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