Senate Bill 2274
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Florida Senate - 1999 SB 2274
By Senator Saunders
25-1159-99
1 A bill to be entitled
2 An act relating to condominium associations;
3 amending s. 718.102, F.S.; providing an
4 additional purpose of ch. 718, F.S.; amending
5 s. 718.103, F.S.; revising definitions;
6 providing additional definitions; amending s.
7 718.104, F.S.; providing additional
8 requirements for a declaration of condominium;
9 providing for determining the percentage share
10 of liability for common expenses and ownership;
11 amending s. 718.110, F.S.; clarifying
12 requirements for amending and recording the
13 declaration of condominium; providing for
14 determining the percentage share of liability
15 for common expenses and ownership for purposes
16 of condominiums comprising a multicondominium
17 development; amending s. 718.111, F.S.;
18 providing requirements for providing official
19 record information to a master condominium
20 association; revising requirements for
21 financial reports; requiring the disclosure of
22 reserves; revising requirements for financial
23 statements; requiring the disclosure of
24 revenues and common expenses; revising certain
25 limitations on the commingling of funds
26 maintained in the name of a condominium
27 association or multicondominium; amending s.
28 718.112, F.S.; providing that certain
29 requirements for electing or selecting board
30 members are inapplicable to master condominium
31 associations; revising requirements for budget
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1 meetings; providing conditions under which a
2 multicondominium association may waive or
3 reduce its funding of reserves; amending s.
4 718.113, F.S.; providing certain limitations on
5 making material alterations or additions to
6 multicondominiums; providing a procedure for
7 approving an alteration or addition if not
8 provided for in the bylaws; revising
9 requirements for condominium boards with
10 respect to installing and maintaining hurricane
11 shutters; specifying expenses that constitute
12 common expenses of a multicondominium
13 association; providing for an association's
14 bylaws to allow certain educational expenses of
15 the officers or directors to be a permitted
16 common expense; revising requirements for
17 determining a unit's share of the common
18 expenses for the purpose of installing
19 hurricane shutters; providing for determining
20 the common surplus owned by a unit owner of a
21 multicondominium; amending s. 718.116, F.S.;
22 revising circumstances under which a developer
23 may be excused from paying certain common
24 expenses and assessments; providing for the
25 developer's obligation for such expenses with
26 respect to a multicondominium association;
27 amending s. 718.117, F.S.; providing that
28 certain requirements governing the termination
29 of a condominium are inapplicable to the merger
30 of a condominium with one or more other
31 condominiums; creating s. 718.405, F.S.;
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1 providing for the creation of
2 multicondominiums; providing requirements for
3 the declaration of condominium; providing
4 notice requirements; providing requirements for
5 the approval of voting interests under certain
6 circumstances; providing for the merger or
7 consolidation of condominium associations that
8 are not controlled by a developer; amending s.
9 718.504, F.S.; providing requirements for the
10 prospectus or offering circular for a
11 condominium that is or may become part of a
12 multicondominium; providing requirements for a
13 condominium unit that is or may be granted use
14 rights in a master condominium; creating part
15 VII of chapter 718, F.S., consisting of ss.
16 718.701-718.708, F.S.; providing purpose and
17 legislative intent with respect to the creation
18 and operation of master condominium
19 associations; providing definitions; providing
20 powers and duties of a master condominium
21 association; providing for meetings of the
22 board, committees, and the membership of the
23 association; requiring the posting of notices;
24 providing for annual meetings; providing for
25 electing or appointing directors; authorizing
26 voting by proxy and certain other actions;
27 providing for the official records of the
28 association; providing for assessments;
29 authorizing a master condominium association to
30 acquire title to property and grant or modify
31 easements; requiring that the association
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1 obtain and maintain liability and property
2 insurance; limiting material alterations or
3 additions to common property; authorizing a
4 master condominium association to acquire
5 memberships or use interests in other lands or
6 facilities; providing a procedure for amending
7 the master condominium association documents;
8 providing for rights to appurtenances;
9 authorizing the merger of master condominium
10 associations; providing for amending the
11 documents if such amendment does not affect the
12 rights or interests of the mortgagees;
13 providing for rights of membership; specifying
14 the obligations of members and affected
15 persons; providing for a master condominium
16 association to levy civil fines; providing
17 limitations; providing for the Division of
18 Florida Land Sales, Condominiums, and Mobile
19 Homes of the Department of Business and
20 Professional Regulation to enforce compliance
21 with part VII of chapter 718; providing
22 requirements for nonbinding arbitration;
23 requiring certain master condominium
24 associations to notify the division of the
25 association's existence; providing requirements
26 for financial reporting; requiring that an
27 association maintain a certain amount or
28 percentage of reserves; authorizing the
29 division to adopt rules; providing for
30 transferring control of an association;
31 amending s. 624.462, F.S., relating to
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1 self-insurance funds; conforming a
2 cross-reference to changes made by the act;
3 providing an effective date.
4
5 Be It Enacted by the Legislature of the State of Florida:
6
7 Section 1. Section 718.102, Florida Statutes, is
8 amended to read:
9 718.102 Purposes.--The purpose of this chapter is:
10 (1) To give statutory recognition to the condominium
11 form of ownership of real property.
12 (2) To establish procedures for the creation, sale,
13 and operation of condominiums.
14 (3) To provide information to condominium association
15 board members and unit owners to foster a better understanding
16 of their rights and responsibilities in the operation of their
17 condominium association.
18
19 Every condominium created and existing in this state shall be
20 subject to the provisions of this chapter.
21 Section 2. Section 718.103, Florida Statutes, 1998
22 Supplement, is amended to read:
23 718.103 Definitions.--As used in this chapter, the
24 term:
25 (1) "Assessment" means a share of the funds which are
26 required for the payment of common expenses, which from time
27 to time is assessed against the unit owner.
28 (2) "Association" means, in addition to those entities
29 responsible for the operation of common elements owned in
30 undivided shares by unit owners, any entity which operates or
31 maintains other real property in which condominium unit owners
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1 have use rights, where unit owner membership in the entity is
2 composed exclusively of condominium unit owners or their
3 elected or appointed representatives, and where membership in
4 the entity is a required condition of unit ownership.
5 (2)(3) "Association property" means that property,
6 real and personal, which is owned or leased by, or is
7 dedicated by a recorded plat to, the association for the use
8 and benefit of its members.
9 (3)(4) "Board of administration" means the board of
10 directors or other representative body which is responsible
11 for administration of the association.
12 (4)(5) "Buyer" means a person who purchases a
13 condominium. The term "purchaser" may be used interchangeably
14 with the term "buyer."
15 (5)(6) "Bylaws" means the bylaws of the association as
16 they exist from time to time.
17 (6)(7) "Committee" means a group of board members,
18 unit owners, or board members and unit owners appointed by the
19 board or a member of the board to make recommendations to the
20 board regarding the association budget or take action on
21 behalf of the board.
22 (7)(8) "Common elements" means the portions of the
23 condominium property which are not included in the units.
24 (8)(9) "Common expenses" means all expenses that and
25 assessments which are properly incurred by the association in
26 the performance of its duties, as further defined in s.
27 718.115 for the condominium.
28 (9)(10) "Common surplus" means the excess of all
29 receipts of the association collected on behalf of a
30 condominium (including, but not limited to, assessments,
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1 rents, profits, and revenues on account of the common
2 elements) over the common expenses.
3 (10)(11) "Condominium" means that form of ownership of
4 real property which is created pursuant to the provisions of
5 this chapter, which is comprised of units that may be owned by
6 one or more persons, and in which there is, appurtenant to
7 each unit, an undivided share in common elements.
8 (11) "Condominium association" means the entity that
9 is primarily responsible for the operation of the common
10 elements or association property of a condominium in which
11 membership is a mandatory condition of parcel ownership, and
12 the entity authorized to impose assessments that, if unpaid,
13 may become a lien on the parcel.
14 (12) "Condominium documents" means the recorded
15 declaration of condominium, and the condominium association's
16 recorded articles of incorporation and bylaws, any recorded
17 amendments to the articles of incorporation or bylaws, and
18 exhibits to the declaration of condominium as described in s.
19 718.104.
20 (13)(12) "Condominium parcel" means a unit, together
21 with the undivided share in the common elements which is
22 appurtenant to the unit.
23 (14)(13) "Condominium property" means the lands,
24 leaseholds, and personal property that are subjected to
25 condominium ownership, whether or not contiguous, and all
26 improvements thereon and all easements and rights appurtenant
27 thereto intended for use in connection with the condominium.
28 (15)(14) "Conspicuous type" means type in capital
29 letters no smaller than the largest type, exclusive of
30 headings, on the page on which it appears and, in all cases,
31 at least 10-point type. Where conspicuous type is required,
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1 it must be separated on all sides from other type and print.
2 Conspicuous type may be used in contracts for purchase or
3 public offering statements only where required by law.
4 (16)(15) "Declaration" or "declaration of condominium"
5 means the instrument or instruments by which a condominium is
6 created, as they are from time to time amended.
7 (17)(16) "Developer" means a person who creates a
8 condominium or offers condominium parcels for sale or lease in
9 the ordinary course of business, but does not include an owner
10 or lessee of a condominium or cooperative unit who has
11 acquired the unit for his or her own occupancy, nor does it
12 include a cooperative association which creates a condominium
13 by conversion of an existing residential cooperative after
14 control of the association has been transferred to the unit
15 owners if, following the conversion, the unit owners will be
16 the same persons who were unit owners of the cooperative and
17 no units are offered for sale or lease to the public as part
18 of the plan of conversion.
19 (18)(17) "Division" means the Division of Florida Land
20 Sales, Condominiums, and Mobile Homes of the Department of
21 Business and Professional Regulation.
22 (19)(18) "Land" means, unless otherwise defined in the
23 declaration as hereinafter provided, the surface of a legally
24 described parcel of real property and includes, unless
25 otherwise specified in the declaration and whether separate
26 from or including such surface, airspace lying above and
27 subterranean space lying below such surface. However, if so
28 defined in the declaration, the term "land" may mean all or
29 any portion of the airspace or subterranean space between two
30 legally identifiable elevations and may exclude the surface of
31
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1 a parcel of real property and may mean any combination of the
2 foregoing, whether or not contiguous.
3 (20)(19) "Limited common elements" means those common
4 elements which are reserved for the use of a certain
5 condominium unit or units to the exclusion of other units, as
6 specified in the declaration of condominium.
7 (21) "Multicondominium" means a real estate
8 development that contains more than one condominium operated
9 by one condominium association.
10 (22)(20) "Operation" or "operation of the condominium"
11 includes the administration and management of the condominium
12 property.
13 (23)(21) "Rental agreement" means any written
14 agreement, or oral agreement if for less duration than 1 year,
15 providing for use and occupancy of premises.
16 (24)(22) "Residential condominium" means a condominium
17 consisting of condominium units, any of which are intended for
18 use as a private temporary or permanent residence, except that
19 a condominium is not a residential condominium if the use for
20 which the units are intended is primarily commercial or
21 industrial and not more than three units are intended to be
22 used for private residence, and are intended to be used as
23 housing for maintenance, managerial, janitorial, or other
24 operational staff of the condominium. With respect to a
25 condominium that is not a timeshare condominium, a residential
26 unit includes a unit intended as a private temporary or
27 permanent residence as well as a unit not intended for
28 commercial or industrial use. With respect to a timeshare
29 condominium, the timeshare instrument as defined in s.
30 721.05(30) s. 721.05(28) shall govern the intended use of each
31 unit in the condominium. If a condominium is a residential
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1 condominium but contains units intended to be used for
2 commercial or industrial purposes, then, with respect to those
3 units which are not intended for or used as private
4 residences, the condominium is not a residential condominium.
5 A condominium which contains both commercial and residential
6 units is a mixed-use condominium subject to the requirements
7 of s. 718.404.
8 (25)(23) "Special assessment" means any assessment
9 levied against unit owners other than the assessment required
10 by a budget adopted annually.
11 (26)(24) "Timeshare estate" means any interest in a
12 unit under which the exclusive right of use, possession, or
13 occupancy of the unit circulates among the various purchasers
14 of a timeshare plan pursuant to chapter 721 on a recurring
15 basis for a period of time.
16 (27)(25) "Timeshare unit" means a unit in which
17 timeshare estates have been created.
18 (28)(26) "Unit" means a part of the condominium
19 property which is subject to exclusive ownership. A unit may
20 be in improvements, land, or land and improvements together,
21 as specified in the declaration.
22 (29)(27) "Unit owner" or "owner of a unit" means a
23 record owner of legal title to a condominium parcel.
24 (30)(28) "Voting certificate" means a document which
25 designates one of the record title owners, or the corporate,
26 partnership, or entity representative, who is authorized to
27 vote on behalf of a condominium unit that is owned by more
28 than one owner or by any entity.
29 (31)(29) "Voting interest" means the voting rights
30 distributed to the association members pursuant to s.
31 718.104(4)(i). In a multicondominium association the voting
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1 interest of the association means the total votes in
2 association affairs distributed to the owners of all units in
3 all condominiums operated by the association. When a vote of
4 the owners in any specific condominium on matters related to
5 that condominium is required or permitted, the voting interest
6 of the condominium means the total votes distributed to the
7 owners of units in that condominium.
8 Section 3. Paragraphs (f) and (g) of subsection (4) of
9 section 718.104, Florida Statutes, 1998 Supplement, are
10 amended to read:
11 718.104 Creation of condominiums; contents of
12 declaration.--Every condominium created in this state shall be
13 created pursuant to this chapter.
14 (4) The declaration must contain or provide for the
15 following matters:
16 (f) The undivided share of ownership of in the common
17 elements and common surplus of the condominium that is
18 appurtenant to each unit stated as a percentage or a fraction
19 of percentages or fractions, which, in the aggregate, must
20 equal the whole. In the declaration of condominium for
21 residential condominiums created after April 1, 1992, the
22 ownership share of the common elements assigned to each
23 residential unit shall be based either upon the total square
24 footage of each residential unit in uniform relationship to
25 the total square footage of each other residential unit in the
26 condominium or on an equal fractional basis.
27 (g) The percentage or fractional shares of liability
28 for the proportions or percentages of and manner of sharing
29 common expenses of the condominium and owning the common
30 surplus, which, for all a residential units condominium, must
31 be the same as the undivided shares of ownership in the common
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1 elements and common surplus appurtenant to each unit under
2 paragraph (f). If a developer has reserved the right in a
3 declaration recorded on or after July 1, 1999, to create a
4 multicondominium development, the declaration of condominium
5 for the first such condominium to be created must state, or
6 provide a specific formula for determining, the fractional or
7 percentage shares of liability for the common expenses of the
8 association and ownership of the common surplus of the
9 association to be allocated to the units in each condominium
10 to be operated by the association. If the first declaration as
11 originally recorded fails to so provide, the share of
12 liability for the common expenses of the association allocated
13 to each unit in condominiums operated by the association shall
14 be a fraction of the whole, the numerator of which is the
15 number "one" and the denominator of which is the total number
16 of units in all condominiums operated by the association.
17 Section 4. Subsections (4) and (9) of section 718.110,
18 Florida Statutes, are amended, and subsection (12) is added to
19 that section, to read:
20 718.110 Amendment of declaration; correction of error
21 or omission in declaration by circuit court.--
22 (4) Unless otherwise provided in the declaration as
23 originally recorded, no amendment may change the configuration
24 or size of any condominium unit in any material fashion,
25 materially alter or modify the appurtenances to the unit, or
26 change the proportion or percentage by which the owner of the
27 unit parcel shares the common expenses and owns the common
28 surplus unless the record owner of the unit and all record
29 owners of liens on it join in the execution of the amendment
30 and unless all the record owners of all other units in the
31 same condominium approve the amendment. The acquisition of
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1 property by the association, and material alterations or
2 substantial additions to such property or the common elements
3 by the association in accordance with s. 718.111(7) or s.
4 718.113, shall not be deemed to constitute a material
5 alteration or modification of the appurtenances to the units.
6 A declaration recorded after April 1, 1992, may not require
7 the approval of less than a majority of total voting interests
8 of the condominium for amendments under this subsection,
9 unless required by any governmental entity.
10 (9) If there is an omission or error in a declaration
11 of condominium, or in any other document required by law to
12 establish the condominium, the association may correct the
13 error or omission by an amendment to the declaration or to the
14 other document required to create a condominium in the manner
15 provided in the declaration to amend the declaration or, if
16 none is provided, by vote of a majority of the voting
17 interests of the condominium. The amendment is effective when
18 passed and approved and a certificate of the amendment is
19 executed and recorded as provided in subsection (2) s.
20 718.104. This procedure for amendment cannot be used if such
21 an amendment would materially or adversely affect property
22 rights of unit owners, unless the affected unit owners consent
23 in writing. This subsection does not restrict the powers of
24 the association to otherwise amend the declaration, or other
25 documentation, but authorizes a simple process of amendment
26 requiring a lesser vote for the purpose of curing defects,
27 errors, or omissions when the property rights of unit owners
28 are not materially or adversely affected.
29 (12) Unless approval by a greater number is uniformly
30 required in the declarations of all condominiums comprising a
31 multicondominium development, an amendment may not change the
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1 fractional or percentage share of liability for the common
2 expenses of the association and ownership of the common
3 surplus of the association allocated to each unit as provided
4 in s. 718.104(4)(g) without the approval of at least a
5 majority of the total voting interests of each condominium
6 operated by the association. Unless a greater number is
7 expressly required in the declaration, the declaration of
8 condominium for any existing condominium may be amended upon
9 the approval of at least a majority of the total voting
10 interests of each condominium operated by the association, for
11 the purpose of causing it to conform to the requirements of s.
12 718.104(4)(f) as reasonably necessary to:
13 (a) Set forth in a declaration a formula that is
14 already in use, but not previously stated in the declaration,
15 for the sharing of common expenses and common surplus of the
16 association within an existing multicondominium development;
17 or
18 (b) Allow the creation or enlargement of a
19 multicondominium development by the merger or consolidation of
20 two or more condominium associations.
21 Section 5. Paragraphs (a) and (c) of subsection (12)
22 and subsections (13), (14), and (15) of section 718.111,
23 Florida Statutes, 1998 Supplement, are amended to read:
24 718.111 The association.--
25 (12) OFFICIAL RECORDS.--
26 (a) From the inception of the association, the
27 association shall maintain each of the following items, when
28 applicable, which shall constitute the official records of the
29 association:
30 1. A copy of the plans, permits, warranties, and other
31 items provided by the developer pursuant to s. 718.301(4).
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1 2. A photocopy of the recorded declaration of
2 condominium of each condominium operated by the association
3 and of each amendment to each declaration.
4 3. A photocopy of the recorded bylaws of the
5 association and of each amendment to the bylaws.
6 4. A certified copy of the articles of incorporation
7 of the association, or other documents creating the
8 association, and of each amendment thereto.
9 5. A copy of the current rules of the association.
10 6. A book or books which contain the minutes of all
11 meetings of the association, of the board of directors, and of
12 unit owners, which minutes shall be retained for a period of
13 not less than 7 years.
14 7. A current roster of all unit owners and their
15 mailing addresses, unit identifications, voting
16 certifications, and, if known, telephone numbers. If a
17 condominium association or its unit owners are made members in
18 a master condominium association, such condominium
19 association, at the request of the master condominium
20 association, shall provide the information listed in this
21 paragraph to the master condominium association at no cost to
22 the master condominium association.
23 8. All current insurance policies of the association
24 and condominiums operated by the association.
25 9. A current copy of any management agreement, lease,
26 or other contract to which the association is a party or under
27 which the association or the unit owners have an obligation or
28 responsibility.
29 10. Bills of sale or transfer for all property owned
30 by the association.
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1 11. Accounting records for the association and
2 separate accounting records for each condominium which the
3 association operates, according to good accounting practices.
4 All accounting records shall be maintained for a period of not
5 less than 7 years. The accounting records shall include, but
6 are not limited to:
7 a. Accurate, itemized, and detailed records of all
8 receipts and expenditures.
9 b. A current account and a monthly, bimonthly, or
10 quarterly statement of the account for each unit designating
11 the name of the unit owner, the due date and amount of each
12 assessment, the amount paid upon the account, and the balance
13 due.
14 c. All audits, reviews, accounting statements, and
15 financial reports of the association or condominium.
16 d. All contracts for work to be performed. Bids for
17 work to be performed shall also be considered official records
18 and shall be maintained for a period of 1 year.
19 12. Ballots, sign-in sheets, voting proxies, and all
20 other papers relating to voting by unit owners, which shall be
21 maintained for a period of 1 year from the date of the
22 election, vote, or meeting to which the document relates.
23 13. All rental records, when the association is acting
24 as agent for the rental of condominium units.
25 14. A copy of the current question and answer sheet as
26 described by s. 718.504.
27 15. All other records of the association not
28 specifically included in the foregoing which are related to
29 the operation of the association.
30 (c) The official records of the association are open
31 to inspection by any association member or the authorized
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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
5 rules regarding the frequency, time, location, notice, and
6 manner of record inspections and copying. The failure of an
7 association to provide the records within 10 working days
8 after receipt of a written request shall create a rebuttable
9 presumption that the association willfully failed to comply
10 with this paragraph. A unit owner who is denied access to
11 official records is entitled to the actual damages or minimum
12 damages for the association's willful failure to comply with
13 this paragraph. The minimum damages shall be $50 per calendar
14 day up to 10 days, the calculation to begin on the 11th
15 working day after receipt of the written request. The failure
16 to 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:
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1 1. Any document protected by the attorney-client
2 privilege as described in s. 90.502, as well as material
3 protected by the work-product privilege which consists of any
4 record A record which was prepared by an association attorney
5 or prepared at the attorney's express direction, which
6 reflects a mental impression, conclusion, litigation strategy,
7 or legal theory of the attorney or the association, and which
8 was prepared exclusively for civil or criminal litigation or
9 for adversarial administrative proceedings, or which was
10 prepared in anticipation of imminent civil or criminal
11 litigation or imminent adversarial administrative proceedings
12 until the conclusion of the litigation or adversarial
13 administrative proceedings.
14 2. Information obtained by an association in
15 connection with the approval of the lease, sale, or other
16 transfer of a unit.
17 3. Medical records of unit owners.
18 (13) FINANCIAL REPORTS.--Within 90 60 days following
19 the end of the fiscal or calendar year or annually on the such
20 date as is otherwise provided in the bylaws of the
21 association, the board of administration of the association
22 shall cause to be prepared mail or furnish by personal
23 delivery to each unit owner a complete financial report of
24 actual receipts and expenditures of the association for the
25 preceding fiscal year. Regardless of the number of units
26 operated by an association or the amount of revenues earned by
27 the association, the association may voluntarily prepare
28 previous 12 months, or a complete set of financial statements
29 as provided in subsection (14) for the preceding fiscal year
30 prepared in accordance with generally accepted accounting
31 principles. The association shall, at the option of the board,
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1 mail or deliver a copy of the financial report or financial
2 statements to all of the unit owners, or shall notify each of
3 the unit owners that a copy of the report or statements is
4 available at no charge, within 14 days after the association's
5 receipt of the report or statements. The financial report must
6 shall show the amounts of receipts by accounts and receipt
7 classifications and shall show the amounts of expenses by
8 accounts and expense classifications for the association and
9 each condominium operated by a multicondominium association,
10 including, if applicable, but not limited to, the following:
11 (a) Costs for security;
12 (b) Professional and management fees and expenses;
13 (c) Taxes;
14 (d) Costs for recreation facilities;
15 (e) Expenses for refuse collection and utility
16 services;
17 (f) Expenses for lawn care;
18 (g) Costs for building maintenance and repair;
19 (h) Insurance costs;
20 (i) Administrative and salary expenses; and
21 (j) Reserves accumulated and expended for capital
22 expenditures, deferred maintenance, and any other category for
23 which the association maintains a reserve account or accounts.
24 For a multicondominium association, the reserve disclosures
25 must separately show reserves accumulated and expended on
26 behalf of the unit owners of all condominiums and by the unit
27 owners of specific condominiums.
28 (14) FINANCIAL STATEMENTS.--The division shall adopt
29 rules that which may require that the association prepare
30 within 90 days after the end of each fiscal year or annually
31 on the date provided in the bylaws deliver to the unit owners,
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1 in lieu of the financial report required by subsection (13), a
2 complete set of financial statements for the preceding fiscal
3 year. The association shall, at the option of the board, mail
4 or deliver a copy of the financial statements to all of the
5 unit owners, or shall notify each of the unit owners that a
6 copy of the statements is available at no charge, within 14
7 days after the association's receipt of the statements. The
8 financial statements shall be delivered within 90 days
9 following the end of the previous fiscal year or annually on
10 such other date as provided by the bylaws. The rules of the
11 division may require that the financial statements be
12 compiled, reviewed, or audited, based on the size of the
13 association and the amount of revenues earned by the
14 association and the rules shall take into consideration the
15 criteria set forth in s. 718.501(1)(j). The requirement to
16 have the financial statements compiled, reviewed, or audited
17 does not apply to associations when a majority of the voting
18 interests of the association present at a duly called meeting
19 of the association have determined for a fiscal year to waive
20 this requirement. In an association in which turnover of
21 control by the developer has not occurred, the developer may
22 vote to waive the audit, review, or compilation requirement
23 for the first 2 fiscal years of the operation of the
24 association, after which time waiver of an applicable audit,
25 review, or compilation requirement shall be by a majority of
26 voting interests of the association other than the developer.
27 The meeting shall be held prior to the end of the fiscal year,
28 and the waiver shall be effective for only 1 fiscal year.
29 This subsection does not apply to an association that operates
30 a condominium which consists of 50 or fewer units. For a
31 multicondominium association, the financial statements may be
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1 presented on a combined basis if the notes or supplementary
2 information disclose the revenues, expenses, and changes in
3 fund balances for the association and for each condominium. In
4 addition, the financial statements, notes, or supplementary
5 information must disclose the revenues and common expenses of
6 the association and the method used to allocate the revenues,
7 expenses, and common surplus of the association to the unit
8 owners.
9 (15) COMMINGLING OF FUNDS.--All funds shall be
10 maintained separately in the association's name. Reserve and
11 operating funds of the association shall not be commingled
12 unless combined for investment purposes. This subsection does
13 not is not meant to prohibit prudent investment of association
14 funds even if such investment involves combining combined with
15 operating and or other reserve funds of the same association,
16 and this subsection does not prohibit a multicondominium
17 association from commingling the operating funds of the
18 condominiums it operates, but the operating and reserve such
19 funds must be accounted for separately, and the combined
20 account balance may not, at any time, be less than the amount
21 identified as reserve funds in the combined account. A No
22 manager or business entity required to be licensed or
23 registered under s. 468.432, and an no agent, employee,
24 officer, or director of a condominium association may not
25 shall commingle any association funds with his or her funds or
26 with the funds of any other condominium association or
27 community association as defined in s. 468.431.
28 Section 6. Paragraphs (d), (e), and (f) of subsection
29 (2) of section 718.112, Florida Statutes, 1998 Supplement, are
30 amended to read:
31 718.112 Bylaws.--
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1 (2) REQUIRED PROVISIONS.--The bylaws shall provide for
2 the following and, if they do not do so, shall be deemed to
3 include the following:
4 (d) Unit owner meetings.--
5 1. There shall be an annual meeting of the unit
6 owners. Unless the bylaws provide otherwise, a vacancy on the
7 board of administration caused by the expiration of a
8 director's term shall be filled by electing a new board
9 member, and the election shall be by secret ballot; however,
10 if the number of vacancies equals or exceeds the number of
11 candidates, no election is required. If there is no provision
12 in the bylaws for terms of the members of the board of
13 administration, the terms of all members of the board of
14 administration shall expire upon the election of their
15 successors at the annual meeting. Any unit owner desiring to
16 be a candidate for board membership shall comply with
17 subparagraph 3. In order to be eligible for board membership,
18 a person must meet the requirements set forth in the
19 declaration. A person who has been convicted of any felony by
20 any court of record in the United States and who has not had
21 his or her right to vote restored pursuant to law in the
22 jurisdiction of his or her residence is not eligible for board
23 membership. The validity of an action by the board is not
24 affected if it is later determined that a member of the board
25 is ineligible for board membership due to having been
26 convicted of a felony.
27 2. The bylaws shall provide the method of calling
28 meetings of unit owners, including annual meetings. Written
29 notice, which notice must include an agenda, shall be mailed
30 or delivered to each unit owner at least 14 days prior to the
31 annual meeting and shall be posted in a conspicuous place on
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1 the condominium property at least 14 continuous days preceding
2 the annual meeting. Upon notice to the unit owners, the board
3 shall by duly adopted rule designate a specific location on
4 the condominium property or association property upon which
5 all notices of unit owner meetings shall be posted; however,
6 if there is no condominium property or association property
7 upon which notices can be posted, this requirement does not
8 apply. Unless a unit owner waives in writing the right to
9 receive notice of the annual meeting by mail, the notice of
10 the annual meeting shall be sent by mail to each unit owner.
11 Where a unit is owned by more than one person, the association
12 shall provide notice, for meetings and all other purposes, to
13 that one address which the developer initially identifies for
14 that purpose and thereafter as one or more of the owners of
15 the unit shall so advise the association in writing, or if no
16 address is given or the owners of the unit do not agree, to
17 the address provided on the deed of record. An officer of the
18 association, or the manager or other person providing notice
19 of the association meeting, shall provide an affidavit or
20 United States Postal Service certificate of mailing, to be
21 included in the official records of the association affirming
22 that the notice was mailed or hand delivered, in accordance
23 with this provision, to each unit owner at the address last
24 furnished to the association.
25 3. The members of the board of administration shall be
26 elected by written ballot or voting machine. Proxies shall in
27 no event be used in electing the board of administration,
28 either in general elections or elections to fill vacancies
29 caused by recall, resignation, or otherwise, unless otherwise
30 provided in this chapter. Not less than 60 days before a
31 scheduled election, the association shall mail or deliver,
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1 whether by separate association mailing or included in another
2 association mailing or delivery including regularly published
3 newsletters, to each unit owner entitled to a vote, a first
4 notice of the date of the election. Any unit owner or other
5 eligible person desiring to be a candidate for the board of
6 administration must give written notice to the association not
7 less than 40 days before a scheduled election. Together with
8 the written notice and agenda as set forth in subparagraph 2.,
9 the association shall mail or deliver a second notice of the
10 election to all unit owners entitled to vote therein, together
11 with a ballot which shall list all candidates. Upon request of
12 a candidate, the association shall include an information
13 sheet, no larger than 8 1/2 inches by 11 inches, which must
14 be furnished by the candidate not less than 35 days before the
15 election, to be included with the mailing of the ballot, with
16 the costs of mailing or delivery and copying to be borne by
17 the association. However, the association has no liability for
18 the contents of the information sheets prepared by the
19 candidates. In order to reduce costs, the association may
20 print or duplicate the information sheets on both sides of the
21 paper. The division shall by rule establish voting procedures
22 consistent with the provisions contained herein, including
23 rules providing for the secrecy of ballots. Elections shall
24 be decided by a plurality of those ballots cast. There shall
25 be no quorum requirement; however, at least 20 percent of the
26 eligible voters must cast a ballot in order to have a valid
27 election of members of the board of administration. No unit
28 owner shall permit any other person to vote his or her ballot,
29 and any such ballots improperly cast shall be deemed invalid.
30 A unit owner who needs assistance in casting the ballot for
31 the reasons stated in s. 101.051 may obtain assistance in
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1 casting the ballot. Any unit owner violating this provision
2 may be fined by the association in accordance with s. 718.303.
3 The regular election shall occur on the date of the annual
4 meeting. The provisions of this subparagraph shall not apply
5 to timeshare condominium associations. In addition, unless
6 otherwise provided in the condominium documents or in the
7 master condominium association documents, this subparagraph
8 does not apply to the election, appointment, or other
9 selection of board members in a master condominium
10 association, which must comply with the condominium documents
11 or the master condominium association documents, as
12 applicable. Notwithstanding the provisions of this
13 subparagraph, an election and balloting are not required
14 unless more candidates file notices of intent to run or are
15 nominated than vacancies exist on the board.
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.
30 6. Unit owners shall have the right to participate in
31 meetings of unit owners with reference to all designated
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1 agenda items. However, the association may adopt reasonable
2 rules governing the frequency, duration, and manner of unit
3 owner participation.
4 7. Any unit owner may tape record or videotape a
5 meeting of the unit owners subject to reasonable rules adopted
6 by the division.
7 8. Unless otherwise provided in the bylaws, any
8 vacancy occurring on the board before the expiration of a term
9 may be filled by the affirmative vote of the majority of the
10 remaining directors, even if the remaining directors
11 constitute less than a quorum, or by the sole remaining
12 director. In the alternative, a board may hold an election to
13 fill the vacancy, in which case the election procedures must
14 conform to the requirements of subparagraph 3. unless the
15 association has opted out of the statutory election process,
16 in which case the bylaws of the association control. Unless
17 otherwise provided in the bylaws, a board member appointed or
18 elected under this section shall fill the vacancy for the
19 unexpired term of the seat being filled. Filling vacancies
20 created by recall is governed by paragraph (j) and rules
21 adopted by the division.
22
23 Notwithstanding subparagraphs (b)2. and (d)3., an association
24 may, by the affirmative vote of a majority of the total voting
25 interests, provide for different voting and election
26 procedures in its bylaws, which vote may be by a proxy
27 specifically delineating the different voting and election
28 procedures. The different voting and election procedures may
29 provide for elections to be conducted by limited or general
30 proxy.
31
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1 (e) Budget meeting.--The board of administration shall
2 hand deliver to each unit owner, or mail to each unit owner at
3 the address last furnished to the association, a meeting
4 notice and copies of the proposed annual budget of common
5 expenses not less than 14 days prior to the meeting of the
6 unit owners or the board of administration at which the budget
7 will be considered. Evidence of compliance with this 14-day
8 notice must be made by an affidavit executed by an officer of
9 the association or the manager or other person providing
10 notice of the meeting and filed among the official records of
11 the association. The meeting must be open to the unit owners.
12 If an adopted budget requires assessments against the unit
13 owners in any fiscal or calendar year which exceed 115 percent
14 of the assessments for the preceding year, the board, upon
15 written application to the board of 10 percent of the voting
16 interests of units subject to assessment under that budget to
17 the board, shall call a special meeting of the unit owners
18 within 30 days upon not less than 10 days' written notice to
19 each unit owner. At the special meeting, the unit owners
20 subject to assessment under the budget may shall consider and
21 enact a different budget. Unless the bylaws require a larger
22 vote, the adoption of an annual the budget by unit owners
23 requires the affirmative a vote of at least not less than a
24 majority vote of all the voting interests subject to
25 assessment under that budget. The board of administration may
26 propose a budget to the unit owners at a meeting of the
27 members or in writing by mail, and if the budget or proposed
28 budget is approved by a majority of the voting interests of
29 units subject to assessments under the budget the unit owners
30 at the meeting or by a majority of all the voting interests in
31 writing, the budget is adopted. If a meeting of the unit
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1 owners has been called and a quorum is not attained or a
2 substitute budget is not adopted by the unit owners, the
3 budget adopted by the board of directors goes into effect as
4 scheduled. In determining whether assessments exceed 115
5 percent of similar assessments in prior years, any authorized
6 provisions for reasonable reserves for repair or replacement
7 of the condominium property, anticipated expenses by the
8 condominium association which are not anticipated to be
9 incurred on a regular or annual basis, or assessments for
10 betterments to the condominium property must be excluded from
11 the computation. However, as long as the developer is in
12 control of the board of administration, the board may not
13 impose an assessment for any year greater than 115 percent of
14 the prior fiscal or calendar year's assessment without
15 approval of a majority of all the voting interests of units
16 subject to assessments under the budget. A multicondominium
17 association shall adopt a separate budget of common expenses
18 for each condominium it operates and shall adopt a separate
19 budget of common expenses of the association.
20 (f) Annual budget.--
21 1. The proposed annual budget of common expenses shall
22 be detailed and shall show the amounts budgeted by accounts
23 and expense classifications, including, if applicable, but not
24 limited to, those expenses listed in s. 718.504(21) s.
25 718.504(20). In addition, if the association maintains limited
26 common elements with the cost to be shared only by those
27 entitled to use the limited common elements as provided for in
28 s. 718.113(1), the budget or a schedule attached thereto shall
29 show amounts budgeted therefor. If, after turnover of control
30 of the association to the unit owners, any of the expenses
31
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1 listed in s. 718.504(21) s. 718.504(20) are not applicable,
2 they need not be listed.
3 2. In addition to annual operating expenses, the
4 budget shall include reserve accounts for capital expenditures
5 and deferred maintenance. These accounts shall include, but
6 are not limited to, roof replacement, building painting, and
7 pavement resurfacing, regardless of the amount of deferred
8 maintenance expense or replacement cost, and for any other
9 item for which the deferred maintenance expense or replacement
10 cost exceeds $10,000. The amount to be reserved shall be
11 computed by means of a formula which is based upon estimated
12 remaining useful life and estimated replacement cost or
13 deferred maintenance expense of each reserve item. The
14 association may adjust replacement reserve assessments
15 annually to take into account any changes in estimates or
16 extension of the useful life of a reserve item caused by
17 deferred maintenance. This subsection does not apply to
18 budgets in which the members of an association have, by a
19 majority vote at a duly called meeting of the association, and
20 voting determined for a fiscal year to provide no reserves or
21 reserves less adequate than required by this subsection.
22 However, prior to turnover of control of an association by a
23 developer to unit owners other than a developer pursuant to s.
24 718.301, the developer may vote to waive the reserves or
25 reduce the funding of reserves for the first 2 fiscal years of
26 the operation of the association, beginning with the date the
27 initial declaration is recorded in the county records, after
28 which time reserves may be waived or reduced only upon the
29 vote of a majority of all nondeveloper voting interests voting
30 in person or by limited proxy at a duly called meeting of the
31 association. If a meeting of the unit owners has been called
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1 to determine to provide no reserves or reserves less adequate
2 than required, and such result is not attained or a quorum is
3 not attained, the reserves as included in the budget shall go
4 into effect. After the turnover, the developer may vote to
5 waive or reduce the funding of reserves.
6 3. Reserve funds and any interest accruing thereon
7 shall remain in the reserve account or accounts, and shall be
8 used only for authorized reserve expenditures unless their use
9 for other purposes is approved in advance by a majority vote
10 at a duly called meeting of the association. Prior to turnover
11 of control of an association by a developer to unit owners
12 other than the developer pursuant to s. 718.301, the
13 developer-controlled association shall not vote to use
14 reserves for purposes other than that for which they were
15 intended without the approval of a majority of all
16 nondeveloper voting interests, voting in person or by limited
17 proxy at a duly called meeting of the association.
18 4. In a multicondominium association, the only voting
19 interests of the association which are eligible to vote on
20 questions that involve waiving or reducing the funding of
21 reserves or using existing reserve funds for other purposes
22 are the voting interests of the units that are subject to
23 assessment to fund the reserves in question.
24 Section 7. Subsections (2) and (5) of section 718.113,
25 Florida Statutes, are amended to read:
26 718.113 Maintenance; limitation upon improvement;
27 display of flag; hurricane shutters.--
28 (2)(a) Except as otherwise provided in this section,
29 there shall be no material alteration or substantial additions
30 to the common elements or to real property which is
31 association property, except in a manner provided in the
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1 declaration. If the declaration does not specify the
2 procedure for approval of alterations or additions, 75 percent
3 of the total voting interests of the association must approve
4 the alterations or additions.
5 (b) For a multicondominium association, there may not
6 be any material alteration or substantial addition made to the
7 common elements of a condominium or condominiums unless
8 approved in a manner provided in the declaration of the
9 affected condominium or condominiums. If a declaration does
10 not specify a procedure for approving an alteration or
11 addition, the approval of 75 percent of the total voting
12 interests of each affected condominium is required. This
13 section does not prohibit a requirement in any condominium
14 document that requires the approval of unit owners in other
15 condominiums or that requires the approval of the board of
16 directors before an alteration or substantial addition to the
17 common elements is permitted.
18 (c) For a multicondominium association, there may not
19 be any material alteration or substantial addition made to
20 association real property, except as provided in the bylaws.
21 If the bylaws do not specify the procedure for approving an
22 alteration or addition to association real property, the
23 approval of 75 percent of the total voting interests of the
24 association is required.
25 (5)(a) With respect to units, the Each board of
26 directors administration shall adopt and maintain hurricane
27 shutter specifications for hurricane shutters suitable for
28 installation over all exterior openings in the perimeter
29 boundary of each unit in building within each condominium
30 operated by the association. The specifications must address
31 which shall include color, style, location, and other factors
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1 reasonably deemed relevant by the board, and must meet or
2 exceed all requirements of. All specifications adopted by the
3 board shall comply with the applicable building codes code.
4 Notwithstanding any other provision to the contrary in the
5 condominium documents, if association approval of alterations
6 or additions to common elements made by owners is required by
7 the documents, a board may shall not deny or unreasonably
8 delay approval of refuse to approve the installation of new or
9 replacement of hurricane shutters substantially conforming to
10 the specifications adopted by the board. The association may
11 operate shutters installed in units as provided in this
12 subsection without permission of the unit owners only when
13 reasonably necessary to preserve and protect other units, the
14 common elements, or both.
15 (b) With respect to common elements and association
16 property, the board may, subject to the provisions of s.
17 718.3026, and the approval of a majority of voting interests
18 of the condominium, install, maintain, repair, and replace
19 hurricane shutters and may maintain, repair, or replace such
20 approved hurricane shutters, whether on or within common
21 elements, limited common elements, units, or association
22 property. The installation, operation, replacement, repair,
23 or maintenance of hurricane shutters in accordance with this
24 paragraph is not a material alteration of or a substantial
25 addition to common elements or association property within the
26 meaning of subsection (2). However, where laminated glass or
27 window film architecturally designed to function as hurricane
28 protection that meets or exceeds all which complies with the
29 applicable building code requirements has been installed, the
30 board may not install hurricane shutters. The board may
31 operate shutters installed pursuant to this subsection without
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1 permission of the unit owners only where such operation is
2 necessary to preserve and protect the condominium property and
3 association property. The installation, replacement,
4 operation, repair, and maintenance of such shutters in
5 accordance with the procedures set forth herein shall not be
6 deemed a material alteration to the common elements or
7 association property within the meaning of this section.
8 Section 8. Section 718.115, Florida Statutes, 1998
9 Supplement, is amended to read:
10 718.115 Common expenses and common surplus.--
11 (1)(a) Common expenses include the expenses of the
12 operation, maintenance, repair, replacement, or protection of
13 the common elements and association property, costs of
14 carrying out the powers and duties of the association, and any
15 other expense, whether or not included in the foregoing,
16 designated as common expense by this chapter, the declaration,
17 the documents creating the association, or the bylaws. Common
18 expenses also include reasonable transportation services,
19 insurance for directors and officers, road maintenance and
20 operation expenses, in-house communications, and security
21 services, which are reasonably related to the general benefit
22 of the unit owners even if such expenses do not attach to the
23 common elements or property of the condominium. However, such
24 common expenses must either have been services or items
25 provided from the date the control of the board of
26 administration of the association was transferred from the
27 developer to the unit owners or must be services or items
28 provided for in the condominium documents or bylaws. With
29 respect to a multicondominium association, the common expenses
30 of the association are the common expenses that are not
31 directly attributable to the operation of a specific
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1 condominium or condominiums, and common expenses of the
2 condominium are the common expenses that are directly
3 attributable to the operation of a specific condominium or
4 condominiums. The common expenses of the association may
5 include categories of expenses related to the property within
6 a specific condominium or condominiums if such property or
7 common elements are within areas that all members of the
8 association have use rights or receive other tangible economic
9 benefits. Such common expenses of the association must be
10 identified in the declaration or bylaws.
11 (b) If provided for in the declaration or bylaws, the
12 actual cost of registration or tuition and reimbursement for
13 mileage, at the rate allowed by the Internal Revenue Service
14 at the time the expense is incurred, is a permissible common
15 expense to pay for participation by officers or directors of
16 the condominium in educational courses offered within the
17 state which relate to the provisions of this chapter and the
18 administrative regulations adopted under this chapter. Such
19 reimbursement is limited to participation in educational
20 programs while serving as an officer or director. The
21 declaration or bylaws may provide a cap on such educational
22 expenditures. All expenses incurred must be documented by
23 contemporaneous receipts, which must be kept as part of the
24 official records of the association. When an educational
25 program is offered in multiple locations, course cost and
26 mileage reimbursement may only be made for the location
27 closest to the condominium association or to the location
28 closest to the attending officer or director.
29 (c)(b) If so provided in the declaration, the cost of
30 a master antenna television system or duly franchised cable
31 television service obtained pursuant to a bulk contract shall
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1 be deemed a common expense. If the declaration does not
2 provide for the cost of a master antenna television system or
3 duly franchised cable television service obtained under a bulk
4 contract as a common expense, the board of administration may
5 enter into such a contract, and the cost of the service will
6 be a common expense but allocated on a per-unit basis rather
7 than a percentage basis if the declaration provides for other
8 than an equal sharing of common expenses, and any contract
9 entered into before July 1, 1998, in which the cost of the
10 service is not equally divided among all unit owners, may be
11 changed by vote of a majority of the voting interests present
12 at a regular or special meeting of the association, to
13 allocate the cost equally among all units. The contract shall
14 be for a term of not less than 2 years.
15 1. Any contract made by the board after the effective
16 date hereof for a community antenna system or duly franchised
17 cable television service may be canceled by a majority of the
18 voting interests present at the next regular or special
19 meeting of the association. Any member may make a motion to
20 cancel said contract, but if no motion is made or if such
21 motion fails to obtain the required majority at the next
22 regular or special meeting, whichever is sooner, following the
23 making of the contract, then such contract shall be deemed
24 ratified for the term therein expressed.
25 2. Any such contract shall provide, and shall be
26 deemed to provide if not expressly set forth, that any hearing
27 impaired or legally blind unit owner who does not occupy the
28 unit with a non-hearing-impaired or sighted person may
29 discontinue the service without incurring disconnect fees,
30 penalties, or subsequent service charges, and as to such
31 units, the owners shall not be required to pay any common
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1 expenses charge related to such service. If less than all
2 members of an association share the expenses of cable
3 television, the expense shall be shared equally by all
4 participating unit owners. The association may use the
5 provisions of s. 718.116 to enforce payment of the shares of
6 such costs by the unit owners receiving cable television.
7 (d)(c) The expense of installation, replacement,
8 operation, repair, and maintenance of hurricane shutters
9 within a condominium by the association under board pursuant
10 to s. 718.113(5) shall constitute a common expense of the
11 condominium as defined herein and shall be collected as
12 provided in this section. The expense of installation,
13 replacement, operation, repair, and maintenance of hurricane
14 shutters on association property as provided in s. 718.113(5)
15 constitutes a common expense of the association as defined in
16 this section. Notwithstanding the provisions of s. 718.116(9),
17 if an association installs hurricane shutters in units as
18 provided in s. 718.113(5), a unit owner who has previously
19 installed hurricane shutters within his or her own unit in
20 accordance with s. 718.113(5), or laminated glass
21 architecturally designed to function as hurricane protection
22 which complies with the applicable building code, shall be
23 deemed to have prepaid the unit's share of all common expenses
24 of the condominium for installing shutters in other units
25 receive a credit equal to the pro rata portion of the assessed
26 installation cost assigned to each unit. However, such unit
27 owner shall remain responsible for the unit's pro rata share
28 of the common expenses of the condominium for installing
29 hurricane shutters installed on common elements and the unit's
30 pro rata share of the common expenses of the association for
31 installing hurricane shutters on association property by the
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1 board pursuant to s. 718.113(5), and shall remain responsible
2 for a pro rata share of the expense of the replacement,
3 operation, repair, and maintenance of such shutters.
4 (e)(d) If any unpaid share of common expenses or
5 assessments is extinguished by foreclosure of a superior lien
6 or by a deed in lieu of foreclosure thereof, the unpaid share
7 of common expenses or assessments are common expenses
8 collectible from all the unit owners in the condominium in
9 which the unit is located.
10 (2) Except as otherwise provided by this chapter,
11 funds for the payment of common expenses of each condominium
12 shall be collected by assessments against unit owners in the
13 proportions or percentages provided in the declaration. In a
14 residential condominium, or mixed-use condominium created
15 after January 1, 1996, each unit's share of unit owners'
16 shares of common expenses and common surplus shall be the same
17 as the in the same proportions as their ownership interest in
18 the common elements. In a multicondominium association, the
19 total common surplus owned by a unit owner includes the unit
20 owner's share of the common surplus of the association as
21 defined in s. 718.104(4)(g).
22 (3) Common surplus is owned by unit owners in the same
23 shares as their ownership interest in the common elements.
24 Section 9. Subsection (9) of section 718.116, Florida
25 Statutes, 1998 Supplement, is amended to read:
26 718.116 Assessments; liability; lien and priority;
27 interest; collection.--
28 (9)(a) A No unit owner may not be excused from the
29 payment of the unit's his or her share of the common expenses
30 expense of a condominium unless all unit owners are likewise
31
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1 proportionately excused from payment, except as provided in
2 subsection (1) and in the following cases:
3 1. If the declaration so provides, a developer or
4 other person who is offering owns condominium units offered
5 for sale may elect to be excused from the payment of the share
6 of the common expenses and assessments related to those units
7 for a stated period of time subsequent to the recording of the
8 declaration of condominium. The period must terminate no
9 later than the first day of the fourth calendar month
10 following the month in which the first closing of the purchase
11 and sale of a unit in that the first condominium unit occurs.
12 However, the developer must pay those common expenses incurred
13 during that period which exceed the amount assessed against
14 other unit owners. Notwithstanding this limitation, if a
15 developer-controlled association has maintained all insurance
16 coverages required by s. 718.111(11)(a), the common expenses
17 incurred during the foregoing period resulting from a natural
18 disaster or an act of God, which are not covered by insurance
19 proceeds from the insurance maintained by the association, may
20 be assessed assigned against all unit owners of owning units
21 on the date of such natural disaster or act of God, and their
22 successors and assigns, including the developer with respect
23 to units owned by the developer. In the event of such an
24 assessment, all units shall be assessed in accordance with
25 their ownership interest in the common elements as required by
26 s. 718.115(2).
27 2. A developer or other person who owns condominium
28 units and is offering the units for sale or who has an
29 obligation to pay common condominium expenses may be excused
30 from paying the payment of his or her share of the common
31 expenses expense which would otherwise be have been assessed
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1 against those units during the period of time that such person
2 he or she has guaranteed to each purchaser in the purchase
3 contract, declaration, or prospectus, or by agreement between
4 the developer and a majority of the unit owners other than the
5 developer, that assessments the assessment for common expenses
6 of the condominium imposed upon the unit owners would not
7 increase over a stated dollar amount, and such person has
8 obligated himself or herself to pay any amount of common
9 expenses incurred during that period and not produced by the
10 assessments at the guaranteed level receivable from other unit
11 owners in the same condominium. Notwithstanding this
12 limitation, if a developer-controlled association has
13 maintained all insurance coverages required by s.
14 718.111(11)(a), the common expenses incurred during the
15 guarantee period resulting from a natural disaster or an act
16 of God, which are not covered by insurance proceeds from the
17 insurance maintained by the association, may be assessed
18 against all unit owners of owning units on the date of such
19 natural disaster or act of God, and their successors and
20 assigns, including the developer with respect to units owned
21 by the developer. In the event of such an assessment, all
22 units shall be assessed in accordance with their ownership
23 interest in the common elements as required by s. 718.115(2).
24 The guarantee may provide that after an initial stated period,
25 the developer has an option or options to extend the guarantee
26 for one or more additional stated periods.
27 (b) If the purchase contract, declaration, prospectus,
28 or agreement between the developer and a majority of unit
29 owners other than the developer provides for the developer or
30 another person to be excused from the payment of assessments
31 pursuant to paragraph (a), no funds which are receivable from
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1 unit purchasers or owners and payable to the association or
2 collected by the developer on behalf of the association, other
3 than regular periodic assessments for common expenses as
4 provided in the declaration and disclosed in the estimated
5 operating budget pursuant to s. 718.503(1)(b)6. or s.
6 718.504(21)(b) s. 718.504(20)(b), shall be used for payment of
7 common expenses prior to the expiration of the period during
8 which the developer or other person is so excused. This
9 restriction applies to funds including, but not limited to,
10 capital contributions or startup funds collected from unit
11 purchasers at closing.
12 (c) If a developer is excused from paying assessments
13 under paragraph (a) within a multicondominium association, the
14 developer's financial obligation to the association shall
15 consist of two parts as follows:
16 1. The developer shall pay those common expenses of
17 the condominium affected by the guarantee, including the
18 funding of reserves as included in the adopted budget of that
19 condominium, in excess of the amount assessed against the
20 nondeveloper units within that condominium through regular
21 periodic assessments related to the adopted budget of that
22 condominium; and
23 2. The developer shall pay the portion of the common
24 expenses of the association, including the funding of reserves
25 as included in the adopted budget of the association,
26 allocated to the units within the condominium affected by the
27 guarantee which is in excess of the amount assessed against
28 the nondeveloper units within that condominium through regular
29 periodic assessments related to the adopted budget of the
30 association.
31
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1 Section 10. Subsection (11) is added to section
2 718.117, Florida Statutes, 1998 Supplement, to read:
3 718.117 Termination.--
4 (11) This section does not apply to the termination of
5 a condominium incident to a merger of that condominium with
6 one or more other condominiums under s. 718.110(7).
7 Section 11. Section 718.405, Florida Statutes, is
8 created to read:
9 718.405 Multicondominiums.--
10 (1) An association may operate more than one
11 condominium if the declaration of condominium for each
12 condominium to be operated by that association provides for
13 multicondominium development, in conformity with this section,
14 and discloses or describes:
15 (a) The manner or formula by which the assets,
16 liabilities, and the common expenses of the association will
17 be apportioned among the various units within the condominiums
18 operated by the association, consistent with s. 718.104(4)(g).
19 (b) The land on which any additional condominiums to
20 be operated by the association may be located.
21 (c) Whether unit owners in other condominiums, or any
22 other persons, will or may have the right to use recreational
23 areas or any other facilities or amenities that are common
24 elements of the condominium, and, if so, the specific formula
25 by which the other users will share the common expenses
26 related to those facilities or amenities.
27 (d) The recreational and other commonly used
28 facilities or amenities that the developer has committed to
29 provide and that are owned or leased by the association but
30 are not included within any condominium. The developer may
31 reserve the right to add additional facilities or amenities if
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1 the prospectus for each condominium to be operated by the
2 association contains the following statement in conspicuous
3 type and in substantially the following form: RECREATIONAL
4 FACILITIES MAY BE EXPANDED OR ADDED WITHOUT CONSENT OF UNIT
5 OWNERS OR THE ASSOCIATION.
6 (e) The voting rights of the owners of each unit in
7 the election of directors and in other association affairs
8 when a vote of the owners is taken, including, but not limited
9 to, a statement as to whether each unit owner will have a
10 right to personally cast his or her own vote in all matters
11 voted upon.
12 (f) Whether timeshare estates will or may be created
13 with respect to any unit in any condominium operated or to be
14 operated by the association, and, if so, the degree, quantity,
15 nature, and extent of such estates, including a specification
16 of the minimum duration of the recurring periods of rights of
17 use, possession, or occupancy that may be established with
18 respect to any unit.
19 (2) The developer shall notify the nondeveloper owners
20 of all units of a decision not to add additional condominiums.
21 Notice must be given by first-class mail addressed to each
22 unit owner at the address of the unit or to the unit owner's
23 last known address.
24 (3) If any declaration requires a developer to convey
25 any additional lands or facilities to the association and the
26 developer fails to do so within the time specified, or within
27 a reasonable time if none is specified, any owner of a unit or
28 the association may enforce such obligation against the
29 developer or bring an action against the developer for
30 specific performance or for damages that result from the
31
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1 developer's failure or refusal to convey such additional lands
2 or facilities.
3 (4) The declaration that creates each condominium to
4 be operated by the association may not, at the time of its
5 initial recording, contain any provision with respect to the
6 allocation of the assets, liabilities, or common expenses of
7 the association which is inconsistent with this chapter or the
8 provisions of the declaration of condominium for any other
9 condominium then being operated by the association.
10 (5) The recording of a declaration that creates an
11 additional condominium to be operated by a multicondominium
12 association in compliance with this section must be approved
13 by two-thirds of the voting interests of each other
14 condominium operated by the association if timeshare estates
15 are authorized in the declaration of the additional
16 condominium. This subsection does not apply if the creation of
17 timeshare estates is authorized under the original declaration
18 of condominium.
19 (6) This section does not prevent or restrict the
20 formation of a multicondominium development by the merger or
21 consolidation of two or more condominium associations that are
22 not under developer control. Such mergers or consolidations
23 shall be accomplished in accordance with the condominium
24 documents of the condominiums involved and in accordance with
25 chapter 617, which governs the merger or consolidation of
26 corporations, as applicable. Section 718.110(4) does not apply
27 to amendments to the declarations of condominium necessary to
28 effect the merger or consolidation.
29 Section 12. Present subsections (15) through (27) of
30 section 718.504, Florida Statutes, 1998 Supplement, are
31 redesignated as subsections (16) through (28), respectively, a
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1 new subsection (15) is added to that section, and subsection
2 (29) is added to that section, to read:
3 718.504 Prospectus or offering circular.--Every
4 developer of a residential condominium which contains more
5 than 20 residential units, or which is part of a group of
6 residential condominiums which will be served by property to
7 be used in common by unit owners of more than 20 residential
8 units, shall prepare a prospectus or offering circular and
9 file it with the Division of Florida Land Sales, Condominiums,
10 and Mobile Homes prior to entering into an enforceable
11 contract of purchase and sale of any unit or lease of a unit
12 for more than 5 years and shall furnish a copy of the
13 prospectus or offering circular to each buyer. In addition to
14 the prospectus or offering circular, each buyer shall be
15 furnished a separate page entitled "Frequently Asked Questions
16 and Answers," which shall be in accordance with a format
17 approved by the division and a copy of the financial
18 information required by s. 718.111. This page shall, in
19 readable language, inform prospective purchasers regarding
20 their voting rights and unit use restrictions, including
21 restrictions on the leasing of a unit; shall indicate whether
22 and in what amount the unit owners or the association is
23 obligated to pay rent or land use fees for recreational or
24 other commonly used facilities; shall contain a statement
25 identifying that amount of assessment which, pursuant to the
26 budget, would be levied upon each unit type, exclusive of any
27 special assessments, and which shall further identify the
28 basis upon which assessments are levied, whether monthly,
29 quarterly, or otherwise; shall state and identify any court
30 cases in which the association is currently a party of record
31 in which the association may face liability in excess of
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1 $100,000; and which shall further state whether membership in
2 a recreational facilities association is mandatory, and if so,
3 shall identify the fees currently charged per unit type. The
4 division shall by rule require such other disclosure as in its
5 judgment will assist prospective purchasers. The prospectus or
6 offering circular may include more than one condominium,
7 although not all such units are being offered for sale as of
8 the date of the prospectus or offering circular. The
9 prospectus or offering circular must contain the following
10 information:
11 (15) If the condominium is or may become part of a
12 multicondominium development, the following information must
13 be stated:
14 (a) A statement in conspicuous type in substantially
15 the following form: THIS CONDOMINIUM IS (MAY BE) PART OF A
16 MULTICONDOMINIUM DEVELOPMENT IN WHICH OTHER CONDOMINIUMS WILL
17 (MAY) BE OPERATED BY THE SAME ASSOCIATION. Immediately
18 following this statement, the location in the prospectus and
19 its exhibits where the multicondominium aspects of the
20 offering are described must be stated.
21 (b) A summary of the provisions in the declaration and
22 bylaws which establish and provide for the operation of the
23 multicondominium development, including a statement as to
24 whether unit owners in the condominium will have the right to
25 use recreational or other facilities located or planned to be
26 located in other condominiums operated by the same
27 association, and the manner of sharing the common expenses
28 related to such facilities.
29 (c) A statement of the minimum and maximum number of
30 condominiums, and the minimum and maximum number of units in
31 each of those condominiums, which will or may be operated by
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1 the association, and the latest date by which the exact
2 numbers will be finally determined.
3 (d) A statement as to whether any of the condominiums
4 may include units intended to be used for nonresidential
5 purposes, and, if so, the purpose or purposes permitted for
6 such use.
7 (e) A general description of the land on which any
8 additional condominiums to be operated by the association may
9 be located.
10 (29) If the condominium unit is or may be granted use
11 rights in a master condominium development, the following
12 statement must appear in conspicuous type in substantially the
13 following form: MEMBERSHIP IN A MASTER CONDOMINIUM
14 ASSOCIATION IS OR MAY BE REQUIRED. REFER TO YOUR MASTER
15 CONDOMINIUM ASSOCIATION DOCUMENTS FOR PROVISIONS RELATING TO
16 TURNOVER, MEMBERSHIP REQUIREMENTS, VOTING RIGHTS, AND THE
17 PAYMENT OF ASSESSMENTS. NOTE THAT THE DEVELOPER MAY BE
18 ENTITLED TO RETAIN CONTROL OF THE MASTER CONDOMINIUM
19 ASSOCIATION WITHOUT LIMITATION UNTIL SUCH TIME AS MAY BE
20 PROVIDED FOR IN THE MASTER CONDOMINIUM ASSOCIATION DOCUMENTS.
21 Section 13. Part VII of chapter 718, Florida Statutes,
22 consisting of ss. 718.701, 718.702, 718.703, 718.704, 718.705,
23 718.706, 718.707, and 718.708, Florida Statutes, is created to
24 read:
25 718.701 Purpose and legislative intent.--
26 (1) The purpose of this part is to recognize certain
27 entities established for the purpose of owning or operating
28 properties and amenities in which condominium unit owners or
29 condominium timeshare owners have use rights, to provide
30 relevant definitions, and to provide for the operation of
31 associations previously included within the definition in s.
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1 718.103(2). This part does not apply to traditional
2 condominium associations that are responsible for operating
3 the common elements of one or more condominiums, but applies
4 only to master condominium associations that administer real
5 property or facilities that do not comprise the common
6 elements or association property of a condominium. The
7 Legislature does not intend to prohibit the creation or
8 operation of committees, organizations, councils, advisory
9 groups, or other entities that exercise some degree of
10 authority, whether derived from contract or from recorded
11 documents, over property that does not comprise the common
12 elements of a condominium in which condominium owners have use
13 rights. However, if an entity falls within the definition of a
14 master condominium association as provided in s. 718.702, if
15 membership is mandatory, and if the entity has the right to
16 charge assessments that may create a lien on condominium
17 property, the entity is subject to this part. This part does
18 not apply to cooperative associations regulated under chapter
19 719, to voluntary associations formed under chapter 723, or to
20 homeowners associations regulated under ss. 617.301-617.312.
21 The Legislature further recognizes that even if condominium
22 unit owners are not made direct voting members in the master
23 condominium association, such owners may be significantly
24 affected by the operation of the association, and in
25 recognition of such effect, it is appropriate to confer
26 certain basic rights on these affected persons.
27 (2) The Legislature does not intend for this part to
28 impair vested rights with respect to master condominium
29 associations in existence prior to July 1, 1999. Therefore,
30 this part applies to master condominium associations created
31 before July 1, 1999, only to the extent that such retroactive
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1 application does not impair vested rights or operate to impair
2 contractual or constitutional rights. This part is remedial in
3 nature and shall be broadly construed to accomplish these
4 objectives.
5 (3) The Legislature finds that it is in the best
6 interest of all parties to provide for an expansive role of
7 the Division of Florida Land Sales, Condominiums, and Mobile
8 Homes of the Department of Business and Professional
9 Regulation in providing for the education of board members,
10 affected owners, and members in master condominium
11 associations. The division shall enforce this part and the
12 rules adopted under this part with respect to master
13 condominium associations to the same extent that the division
14 regulates condominium associations under s. 718.501.
15 718.702 Definitions.--As used in this part, the term:
16 (1) "Affected owner" means a condominium unit owner
17 who is not a voting member in the master condominium
18 association, but who has use rights in the common property or
19 facilities administered by that association.
20 (2) "Common property" means those properties and
21 facilities operated by a master condominium association for
22 the use and benefit of its members and affected persons,
23 regardless of whether such property is owned by the master
24 condominium association.
25 (3) "Declaration of covenants and restrictions" means
26 a declaration of covenants, restrictions, servitudes, or deed
27 restrictions, or any other recorded covenant or restriction
28 that governs the properties administered by the master
29 condominium association. A declaration of covenants and
30 restrictions is not required in order to form a master
31 condominium development.
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1 (4) "Developer" means a person who creates a master
2 condominium development by recording in the public records a
3 declaration of covenants and restrictions or otherwise, or who
4 offers condominium parcels for sale or lease in the ordinary
5 course of business where the condominium parcel owner will
6 have use rights in property operated by a master condominium
7 association. The term includes a successor or subsequent
8 developer who succeeds to the interests of a developer by
9 sale, lease, assignment, foreclosure of a mortgage, or other
10 transfer and who offers parcels for sale or lease in the
11 ordinary course of business. The term also includes a
12 concurrent developer who acts concurrently with a developer in
13 selling or leasing condominium parcels in the ordinary course
14 of business. The term does not include an owner of a
15 condominium unit who has acquired a condominium unit for his
16 or her own occupancy and who later offers it for resale or for
17 lease.
18 (5) "Division" means the Division of Florida Land
19 Sales, Condominiums, and Mobile Homes of the Department of
20 Business and Professional Regulation.
21 (6) "Master condominium association" means the entity
22 that is primarily responsible for the operation of real
23 property or facilities that do not constitute the common
24 elements of a condominium or association property of a
25 condominium association; in which condominium unit owners have
26 use rights; where voting membership will be composed
27 exclusively of condominium unit owners or their agents or
28 representatives; where membership either directly by a
29 condominium unit owner or through an agent or representative
30 is a required condition of condominium unit ownership; where
31 the entity may assess its members or affected owners for the
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1 costs of shared expenses; and where any unpaid assessment may
2 ultimately become a lien on a condominium parcel or on the
3 common elements of a condominium.
4 (7) "Master condominium association documents" means
5 any declaration of covenants and restrictions recorded in the
6 public records which governs the property administered by the
7 master condominium association, the bylaws, the articles of
8 incorporation of the association, and any recorded amendments
9 to the covenants and restrictions, bylaws, or articles of
10 incorporation.
11 (8) "Master condominium development" means a community
12 in which a master condominium association operates common
13 property or other recreational or common facilities for the
14 use and benefit of its members and affected owners, and
15 includes all property and improvements intended for use in
16 conjunction with the development, whether built or unbuilt,
17 which is added in future development.
18 (9) "Member" means a member of the master condominium
19 association as designated in the master condominium
20 association documents, and may include, but is not limited to,
21 the owner of a condominium parcel, a condominium association
22 representing condominium unit owners, or any other person or
23 entity designated as a member by the master condominium
24 association documents. A master condominium association may
25 include voting members and nonvoting members.
26 (10) "Voting interest" means the voting rights
27 distributed to members of the association pursuant to the
28 association documents.
29 718.703 Association powers and duties; meetings;
30 official records.--
31
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1 (1) POWERS AND DUTIES.--The master condominium
2 association must be a Florida not-for-profit corporation. The
3 master condominium association documents and any amendment to
4 the documents must be recorded in the official records of the
5 county or counties in which the common property operated by
6 the association, and all condominiums in which the unit owners
7 have use rights in that common property, are located. The
8 officers and directors of the association have a fiduciary
9 duty to the members, the affected owners served by the
10 association, and the association. The powers and duties of the
11 master condominium association include those set forth in this
12 part; those set forth in the master condominium association
13 documents, except as expressly limited by this part; and those
14 set forth in chapter 617, to the extent such provisions are
15 not inconsistent with this part. An affected owner or member
16 is not authorized to act for the master condominium
17 association merely by virtue of being an affected owner or
18 member. The association may contract, sue, or be sued with
19 respect to the exercise or nonexercise of its powers. The
20 powers of the association include, but are not limited to,
21 maintaining, managing, protecting, and operating the common
22 property.
23 (2) BOARD, COMMITTEE, AND MEMBERSHIP MEETINGS.--
24 (a) Meetings of the board at which at least a quorum
25 of the members of the board are present shall be open to the
26 members of the association, as well as affected owners.
27 Meetings between the board or a committee and the association
28 attorney with respect to proposed or pending litigation, or
29 when the board or committee meeting is held for the purpose of
30 rendering or seeking legal advice, shall not be open to the
31
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1 membership of the association, and notice to the membership of
2 such meetings is not required.
3 (b) Except in an emergency, or as otherwise provided
4 in this part, notices of board meetings, including an agenda
5 that specifically lists the items of business to be taken up
6 at the meeting, must be posted in a conspicuous place on the
7 common property at least 48 hours in advance of the meeting.
8 Any item that is not included on the notice may be taken up on
9 an emergency basis by a vote of at least a majority plus one
10 of the members of the board. Such emergency action must be
11 noticed and ratified at the next regular meeting of the board.
12 However, written notice of any meeting at which nonemergency
13 special assessments, or at which an amendment to rules
14 regarding unit use, will be considered must be mailed or
15 delivered to the members and affected owners and posted
16 conspicuously on the master condominium association property
17 not less than 14 days prior to the meeting. Evidence of
18 compliance with this 14-day notice must be made by an
19 affidavit executed by the person providing the notice and
20 filed among the official records of the association. Meetings
21 of a committee to take final action on behalf of the board, or
22 to make recommendations to the board regarding the budget, are
23 subject to this paragraph.
24 (c) There shall be an annual meeting of the members of
25 the master condominium association. The bylaws must provide a
26 reasonable method of calling and noticing membership meetings,
27 including annual and special meetings. Notice of a meeting
28 must be delivered or mailed at least 14 days before the
29 meeting to all members of the master condominium association
30 and affected owners and must be posted in a conspicuous
31 location on the common property. Each notice of any membership
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1 meeting must include a description of the purpose for which
2 the meeting has been called.
3 (d) Members of the master condominium association and
4 affected owners may attend and make audio or video recordings
5 of record board meetings, committee meetings where the
6 committee takes final action on behalf of the board or makes
7 recommendations to the board regarding the budget, and
8 membership meetings, except as otherwise provided in this
9 section. The board may adopt reasonable rules regarding the
10 use of audio and video equipment, and may prohibit or limit
11 the use of artificial lighting.
12 (3) ELECTIONS, APPOINTMENTS, OR SELECTION OF
13 DIRECTORS.--If regular elections are required to be held by
14 the master condominium association, such elections must be
15 held at or in conjunction with the annual meeting of the
16 master condominium association. Elections, appointments, or
17 other selections of board members of the master condominium
18 association must be conducted in accordance with the
19 procedures contained in the master condominium association
20 documents or condominium documents, as applicable, which may
21 provide for election by limited proxy, general proxy, voting
22 machine, secret ballot, absentee ballot, or other method that
23 is fair and reasonable.
24 (4) PROXY VOTING.--Unless the master condominium
25 association documents provide to the contrary, members may
26 vote by limited proxy or general proxy in any association
27 business.
28 (5) ACTION WITHOUT MEETING.--The master condominium
29 association documents may provide for the membership to take
30 action without holding a meeting pursuant to an agreement in
31
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1 writing, an absentee ballot, a written ballot, or any other
2 reasonable and dependable method of voting.
3 (6) OFFICIAL RECORDS.--Section 718.111(12) applies to
4 master condominium associations, except that references to
5 unit owners contained in s. 718.111(12) refer to members and
6 affected owners, and references to any of the condominium
7 documents refer to the master condominium association
8 documents.
9 (7) ASSESSMENTS.--The master condominium association
10 may make and collect assessments against its members and may
11 lease, maintain, repair, and replace the common property. The
12 association may impose reasonable fees authorized by law or
13 authorized by the master condominium association documents.
14 However, the association may not charge a use fee against
15 members or affected owners for the use of the common property
16 or facilities unless such a fee is expressly authorized in the
17 master condominium association documents and the fee relates
18 to expenses incurred by an owner having exclusive use of the
19 common property.
20 (8) RULEMAKING AUTHORITY.--The division may adopt
21 rules to administer this section.
22 718.704 Common property; alterations; appurtenances;
23 amendments to master association documents.--
24 (1) TITLE TO PROPERTY.--A master condominium
25 association has the power to acquire title to and other
26 ownership or use interests in property, both real and
27 personal, including, but not limited to, the power to purchase
28 any lease of land, buildings, or recreation facilities, and to
29 otherwise hold, convey, pledge, or mortgage property that it
30 owns for the benefit of the members and for the use and
31 benefit of affected owners, which power must be exercised in
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1 the manner set forth in the master condominium association
2 documents, except that such power may be exercised by the
3 board of directors with respect to personal property. If the
4 documents do not specify a voting procedure, the prior
5 approval of two-thirds of the total voting interests of the
6 association is required. The master condominium association
7 documents may limit the method of acquiring, conveying,
8 leasing, pledging, or mortgaging property. Unless expressly
9 restricted in the master condominium association documents, an
10 association may purchase a condominium unit granted use rights
11 in the common property without a vote of the members of
12 affected unit owners, and may own, lease, mortgage, or sell
13 the unit or units. This subsection does not limit the ability
14 of an association to take title to a unit through foreclosure
15 of an association lien for unpaid master condominium expenses
16 or limit the ability of an association to accept a deed in
17 lieu of foreclosure.
18 (2) EASEMENTS.--Unless prohibited or restricted by the
19 master condominium association documents or by this part, and
20 subject to subsection (5), a master condominium association
21 may grant, modify, or move any easement that is located on or
22 that crosses the common property. Except as prohibited or
23 restricted by the master condominium association documents or
24 this part, and subject to subsection (5), the board may
25 exercise this authority without the joinder or consent of
26 members or affected owners.
27 (3) INSURANCE.--The master condominium association
28 shall obtain and maintain adequate liability and property
29 insurance to protect the association, its members, the common
30 property, and any improvements to the common property,
31 including, but not limited to, liability insurance for
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1 directors, officers, and committee members; insurance for the
2 benefit of association employees; flood insurance; and title
3 insurance for any real property owned or operated by the
4 association. Any insurance policy is subject to reasonable
5 deductibles and exclusions. At the option of the board, the
6 association may maintain an insurance reserve to protect
7 against uninsured losses due to the application of a
8 deductible or coverage exclusion.
9 (4) MATERIAL ALTERATIONS OR ADDITIONS TO COMMON
10 PROPERTY.--Except as provided in subsection (1), the common
11 property or related improvements administered by the master
12 condominium association may not be materially altered or
13 substantially added to except as provided in the master
14 condominium association documents. However, any material
15 alteration or substantial addition necessary to protect,
16 maintain, repair, replace, or insure the common property or
17 related improvements operated by the master condominium
18 association, or necessary to protect the security or
19 well-being of members or affected owners, may be made by the
20 board without any vote of the members or affected owners,
21 regardless of the estimated cost of the alteration or addition
22 or regardless of the source of funding. If the master
23 condominium association documents do not specify a procedure
24 for approving alterations or additions, and if the
25 contemplated alteration or addition does not involve the
26 maintenance, protection, repair, or replacement of the common
27 properties or the protection of the members or affected
28 owners, the alteration or addition must be approved by at
29 least a majority of the total voting interests of the
30 association, expressed by a vote at a meeting or by written
31 action. A material change in use of the common property
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1 constitutes a material alteration to the common areas and does
2 not constitute a material alteration to the appurtenances of
3 the common property as described under paragraph (6)(d).
4 (5) MEMBERSHIPS.--A master condominium association may
5 enter into agreements to acquire leaseholds, memberships, or
6 other possessory or use interests in lands or facilities, such
7 as country clubs, golf courses, marinas, and other
8 recreational facilities, regardless of whether the lands or
9 facilities are contiguous to the properties administered by
10 the association or whether the properties are owned as common
11 elements by any affected owners, if such properties are
12 intended to provide enjoyment, recreation, or other use or
13 benefit to the association members or affected owners. All
14 such leaseholds, memberships, or other possessory or use
15 interests existing or created at the time of recording the
16 association documents must be stated and fully described in
17 the association documents. Subsequent to recording the master
18 condominium association documents, the master condominium
19 association may not acquire or enter into such agreement
20 except as authorized by the association documents or any
21 amendments to the association documents. The master
22 condominium association documents may provide that the rental,
23 membership fees, operations, replacements, or other expenses
24 are common expenses of the association and may impose
25 covenants and restrictions concerning their use, which may
26 contain other provisions not inconsistent with this part. An
27 association may conduct bingo games as provided in s.
28 849.0931.
29 (6) AMENDMENTS TO MASTER CONDOMINIUM ASSOCIATION
30 DOCUMENTS.--
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1 (a) Except as provided in paragraph (d), a master
2 condominium association document recorded after October 1,
3 1999, may not require that an amendment to the master
4 condominium association documents be approved by more than a
5 two-thirds majority of the total voting interests of the
6 master condominium association. If the documents do not
7 provide for an amendatory procedure, an amendment to the
8 master condominium association documents must be approved by
9 at least two-thirds of the total voting interests of the
10 association.
11 (b) Section 718.110(2) shall govern the right of a
12 developer to amend the association documents.
13 (c) An amendment to the master condominium association
14 documents takes effect when recorded in the manner provided in
15 s. 718.701(1). An amendment, other than an amendment made by
16 the developer without a vote of the members pursuant to any
17 right the developer has lawfully reserved in the document
18 being amended to amend it without consent of the members,
19 which reservation must be limited to matters other than those
20 specified under s. 718.110(4) and (8), must be evidenced by a
21 certificate of amendment executed by the association with the
22 formalities of a deed. An amendment made unilaterally by the
23 developer must also be evidenced by a certificate of amendment
24 and must be executed by the developer rather than the
25 association.
26 (d) Unless otherwise provided in the master
27 condominium association documents as originally recorded, an
28 amendment to the master condominium association documents may
29 not materially alter or modify the appurtenances of any
30 member, or the appurtenances to a unit owned by an affected
31 owner, or change the proportion or percentage by which a
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1 member or affected owner shares in the common expenses or owns
2 the common surplus, unless all record owners of liens on
3 common property operated by the master condominium association
4 join in the execution of the amendment and unless, in the case
5 of an amendment altering the appurtenances of a member, all of
6 the affected members join in the execution of the amendment.
7 In the case of an amendment altering the appurtenances to a
8 unit owned by an affected owner, all affected condominium unit
9 owners owning a unit in that condominium must join in the
10 execution of the amendment in order for the amendment to be
11 valid. The acquisition of property by the master condominium
12 association or a material alteration or substantial addition
13 to the common property in accordance with subsection (5) do
14 not constitute a material alteration or modification to the
15 appurtenances. Master condominium association documents
16 recorded after October 1, 1999, may not require approval of
17 fewer than two-thirds of the total voting interests for
18 amendments under this paragraph, unless the amendment is
19 required by any state or local government or agency thereof.
20 (7) APPURTENANCES.--Members and affected owners shall
21 have the following appurtenances, but only to the extent
22 granted by the condominium documents or master condominium
23 association documents:
24 (a) Any ownership right or use right in the properties
25 and facilities operated by the master condominium association,
26 as set forth in the condominium documents or master
27 condominium association documents;
28 (b) The nonexclusive right to use the common areas for
29 the purposes for which they are intended and reasonably
30 suited, as set forth in the condominium documents or master
31 condominium association documents;
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1 (c) Membership or affected-owner status, including any
2 right to vote in the affairs of the master condominium
3 association, as set forth in the condominium documents or
4 master condominium association documents;
5 (d) The right to share in the expenses of the
6 association and to share in the common surplus of the
7 association in the proportions or percentages provided for in
8 the condominium documents or master condominium association
9 documents; and
10 (e) Any other appurtenance provided for in the
11 condominium documents or master condominium association
12 documents.
13 (8) MERGER.--The property and facilities operated by a
14 master condominium association may be merged with the property
15 and facilities operated by a separate master condominium
16 association upon the approval of the voting interests as
17 provided for in the documents of each association. If the
18 master condominium association documents do not provide for
19 such a procedure, any such merger must be approved by the same
20 vote that is required to modify the appurtenances to
21 membership in the associations.
22 (9) AMENDMENTS NOT AFFECTING RIGHTS OR INTERESTS.--The
23 master condominium association documents may not require the
24 consent or joinder of some or all mortgagees of units of
25 affected owners or the consent or joinder of some or all
26 mortgagees of the property operated by the master condominium
27 association for amendments to the master condominium
28 association documents unless the requirement is limited to
29 amendments materially and substantially affecting the rights
30 or interests of the mortgagees, such as a change to the
31 relative priority of the mortgage lien, or as otherwise
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1 required by the Federal National Mortgage Association or the
2 Federal Home Loan Mortgage Corporation, and unless the
3 requirement provides that such consent or joinder may not be
4 unreasonably withheld. Except with respect to the matters
5 described in paragraph (6)(d), it is presumed that amendments
6 to the association documents do not materially affect the
7 rights or interests of mortgagees. If mortgagee consent is
8 provided other than by properly recorded joinder, such consent
9 must be evidenced by affidavit of the association recorded in
10 the public records of the county or counties where the common
11 property is located.
12 (10) RULEMAKING AUTHORITY.--The division may adopt
13 rules to administer this section.
14 718.705 Basic rights; obligations of members and
15 affected persons; imposition of fines.--
16 (1) If condominium unit owners are made voting members
17 in the master condominium association, such condominium unit
18 owners shall have all of the rights of membership set forth in
19 this part, in the association documents, and in chapter 617,
20 as applicable. However, if condominium unit owners are not
21 made voting members in the master condominium association, as
22 in the case where a condominium association is made a
23 representative member in the master condominium association,
24 individual condominium unit owners who are affected owners, as
25 defined in s. 718.701, do not have and may not exercise
26 membership rights. However, all affected owners may attend and
27 make audio and video recordings of board meetings, committee
28 meetings where the committee takes final action on behalf of
29 the board or makes recommendations to the board regarding the
30 budget, and membership meetings; have the right of access to
31 the official records as provided in this part; and, where unit
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1 owners have the right to vote in the election of a
2 representative, have the right to recall a representative on
3 the board of the master condominium association. These rights
4 are coextensive with the rights granted to members.
5 (2) Members and affected owners may exercise the
6 voting and election rights set forth in the master condominium
7 association documents or condominium documents. Unless the
8 master condominium association documents or condominium
9 documents provide otherwise, and except as otherwise provided
10 by this part, affected owners who are not members in the
11 master condominium association may not vote in the affairs of
12 the master condominium association and may not become
13 candidates for the board merely by virtue of being an affected
14 owner.
15 (3) The master condominium association may not suspend
16 any membership or use rights or rights granted to members or
17 affected owners for an alleged failure to pay assessments. In
18 such case, the association's remedies are limited to the
19 remedies provided in this part and s. 718.116.
20 (4) All common properties administered by the master
21 condominium association must be available to members and
22 affected owners, and their invited guests, for the use
23 intended and reasonably suited. The master condominium
24 association may adopt reasonable rules governing the use of
25 the common property. An association may not unreasonably
26 restrict any member or affected owner's right to invite public
27 speakers or candidates for public office to appear and speak
28 on those portions of the common properties suitable for such
29 purposes.
30 (5) Each master condominium association, member,
31 affected owner, tenant, and other invitee is governed by, and
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1 must comply with, this part, applicable portions of this
2 chapter, the master condominium association documents, and
3 those portions of chapter 617 made applicable to this part,
4 and such provisions are deemed to be incorporated into any
5 lease of a condominium unit by a member or affected owner.
6 Subject to the requirement of mandatory nonbinding
7 arbitration, as provided in s. 718.1255, an action for
8 damages, injunctive relief, declaratory relief, or other
9 relief for failure to comply with these provisions, and any
10 other action in law or equity, regardless of any lack of
11 privity of contract, may be brought in the courts directly by
12 a master condominium association, member, or affected owner
13 against the association; a member; an affected owner;
14 directors or officers appointed by the developer for actions
15 taken by them prior to the time control of the association is
16 assumed by members other than the developer; any director or
17 officer who willfully and knowingly fails to comply with these
18 provisions; any tenant leasing a unit from an affected owner;
19 and any guests or other invitees of a member or affected
20 owner. The prevailing party in any such court action may
21 recover reasonable costs and attorney's fees. A unit owner who
22 prevails in an action between the association and the unit
23 owner, in addition to recovering reasonable costs and
24 attorney's fees, may recover additional amounts that the court
25 determines are necessary to reimburse the unit owner for his
26 or her share of assessments levied by the association to fund
27 its expenses of litigation. This relief does not exclude other
28 remedies provided by law.
29 (6) If provided in the master condominium association
30 documents, the master condominium association may levy
31 reasonable fines against a condominium unit for the failure of
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1 a member or affected owner, or a tenant, invitee, or other
2 occupant of the unit of an affected owner, to comply with the
3 master condominium association documents or the reasonable
4 rules of the association. A fine may not become a lien against
5 a condominium unit, and a fine may not exceed $100 per
6 violation. A fine may be levied on the basis of each day of a
7 continuing violation, with a single notice and opportunity for
8 a hearing. However, such fine may not exceed $1,000 in the
9 aggregate. A fine may not be levied except after giving
10 reasonable notice and an opportunity for a hearing. The
11 hearing must be held before a committee of members or affected
12 persons other than board members, officers, or employees of
13 the master condominium association. If the committee does not
14 agree with the proposed fine, the fine may not be levied. This
15 subsection does not apply to the imposition of administrative
16 late fees or interest for failure to pay assessments as
17 provided in the master condominium association documents.
18 718.706 Powers and duties of the division.--
19 (1) Pursuant to s. 718.501, the division may ensure
20 and enforce compliance with this part and the rules adopted
21 under this part and may institute enforcement proceedings
22 under chapter 120. By October 1, 1999, the division shall
23 adopt, by rule, penalty and educational guidelines applicable
24 to possible violations of this part, categories of violations
25 of this part, or rules adopted by the division. The guidelines
26 must specify a meaningful range of civil penalties for each
27 such violation of this part and rules, and must be based upon
28 the harm caused by the violation, the repetition of the
29 violation, and any other factors deemed relevant by the
30 division. The division may consider whether the violation was
31 committed by the developer of a master condominium development
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1 or by an owner-controlled association, the size of the master
2 condominium association, and other factors. The guidelines
3 must designate the possible mitigating or aggravating
4 circumstances that justify a departure from the range of
5 penalties provided by the rules. The Legislature intends that
6 minor violations be distinguished from those that endanger the
7 health, safety, or welfare of the condominium residents or
8 other persons and that such guidelines provide reasonable and
9 meaningful notice to the public of likely penalties that may
10 be imposed for proscribed conduct. The rules must specify when
11 the division shall use education in lieu of enforcement by
12 investigation and civil penalty. This subsection does not
13 limit the ability of the division to informally dispose of
14 administrative actions or complaints by stipulation, agreed
15 settlement, or consent order.
16 (2) The division shall provide education for members
17 in master condominium associations and for board members and
18 affected owners.
19 (3) Before instituting litigation, a party to a
20 dispute described under s. 718.1255 shall petition the
21 division for mandatory nonbinding arbitration, which must be
22 performed in accordance with that section. The division shall
23 conduct arbitrations described in s. 718.1255 to resolve
24 described disputes between a master condominium association
25 and a member or members of the master condominium association
26 and disputes between a master condominium association and an
27 affected owner or owners, their tenants, guests, or other
28 invitees.
29 (4) Each master condominium association that exists on
30 July 1, 1999, must notify the division in writing of its
31 existence prior to September 1, 1999, and must also notify the
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1 division in writing within 30 days after the date on which
2 membership of the master condominium association is no longer
3 composed exclusively of condominium unit owners or their
4 agents or representatives.
5 718.707 Financial reporting; master condominium
6 association expenses; guarantees of expenses; budgets.--
7 (1) Master condominium association expenses include
8 the expenses of operating, maintaining, repairing, replacing,
9 protecting, and insuring the properties and facilities
10 operated by the master condominium association; the costs of
11 carrying out the powers and duties of the association; and any
12 other expense, even if unrelated to the foregoing or not
13 attached to the property or facilities operated by the
14 association, which is specifically designated as a master
15 condominium association expense by this chapter or by the
16 master condominium association documents as initially recorded
17 or as amended in accordance with the amendatory procedures
18 provided in the documents.
19 (2) Funds for paying master condominium association
20 expenses shall be collected by assessments against the members
21 of the master condominium association, or affected owners, in
22 the manner and in the percentages or proportions provided for
23 in the master condominium association documents. The funds of
24 the association may not be commingled with the funds of the
25 developer, another master condominium association, or any
26 other entity.
27 (3)(a) A master condominium association shall prepare
28 annual financial reports as required by this subsection. As
29 used in this subsection, the term "revenues" includes all
30 regular and special assessments for reserves, operating
31 expenses, or any other expenses, and all other sources of
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1 revenues, including, but not limited to, interest, user fees,
2 developer subsidies, litigation proceeds, and insurance
3 proceeds.
4 (b) If total annual revenues of the association are
5 $100,000 or less, the association shall, at a minimum, prepare
6 a complete cash-basis financial report of actual receipts and
7 expenditures for the prior fiscal year. The report must show
8 the amounts of receipts and expenditures by receipt and
9 expense classification.
10 (c) If total annual revenues of the association exceed
11 $100,000, the association shall prepare a complete set of
12 financial statements as follows:
13 1. If total annual revenues of the association exceed
14 $100,000, but are less than $200,000, the association shall,
15 at a minimum, prepare compiled financial statements.
16 2. If total annual revenues of the association are at
17 least $200,000, but are less than $400,000, the association
18 shall, at a minimum, prepare reviewed financial statements.
19 3. If total annual revenues of the association are
20 $400,000 or more, the association shall prepare audited
21 financial statements.
22
23 The financial statements required by this paragraph must be
24 prepared on the accrual basis of accounting using fund
25 accounting, and must be presented in accordance with generally
26 accepted accounting principles.
27 (d) The requirements of this subsection to provide for
28 compiled, reviewed, or audited financial statements may be
29 waived upon approval of at least a majority of the total
30 voting interests of the association. Such waiver is effective
31 for only 1 fiscal year. If the requirement for compiled,
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1 reviewed, or audited financial statements is waived, the
2 financial report must comply, at a minimum, with s.
3 718.111(13).
4 (e) An association is not precluded from exceeding the
5 reporting requirements set forth in this subsection by
6 preparing financial statements rather than a financial report
7 of actual receipts and expenditures, by providing reviewed or
8 audited financial statements rather than compiled statements,
9 or by providing audited rather than reviewed statements.
10 (f) Except as otherwise provided in the master
11 condominium association documents, the association shall
12 prepare the financial report or financial statements within 90
13 days following the end of the fiscal year to which the report
14 or statements relate. The association shall, at the option of
15 the board, mail or deliver a copy of the financial report or
16 financial statements to all members, or shall notify each
17 member that the report or statements are available at no
18 charge, within 14 days after receipt of the report or
19 statements by the association.
20 (4) Reserves for any item of capital expenditure or
21 deferred maintenance which costs at least $10,000 or 10
22 percent of the annual operating budget to replace, whichever
23 is greater, must be included in the annual budget and must be
24 funded annually, unless waived in the manner provided in the
25 master condominium association documents. In determining
26 whether the cost equals or exceeds 10 percent of the budget,
27 any authorized provisions for reasonable reserves for repair
28 or replacement of the common property, and anticipated
29 expenses by the association which are not anticipated to be
30 incurred on a regular or annual basis, must be excluded from
31 the computation. If the documents do not contain a waiver, the
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1 required reserves may be waived by a majority of the voting
2 interests present at a membership meeting at which a quorum of
3 the voting interests is present. Reserves must be used for the
4 specific item such funds are reserved for, unless the use of
5 such funds is approved in advance by a majority of the voting
6 interests present at a membership meeting at which a quorum is
7 present. However, as provided in s. 718.112(2)(f)2., prior to
8 turnover of control, a developer-controlled association may
9 not use reserves for purposes other than that for which they
10 were intended without the approval of a majority of all
11 nondeveloper voting interests voting in person or by limited
12 proxy at a meeting of the association.
13 (5) The budget for a master condominium association
14 must comply with s. 718.112(2)(f).
15 (6) The division may adopt rules to administer this
16 section.
17 718.708 Transfer of association control.--Any
18 transition of the control of a master condominium association
19 must be made in accordance with s. 617.307.
20 Section 14. Paragraph (a) of subsection (2) of section
21 624.462, Florida Statutes, is amended to read:
22 624.462 Commercial self-insurance funds.--
23 (2) As used in ss. 624.460-624.488, "commercial
24 self-insurance fund" or "fund" means a group of members,
25 operating individually and collectively through a trust or
26 corporation, that must be:
27 (a) Established by:
28 1. A not-for-profit trade association, industry
29 association, or professional association of employers or
30 professionals which has a constitution or bylaws, which is
31 incorporated under the laws of this state, and which has been
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1 organized for purposes other than that of obtaining or
2 providing insurance and operated in good faith for a
3 continuous period of 1 year;
4 2. A self-insurance trust fund organized pursuant to
5 s. 627.357 and maintained in good faith for a continuous
6 period of 1 year for purposes other than that of obtaining or
7 providing insurance pursuant to this section. Each member of
8 a commercial self-insurance trust fund established pursuant to
9 this subsection must maintain membership in the self-insurance
10 trust fund organized pursuant to s. 627.357; or
11 3. A not-for-profit group composed comprised of no
12 fewer less than 10 condominium associations as defined in s.
13 718.103(11) s. 718.103(2), which is incorporated under the
14 laws of this state, which restricts its membership to
15 condominium associations only, and which has been organized
16 and maintained in good faith for a continuous period of 1 year
17 for purposes other than that of obtaining or providing
18 insurance.
19 Section 15. This act shall take effect July 1, 1999.
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2 SENATE SUMMARY
3 Revises various provisions of part I of ch. 718, F.S.,
relating to general provisions governing condominium
4 associations. Authorizes the creation of
multicondominiums and conforms various provisions to such
5 authorization. Provides for determining the percentage
share of liability for common expenses and ownership in a
6 multicondominium. Provides certain limitations on making
material alterations or additions to multicondominiums.
7 Revises requirements for installing and maintaining
hurricane shutters. Provides for determining the common
8 surplus owned by a unit owner of a multicondominium.
Provides for merging or consolidating certain condominium
9 associations. Creates part VII of ch. 718, F.S., to
authorize the creation and operation of master
10 condominium associations. Provides for the Division of
Florida Land Sales, Condominiums, and Mobile Homes of the
11 Department of Business and Professional Regulation to
administer part VII of ch. 718, F.S. Provides for a
12 master condominium association to acquire title to
property and grant or modify easements. Provides
13 requirements for liability and property insurance.
Provides for a master condominium association to acquire
14 memberships or use interests in other lands or
facilities. Provides for amending the master condominium
15 association documents. Authorizes merging master
condominium associations. Provides rights of membership
16 in a master condominium association. Authorizes a master
condominium association to levy certain fines. (See bill
17 for details.)
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