respectful way portable, removable 3 official flags, not larger than 4 1/2 feet by 6 feet, that 4 represent the United States Army, Navy, Air Force, Marine 5 Corps, or Coast Guard, regardless of any declaration rules or 6 requirements dealing with flags or decorations. 7 (5) Each board of administration shall, at each annual 8 meeting, adopt or restate hurricane shutter specifications for 9 each building within each condominium operated by the 10 association which shall include color, style, and other 11 factors deemed relevant by the board. All specifications 12 adopted or restated by the board shall comply with the 13 applicable building code. Notwithstanding any provision to the 14 contrary in the condominium documents, if approval is required 15 by the documents, a board shall not refuse to approve the 16 installation or replacement of hurricane shutters conforming 17 to the specifications adopted by the board. The board may, 18 subject to the provisions of s. 718.3026, and the approval of 19 a majority of voting interests of the condominium, install 20 hurricane shutters or hurricane protection that complies with 21 the applicable building code, and may maintain, repair, or 22 replace such approved hurricane shutters, whether on or within 23 common elements, limited common elements, units, or 24 association property. However, where laminated glass or window 25 film architecturally designed to function as hurricane 26 protection which complies with the applicable building code 27 has been installed, the board may not install hurricane 28 shutters. The board may operate shutters installed pursuant to 29 this subsection without permission of the unit owners only 30 where such operation is necessary to preserve and protect the 31 condominium property and association property. The Page 40 1 installation, replacement, operation, repair, and maintenance 2 of such shutters in accordance with the procedures set forth 3 herein shall not be deemed a material alteration to the common 4 elements or association property within the meaning of this 5 section. 6 (6) Every 5 years, the board of administration shall 7 have the condominium buildings inspected by a professional 8 engineer or professional architect registered in the state for 9 the purposes of determining that the building is structurally 10 and electrically safe, and determining any immediate 11 maintenance required as well as any long term maintenance 12 necessary in the form of a long-term maintenance plan. The 13 long-term maintenance plan must include an executive summary 14 that shall be distributed to all unit owners. The engineer or 15 architect shall provide a report indicating the manner and 16 type of inspection forming the basis for the report and 17 description of any matters identified as requiring remedial 18 action. The report shall become an official record of the 19 association to be provided to the members upon request 20 pursuant to s. 718.111(12). 21 (7) An association may not prohibit the attachment of 22 religious items at the door or at the entrance of a unit. The 23 board may adopt reasonable size restrictions for such items. 24 Section 6. Section 718.1224, Florida Statutes, is 25 created to read: 26 718.1224 Prohibition against SLAPP suits.-- 27 (1) It is the intent of the Legislature to protect the 28 right of condominium unit owners to exercise their rights to 29 instruct their representatives and petition for redress of 30 grievances before the various governmental entities of this 31 state as protected by the First Amendment to the United States Page 41 1 Constitution and s. 5, Art. I of the State Constitution. The 2 Legislature recognizes that strategic lawsuits against public 3 participation, or "SLAPP" suits as they are typically referred 4 to, have occurred when association members are sued by 5 individuals, business entities, or governmental entities 6 arising out of a condominium unit owner's appearance and 7 presentation before a governmental entity on matters related 8 to the condominium association. However, it is the public 9 policy of this state that governmental entities, business 10 organizations, and individuals not to engage in SLAPP suits, 11 because such actions are inconsistent with the right of 12 condominium unit owners to participate in the state's 13 institutions of government. Therefore, the Legislature finds 14 and declares that prohibiting such lawsuits by governmental 15 entities, business entities, and individuals against 16 condominium unit owners who address matters concerning their 17 condominium association will preserve this fundamental state 18 policy, preserve the constitutional rights of condominium unit 19 owners, and ensure the continuation of representative 20 government in this state. It is the intent of the Legislature 21 that such lawsuits be expeditiously disposed of by the courts. 22 As used in this subsection, the term "governmental entity" 23 means the state, including the executive, legislative, and 24 judicial branches of government, the independent 25 establishments of the state, counties, municipalities, 26 districts, authorities, boards, or commissions, or any 27 agencies of these branches which are subject to chapter 286. 28 (2) A governmental entity, business organization, or 29 individual in this state may not file or cause to be filed 30 through its employees or agents any lawsuit, cause of action, 31 claim, cross-claim, or counterclaim against a condominium unit Page 42 1 owner without merit and solely because such condominium unit 2 owner has exercised the right to instruct his or her 3 representatives or the right to petition for redress of 4 grievances before the various governmental entities of this 5 state, as protected by the First Amendment to the United 6 States Constitution and s. 5, Art. I of the State 7 Constitution. 8 (3) If a condominium unit owner is sued by a 9 governmental entity, business organization, or individual in 10 violation of this section, the condominium unit owner has a 11 right to an expeditious resolution of a claim that the suit is 12 in violation of this section. A condominium unit owner may 13 petition the court for an order dismissing the action or 14 granting final judgment in favor of that condominium unit 15 owner. The condominium unit owner may file a motion for 16 summary judgment, together with supplemental affidavits, 17 seeking a determination that the governmental entity's, 18 business organization's, or individual's lawsuit has been 19 brought in violation of this section. The governmental entity, 20 business organization, or individual shall thereafter file its 21 response and any supplemental affidavits. As soon as 22 practicable, the court shall set a hearing on the condominium 23 unit owner's motion, which shall be held at the earliest 24 possible time after the filing of the governmental entity's, 25 business organization's or individual's response. The court 26 may award the condominium unit owner sued by the governmental 27 entity, business organization, or individual actual damages 28 arising from the governmental entity's, individual's, or 29 business organization's violation of this section. A court may 30 treble the damages awarded to a prevailing condominium unit 31 owner and shall state the basis for the treble damages award Page 43 1 in its judgment. The court shall award the prevailing party 2 reasonable attorney's fees and costs incurred in connection 3 with a claim that an action was filed in violation of this 4 section. 5 (4) Condominium associations may not expend 6 association funds in prosecuting a SLAPP suit against a 7 condominium unit owner. 8 Section 7. Paragraphs (e) and (h) of subsection (4) of 9 section 718.1255, Florida Statutes, are amended to read: 10 718.1255 Alternative dispute resolution; voluntary 11 mediation; mandatory nonbinding arbitration; legislative 12 findings.-- 13 (4) MANDATORY NONBINDING ARBITRATION AND MEDIATION OF 14 DISPUTES.--The Division of Florida Land Sales, Condominiums, 15 and Mobile Homes of the Department of Business and 16 Professional Regulation shall employ full-time attorneys to 17 act as arbitrators to conduct the arbitration hearings 18 provided by this chapter. The division may also certify 19 attorneys who are not employed by the division to act as 20 arbitrators to conduct the arbitration hearings provided by 21 this section. No person may be employed by the department as a 22 full-time arbitrator unless he or she is a member in good 23 standing of The Florida Bar. The department shall promulgate 24 rules of procedure to govern such arbitration hearings 25 including mediation incident thereto. The decision of an 26 arbitrator shall be final; however, such a decision shall not 27 be deemed final agency action. Nothing in this provision shall 28 be construed to foreclose parties from proceeding in a trial 29 de novo unless the parties have agreed that the arbitration is 30 binding. If such judicial proceedings are initiated, the final 31 Page 44 1 decision of the arbitrator shall be admissible in evidence in 2 the trial de novo. 3 (e) Either before or after the filing of the 4 respondents' answer to the petition, any party may request 5 that the arbitrator refer the case to mediation under this 6 section and any rules adopted by the division. Upon receipt 7 of a request for mediation, the division shall promptly refer 8 the case
9
10 11 12 arbitrator may refer a dispute to mediation at any time. 13 (h) Mediation proceedings must generally be conducted 14 in accordance with the Florida Rules of Civil Procedure, and 15 these proceedings are privileged and confidential to the same 16 extent as court-ordered mediation. Persons who are not parties 17 to the dispute are not allowed to attend the mediation 18 conference without the consent of all parties, with the 19 exception of counsel for the parties and corporate 20 representatives designated to appear for a party. If the 21 mediator declares an impasse after a mediation conference has 22 been held, the arbitration proceeding terminates, unless all 23 parties agree in writing to continue the arbitration 24 proceeding, in which case the arbitrator's decision shall be 25 either binding or nonbinding, as agreed upon by the parties; 26 in the arbitration proceeding, the arbitrator shall not 27 consider any evidence relating to the unsuccessful mediation 28 except in a proceeding to impose sanctions for failure to 29 appear at the mediation conference. If the parties do not 30 agree to continue arbitration, the arbitrator shall enter an 31 order of dismissal, and either party may institute a suit in a Page 45 1 court of competent jurisdiction. The parties may seek to 2 recover any costs and attorneys' fees incurred in connection 3 with arbitration 4 as part of the costs and fees that may be recovered by the 5 prevailing party in any subsequent litigation. 6 Section 8. Section 718.1257, Florida Statutes, is 7 created to read: 8 718.1257 Emotional-support animals.-- 9 (1) Every unit owner or renter of a condominium unit 10 in this state has the right to own a companion animal and to 11 have such animal live with him or her in the condominium unit 12 if the companion animal is deemed helpful to the person's 13 physical or psychological well-being as attested to by at 14 least two qualified health care professionals. 15 (2) Any municipal or county code or ordinance, or any 16 purported rule, declaration, by-law, or other form of 17 restriction contrary to the right provided in subsection (1) 18 contained in any governing document of any condominium 19 association shall be deemed unconscionable, and thus 20 unenforceable, invalid, and of no legal effect. 21 (3) An animal does not require specialized training or 22 skill in assisting its owner to be classified as a companion 23 animal under this section. The animal can be a cat, dog, 24 ferret, bird, gerbil, or any other commonly accepted 25 domesticated animal. However, if such training can be 26 documented, a letter from only one qualified health care 27 professional is required, as per pre-existing federal 28 disability and fair housing laws. 29 (4) Qualified health professionals include any 30 physician or advanced registered nurse practitioner who is 31 licensed in this state to prescribe medications for emotional Page 46 1 or mental conditions, or any mental health worker, mental 2 health counselor, psychologist, or social worker who is 3 licensed in this state to practice counseling therapy. The 4 letter must say that the animal is necessary to ameliorate and 5 help with life functions for a condition covered under the 6 Americans with Disabilities Act. The letter does not have to 7 give details of the nature of the unit owner's or renter's 8 disorder, in order not to invade the patient's privacy per the 9 Health Insurance Portability and Accountability Act. Where the 10 primary residence of the owner or renter is in another state, 11 the qualified health care professional is defined as a 12 qualified health care professional licensed in the owner's or 13 renter's home state. 14 (5) If it becomes necessary for an owner or renter of 15 any condominium unit to enforce this section in court against 16 an association that has threatened, either orally or in 17 writing to limit his or her right to own and reside with a 18 companion animal, the unit owner or renter shall be entitled 19 to recover his or her reasonable costs and attorney's fees if 20 the unit owner or renter is the prevailing party. This 21 attorney's fee provision is not reciprocal. 22 Section 9. Subsection (1) of section 718.302, Florida 23 Statutes, is amended to read: 24 718.302 Agreements entered into by the association.-- 25 (1) Any grant or reservation made by a declaration, 26 lease, or other document, and any contract made by an 27 association prior to assumption of control of the association 28 by unit owners other than the developer, that provides for 29 services, products, operation, maintenance, or management of a 30 condominium association or property serving the unit owners of 31 a condominium shall be fair and reasonable, and such grant, Page 47 1 reservation, or contract may be canceled by unit owners other 2 than the developer: 3 (a) If the association operates only one condominium 4 and the unit owners other than the developer have assumed 5 control of the association, or if unit owners other than the 6 developer own not less than 75 percent of the voting interests 7 in the condominium, the cancellation shall be by concurrence 8 of the owners of not less than 75 percent of the voting 9 interests other than the voting interests owned by the 10 developer. If a grant, reservation, or contract is so 11 canceled and the unit owners other than the developer have not 12 assumed control of the association, the association shall make 13 a new contract or otherwise provide for maintenance, 14 management, or operation in lieu of the canceled obligation, 15 at the direction of the owners of not less than a majority of 16 the voting interests in the condominium other than the voting 17 interests owned by the developer. 18 (b) If the association operates more than one 19 condominium and the unit owners other than the developer have 20 not assumed control of the association, and if unit owners 21 other than the developer own at least 75 percent of the voting 22 interests in a condominium operated by the association, any 23 grant, reservation, or contract for maintenance, management, 24 or operation of buildings containing the units in that 25 condominium or of improvements used only by unit owners of 26 that condominium may be canceled by concurrence of the owners 27 of at least 75 percent of the voting interests in the 28 condominium other than the voting interests owned by the 29 developer. No grant, reservation, or contract for 30 maintenance, management, or operation of recreational areas or 31 any other property serving more than one condominium, and Page 48 1 operated by more than one association, may be canceled except 2 pursuant to paragraph (d). 3 (c) If the association operates more than one 4 condominium and the unit owners other than the developer have 5 assumed control of the association, the cancellation shall be 6 by concurrence of the owners of not less than 75 percent of 7 the total number of voting interests in all condominiums 8 operated by the association other than the voting interests 9 owned by the developer. 10 (d) If the owners of units in a condominium have the 11 right to use property in common with owners of units in other 12 condominiums and those condominiums are operated by more than 13 one association, no grant, reservation, or contract for 14 maintenance, management, or operation of the property serving 15 more than one condominium may be canceled until unit owners 16 other than the developer have assumed control of all of the 17 associations operating the condominiums that are to be served 18 by the recreational area or other property, after which 19 cancellation may be effected by concurrence of the owners of 20 not less than 75 percent of the total number of voting 21 interests in those condominiums other than voting interests 2 owned by the developer. 23 Section 10. Paragraphs (f) and (g) are added to 24 subsection (1) of section 718.3025, Florida Statutes, to read: 25 718.3025 Agreements for operation, maintenance, or 26 management of condominiums; specific requirements.-- 27 (1) No written contract between a party contracting to 28 provide maintenance or management services and an association 29 which contract provides for operation, maintenance, or 30 management of a condominium association or property serving 31 Page 49 1 the unit owners of a condominium shall be valid or enforceable 2 unless the contract: 3 (f) Requires that all obligations under the contract 4 be completed within a 1-year period. 5 (g) Contains a provision expressly prohibiting 6 automatic renewal of the contract. 7 Section 11. Paragraph (a) of subsection (2) of section 8 718.3026, Florida Statutes, is amended to read: 9 718.3026 Contracts for products and services; in 10 writing; bids; exceptions.--Associations with less than 100 11 units may opt out of the provisions of this section if 12 two-thirds of the unit owners vote to do so, which opt-out may 13 be accomplished by a proxy specifically setting forth the 14 exception from this section. 15 (2)(a)1. Notwithstanding the foregoing, contracts with 16 employees of the association, and contracts for attorney, 17 accountant, architect, community association manager, 18 timeshare management firm, engineering, and landscape 19 architect services are not subject to the provisions of this 20 section. 21 2. A contract executed before January 1, 1992, and any 22 renewal thereof, is not subject to the competitive bid 23 requirements of this section. If a contract was awarded under 24 the competitive bid procedures of this section, any renewal of 25 that contract is not subject to such competitive bid 26 requirements if the contract contains a provision that allows 27 the board to cancel the contract on 30 days' notice. 28 Materials, equipment, or services provided to a condominium 29 under a local government franchise agreement by a franchise 30 holder are not subject to the competitive bid requirements of 31 this section. A contract with a manager, if made by a Page 50 1 competitive bid, may be made for up to 3 years. A condominium 2 whose declaration or bylaws provides for competitive bidding 3 for services may operate under the provisions of that 4 declaration or bylaws in lieu of this section if those 5 provisions are not less stringent than the requirements of 6 this section. 7 3. A contract by and between a service provider and an 8 association may not be for a term in excess of 3 years and may 9 not contain an automatic renewal clause. 10 4. A contract for construction or repair of the 11 property which exceeds 10 percent of the total annual budget 12 of the association, including reserves, shall occur under the 13 written advisement of an attorney. 14 Section 12. Subsection (3) of section 718.303, Florida 15 Statutes, is amended, and subsection (4) is added to that 16 section, to read: 17 718.303 Obligations of owners; waiver; levy of fine 18 against unit by association.-- 19 (3) If the declaration or bylaws so provide, the 20 association may levy reasonable fines against a unit for the 21 failure of the owner of the unit, or its occupant, licensee, 22 or invitee, to comply with any provision of the declaration, 23 the association bylaws, or reasonable rules of the 24 association. No fine will become a lien against a unit. No 25 fine may exceed $100 per violation. However, a fine may be 26 levied on the basis of each day of a continuing violation, 27 with a single notice and opportunity for hearing, provided 28 that no such fine shall in the aggregate exceed $1,000. No 29 fine may be levied except after giving reasonable notice and 30 opportunity for a hearing to the unit owner and, if 31 applicable, its licensee or invitee. The hearing must be held Page 51 1 before a
committee of 2 the board of administration of the association. If the 3 committee does not agree with the fine, the fine may not be 4 levied. The provisions of this subsection do not apply to 5 unoccupied units. 6 (4) Anyone subject to an action under this section 7 shall be notified of the violation by certified mail, return 8 receipt requested, and, except in the case of imminent danger 9 to person or property, has 30 days in which to respond in 10 writing. If no response is provided and the violation 11 continues or is repeated, the association may proceed under 12 subsections (1) and (2) without further notice except as 13 provided in subsection (3). 14 Section 13. Subsections (1) and (2) of section 15 718.404, Florida Statutes, are amended to read: 16 718.404 Mixed-use condominiums.--When a condominium 17 consists of both residential and commercial units, the 18 following provisions shall apply: 19 (1) The condominium documents shall not provide that 20 the owner of any commercial unit shall have the authority to 21 veto amendments to the declaration, articles of incorporation, 22 bylaws, or rules or regulations of the association. It is 23 intended that this subsection apply retroactively as a 24 remedial measure. 25 (2) Subject to s. 718.301, where the number of 26 residential units in the condominium equals or exceeds 50 27 percent of the total units operated by the association, owners 28 of the residential units shall be entitled to vote for a 29 majority of the seats on the board of administration. It is 30 intended that this subsection apply retroactively as a 31 remedial measure. Page 52 1 Section 14. Paragraphs (e) and (j) of subsection (1) 2 of section 718.501, Florida Statutes, are amended, and 3 paragraph (n) is added to that subsection, to read: 4 718.501 Powers and duties of Division of Florida Land 5 Sales, Condominiums, and Mobile Homes.-- 6 (1) The Division of Florida Land Sales, Condominiums, 7 and Mobile Homes of the Department of Business and 8 Professional Regulation, referred to as the "division" in this 9 part, in addition to other powers and duties prescribed by 10 chapter 498, has the power to enforce and ensure compliance 11 with the provisions of this chapter and rules promulgated 12 pursuant hereto relating to the development, construction, 13 sale, lease, ownership, operation, and management of 14 residential condominium units. In performing its duties, the 15 division has the following powers and duties: 16 (e) The division shall
17 disseminate a prospectus and other information to assist 18 prospective owners, purchasers, lessees, and developers of 19 residential condominiums in assessing the rights, privileges, 20 and duties pertaining thereto. 21 (j) The division shall provide training programs for 22 condominium association board members and unit owners in 23 conjunction with the recommendations of the ombudsman, at the 24 associations' expense. 25 (n) Upon a finding that any association has committed 26 a violation within the jurisdiction of the division, the 27 division shall require the association to mail and post a 28 notice to all unit owners setting forth the facts and findings 29 relative to any and all violations, as well as a description 30 of the corrective action required. 31 Page 53 1 Section 15. Subsection (1) of section 718.5011, 2 Florida Statutes, is amended to read: 3 718.5011 Ombudsman; appointment; administration.-- 4 (1) There is created an Office of the Condominium 5 Ombudsman, to be located, solely for administrative purposes, 6 within the Division of Florida Land Sales, Condominiums, and 7 Mobile Homes. The ombudsman shall exercise his or her 8 policymaking and other functions delegated by this chapter 9 independently of the Department of Business and Professional 10 Regulation and without approval or control of the department. 11 The department shall render administrative support to the 12 Office of the Condominium Ombudsman in matters pertaining to 13 budget, personnel, office space, equipment, and supplies. The 14 functions of the office shall be funded by the Division of 15 Florida Land Sales, Condominiums, and Mobile Homes Trust Fund. 16 The ombudsman shall be a bureau chief of the division, and the 17 office shall be set within the division in the same manner as 18 any other bureau is staffed and funded. 19 Section 16. Section 718.5012, Florida Statutes, is 20 amended to read: 21 718.5012 Ombudsman; powers and duties.-- 22 (1) The ombudsman shall have the powers that are 23 necessary to carry out the duties of his or her office, 24 including the following specific powers: 25 (a) 26 records of the division. 27 (b) 28 necessary for the efficient operation of the office. 29 (c) 30 recommendations to the Governor, the department, the division, 31 the Advisory Council on Condominiums, the President of the Page 54 1 Senate, and the Speaker of the House of Representatives on any 2 matter or subject within the jurisdiction of the division. The 3 ombudsman shall make recommendations he or she deems 4 appropriate for legislation relative to division procedures, 5 rules, jurisdiction, personnel, and functions. 6 (d) 7 owners, boards of directors, board members, community 8 association managers, and other affected parties. The 9 ombudsman shall 10 owners, boards of directors, board members, community 11 association managers, and other affected parties to understand 12 their rights and responsibilities as set forth in this chapter 13 and the condominium documents governing their respective 14 association. The ombudsman shall coordinate and assist in the 15 preparation and adoption of educational and reference 16 material, and shall endeavor to coordinate with private or 17 volunteer providers of these services, so that the 18 availability of these resources is made known to the largest 19 possible audience. 20 (e) 21 concerning condominium elections or meetings, including, but 22 not limited to, recommending that the division pursue 23 enforcement action in any manner where there is reasonable 24 cause to believe that election misconduct has occurred. 25 (f) 26 changes in rules and procedures for the filing, investigation, 27 and resolution of complaints filed by unit owners, 28 associations, and managers. 29 (g) 30 boards of directors and officers of associations to carry out 31 their powers and duties consistent with this chapter, division Page 55 1 rules, and the condominium documents governing the 2 association. 3 (h) 4 meetings with and between unit owners, boards of directors, 5 board members, community association managers, and other 6 affected parties when the meetings may assist in resolving a 7 dispute within a community association before a person submits 8 a dispute for a formal or administrative remedy. It is the 9 intent of the Legislature that the ombudsman act as a neutral 10 resource for both the rights and responsibilities of unit 11 owners, associations, and board members. 12 (2) 13 in a condominium association, or six unit owners, whichever is 14 greater, may petition the ombudsman to appoint an election 15 monitor to attend the annual meeting of the unit owners and 16 conduct the election of directors. The ombudsman shall appoint 17 a division employee, a person or persons specializing in 18 condominium election monitoring, or an attorney licensed to 19 practice in this state as the election monitor. All costs 20 associated with the election monitoring process shall be paid 21 by the association. The division shall adopt a rule 22 establishing procedures for the appointment of election 23 monitors and the scope and extent of the monitor's role in the 24 election process. 25 (3) Any unit owner or association acting in good faith 26 on the advice or opinion of the office of the ombudsman is 27 immune from any penalties or actions. 28 Section 17. Subsection (21) of section 718.504, 29 Florida Statutes, is amended to read: 30 718.504 Prospectus or offering circular.--Every 31 developer of a residential condominium which contains more Page 56 1 than 20 residential units, or which is part of a group of 2 residential condominiums which will be served by property to 3 be used in common by unit owners of more than 20 residential 4 units, shall prepare a prospectus or offering circular and 5 file it with the Division of Florida Land Sales, Condominiums, 6 and Mobile Homes prior to entering into an enforceable 7 contract of purchase and sale of any unit or lease of a unit 8 for more than 5 years and shall furnish a copy of the 9 prospectus or offering circular to each buyer. In addition to 10 the prospectus or offering circular, each buyer shall be 11 furnished a separate page entitled "Frequently Asked Questions 12 and Answers," which shall be in accordance with a format 13 approved by the division and a copy of the financial 14 information required by s. 718.111. This page shall, in 15 readable language, inform prospective purchasers regarding 16 their voting rights and unit use restrictions, including 17 restrictions on the leasing of a unit; shall indicate whether 18 and in what amount the unit owners or the association is 19 obligated to pay rent or land use fees for recreational or 20 other commonly used facilities; shall contain a statement 21 identifying that amount of assessment which, pursuant to the 22 budget, would be levied upon each unit type, exclusive of any 23 special assessments, and which shall further identify the 24 basis upon which assessments are levied, whether monthly, 25 quarterly, or otherwise; shall state and identify any court 26 cases in which the association is currently a party of record 27 in which the association may face liability in excess of 28 $100,000; and which shall further state whether membership in 29 a recreational facilities association is mandatory, and if so, 30 shall identify the fees currently charged per unit type. The 31 division shall by rule require such other disclosure as in its Page 57 1 judgment will assist prospective purchasers. The prospectus or 2 offering circular may include more than one condominium, 3 although not all such units are being offered for sale as of 4 the date of the prospectus or offering circular. The 5 prospectus or offering circular must contain the following 6 information: 7 (21) An estimated operating budget for the condominium 8 and the association, and a schedule of the unit owner's 9 expenses shall be attached as an exhibit and shall contain the 10 following information: 11 (a) The estimated monthly and annual revenues and 12
expenses of the condominium and the association which 13 earned by the association or collected from unit owners by 14 assessments. 15 (b) The estimated monthly and annual expenses of each 16 unit owner for a unit, other than common expenses paid by all 17 unit owners, payable by the unit owner to persons or entities 18 other than the association, as well as to the association, 19 including fees assessed pursuant to s. 718.113(1) for 20 maintenance of limited common elements where such costs are 21 shared only by those entitled to use the limited common 22 element, and the total estimated monthly and annual expense. 23 There may be excluded from this estimate expenses which are 24 not provided for or contemplated by the condominium documents, 25 including, but not limited to, the costs of private telephone; 26 maintenance of the interior of condominium units, which is not 27 the obligation of the association; maid or janitorial services 28 privately contracted for by the unit owners; utility bills 29 billed directly to each unit owner for utility services to his 30 or her unit; insurance premiums other than those incurred for 31 policies obtained by the condominium; and similar personal Page 58 1 expenses of the unit owner. A unit owner's estimated payments 2 for assessments shall also be stated in the estimated amounts 3 for the times when they will be due. 4 (c) The estimated items of expenses of the condominium 5 and the association, except as excluded under paragraph (b), 6 including, but not limited to, the following items, which 7 shall be stated either as an association expense collectible 8 by assessments or as unit owners' expenses payable to persons 9 other than the association: 10 1. Expenses for the association and condominium: 11 a. Administration of the association. 12 b. Management fees. 13 c. Maintenance. 14 d. Rent for recreational and other commonly used 15 facilities. 16 e. Taxes upon association property. 17 f. Taxes upon leased areas. 18 g. Insurance. 19 h. Security provisions. 20 i. Other expenses. 21 j. Operating capital. 22 k. Reserves. 23 l. Fees payable to the division. 24 2. Expenses for a unit owner: 25 a. Rent for the unit, if subject to a lease. 26 b. Rent payable by the unit owner directly to the 27 lessor or agent under any recreational lease or lease for the 28 use of commonly used facilities, which use and payment is a 29 mandatory condition of ownership and is not included in the 30 common expense or assessments for common maintenance paid by 31 the unit owners to the association. Page 59 1
2
3 4 5
6 Section 18. Subsections (6) and (7) of section 7 720.303, Florida Statutes, are amended to read: 8 720.303 Association powers and duties; meetings of 9 board; official records; budgets; financial reporting; 10 association funds; recalls.-- 11 (6) BUDGETS.-- 12 (a) The association shall prepare an annual budget 13 that sets out the annual operating expenses. The budget must 14 reflect the estimated revenues and expenses for that year and 15 the estimated surplus or deficit as of the end of the current 16 year. The budget must set out separately all fees or charges 17 paid for by the association for recreational amenities, 18 whether owned by the association, the developer, or another 19 person. The association shall provide each member with a copy 20 of the annual budget or a written notice that a copy of the 21 budget is available upon request at no charge to the member. 22 The copy must be provided to the member within the time limits 23 set forth in subsection (5). 24 (b) In addition to annual operating expenses, the 25 budget may include reserve accounts for capital expenditures 26 and deferred maintenance for which the association is 27 responsible to the extent that the governing documents do not 28 limit increases in assessments, including reserves. If the 29 budget of the association includes reserve accounts, such 30 reserves shall be determined, maintained, and waived in the 31 manner provided in this subsection. Once an association Page 60 1 provides for reserve accounts in the budget, the association 2 shall thereafter determine, maintain, and waive reserves in 3 compliance with the provisions of this subsection. 4 (c) If the budget of the association does not provide 5 for reserve accounts governed by this subsection and the 6 association is responsible for the repair and maintenance of 7 capital improvements that may result in a special assessment 8 if reserves are not provided, each financial report for the 9 preceding fiscal year required by subsection (7) must contain 10 the following statement in conspicuous type: THE BUDGET OF THE 11 ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL 12 EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN 13 SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE 14 ACCOUNTS UNDER THE PROVISIONS OF SECTION 720.303(6), FLORIDA 15 STATUTES, UPON THE APPROVAL OF NOT LESS THAN A MAJORITY OF THE 16 TOTAL VOTING INTERESTS OF THE ASSOCIATION. 17 (d) An association is deemed to have provided for 18 reserve accounts when reserve accounts have been initially 19 established by the developer or when the membership of the 20 association affirmatively elects to provide for reserves. If 21 reserve accounts are not initially provided for by the 22 developer, the membership of the association may elect to do 23 so upon the affirmative approval of not less than a majority 24 of the total voting interests of the association. The approval 25 may be attained by vote of the members at a duly called 26 meeting of the membership or upon a written consent executed 27 by not less than a majority of the total voting interests in 28 the community. The approval action of the membership shall 29 state that reserve accounts shall be provided for in the 30 budget and designate the components for which the reserve 31 accounts are to be established. Upon approval by the Page 61 1 membership, the board of directors shall provide for the 2 required reserve accounts for inclusion in the budget in the 3 next fiscal year following the approval and in each year 4 thereafter. Once established as provided in this subsection, 5 the reserve accounts shall be funded or maintained or shall 6 have their funding waived in the manner provided in paragraph 7 (f). 8 (e) The amount to be reserved in any account 9 established shall be computed by means of a formula that is 10 based upon estimated remaining useful life and estimated 11 replacement cost or deferred maintenance expense of each 12 reserve item. The association may adjust replacement reserve 13 assessments annually to take into account any changes in 14 estimates of cost or useful life of a reserve item. 15 (f) Once a reserve account or reserve accounts are 16 established, the membership of the association, upon a 17 majority vote at a meeting at which a quorum is present, may 18 provide for no reserves or less reserves than required by this 19 section. If a meeting of the unit owners is called to 20 determine whether to waive or reduce the funding of reserves 21 and no such result is achieved or a quorum is not present, the 22 reserves as included in the budget shall go into effect. After 23 the turnover, the developer may vote its voting interest to 24 waive or reduce the funding of reserves. Any vote taken under 25 this subsection to waive or reduce reserves shall be 26 applicable only to one budget year. 27 (g) Funding formulas for reserves authorized by this 28 section shall be based on either a separate analysis of each 29 of the required assets or a pooled analysis of two or more of 30 the required assets. 31 Page 62 1 1. If the association maintains separate reserve 2 accounts for each of the required assets, the amount of the 3 contribution to each reserve account shall be the sum of the 4 following two calculations: 5 a. The total amount necessary, if any, to bring a 6 negative component balance to zero. 7 b. The total estimated deferred maintenance expense or 8 estimated replacement cost of the reserve component less the 9 estimated balance of the reserve component as of the beginning 10 of the period for which the budget will be in effect. The 11 remainder, if greater than zero, shall be divided by the 12 estimated remaining useful life of the component. 13 14 The formula may be adjusted each year for changes in estimates 15 and deferred maintenance performed during the year and may 16 include factors such as inflation and earnings on invested 17 funds. 18 2. If the association maintains a pooled account of 19 two or more of the required reserve assets, the amount of the 20 contribution to the pooled reserve account as disclosed on the 21 proposed budget may not be less than that required to ensure 22 that the balance at the beginning of the period for which the 23 budget will go into effect plus the projected annual cash 24 inflows over the remaining estimated useful life of all of the 25 assets that make up the reserve pool are equal to or greater 26 than the projected annual cash outflows over the remaining 27 estimated useful lives of all of the assets that make up the 28 reserve pool, based on the current reserve analysis. The 29 projected annual cash inflows may include estimated earnings 30 from investment of principal. The reserve funding formula may 31 not include any type of balloon payments. Page 63 1 (h) Reserve funds and any interest accruing thereon 2 shall remain in the reserve account or accounts and shall be 3 used only for authorized reserve expenditures unless their use 4 for other purposes is approved in advance by a majority vote 5 at a meeting at which a quorum is present. Prior to turnover 6 of control of an association by a developer to parcel owners, 7 the developer-controlled association may not vote to use 8 reserves for purposes other than those for which they were 9 intended without the approval of a majority of all 10 nondeveloper voting interests voting in person or by limited 11 proxy at a duly called meeting of the association. 12 (7) FINANCIAL REPORTING.--Within 90 days after the end 13 of the fiscal year, or annually on a date provided in the 14 bylaws, the association shall prepare and complete, or 15 contract with a third party for the preparation and completion 16 of, a financial report for the preceding fiscal year. Within 17 21 days after the final financial report is completed by the 18 association or received from the third party, but not later 19 than 120 days after the end of the fiscal year or other date 20 as
provided in the bylaws, the association shall 21 22 23 forth in subsection (5), provide each member with a copy of 24 the annual financial report or a written notice that a copy of 25 the financial report is available upon request at no charge to 26 the member. Financial reports shall be prepared as follows: 27 (a) An association that meets the criteria of this 28 paragraph shall prepare or cause to be prepared a complete set 29 of financial statements in accordance with generally accepted 30 accounting principles as adopted by the Board of Accountancy. 31 Page 64 1 The financial statements shall be based upon the association's 2 total annual revenues, as follows: 3 1. An association with total annual revenues of 4 $100,000 or more, but less than $200,000, shall prepare 5 compiled financial statements. 6 2. An association with total annual revenues of at 7 least $200,000, but less than $400,000, shall prepare reviewed 8 financial statements. 9 3. An association with total annual revenues of 10 $400,000 or more shall prepare audited financial statements. 11 (b)1. An association with total annual revenues of 12 less than $100,000 shall prepare a report of cash receipts and 13 expenditures. 14 2. An association in a community of fewer than 50 15 parcels, regardless of the association's annual revenues, may 16 prepare a report of cash receipts and expenditures in lieu of 17 financial statements required by paragraph (a) unless the 18 governing documents provide otherwise. 19 3. A report of cash receipts and disbursement must 20 disclose the amount of receipts by accounts and receipt 21 classifications and the amount of expenses by accounts and 22 expense classifications, including, but not limited to, the 23 following, as applicable: costs for security, professional, 24 and management fees and expenses; taxes; costs for recreation 25 facilities; expenses for refuse collection and utility 26 services; expenses for lawn care; costs for building 27 maintenance and repair; insurance costs; administration and 28 salary expenses; and reserves if maintained by the 29 association. 30 (c) If 20 percent of the parcel owners petition the 31 board for a level of financial reporting higher than that Page 65 1 required by this section, the association shall duly notice 2 and hold a meeting of members within 30 days of receipt of the 3 petition for the purpose of voting on raising the level of 4 reporting for that fiscal year. Upon approval of a majority of 5 the total voting interests of the parcel owners, the 6 association shall prepare or cause to be prepared, shall amend 7 the budget or adopt a special assessment to pay for the 8 financial report regardless of any provision to the contrary 9 in the governing documents, and shall provide within 90 days 10 of the meeting or the end of the fiscal year, whichever occurs 11 later: 12 1. Compiled, reviewed, or audited financial 13 statements, if the association is otherwise required to 14 prepare a report of cash receipts and expenditures; 15 2. Reviewed or audited financial statements, if the 16 association is otherwise required to prepare compiled 17 financial statements; or 18 3. Audited financial statements if the association is 19 otherwise required to prepare reviewed financial statements. 20 (d) If approved by a majority of the voting interests 21 present at a properly called meeting of the association, an 22 association may prepare or cause to be prepared: 23 1. A report of cash receipts and expenditures in lieu 24 of a compiled, reviewed, or audited financial statement; 25 2. A report of cash receipts and expenditures or a 26 compiled financial statement in lieu of a reviewed or audited 27 financial statement; or 28 3. A report of cash receipts and expenditures, a 29 compiled financial statement, or a reviewed financial 30 statement in lieu of an audited financial statement. 31 Page 66 1 Section 19. Section 720.307, Florida Statutes, is 2 amended to read: 3 720.307 Transition of association control in a 4 community.--With respect to homeowners' associations: 5 (1) Members other than the developer are entitled to 6 elect at least a majority of the members of the board of 7 directors of the homeowners' association when the earlier of 8 the following events occurs: 9 (a) Three months after 75 10 all phases of the community that will ultimately be operated 11 by the homeowners' association have been conveyed to members; 12 or 13 (b) Such other percentage of the parcels has been 14 conveyed to members, or such other date or event has occurred, 15 as is set forth in the governing documents in order to comply 16 with the requirements of any governmentally chartered entity 17 with regard to the mortgage financing of parcels. 18 19 For purposes of this section, the term "members other than the 20 developer" shall not include builders, contractors, or others 21 who purchase a parcel for the purpose of constructing 22 improvements thereon for resale. 23 (2) The developer is entitled to elect at least one 24 member of the board of directors of the homeowners' 25 association as long as the developer holds for sale in the 26 ordinary course of business at least 5 percent of the parcels 27 in all phases of the community. After the developer 28 relinquishes control of the homeowners' association, the 29 developer may exercise the right to vote any developer-owned 30 voting interests in the same manner as any other member, 31 except for purposes of reacquiring control of the homeowners' Page 67 1 association or selecting the majority of the members of the 2 board of directors. 3 (3) Prior to turnover, the developer or owner of all 4 common areas shall convey the title to all common areas to the 5 association immediately upon incorporation of the association. 6 If additional common areas are acquired prior to transition of 7 control and subject to the governing documents, title to those 8 common areas shall also be immediately transferred to the 9 association.
10 (4) 11 at least a majority of the board of directors of the 12 homeowners' association, the developer shall, at the 13 developer's expense, within no more than 90 days deliver the 14 following documents to the board: 15 (a) All deeds to common property owned by the 16 association or the developer. 17 (b) The original of the association's declarations of 18 covenants and restrictions. 19 (c) A certified copy of the articles of incorporation 20 of the association. 21 (d) A copy of the bylaws. 22 (e) The minute books, including all minutes. 23 (f) The books and records of the association. 24 (g) Policies, rules, and regulations, if any, which 25 have been adopted. 26 (h) Resignations of directors who are required to 27 resign because the developer is required to relinquish control 28 of the association. 29 (i) The financial records of the association from the 30 date of incorporation through the date of turnover. 31 (j) All association funds and control thereof. Page 68 1 (k) All tangible property of the association. 2 (l) A copy of all contracts which may be in force with 3 the association as one of the parties. 4 (m) A list of the names and addresses and telephone 5 numbers of all contractors, subcontractors, or others in the 6 current employ of the association. 7 (n) Any and all insurance policies in effect. 8 (o) Any permits issued to the association by 9 governmental entities. 10 (p) Any and all warranties in effect. 11 (q) A roster of current homeowners and their addresses 12 and telephone numbers and section and lot numbers. 13 (r) Employment and service contracts in effect. 14 (s) All other contracts and agreements in effect to 15 which the association is a party. 16 (t) The financial records, including financial 17 statements of the association, and source documents from the 18 incorporation of the association through the date of turnover. 19 The records shall be audited by an independent certified 20 public accountant for the period of the incorporation of the 21 association or for the period covered by the last audit, if an 22 audit has been performed for each fiscal year since 23 incorporation. All financial statements shall be prepared in 24 accordance with generally accepted accounting standards and 25 shall be audited in accordance with generally accepted 26 auditing standards as prescribed by the Board of Accountancy. 27 The accountant performing the review shall examine to the 28 extent necessary supporting documents and records, including 29 the cash disbursements and related paid invoices to determine 30 whether expenditures were for association purposes, and the 31 billings, cash receipts, and related records to determine Page 69 1 whether the developer was charged and paid the proper amounts 2 of assessments. This paragraph applies to associations with a 3 date of incorporation after December 31, 2007. 4
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13 Section 20. Subsection (5) is added to section 14 720.3075, Florida Statutes, to read: 15 720.3075 Prohibited clauses in association 16 documents.-- 17 (5)(a) An association may not restrict a homeowner 18 from mounting or employing shutters or other hurricane 19 protection on any portion of the home. 20 (b) Except as provided in paragraph (c), an 21 association may not restrict a homeowner from mounting or 22 employing temporary or permanent shutters or other hurricane 23 protection on any portion of the home during any time that a 24 hurricane warning has been declared, during any time when an 25 evacuation order has been given, or for the following period 26 after conclusion of the hurricane watch or evacuation order: 27 1. Seven days; or 28 2. Fourteen days if the hurricane watch concerns a 29 category 4 storm or greater or if the evacuation order lasts 30 more than 3 days. 31 Page 70 1 (c) If a local government restricts homeowners' 2 mounting or employing temporary or permanent shutters or other 3 hurricane protection, the local government may also authorize 4 associations to adopt and enforce equal or lesser 5 restrictions. 6 (d) Except as provided in paragraph (c) or paragraph 7 (e), an association may not restrict a homeowner from mounting 8 or employing permanent shutters or other hurricane protection 9 on any portion of the home. 10 (e) If the association otherwise properly adopts 11 restrictions governing color or form of shutters or other 12 permanent exterior window coverings, the association may adopt 13 and enforce equal or lesser restrictions that apply to 14 permanent exterior hurricane protections. 15 (f) An association may not restrict the time or 16 duration for shutters or other hurricane protection to be open 17 or closed during any period and may not restrict homeowners 18 from mounting or employing temporary shutters or other 19 hurricane protection on any portion of the home. 20 Section 21. Notwithstanding any provision to the 21 contrary contained in a declaration of condominium, 22 condominium bylaws, or other documents, a condominium 23 developer who rents or leases any unsold units in a 24 condominium must pay all monthly maintenance fees on those 25 units to the association as if the units were owned by 26 individual owners. 27 Section 22. This act shall take effect July 1, 2007. 28 29 30 31 Page 71 1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN COMMITTEE SUBSTITUTE FOR 2 CS for Senate Bill 2816 3 4 The committee substitute revises the requirement that association records be kept at a location within 30 miles 5 driving distance of the condominium property to provide that the records must be kept at a location within the county in 6 which the condominium property is located. |
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