House Bill 0285

CODING: Words stricken are deletions; words underlined are additions.







    Florida House of Representatives - 1999                 HB 285

        By Representative Goodlette






  1                      A bill to be entitled

  2         An act relating to homeowner's associations and

  3         cooperatives; amending s. 617.301, F.S.;

  4         redefining the term "homeowners' association"

  5         for the purposes of the Florida Not For Profit

  6         Corporation Act to include a mobile home

  7         subdivision; providing that provisions

  8         currently governed by the act relating to the

  9         purpose and scope of homeowners' associations,

10         powers and duties, right of owners to peaceably

11         assemble, meetings, transition of homeowners'

12         associations' control in a community,

13         assessments and charges, agreements,

14         recreational leaseholds, dispute resolutions,

15         and covenants would apply to mobile home

16         subdivisions; amending s. 719.103, F.S.;

17         defining the terms "special assessment,"

18         "voting certificate," and "voting interests"

19         for the purposes of the Cooperative Act;

20         amending s. 719.1035, F.S.; providing that all

21         provisions of the cooperative documents are

22         enforceable equitable servitudes, run with the

23         land, and are effective until the cooperative

24         is terminated; amending s. 719.104, F.S.;

25         revising language with respect to commingling;

26         providing for easements; amending s. 719.1055,

27         F.S.; revising the amount of votes necessary to

28         amend the cooperative documents; providing

29         additional requirements with respect to

30         amendments; amending s. 719.106, F.S.;

31         providing requirements with respect to

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1         insurance and fidelity bonds; creating s.

  2         719.115, F.S.; providing limitations on

  3         liability of unit owners; creating s. 719.116,

  4         F.S.; providing that cooperatives are

  5         residential property for certain purposes;

  6         amending ss. 849.085 and 849.0931, F.S;

  7         including cooperatives within the provisions of

  8         law relating to penny-ante games and bingo;

  9         providing an effective date.

10

11  Be It Enacted by the Legislature of the State of Florida:

12

13         Section 1.  Subsection (7) of section 617.301, Florida

14  Statutes, is amended to read:

15         617.301  Homeowners' associations; definitions.--As

16  used in ss. 617.301-617.312, the term:

17         (7)  "Homeowners' association" or "association" means a

18  Florida corporation responsible for the operation of a

19  community or a mobile home subdivision in which the voting

20  membership is made up of parcel owners or their agents, or a

21  combination thereof, and in which membership is a mandatory

22  condition of parcel ownership, and which is authorized to

23  impose assessments that, if unpaid, may become a lien on the

24  parcel.  The term "homeowners' association" does not include a

25  community development district or other similar special taxing

26  district created pursuant to statute.

27         Section 2.  Subsections (22) and (23) of section

28  719.103, Florida Statutes, 1998 Supplement, are renumbered as

29  subsections (23) and (24), respectively, and new subsections

30  (22), (25), and (26) are added to said section to read:

31         719.103  Definitions.--As used in this chapter:

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1         (22)  "Special assessment" means any assessment levied

  2  against unit owners other than the assessment required by a

  3  budget adopted annually.

  4         (25)  "Voting certificate" means a document which

  5  designates one of the record title owners, or the corporate,

  6  partnership, or entity representative who is authorized to

  7  vote on behalf of a cooperative unit that is owned by more

  8  than one owner or by any entity.

  9         (26)  "Voting interests" means the voting rights

10  distributed to the association members as provided for in the

11  Articles of Incorporation.

12         Section 3.  Section 719.1035, Florida Statutes, 1998

13  Supplement, is amended to read:

14         719.1035  Creation of cooperatives.--

15         (1)  The date when cooperative existence shall commence

16  is upon commencement of corporate existence of the cooperative

17  association as provided in s. 607.0203.  The cooperative

18  documents must be recorded in the county in which the

19  cooperative is located before property may be conveyed or

20  transferred to the cooperative.  All persons who have any

21  record interest in any mortgage encumbering the interest in

22  the land being submitted to cooperative ownership must either

23  join in the execution of the cooperative documents or execute,

24  with the requirements for deed, and record, a consent to the

25  cooperative documents or an agreement subordinating their

26  mortgage interest to the cooperative documents. Upon creation

27  of a cooperative, the developer or association shall file the

28  recording information with the division within 30 working days

29  on a form prescribed by the division.

30

31

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1         (2)  All provisions of the cooperative documents are

  2  enforceable equitable servitudes, run with the land, and are

  3  effective until the cooperative is terminated.

  4         Section 4.  Subsection (7) of section 719.104, Florida

  5  Statutes, 1998 Supplement, is amended, present subsection (9)

  6  is renumbered as subsection (10), and a new subsection (9) is

  7  added to said section to read:

  8         719.104  Cooperatives; access to units; records;

  9  financial reports; assessments; purchase of leases.--

10         (7)  COMMINGLING.--All funds shall be maintained

11  separately in the association's name.  Reserve and operating

12  funds of the association shall not be commingled unless

13  combined for investment purposes. This subsection is not meant

14  to prohibit prudent investment of association funds even if

15  combined with operating or other reserve funds of the same

16  association, but such funds must be accounted for separately,

17  and the combined account balance may not, at any time, be less

18  than the amount identified as reserve funds in the combined

19  account. No manager or business entity required to be licensed

20  or registered under s. 468.432, or an agent, employee,

21  officer, or director of a cooperative association may

22  commingle any association funds with his or her own funds or

23  with the funds of any other cooperative association or

24  community association as defined in s. 468.431.

25         (9)  EASEMENTS.--Unless prohibited by the cooperative

26  documents, the board of administration has the authority,

27  without the joinder of any unit owner, to grant, modify, or

28  move any easement, if the easement constitutes part of or

29  crosses the common areas or association property. This

30  subsection does not authorize the board of administration to

31  modify, move, or vacate any easement created in whole or in

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1  part for the use or benefit of anyone other than the unit

  2  owners, or crossing the property of anyone other than the unit

  3  owners, without the consent or approval of those other persons

  4  having the use or benefit of the easement, as required by law

  5  or by the instrument creating the easement.

  6         Section 5.  Subsections (2) and (3) of section

  7  719.1055, Florida Statutes, are amended and subsection (4) is

  8  added to said section to read:

  9         719.1055  Amendment of cooperative documents;

10  alteration and acquisition of property.--

11         (2)  Unless a lower number is provided in the

12  cooperative documents or unless such action is expressly

13  prohibited by the articles of incorporation or bylaws of the

14  cooperative, the acquisition of real property by the

15  association, and material alterations or substantial additions

16  to such property by the association shall not be deemed to

17  constitute a material alteration or modification of the

18  appurtenances to the unit if such action is approved by

19  two-thirds 75 percent of the total voting interests of the

20  cooperative.

21         (3)(a)  Unless other procedures are provided in the

22  cooperative documents or such action is expressly prohibited

23  by the articles of incorporation or bylaws of the cooperative,

24  the association may materially alter, convert, lease, or

25  modify the common areas of the mobile home cooperative if the

26  action is approved by two-thirds 75 percent of the total

27  voting interests of the cooperative.

28         (b)  The association may change the configuration or

29  size of a unit only if the action is approved by the affected

30  unit owners and by two-thirds 75 percent of the total voting

31  interests of the cooperative.

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1         (4)(a)  If the cooperative documents fail to provide a

  2  method of amendment, the documents may be amended as to all

  3  matters except those described in subsection (1) if the

  4  amendment is approved by the owners of not less than

  5  two-thirds of the units.

  6         (b)  No provision of the cooperative documents shall e

  7  revised or amended by reference to its title or number only.

  8  Proposals to amend existing provisions of the cooperative

  9  documents shall contain the full text of the provision to be

10  amended, new words shall be inserted in the text and

11  underlined, and words to be deleted shall be lined through

12  with hyphens. However, if the proposed change is so extensive

13  that this procedure would hinder, rather than assist, the

14  understanding of the proposed amendment, it is not necessary

15  to use underlining and hyphens as indicators of words added or

16  deleted, but instead, a notation must be inserted immediately

17  preceding the proposed amendment in substantially the

18  following language:  "Substantial rewording of document. See

19  provision     for present text."

20         (c)  Nonmaterial errors or omissions in the amendment

21  process will not invalidate an otherwise properly promulgated

22  amendment.

23         Section 6.  Paragraph (k) of subsection (1) of section

24  719.106, Florida Statutes, 1998 Supplement, is amended to

25  read:

26         719.106  Bylaws; cooperative ownership.--

27         (1)  MANDATORY PROVISIONS.--The bylaws or other

28  cooperative documents shall provide for the following, and if

29  they do not, they shall be deemed to include the following:

30         (k)  Insurance or fidelity bonds.--The association

31  shall obtain and maintain adequate insurance or provision for

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1  the fidelity bonding of all persons who control or disburse

  2  funds of the association. The insurance policy or fidelity

  3  bond must cover the maximum funds that will be in the custody

  4  of the association or its management agent at any one time. As

  5  used in this paragraph section, the term "persons who control

  6  or disburse funds of the association" includes, but is not

  7  limited to, means those individuals authorized to sign checks,

  8  and the president, secretary, and treasurer of the

  9  association.  If an association's annual gross receipts do not

10  exceed $100,000, the bond shall be in the principal sum of not

11  less than $10,000 for each such person. If an association's

12  annual gross receipts exceed $100,000 but do not exceed

13  $300,000, the bond shall be in the principal sum of $30,000

14  for each such person.  If an association's annual gross

15  receipts are greater than $300,000, the bond shall be in the

16  principal sum of not less than $50,000 for each such person.

17  The association shall bear the cost of bonding.

18         Section 7.  Section 719.115, Florida Statutes, is

19  created to read:

20         719.115  Limitation of liability.--

21         (1)  The liability of the owner of a unit for common

22  expenses is limited to the amounts for which he or she is

23  assessed for common expenses from time to time in accordance

24  with this chapter, the cooperative documents, and the bylaws.

25         (2)  The owner of a unit may be personally liable for

26  acts or omissions of the association in relation to the use of

27  the common areas, but only to the extent of his or her pro

28  rata share of the liability in the same percentage of his or

29  her designated portion of the common expenses and then in no

30  case shall the liability exceed the value of his or her unit.

31

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1         (3)  In any legal action in which the association may

  2  be exposed to liability in excess of insurance coverage

  3  protecting it and the unit owners, the association shall give

  4  notice of the exposure within a reasonable time to all unit

  5  owners and they shall have the right to intervene and defend.

  6         Section 8.  Section 719.116, Florida Statutes, is

  7  created to read:

  8         719.116  Cooperatives as residential property.--For

  9  purposes of property and casualty insurance risk

10  classification, cooperatives shall be classified as

11  residential property.

12         Section 9.  Paragraph (b) of subsection (2) and

13  subsection (5) of section 849.085, Florida Statutes, are

14  amended to read:

15         849.085  Certain penny-ante games not crimes;

16  restrictions.--

17         (2)  As used in this section:

18         (b)  "Dwelling" means residential premises owned or

19  rented by a participant in a penny-ante game and occupied by

20  such participant or the common elements or common recreational

21  areas of a condominium, cooperative, or mobile home park of

22  which a participant in a penny-ante game is a unit owner, or

23  the facilities of an organization which is tax exempt under s.

24  501(c)(7) of the Internal Revenue Code.  The term "dwelling"

25  also includes a college dormitory room or the common

26  recreational area of a college dormitory or a publicly owned

27  community center owned by a municipality or county.

28         (5)  The conduct of any penny-ante game within the

29  common elements or common recreation area of a condominium,

30  cooperative, or mobile home park or the conduct of any

31  penny-ante game within the dwelling of an eligible

                                  8

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1  organization as defined in subsection (2) or within a publicly

  2  owned community center owned by a municipality or county

  3  creates no civil liability for damages arising from the

  4  penny-ante game on the part of a condominium association,

  5  cooperative association, mobile home owner's association,

  6  dwelling owner, or municipality or county or on the part of a

  7  unit owner who was not a participant in the game.

  8         Section 10.  Subsection (4) of section 849.0931,

  9  Florida Statutes, is amended to read:

10         849.0931  Bingo authorized; conditions for conduct;

11  permitted uses of proceeds; limitations.--

12         (4)  The right of a condominium association, a

13  cooperative association, a mobile home owners' association, a

14  group of residents of a mobile home park as defined in chapter

15  723, or a group of residents of a mobile home park or

16  recreational vehicle park as defined in chapter 513 to conduct

17  bingo is conditioned upon the return of the net proceeds from

18  such games to players in the form of prizes after having

19  deducted the actual business expenses for such games for

20  articles designed for and essential to the operation, conduct,

21  and playing of bingo. Any net proceeds remaining after paying

22  prizes may be donated by the association to a charitable,

23  nonprofit, or veterans' organization which is exempt from

24  federal income tax under the provisions of s. 501(c) of the

25  Internal Revenue Code to be used in such recipient

26  organization's charitable, civic, community, benevolent,

27  religious, or scholastic works or similar activities or, in

28  the alternative, such remaining proceeds shall be used as

29  specified in subsection (3).

30         Section 11.  This act shall take effect upon becoming a

31  law.

                                  9

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                 HB 285

    704-100-99






  1            *****************************************

  2                          HOUSE SUMMARY

  3
      Redefines the term "homeowners' association" for the
  4    purposes of the Florida Not For Profit Corporation Act to
      include a mobile home subdivision.
  5

  6    Defines the terms "special assessment," "voting
      certificate," and "voting interests" for the purposes of
  7    the Cooperative Act. Provides that all provisions of the
      cooperative documents are enforceable equitable
  8    servitudes, run with the land, and are effective until
      the cooperative is terminated. Revises language with
  9    respect to cooperative associations to provide
      requirements concerning commingling and to provide for
10    easements. Revises the amount of votes necessary to amend
      the cooperative documents and to provide additional
11    requirements with respect to amendments to such
      documents. Provides requirements with respect to
12    insurance and fidelity bonds. Provides limitations on
      liability of unit owners. Provides that for the purposes
13    of property and casualty insurance risk classifications,
      cooperatives are classified as residential property.
14

15    Includes cooperatives within the provisions of law
      relating to penny-ante games and bingo. See bill for
16    details.

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

                                  10