CODING: Words stricken are deletions; words underlined are additions.House Bill 3321
Florida House of Representatives - 1998 HB 3321
By Representative Crow
1 A bill to be entitled
2 An act relating to condominiums; amending s.
3 718.103, F.S.; redefining the term "developer";
4 amending s. 718.111, F.S.; revising language
5 with respect to the operation of the
6 association to provide for the regulation of
7 resort condominiums; providing criteria;
8 amending s. 718.112, F.S.; revising language
9 with respect to required provisions in the
10 bylaws; authorizing a member of the board of
11 administration or a committee to join by
12 written concurrence in certain actions;
13 providing requirements with respect to
14 telephone conferences; amending s. 718.116,
15 F.S.; providing for the payment of uninsured
16 common expenses under certain circumstances;
17 reenacting s. 718.115(1)(c), F.S.; to
18 incorporate said amendment in a reference;
19 amending s. 718.301, F.S.; authorizing the
20 division to adopt rules to ensure the efficient
21 and effective transition from developer control
22 of a condominium to a unit owner-controlled
23 association; amending s. 718.3026, F.S.;
24 providing conditions under which a worker is
25 considered an employee of an association;
26 amending s. 718.501, F.S.; authorizing the
27 division to establish timeframes for and
28 require information relating to the creation,
29 merger, and termination of condominiums and the
30 dissolution of condominium associations;
31 amending s. 718.502, F.S.; providing time
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1 limitations on closing a contract for sale or
2 lease of a condominium for a period of more
3 than 5 years; providing for rules; amending s.
4 718.503, F.S.; providing an additional
5 requirement with respect to developer
6 disclosure; creating s. 718.621, F.S.;
7 providing for rulemaking authority; providing
8 an effective date.
9
10 Be It Enacted by the Legislature of the State of Florida:
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12 Section 1. Subsection (15) of section 718.103, Florida
13 Statutes, is amended to read:
14 718.103 Definitions.--As used in this chapter, the
15 term:
16 (15) "Developer" means a person who creates a
17 condominium or offers condominium parcels for sale or lease in
18 the ordinary course of business, but does not include an owner
19 or lessee of a condominium or cooperative unit who has
20 acquired the unit for his or her own occupancy, nor does it
21 include a cooperative association which creates a condominium
22 by conversion of an existing residential cooperative after
23 control of the association has been transferred to the unit
24 owners if, following the conversion, the unit owners will be
25 the same persons who were unit owners of the cooperative and
26 no units are offered for sale or lease to the public as part
27 of the plan of conversion. For the purposes of this
28 subsection, a person is presumed to offer condominium parcels
29 for sale or lease in the ordinary course of business when that
30 person:
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1 (a) Offers more than seven parcels, or for
2 condominiums comprised of less than 70 parcels, when that
3 person offers more than five parcels in the condominium within
4 a period of 1 year; or
5 (b) Participates in a common promotional plan which
6 offers more than seven parcels within a period of 1 year. A
7 person is not, however, deemed to have participated in a plan
8 merely by virtue of providing financial contributions or
9 professional or brokerage services.
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11 The provisions of this subsection to the contrary
12 notwithstanding, the presumption that a person is offering
13 condominium units in the ordinary course of business will not
14 apply for filing purposes when all of the units are offered
15 and conveyed to a single purchaser in a single transaction. An
16 example of such a transaction would be a financial lending
17 institution receiving title to a number of condominium units
18 through foreclosure or deed in lieu of foreclosure and then
19 conveying all of such units to another person. In such
20 circumstances, the lending institution would be deemed to be a
21 developer for filing purposes. However, such entity shall,
22 upon conveyance to a single purchaser, notify the bureau in
23 writing of the identity and business address of the purchaser,
24 the name of the condominium involved, the date of the
25 conveyance, and the number of units conveyed.
26 Section 2. Subsection (6) of section 718.111, Florida
27 Statutes, is amended to read:
28 718.111 The association.--
29 (6) OPERATION OF PHASE AND RESORT CONDOMINIUMS.--
30 (a) Notwithstanding any provision of this chapter, an
31 association may operate residential condominiums in a phase
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1 project initially created pursuant to former s. 711.64 and may
2 continue to so operate such project as though it were a single
3 condominium for purposes of financial matters, including
4 budgets, assessments, accounting, recordkeeping, and similar
5 matters, if provision is made for such consolidated operation
6 in the applicable declarations of each such condominium as
7 initially recorded or in the bylaws as initially adopted.
8 Notwithstanding any provision in this chapter, common expenses
9 for residential condominiums in such a project being operated
10 by a single association may be assessed against all unit
11 owners in such project pursuant to the proportions or
12 percentages established therefor in the declarations as
13 initially recorded or in the bylaws as initially adopted,
14 subject, however, to the limitations of ss. 718.116 and
15 718.302.
16 (b) If authorized by the bylaws, common expenses of
17 multiple condominiums operated by a single association may
18 also be assessed against all owners in such condominiums,
19 provided that such condominiums are all operated as part of a
20 rental pool in a hotel or resort-type setting, where each unit
21 of a similar type and square footage receives a uniform rental
22 income; the association determines that the proper maintenance
23 of the units and buildings in all condominiums participating
24 in such an agreement is important to the preservation of value
25 and marketability of each of the individual condominiums; and
26 the condominium units were registered and sold as securities
27 with the Securities and Exchange Commission (SEC), and the
28 prospectus did not state that the owners in each condominium
29 within the complex would be solely responsible for expenses
30 attributable to the individual condominium.
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1 Section 3. Paragraph (b) of subsection (2) of section
2 718.112, Florida Statutes, is amended to read:
3 718.112 Bylaws.--
4 (2) REQUIRED PROVISIONS.--The bylaws shall provide for
5 the following and, if they do not do so, shall be deemed to
6 include the following:
7 (b) Quorum; voting requirements; proxies.--
8 1. Unless a lower number is provided in the bylaws,
9 the percentage of voting interests required to constitute a
10 quorum at a meeting of the members shall be a majority of the
11 voting interests. Unless otherwise provided in this chapter
12 or in the declaration, articles of incorporation, or bylaws,
13 and except as provided in subparagraph (d)3., decisions shall
14 be made by owners of a majority of the voting interests
15 represented at a meeting at which a quorum is present.
16 2. Except as specifically otherwise provided herein,
17 after January 1, 1992, unit owners may not vote by general
18 proxy, but may vote by limited proxies substantially
19 conforming to a limited proxy form adopted by the division.
20 Limited proxies and general proxies may be used to establish a
21 quorum. Limited proxies shall be used for votes taken to
22 waive or reduce reserves in accordance with subparagraph
23 (f)2.; for votes taken to waive financial statement
24 requirements as provided by s. 718.111(14); for votes taken to
25 amend the declaration pursuant to s. 718.110; for votes taken
26 to amend the articles of incorporation or bylaws pursuant to
27 this section; and for any other matter for which this chapter
28 requires or permits a vote of the unit owners. Except as
29 provided in paragraph (d), after January 1, 1992, no proxy,
30 limited or general, shall be used in the election of board
31 members. General proxies may be used for other matters for
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1 which limited proxies are not required, and may also be used
2 in voting for nonsubstantive changes to items for which a
3 limited proxy is required and given. Notwithstanding the
4 provisions of this subparagraph, unit owners may vote in
5 person at unit owner meetings. Nothing contained herein shall
6 limit the use of general proxies or require the use of limited
7 proxies for any agenda item or election at any meeting of a
8 timeshare condominium association.
9 3. Any proxy given shall be effective only for the
10 specific meeting for which originally given and any lawfully
11 adjourned meetings thereof. In no event shall any proxy be
12 valid for a period longer than 90 days after the date of the
13 first meeting for which it was given. Every proxy is
14 revocable at any time at the pleasure of the unit owner
15 executing it.
16 4. A member of the board of administration or a
17 committee may join by written concurrence in any action taken
18 at a meeting of the board or committee, but such concurrence
19 may not be used for the purposes of creating a quorum.
20 5. When some or all of the board or committee members
21 meet by telephone conference, those board or committee members
22 attending by telephone conference may be counted toward
23 obtaining a quorum and may vote by telephone. A telephone
24 speaker shall be utilized so that the conversation of those
25 board members attending by telephone may be heard by the board
26 or committee members attending in person, as well as by unit
27 owners present at the meeting.
28 Section 4. Paragraph (a) of subsection (9) of section
29 718.116, Florida Statutes, is amended to read:
30 718.116 Assessments; liability; lien and priority;
31 interest; collection.--
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1 (9)(a) No unit owner may be excused from the payment
2 of his or her share of the common expense of a condominium
3 unless all unit owners are likewise proportionately excused
4 from payment, except as provided in subsection (1) and in the
5 following cases:
6 1. If the declaration so provides, a developer or
7 other person who owns condominium units offered for sale may
8 be excused from the payment of the share of the common
9 expenses and assessments related to those units for a stated
10 period of time subsequent to the recording of the declaration
11 of condominium. The period must terminate no later than the
12 first day of the fourth calendar month following the month in
13 which the closing of the purchase and sale of the first
14 condominium unit occurs. However, the developer must pay
15 those the portion of common expenses incurred during that
16 period which exceed the amount assessed against other unit
17 owners. However, if the developer-controlled association shall
18 have maintained all the insurance coverages required by s.
19 718.111(11), the common expenses incurred during the foregoing
20 period resulting from a natural disaster or an act of God,
21 which are not covered by insurance proceeds from the insurance
22 maintained by the association, shall be assessed against all
23 unit owners owning units on the date of such natural disaster
24 or act of God and their successors and assigns, including the
25 developer with respect to units owned by the developer. Each
26 unit owner and his or her unit shall be assessed a pro rata
27 amount of such uninsured costs based upon such unit's
28 undivided share of the common elements.
29 2. A developer or other person who owns condominium
30 units or who has an obligation to pay condominium expenses may
31 be excused from the payment of his or her share of the common
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1 expense which would have been assessed against those units
2 during the period of time that he or she has guaranteed to
3 each purchaser in the purchase contract, declaration, or
4 prospectus, or by agreement between the developer and a
5 majority of the unit owners other than the developer, that the
6 assessment for common expenses of the condominium imposed upon
7 the unit owners would not increase over a stated dollar amount
8 and has obligated himself or herself to pay those any amount
9 of common expenses incurred during that period and not
10 produced by the assessments at the guaranteed level receivable
11 from other unit owners. The guarantee may provide that after
12 an initial stated period, the developer has an option or
13 options to extend the guarantee for one or more additional
14 stated periods. However, notwithstanding the foregoing
15 limitation, if the developer-controlled association shall have
16 properly maintained all insurance coverages required by s.
17 718.111(11), the common expenses incurred during the period of
18 guarantee resulting from a natural disaster or an act of God
19 which is not covered by insurance proceeds from the insurance
20 maintained by the association, shall be assessed against all
21 unit owners owning units on the date of such natural disaster
22 or act of God and their successors and assigns, including the
23 developer with respect to the units owned by the developer.
24 Each unit owner and his or her unit shall be assessed a pro
25 rata amount of such uninsured costs based upon such unit's
26 undivided share of common elements.
27 Section 5. Subsection (6) is added to section 718.301,
28 Florida Statutes, to read:
29 718.301 Transfer of association control.--
30 (6) The division may establish rules to ensure the
31 efficient and effective transition from developer control of a
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1 condominium to the establishment of a unit owner-controlled
2 association.
3 Section 6. Paragraph (a) of subsection (2) of section
4 718.3026, Florida Statutes, is amended to read:
5 718.3026 Contracts for products and services; in
6 writing; bids; exceptions.--Associations with less than 100
7 units may opt out of the provisions of this section if
8 two-thirds of the unit owners vote to do so, which opt-out may
9 be accomplished by a proxy specifically setting forth the
10 exception from this section.
11 (2)(a)1. Notwithstanding the foregoing, contracts with
12 employees of the association, and contracts for attorney,
13 accountant, architect, community association manager,
14 timeshare management firm, engineering, and landscape
15 architect services are not subject to the provisions of this
16 section. For purposes of this paragraph, a worker shall be
17 considered an employee of an association when the association
18 pays or deducts, for or on behalf of the worker, social
19 security taxes, unemployment compensation taxes, and federal
20 withholding taxes.
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
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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 (b) Nothing contained herein is intended to limit the
8 ability of an association to obtain needed products and
9 services in an emergency.
10 (c) This section shall not apply if the business
11 entity with which the association desires to enter into a
12 contract is the only source of supply within the county
13 serving the association.
14 (d) Nothing contained herein shall excuse a party
15 contracting to provide maintenance or management services from
16 compliance with s. 718.3025.
17 Section 7. Subsection (2) of section 718.501, Florida
18 Statutes, is amended to read:
19 718.501 Powers and duties of Division of Florida Land
20 Sales, Condominiums, and Mobile Homes.--
21 (2)(a) Effective January 1, 1992, each condominium
22 association which operates more than two units shall pay to
23 the division an annual fee in the amount of $4 for each
24 residential unit in condominiums operated by the association.
25 If the fee is not paid by March 1, then the association shall
26 be assessed a penalty of 10 percent of the amount due, and the
27 association will not have standing to maintain or defend any
28 action in the courts of this state until the amount due, plus
29 any penalty, is paid.
30 (b) The division may, by rule, establish timeframes
31 for and require information relating to the creation, merger,
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1 and termination of condominiums and dissolution of condominium
2 associations.
3 (c)(b) All fees shall be deposited in the Division of
4 Florida Land Sales, Condominiums, and Mobile Homes Trust Fund
5 as provided by law.
6 Section 8. Subsection (1) of section 718.502, Florida
7 Statutes, is amended to read:
8 718.502 Filing prior to sale or lease.--
9 (1)(a) A developer of a residential condominium or
10 mixed-use condominium shall file with the division one copy of
11 each of the documents and items required to be furnished to a
12 buyer or lessee by ss. 718.503 and 718.504, if applicable.
13 Until the developer has so filed, a contract for sale of a
14 unit or lease of a unit for more than 5 years shall be
15 voidable by the purchaser or lessee prior to the closing of
16 his or her purchase or lease of a unit. A developer shall not
17 close on any contract for sale or contract for a lease period
18 of more than 5 years until the developer prepares and delivers
19 to a purchaser and to the division documents that comply with
20 this chapter and rules adopted by the division and until the
21 division notifies the developer that the filing is proper.
22 (b) The division may, by rule, develop filing and
23 review programs and relevant timetables necessary to ensure
24 compliance with the notice and disclosure requirements of this
25 chapter.
26 Section 9. Paragraph (b) of subsection (1) of section
27 718.503, Florida Statutes, is amended to read:
28 718.503 Developer disclosure prior to sale;
29 nondeveloper unit owner disclosure prior to sale;
30 voidability.--
31 (1) DEVELOPER DISCLOSURE.--
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1 (b) Copies of documents to be furnished to prospective
2 buyer or lessee.--Until such time as the developer has
3 furnished the documents listed below to a person who has
4 entered into a contract to purchase a residential unit or
5 lease it for more than 5 years, the contract may be voided by
6 that person, entitling the person to a refund of any deposit
7 together with interest thereon as provided in s. 718.202. The
8 contract may be terminated by written notice from the proposed
9 buyer or lessee delivered to the developer within 15 days
10 after the buyer or lessee receives all of the documents
11 required by this section. The developer shall not close for 15
12 days following the execution of the agreement and delivery of
13 the documents to the buyer as evidenced by a signed receipt
14 for documents unless the buyer is informed in the 15-day
15 voidability period and agrees to close prior to the expiration
16 of the 15 days. The developer shall retain in his records
17 proof of purchaser's agreement to close prior to the
18 expiration of said voidability period. Said proof shall be
19 retained for a period of 5 years after the date of the closing
20 of the transaction. The documents to be delivered to the
21 prospective buyer are the prospectus or disclosure statement
22 with all exhibits, if the development is subject to the
23 provisions of s. 718.504, or, if not, then copies of the
24 following which are applicable:
25 1. The question and answer sheet described in s.
26 718.504, and declaration of condominium, or the proposed
27 declaration if the declaration has not been recorded, which
28 shall include the certificate of a surveyor approximately
29 representing the locations required by s. 718.104.
30 2. The documents creating the association.
31 3. The bylaws.
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1 4. The ground lease or other underlying lease of the
2 condominium.
3 5. The management contract, maintenance contract, and
4 other contracts for management of the association and
5 operation of the condominium and facilities used by the unit
6 owners having a service term in excess of 1 year, and any
7 management contracts that are renewable.
8 6. The estimated operating budget for the condominium
9 and a schedule of expenses for each type of unit, including
10 fees assessed pursuant to s. 718.113(1) for the maintenance of
11 limited common elements where such costs are shared only by
12 those entitled to use the limited common elements.
13 7. The lease of recreational and other facilities that
14 will be used only by unit owners of the subject condominium.
15 8. The lease of recreational and other common
16 facilities that will be used by unit owners in common with
17 unit owners of other condominiums.
18 9. The form of unit lease if the offer is of a
19 leasehold.
20 10. Any declaration of servitude of properties serving
21 the condominium but not owned by unit owners or leased to them
22 or the association.
23 11. If the development is to be built in phases or if
24 the association is to manage more than one condominium, a
25 description of the plan of phase development or the
26 arrangements for the association to manage two or more
27 condominiums.
28 12. If the condominium is a conversion of existing
29 improvements, the statements and disclosure required by s.
30 718.616.
31 13. The form of agreement for sale or lease of units.
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1 14. A copy of the floor plan of the unit and the plot
2 plan showing the location of the residential buildings and the
3 recreation and other common areas.
4 15. A copy of all covenants and restrictions which
5 will affect the use of the property and which are not
6 contained in the foregoing.
7 16. If the developer is required by state or local
8 authorities to obtain acceptance or approval of any dock or
9 marina facilities intended to serve the condominium, a copy of
10 any such acceptance or approval acquired by the time of filing
11 with the division under s. 718.502(1), or a statement that
12 such acceptance or approval has not been acquired or received.
13 17. Evidence demonstrating that the developer has an
14 ownership, leasehold, or contractual interest in the land upon
15 which the condominium is to be developed.
16 Section 10. Section 718.621, Florida Statutes, is
17 created to read:
18 718.621 Rulemaking authority.--The division is
19 authorized to make rules as necessary to implement and ensure
20 compliance with the developer's obligations with respect to
21 condominium conversions concerning the filing and noticing of
22 intended conversion, rental agreement extensions, right of
23 first refusal, and disclosure and post-disclosure protections.
24 Section 11. For the purpose of incorporating the
25 amendment to paragraph (a) of subsection (9) of section
26 718.116, Florida Statutes, in a reference thereto, paragraph
27 (c) of subsection (1) of section 718.115, Florida Statutes, is
28 reenacted to read:
29 718.115 Common expenses and common surplus.--
30 (1)
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1 (c) The expense of installation, replacement,
2 operation, repair, and maintenance of hurricane shutters by
3 the board pursuant to s. 718.113(5) shall constitute a common
4 expense as defined herein and shall be collected as provided
5 in this section. Notwithstanding the provisions of s.
6 718.116(9), a unit owner who has previously installed
7 hurricane shutters in accordance with s. 718.113(5) or
8 laminated glass architecturally designed to function as
9 hurricane protection which complies with the applicable
10 building code shall receive a credit equal to the pro rata
11 portion of the assessed installation cost assigned to each
12 unit. However, such unit owner shall remain responsible for
13 the pro rata share of expenses for hurricane shutters
14 installed on common elements and association property by the
15 board pursuant to s. 718.113(5), and shall remain responsible
16 for a pro rata share of the expense of the replacement,
17 operation, repair, and maintenance of such shutters.
18 Section 12. This act shall take effect upon becoming a
19 law.
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1 *****************************************
2 HOUSE SUMMARY
3
Revises provisions of law relating to condominiums to:
4 1. Redefine the term "developer."
2. Provide for the operation of resort condominiums
5 and to provide that when authorized by bylaws, common
expenses of multiple condominiums operated by a single
6 association may also be assessed against all unit owners
in such condominiums under described circumstances.
7 3. Authorize members of the board of administration
or a committee to join by written concurrence in certain
8 actions and to provide requirements with respect to the
constitution of a quorum.
9 4. Provide for the payment of uninsured common
expenses under described circumstances.
10 5. Authorize the division to adopt rules to ensure
the efficient and effective transition from developer
11 control of a condominium to a unit owner-controlled
association.
12 6. Provide conditions under which a worker is
considered an employee of the association.
13 7. Authorize the division to establish timeframes
for and require information relating to the creation,
14 merger, and termination of condominiums and the
dissolution of condominium associations.
15 8. Provide limitations on the closing of a contract
for sale or lease of a condominium for a period of more
16 than 5 years.
9. Provide additional requirements with respect to
17 developer disclosure.
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