House Bill 0383

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    Florida House of Representatives - 1999                 HB 383

        By Representatives Goodlette, Brown, Fasano, Merchant,
    Jones, Fiorentino, Warner, Cosgrove, Bilirakis, Sublette, Gay,
    Posey, Waters, Ogles, Hafner, Kelly, Farkas, Byrd and Edwards




  1                      A bill to be entitled

  2         An act relating to homeowners' associations and

  3         cooperatives; amending ss. 607.0802 and

  4         617.0802, F.S.; providing that certain persons

  5         may be deemed members of the association and

  6         eligible to serve as a director of a

  7         condominium association, cooperative

  8         association, homeowners' association, or mobile

  9         homeowners' association under certain

10         circumstances; amending s. 617.301, F.S.;

11         redefining the term "homeowners' association"

12         for the purposes of the Florida Not For Profit

13         Corporation Act to include a mobile home

14         subdivision; providing that provisions

15         currently governed by the act relating to the

16         purpose and scope of homeowners' associations,

17         powers and duties, right of owners to peaceably

18         assemble, meetings, transition of homeowners'

19         associations' control in a community,

20         assessments and charges, agreements,

21         recreational leaseholds, dispute resolutions,

22         and covenants would apply to mobile home

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

24         defining the terms "special assessment,"

25         "voting certificate," and "voting interests"

26         for the purposes of the Cooperative Act;

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

28         provisions of the cooperative documents are

29         enforceable equitable servitudes, run with the

30         land, and are effective until the cooperative

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

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  1         revising language with respect to commingling;

  2         providing for easements; amending s. 719.1055,

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

  4         amend the cooperative documents; providing

  5         additional requirements with respect to

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

  7         providing requirements with respect to

  8         insurance and fidelity bonds; creating s.

  9         719.115, F.S.; providing limitations on

10         liability of unit owners; creating s. 719.116,

11         F.S.; providing that cooperatives are

12         residential property for certain purposes;

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

14         including cooperatives within the provisions of

15         law relating to penny-ante games and bingo;

16         providing an effective date.

17

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

19

20         Section 1.  Section 607.0802, Florida Statutes, is

21  amended to read:

22         607.0802  Qualifications of directors.--

23         (1)  Directors must be natural persons who are 18 years

24  of age or older but need not be residents of this state or

25  shareholders of the corporation unless the articles of

26  incorporation or bylaws so require.  The articles of

27  incorporation or bylaws may prescribe additional

28  qualifications for directors.

29         (2)  In the event that the eligibility to serve as a

30  member of the board of directors of a condominium association,

31  cooperative association, homeowners' association, or mobile

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  1  homeowners' association is restricted to membership in such

  2  association and membership is appurtenant to ownership of a

  3  unit, parcel, or mobile home, a grantor of a trust described

  4  in s. 733.707(3), or if no grantor, a beneficiary as defined

  5  in s. 737.303(4)(b) of a trust which owns a unit, parcel, or

  6  mobile home shall be deemed a member of the association and

  7  eligible to serve as a director of the condominium

  8  association, cooperative association, homeowners' association,

  9  or mobile homeowners' association, provided that said

10  beneficiary occupies the unit, parcel, or mobile home.

11         Section 2.  Section 617.0802, Florida Statutes, is

12  amended to read:

13         617.0802  Qualifications of directors.--

14         (1)  Directors must be natural persons who are 18 years

15  of age or older but need not be residents of this state or

16  members of the corporation unless the articles of

17  incorporation or bylaws so require.  The articles of

18  incorporation or the bylaws may prescribe additional

19  qualifications for directors.

20         (2)  In the event that the eligibility to serve as a

21  member of the board of directors of a condominium association,

22  cooperative association, homeowners' association, or mobile

23  homeowners' association is restricted to membership in such

24  association and membership is appurtenant to ownership of a

25  unit, parcel, or mobile home, a grantor of a trust described

26  in s. 733.707(3), or if no grantor, a beneficiary as defined

27  in s. 737.303(4)(b) of a trust which owns a unit, parcel, or

28  mobile home shall be deemed a member of the association and

29  eligible to serve as a director of the condominium

30  association, cooperative association, homeowners' association,

31

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  1  or mobile homeowners' association, provided that said

  2  beneficiary occupies the unit, parcel, or mobile home.

  3         Section 3.  Subsection (7) of section 617.301, Florida

  4  Statutes, is amended to read:

  5         617.301  Homeowners' associations; definitions.--As

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

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

  8  Florida corporation responsible for the operation of a

  9  community or a mobile home subdivision in which the voting

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

11  combination thereof, and in which membership is a mandatory

12  condition of parcel ownership, and which is authorized to

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

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

15  community development district or other similar special taxing

16  district created pursuant to statute.

17         Section 4.  Subsections (22) and (23) of section

18  719.103, Florida Statutes, 1998 Supplement, are renumbered as

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

20  (22), (25), and (26) are added to said section to read:

21         719.103  Definitions.--As used in this chapter:

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

23  against unit owners other than the assessment required by a

24  budget adopted annually.

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

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

27  partnership, or entity representative who is authorized to

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

29  than one owner or by any entity.

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

  2  distributed to the association members as provided for in the

  3  Articles of Incorporation.

  4         Section 5.  Section 719.1035, Florida Statutes, 1998

  5  Supplement, is amended to read:

  6         719.1035  Creation of cooperatives.--

  7         (1)  The date when cooperative existence shall commence

  8  is upon commencement of corporate existence of the cooperative

  9  association as provided in s. 607.0203.  The cooperative

10  documents must be recorded in the county in which the

11  cooperative is located before property may be conveyed or

12  transferred to the cooperative.  All persons who have any

13  record interest in any mortgage encumbering the interest in

14  the land being submitted to cooperative ownership must either

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

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

17  cooperative documents or an agreement subordinating their

18  mortgage interest to the cooperative documents. Upon creation

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

20  recording information with the division within 30 working days

21  on a form prescribed by the division.

22         (2)  All provisions of the cooperative documents are

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

24  effective until the cooperative is terminated.

25         Section 6.  Subsection (7) of section 719.104, Florida

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

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

28  added to said section to read:

29         719.104  Cooperatives; access to units; records;

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

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

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

  3  funds of the association shall not be commingled unless

  4  combined for investment purposes. This subsection is not meant

  5  to prohibit prudent investment of association funds even if

  6  combined with operating or other reserve funds of the same

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

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

  9  than the amount identified as reserve funds in the combined

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

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

12  officer, or director of a cooperative association may

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

14  with the funds of any other cooperative association or

15  community association as defined in s. 468.431.

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

17  documents, the board of administration has the authority,

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

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

20  crosses the common areas or association property. This

21  subsection does not authorize the board of administration to

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

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

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

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

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

27  or by the instrument creating the easement.

28         Section 7.  Subsections (2) and (3) of section

29  719.1055, Florida Statutes, are amended and subsection (4) is

30  added to said section to read:

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  1         719.1055  Amendment of cooperative documents;

  2  alteration and acquisition of property.--

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

  4  cooperative documents or unless such action is expressly

  5  prohibited by the articles of incorporation or bylaws of the

  6  cooperative, the acquisition of real property by the

  7  association, and material alterations or substantial additions

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

  9  constitute a material alteration or modification of the

10  appurtenances to the unit if such action is approved by

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

12  cooperative.

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

14  cooperative documents or such action is expressly prohibited

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

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

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

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

19  voting interests of the cooperative.

20         (b)  The association may change the configuration or

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

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

23  interests of the cooperative.

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

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

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

27  amendment is approved by the owners of not less than

28  two-thirds of the units.

29         (b)  No provision of the cooperative documents shall be

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

31  Proposals to amend existing provisions of the cooperative

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

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

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

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

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

  6  understanding of the proposed amendment, it is not necessary

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

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

  9  preceding the proposed amendment in substantially the

10  following language:  "Substantial rewording of document. See

11  provision     for present text."

12         (c)  Nonmaterial errors or omissions in the amendment

13  process will not invalidate an otherwise properly promulgated

14  amendment.

15         Section 8.  Paragraph (k) of subsection (1) of section

16  719.106, Florida Statutes, 1998 Supplement, is amended to

17  read:

18         719.106  Bylaws; cooperative ownership.--

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

20  cooperative documents shall provide for the following, and if

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

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

23  shall obtain and maintain adequate insurance or provision for

24  the fidelity bonding of all persons who control or disburse

25  funds of the association. The insurance policy or fidelity

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

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

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

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

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

31  and the president, secretary, and treasurer of the

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

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

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

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

  5  $300,000, the bond shall be in the principal sum of $30,000

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

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

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

  9  The association shall bear the cost of bonding.

10         Section 9.  Section 719.115, Florida Statutes, is

11  created to read:

12         719.115  Limitation of liability.--

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

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

15  assessed for common expenses from time to time in accordance

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

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

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

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

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

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

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

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

24  be exposed to liability in excess of insurance coverage

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

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

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

28         Section 10.  Section 719.116, Florida Statutes, is

29  created to read:

30         719.116  Cooperatives as residential property.--For

31  purposes of property and casualty insurance risk

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  1  classification, cooperatives shall be classified as

  2  residential property.

  3         Section 11.  Paragraph (b) of subsection (2) and

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

  5  amended to read:

  6         849.085  Certain penny-ante games not crimes;

  7  restrictions.--

  8         (2)  As used in this section:

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

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

11  such participant or the common elements or common recreational

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

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

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

15  501(c)(7) of the Internal Revenue Code.  The term "dwelling"

16  also includes a college dormitory room or the common

17  recreational area of a college dormitory or a publicly owned

18  community center owned by a municipality or county.

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

20  common elements or common recreation area of a condominium,

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

22  penny-ante game within the dwelling of an eligible

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

24  owned community center owned by a municipality or county

25  creates no civil liability for damages arising from the

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

27  cooperative association, mobile home owner's association,

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

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

30         Section 12.  Subsection (4) of section 849.0931,

31  Florida Statutes, is amended to read:

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  1         849.0931  Bingo authorized; conditions for conduct;

  2  permitted uses of proceeds; limitations.--

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

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

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

  6  723, or a group of residents of a mobile home park or

  7  recreational vehicle park as defined in chapter 513 to conduct

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

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

10  deducted the actual business expenses for such games for

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

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

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

14  nonprofit, or veterans' organization which is exempt from

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

16  Internal Revenue Code to be used in such recipient

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

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

19  the alternative, such remaining proceeds shall be used as

20  specified in subsection (3).

21         Section 13.  This act shall take effect upon becoming a

22  law.

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

  2                          HOUSE SUMMARY

  3
      Provides that described persons shall be deemed a member
  4    of the association and eligible to serve as a director of
      the condominium association, cooperative association,
  5    homeowners' association, or mobile homeowners'
      association under certain circumstances.
  6

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

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

18
      Includes cooperatives within the provisions of law
19    relating to penny-ante games and bingo. See bill for
      details.
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