House Bill hb1907
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Florida House of Representatives - 2001 HB 1907
By the Committee on Business Regulation and
Representatives Kyle, Gottlieb and Cantens
1 A bill to be entitled
2 An act relating to condominiums; amending s.
3 718.1255, F.S., relating to alternative dispute
4 resolution procedures; providing for the
5 expedited handling of any allegation of an
6 irregularity in the election of any director of
7 the board of administration of a condominium;
8 amending s. 702.09, F.S.; revising the
9 definitions of the terms "mortgage" and
10 "foreclosure proceedings"; amending s. 718.104,
11 F.S., revising language with respect to
12 declarations for the creation of a condominium;
13 amending s. 718.106, F.S.; revising language
14 with respect to appurtenances that pass with a
15 condominium unit; amending s. 718.110, F.S.;
16 revising language with respect to amendments to
17 a declaration of condominium; amending s.
18 718.111, F.S.; revising language with respect
19 to the association; amending s. 718.112, F.S.;
20 revising language with respect to bylaws;
21 amending s. 718.113, F.S.; revising language
22 with respect to material alterations of common
23 elements or association real property operated
24 by a multicondominium association; amending s.
25 718.115, F.S.; revising language with respect
26 to common expenses; amending s. 718.405, F.S.;
27 revising language with respect to
28 multicondominiums and multicondominium
29 associations; amending s. 718.503, F.S.,
30 relating to disclosure requirements for the
31 sale of certain condominiums; removing the
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1 requirement that question and answer sheets be
2 part of the closing documents; amending s.
3 718.504, F.S.; revising language with respect
4 to the prospectus or offering circular;
5 providing an effective date.
6
7 Be It Enacted by the Legislature of the State of Florida:
8
9 Section 1. Subsection (5) is added to section
10 718.1255, Florida Statutes, to read:
11 718.1255 Alternative dispute resolution; voluntary
12 mediation; mandatory nonbinding arbitration; disputes
13 involving election irregularities; legislative findings.--
14 (1) DEFINITIONS.--As used in this section, the term
15 "dispute" means any disagreement between two or more parties
16 that involves:
17 (a) The authority of the board of directors, under
18 this chapter or association document to:
19 1. Require any owner to take any action, or not to
20 take any action, involving that owner's unit or the
21 appurtenances thereto.
22 2. Alter or add to a common area or element.
23 (b) The failure of a governing body, when required by
24 this chapter or an association document, to:
25 1. Properly conduct elections.
26 2. Give adequate notice of meetings or other actions.
27 3. Properly conduct meetings.
28 4. Allow inspection of books and records.
29
30 "Dispute" does not include any disagreement that primarily
31 involves: title to any unit or common element; the
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1 interpretation or enforcement of any warranty; the levy of a
2 fee or assessment, or the collection of an assessment levied
3 against a party; the eviction or other removal of a tenant
4 from a unit; alleged breaches of fiduciary duty by one or more
5 directors; or claims for damages to a unit based upon the
6 alleged failure of the association to maintain the common
7 elements or condominium property.
8 (2) VOLUNTARY MEDIATION.--Voluntary mediation through
9 Citizen Dispute Settlement Centers as provided for in s.
10 44.201 is encouraged.
11 (3) LEGISLATIVE FINDINGS.--
12 (a) The Legislature finds that unit owners are
13 frequently at a disadvantage when litigating against an
14 association. Specifically, a condominium association, with its
15 statutory assessment authority, is often more able to bear the
16 costs and expenses of litigation than the unit owner who must
17 rely on his or her own financial resources to satisfy the
18 costs of litigation against the association.
19 (b) The Legislature finds that the courts are becoming
20 overcrowded with condominium and other disputes, and further
21 finds that alternative dispute resolution has been making
22 progress in reducing court dockets and trials and in offering
23 a more efficient, cost-effective option to court litigation.
24 However, the Legislature also finds that alternative dispute
25 resolution should not be used as a mechanism to encourage the
26 filing of frivolous or nuisance suits.
27 (c) There exists a need to develop a flexible means of
28 alternative dispute resolution that directs disputes to the
29 most efficient means of resolution.
30 (d) The high cost and significant delay of circuit
31 court litigation faced by unit owners in the state can be
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1 alleviated by requiring nonbinding arbitration and mediation
2 in appropriate cases, thereby reducing delay and attorney's
3 fees while preserving the right of either party to have its
4 case heard by a jury, if applicable, in a court of law.
5 (4) MANDATORY NONBINDING ARBITRATION AND MEDIATION OF
6 DISPUTES.--The Division of Florida Land Sales, Condominiums,
7 and Mobile Homes of the Department of Business and
8 Professional Regulation shall employ full-time attorneys to
9 act as arbitrators to conduct the arbitration hearings
10 provided by this chapter. The division may also certify
11 attorneys who are not employed by the division to act as
12 arbitrators to conduct the arbitration hearings provided by
13 this section. No person may be employed by the department as a
14 full-time arbitrator unless he or she is a member in good
15 standing of The Florida Bar. The department shall promulgate
16 rules of procedure to govern such arbitration hearings
17 including mediation incident thereto. The decision of an
18 arbitrator shall be final; however, such a decision shall not
19 be deemed final agency action. Nothing in this provision shall
20 be construed to foreclose parties from proceeding in a trial
21 de novo unless the parties have agreed that the arbitration is
22 binding. If such judicial proceedings are initiated, the final
23 decision of the arbitrator shall be admissible in evidence in
24 the trial de novo.
25 (a) Prior to the institution of court litigation, a
26 party to a dispute shall petition the division for nonbinding
27 arbitration. The petition must be accompanied by a filing fee
28 in the amount of $50. Filing fees collected under this
29 section must be used to defray the expenses of the alternative
30 dispute resolution program.
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1 (b) The petition must recite, and have attached
2 thereto, supporting proof that the petitioner gave the
3 respondents:
4 1. Advance written notice of the specific nature of
5 the dispute;
6 2. A demand for relief, and a reasonable opportunity
7 to comply or to provide the relief; and
8 3. Notice of the intention to file an arbitration
9 petition or other legal action in the absence of a resolution
10 of the dispute.
11
12 Failure to include the allegations or proof of compliance with
13 these prerequisites requires dismissal of the petition without
14 prejudice.
15 (c) Upon receipt, the petition shall be promptly
16 reviewed by the division to determine the existence of a
17 dispute and compliance with the requirements of paragraphs (a)
18 and (b). If emergency relief is required and is not available
19 through arbitration, a motion to stay the arbitration may be
20 filed. The motion must be accompanied by a verified petition
21 alleging facts that, if proven, would support entry of a
22 temporary injunction, and if an appropriate motion and
23 supporting papers are filed, the division may abate the
24 arbitration pending a court hearing and disposition of a
25 motion for temporary injunction.
26 (d) Upon determination by the division that a dispute
27 exists and that the petition substantially meets the
28 requirements of paragraphs (a) and (b) and any other
29 applicable rules, a copy of the petition shall forthwith be
30 served by the division upon all respondents.
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1 (e) Either before or after the filing of the
2 respondents' answer to the petition, any party may request
3 that the arbitrator refer the case to mediation under this
4 section and any rules adopted by the division. Upon receipt
5 of a request for mediation, the division shall promptly
6 contact the parties to determine if there is agreement that
7 mediation would be appropriate. If all parties agree, the
8 dispute must be referred to mediation. Notwithstanding a lack
9 of an agreement by all parties, the arbitrator may refer a
10 dispute to mediation at any time.
11 (f) Upon referral of a case to mediation, the parties
12 must select a mutually acceptable mediator. To assist in the
13 selection, the arbitrator shall provide the parties with a
14 list of both volunteer and paid mediators that have been
15 certified by the division under s. 718.501. If the parties
16 are unable to agree on a mediator within the time allowed by
17 the arbitrator, the arbitrator shall appoint a mediator from
18 the list of certified mediators. If a case is referred to
19 mediation, the parties shall attend a mediation conference, as
20 scheduled by the parties and the mediator. If any party fails
21 to attend a duly noticed mediation conference, without the
22 permission or approval of the arbitrator or mediator, the
23 arbitrator must impose sanctions against the party, including
24 the striking of any pleadings filed, the entry of an order of
25 dismissal or default if appropriate, and the award of costs
26 and attorneys' fees incurred by the other parties. Unless
27 otherwise agreed to by the parties or as provided by order of
28 the arbitrator, a party is deemed to have appeared at a
29 mediation conference by the physical presence of the party or
30 its representative having full authority to settle without
31 further consultation, provided that an association may comply
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1 by having one or more representatives present with full
2 authority to negotiate a settlement and recommend that the
3 board of administration ratify and approve such a settlement
4 within 5 days from the date of the mediation conference. The
5 parties shall share equally the expense of mediation, unless
6 they agree otherwise.
7 (g) The purpose of mediation as provided for by this
8 section is to present the parties with an opportunity to
9 resolve the underlying dispute in good faith, and with a
10 minimum expenditure of time and resources.
11 (h) Mediation proceedings must generally be conducted
12 in accordance with the Florida Rules of Civil Procedure, and
13 these proceedings are privileged and confidential to the same
14 extent as court-ordered mediation. Persons who are not parties
15 to the dispute are not allowed to attend the mediation
16 conference without the consent of all parties, with the
17 exception of counsel for the parties and corporate
18 representatives designated to appear for a party. If the
19 mediator declares an impasse after a mediation conference has
20 been held, the arbitration proceeding terminates, unless all
21 parties agree in writing to continue the arbitration
22 proceeding, in which case the arbitrator's decision shall be
23 either binding or nonbinding, as agreed upon by the parties;
24 in the arbitration proceeding, the arbitrator shall not
25 consider any evidence relating to the unsuccessful mediation
26 except in a proceeding to impose sanctions for failure to
27 appear at the mediation conference. If the parties do not
28 agree to continue arbitration, the arbitrator shall enter an
29 order of dismissal, and either party may institute a suit in a
30 court of competent jurisdiction. The parties may seek to
31 recover any costs and attorneys' fees incurred in connection
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1 with arbitration and mediation proceedings under this section
2 as part of the costs and fees that may be recovered by the
3 prevailing party in any subsequent litigation.
4 (i) Arbitration shall be conducted according to rules
5 promulgated by the division. The filing of a petition for
6 arbitration shall toll the applicable statute of limitations.
7 (j) At the request of any party to the arbitration,
8 such arbitrator shall issue subpoenas for the attendance of
9 witnesses and the production of books, records, documents, and
10 other evidence and any party on whose behalf a subpoena is
11 issued may apply to the court for orders compelling such
12 attendance and production. Subpoenas shall be served and shall
13 be enforceable in the manner provided by the Florida Rules of
14 Civil Procedure. Discovery may, in the discretion of the
15 arbitrator, be permitted in the manner provided by the Florida
16 Rules of Civil Procedure. Rules adopted by the division may
17 authorize any reasonable sanctions except contempt for a
18 violation of the arbitration procedural rules of the division
19 or for the failure of a party to comply with a reasonable
20 nonfinal order issued by an arbitrator which is not under
21 judicial review.
22 (k) The arbitration decision shall be presented to the
23 parties in writing. An arbitration decision is final in those
24 disputes in which the parties have agreed to be bound. An
25 arbitration decision is also final if a complaint for a trial
26 de novo is not filed in a court of competent jurisdiction in
27 which the condominium is located within 30 days. The right to
28 file for a trial de novo entitles the parties to file a
29 complaint in the appropriate trial court for a judicial
30 resolution of the dispute. The prevailing party in an
31 arbitration proceeding shall be awarded the costs of the
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1 arbitration and reasonable attorney's fees in an amount
2 determined by the arbitrator. Such an award shall include the
3 costs and reasonable attorney's fees incurred in the
4 arbitration proceeding as well as the costs and reasonable
5 attorney's fees incurred in preparing for and attending any
6 scheduled mediation.
7 (l) The party who files a complaint for a trial de
8 novo shall be assessed the other party's arbitration costs,
9 court costs, and other reasonable costs, including attorney's
10 fees, investigation expenses, and expenses for expert or other
11 testimony or evidence incurred after the arbitration hearing
12 if the judgment upon the trial de novo is not more favorable
13 than the arbitration decision. If the judgment is more
14 favorable, the party who filed a complaint for trial de novo
15 shall be awarded reasonable court costs and attorney's fees.
16 (m) Any party to an arbitration proceeding may enforce
17 an arbitration award by filing a petition in a court of
18 competent jurisdiction in which the condominium is located. A
19 petition may not be granted unless the time for appeal by the
20 filing of a complaint for trial de novo has expired. If a
21 complaint for a trial de novo has been filed, a petition may
22 not be granted with respect to an arbitration award that has
23 been stayed. If the petition for enforcement is granted, the
24 petitioner shall recover reasonable attorney's fees and costs
25 incurred in enforcing the arbitration award. A mediation
26 settlement may also be enforced through the county or circuit
27 court, as applicable, and any costs and fees incurred in the
28 enforcement of a settlement agreement reached at mediation
29 must be awarded to the prevailing party in any enforcement
30 action.
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1 (5) DISPUTES INVOLVING ELECTION IRREGULARITIES.--Every
2 arbitration petition received by the division and required to
3 be filed under this section challenging the legality of the
4 election of any director of the board of administration shall
5 be handled on an expedited basis in the manner provided by
6 division rules for recall arbitration disputes.
7 Section 2. Section 702.09, Florida Statutes, is
8 amended to read:
9 702.09 Definitions.--For the purposes of ss. 702.07
10 and 702.08 the words "decree of foreclosure" shall include a
11 judgment or order rendered or passed in the foreclosure
12 proceedings in which the decree of foreclosure shall be
13 rescinded, vacated, and set aside; the word "mortgage" shall
14 mean any written instrument securing the payment of money or
15 advances and shall include liens to secure payment of
16 assessments arising under chapters 718, 719, and 720; the word
17 "debt" shall include promissory notes, bonds, and all other
18 written obligations given for the payment of money; the words
19 "foreclosure proceedings" shall embrace every action in the
20 circuit or county courts of this state wherein it is sought to
21 foreclose a mortgage and sell the property covered by the
22 same; and the word "property" shall mean and include both real
23 and personal property.
24 Section 3. Paragraph (h) of subsection (4) and
25 subsection (5) of section 718.104, Florida Statutes, are
26 amended to read:
27 718.104 Creation of condominiums; contents of
28 declaration.--Every condominium created in this state shall be
29 created pursuant to this chapter.
30 (4) The declaration must contain or provide for the
31 following matters:
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1 (h) If a developer reserves the right, in a
2 declaration recorded on or after July 1, 2000, to create a
3 multicondominium, the declaration must state, or provide a
4 specific formula for determining, the fractional or percentage
5 shares of liability for the common expenses of the association
6 and of ownership of the common surplus of the association to
7 be allocated to the units in each condominium to be operated
8 by the association. If a the declaration recorded on or after
9 July 1, 2000, for a condominium operated by a multicondominium
10 association, as originally recorded, fails to so provide, the
11 share of liability for the common expenses of the association
12 and of ownership of the common surplus of the association
13 allocated to each unit in each condominium operated by the
14 association shall be a fraction of the whole, the numerator of
15 which is the number "one" and the denominator of which is the
16 total number of units in all condominiums operated by the
17 association.
18 (5) The declaration as originally recorded, or as
19 amended pursuant to the procedures provided therein, may
20 include covenants and restrictions concerning the use,
21 occupancy, and transfer of the units permitted by law with
22 reference to real property. With the exception of amendments
23 that materially modify unit appurtenances as provided in s.
24 718.110(4), amendments may be applied to owners of units
25 existing as of the effective date of the amendment. This
26 section is intended to clarify existing law and applies to
27 associations existing on the effective date of this act.
28 However, the rule against perpetuities shall not defeat a
29 right given any person or entity by the declaration for the
30 purpose of allowing unit owners to retain reasonable control
31 over the use, occupancy, and transfer of units.
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1 Section 4. Paragraph (b) of subsection (2) of section
2 718.106, Florida Statutes, is amended to read:
3 718.106 Condominium parcels; appurtenances; possession
4 and enjoyment.--
5 (2) There shall pass with a unit, as appurtenances
6 thereto:
7 (b) The exclusive right to use such portion of the
8 common elements as may be provided by the declaration,
9 including the right to transfer such right to other units or
10 unit owners to the extent authorized by the declaration as
11 originally recorded, or amendments to the declaration adopted
12 pursuant to the provisions contained therein under s.
13 718.110(2). Amendments to declarations of condominium
14 providing for the transfer of use rights with respect to
15 limited common elements are not amendments which materially
16 modify unit appurtenances as described in s. 718.110(4).
17 However, in order to be effective, the transfer of use rights
18 with respect to limited common elements must be effectuated in
19 conformity with the procedures set forth in the declaration as
20 originally recorded or as amended. Further, such transfers
21 must be evidenced by a written instrument which must be
22 executed with the formalities of a deed and recorded in the
23 land records of the county in which the condominium is located
24 in order to be effective. Such instrument of transfer must
25 also specify the legal description of the unit which is
26 transferring use rights, as well as the legal description of
27 the unit obtaining the transfer of such rights. This section
28 is intended to clarify existing law and applies to
29 associations existing on the effective date of this act.
30 Section 5. Subsection (4) of section 718.110, Florida
31 Statutes, is amended to read:
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1 718.110 Amendment of declaration; correction of error
2 or omission in declaration by circuit court.--
3 (4) Unless otherwise provided in the declaration as
4 originally recorded, no amendment may change the configuration
5 or size of any unit in any material fashion, materially alter
6 or modify the appurtenances to the unit, or change the
7 proportion or percentage by which the unit owner shares the
8 common expenses of the condominium and owns the common surplus
9 of the condominium unless the record owner of the unit and all
10 record owners of liens on the unit join in the execution of
11 the amendment and unless all the record owners of all other
12 units in the same condominium approve the amendment. The
13 acquisition of property by the association, and material
14 alterations or substantial additions to such property or the
15 common elements by the association in accordance with s.
16 718.111(7) or s. 718.113, amendments providing for the
17 transfer of use rights in limited common elements pursuant to
18 s. 718.106(2)(b), and amendments restricting or modifying the
19 right to lease condominium units shall not be deemed to
20 constitute a material alteration or modification of the
21 appurtenances to the units. With the exception of amendments
22 that materially modify unit appurtenances as provided in this
23 section, amendments may be applied to owners of units existing
24 as of the effective date of the amendment. This section is
25 intended to clarify existing law and applies to associations
26 existing on the effective date of this act. A declaration
27 recorded after April 1, 1992, may not require the approval of
28 less than a majority of total voting interests of the
29 condominium for amendments under this subsection, unless
30 otherwise required by a governmental entity.
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1 Section 6. Subsection (4), paragraph (a) of subsection
2 (7), and subsection (13) of section 718.111, Florida Statutes,
3 are amended to read:
4 718.111 The association.--
5 (4) ASSESSMENTS; MANAGEMENT OF COMMON ELEMENTS.--The
6 association has the power to make and collect assessments and
7 to lease, maintain, repair, and replace the common elements or
8 association property; however, the association may not charge
9 a use fee against a unit owner for the use of common elements
10 or association property unless otherwise provided for in the
11 declaration of condominium or by a majority vote of the
12 association or unless the charges relate to expenses incurred
13 by an owner having exclusive use of the common elements or
14 association property.
15 (7) TITLE TO PROPERTY.--
16 (a) The association has the power to acquire title to
17 property or otherwise hold, convey, lease, and mortgage
18 association property for the use and benefit of its members.
19 The power to acquire personal property shall be exercised by
20 the board of administration. Except as otherwise permitted in
21 subsections (8) and (9) and in s. 718.114, no association may
22 acquire, convey, lease, or mortgage association real property
23 except in the manner provided in the declaration, and if the
24 declaration does not specify the procedure, then approval of
25 75 percent of the total voting interests shall be required.
26 (13) FINANCIAL REPORTING.--Within 90 days after the
27 end of the fiscal year, or annually on a date provided in the
28 bylaws, the association shall prepare and complete, or
29 contract for the preparation and completion of cause to be
30 prepared and completed by a third party, a financial report
31 for the preceding fiscal year. Within 21 days after the final
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1 financial report is completed by the association or received
2 by the association from the third party, but in no event later
3 than 120 days after the end of the fiscal year, or such other
4 date as is provided in the bylaws, the association shall mail
5 to each unit owner at the address last furnished to the
6 association by the unit owner, or hand deliver to each unit
7 owner, a copy of the financial report or a notice that a copy
8 of the financial report will be mailed or hand delivered to
9 the unit owner, without charge, upon receipt of a written
10 request from the unit owner. The division shall adopt rules
11 setting forth uniform accounting principles and standards to
12 be used by all associations and shall adopt rules addressing
13 financial reporting requirements for multicondominium
14 associations. In adopting such rules, the division shall
15 consider the number of members and annual revenues of an
16 association. Financial reports shall be prepared as follows:
17 (a) An association that meets the criteria of this
18 paragraph shall prepare or cause to be prepared a complete set
19 of financial statements in accordance with generally accepted
20 accounting principles. The financial statements shall be
21 based upon the association's total annual revenues, as
22 follows:
23 1. An association with total annual revenues of
24 $100,000 or more, but less than $200,000, shall prepare
25 compiled financial statements.
26 2. An association with total annual revenues of at
27 least $200,000, but less than $400,000, shall prepare reviewed
28 financial statements.
29 3. An association with total annual revenues of
30 $400,000 or more shall prepare audited financial statements.
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1 (b)1. An association with total annual revenues of
2 less than $100,000 shall prepare a report of cash receipts and
3 expenditures.
4 2. An association which operates less than 50 units,
5 regardless of the association's annual revenues, shall prepare
6 a report of cash receipts and expenditures in lieu of
7 financial statements required by paragraph (a).
8 3. A report of cash receipts and disbursements must
9 disclose the amount of receipts by accounts and receipt
10 classifications and the amount of expenses by accounts and
11 expense classifications, including, but not limited to, the
12 following, as applicable: costs for security, professional and
13 management fees and expenses, taxes, costs for recreation
14 facilities, expenses for refuse collection and utility
15 services, expenses for lawn care, costs for building
16 maintenance and repair, insurance costs, administration and
17 salary expenses, and reserves accumulated and expended for
18 capital expenditures, deferred maintenance, and any other
19 category for which the association maintains reserves.
20 (c) An association may prepare or cause to be
21 prepared, without a meeting of or approval by the unit owners:
22 1. Compiled, reviewed, or audited financial
23 statements, if the association is required to prepare a report
24 of cash receipts and expenditures;
25 2. Reviewed or audited financial statements, if the
26 association is required to prepare compiled financial
27 statements; or
28 3. Audited financial statements if the association is
29 required to prepare reviewed financial statements.
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1 (d) If approved by a majority of the voting interests
2 present at a properly called meeting of the association, an
3 association may prepare or cause to be prepared:
4 1. A report of cash receipts and expenditures in lieu
5 of a compiled, reviewed, or audited financial statement;
6 2. A report of cash receipts and expenditures or a
7 compiled financial statement in lieu of a reviewed or audited
8 financial statement; or
9 3. A report of cash receipts and expenditures, a
10 compiled financial statement, or a reviewed financial
11 statement in lieu of an audited financial statement.
12
13 Such meeting and approval must occur prior to the end of the
14 fiscal year and is effective only for the fiscal year in which
15 the vote is taken. With respect to an association to which the
16 developer has not turned over control of the association, all
17 unit owners, including the developer, may vote on issues
18 related to the preparation of financial reports for the first
19 2 fiscal years of the association's operation, beginning with
20 the fiscal year in which the declaration is recorded.
21 Thereafter, all unit owners except the developer may vote on
22 such issues until control is turned over to the association by
23 the developer.
24 Section 7. Subsection (3) of section 718.112, Florida
25 Statutes, is amended to read:
26 718.112 Bylaws.--
27 (3) OPTIONAL PROVISIONS.--The bylaws as originally
28 recorded, or as amended pursuant to the procedure provided
29 therein, may provide for the following:
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1 (a) A method of adopting and amending administrative
2 rules and regulations governing the details of the operation
3 and use of the common elements.
4 (b) Restrictions on and requirements for the use,
5 maintenance, and appearance of the units and the use of the
6 common elements.
7 (c) Other provisions which are not inconsistent with
8 this chapter or with the declaration, as may be desired. This
9 subsection is intended to clarify existing law and applies to
10 associations existing on the effective date of this act.
11 Section 8. Subsection (2) of section 718.113, Florida
12 Statutes, is amended to read:
13 718.113 Maintenance; limitation upon improvement;
14 display of flag; hurricane shutters.--
15 (2)(a) Except as otherwise provided in this section,
16 there shall be no material alteration or substantial additions
17 to the common elements or to real property which is
18 association property, except in a manner provided in the
19 declaration. If the declaration does not specify the
20 procedure for approval of material alterations or substantial
21 additions, 75 percent of the total voting interests of the
22 association must approve the alterations or additions.
23 (b) There shall not be any material alteration of, or
24 substantial addition to, the common elements of any
25 condominium operated by a multicondominium association unless
26 approved in the manner provided in the declaration of the
27 affected condominium or condominiums as originally recorded,
28 or as amended pursuant to the procedures provided therein. If
29 a declaration as originally recorded or amended does not
30 specify a procedure for approving such an alteration or
31 addition, the approval of 75 percent of the total voting
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1 interests of each affected condominium is required. This
2 subsection does not prohibit a provision in any declaration,
3 articles of incorporation, or bylaws as originally recorded or
4 amended requiring the approval of unit owners in any
5 condominium operated by the same association or requiring
6 board approval before a material alteration or substantial
7 addition to the common elements is permitted. This paragraph
8 is intended to clarify existing law and applies to
9 associations existing on the effective date of this act.
10 (c) There shall not be any material alteration or
11 substantial addition made to association real property
12 operated by a multicondominium association, except as provided
13 in the declaration, articles of incorporation, or bylaws as
14 said documents are originally recorded or amended pursuant to
15 the procedures provided therein. If the declaration, articles
16 of incorporation, or bylaws do not specify the procedure for
17 approving an alteration or addition to association real
18 property, the approval of 75 percent of the total voting
19 interests of the association is required. This paragraph is
20 intended to clarify existing law and applies to associations
21 existing on the effective date of this act.
22 Section 9. Paragraphs (b) and (c) of subsection (1) of
23 section 718.115, Florida Statutes, are amended to read:
24 718.115 Common expenses and common surplus.--
25 (1)
26 (b) The common expenses of a condominium within a
27 multicondominium are the common expenses directly attributable
28 to the operation of that condominium. The common expenses of a
29 multicondominium association do not include the common
30 expenses directly attributable to the operation of any
31 specific condominium or condominiums within the
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1 multicondominium. This paragraph is intended to clarify
2 existing law and applies to associations existing on the
3 effective date of this act.
4 (c) The common expenses of a multicondominium
5 association may include categories of expenses related to the
6 property or common elements within a specific condominium in
7 the multicondominium if such property or common elements are
8 areas in which all members of the multicondominium association
9 have use rights or from which all members receive tangible
10 economic benefits. Such common expenses of the association
11 shall be identified in the declaration or bylaws of each
12 condominium within the multicondominium association. This
13 paragraph is intended to clarify existing law and applies to
14 associations existing on the effective date of this act.
15 Section 10. Subsections (1) and (4) of section
16 718.405, Florida Statutes, are amended to read:
17 718.405 Multicondominiums; multicondominium
18 associations.--
19 (1) An association may operate more than one
20 condominium. For multicondominiums created on or after July 1,
21 2000, if the declaration for each condominium to be operated
22 by that association shall provide provides for participation
23 in a multicondominium, in conformity with this section, and
24 disclose discloses or describe describes:
25 (a) The manner or formula by which the assets,
26 liabilities, common surplus, and common expenses of the
27 association will be apportioned among the units within the
28 condominiums operated by the association, in accordance with
29 s. 718.104(4)(g) or (h), as applicable.
30 (b) Whether unit owners in any other condominium, or
31 any other persons, will or may have the right to use
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1 recreational areas or any other facilities or amenities that
2 are common elements of the condominium, and, if so, the
3 specific formula by which the other users will share the
4 common expenses related to those facilities or amenities.
5 (c) Recreational and other commonly used facilities or
6 amenities which the developer has committed to provide that
7 will be owned, leased by, or dedicated by a recorded plat to
8 the association but which are not included within any
9 condominium operated by the association. The developer may
10 reserve the right to add additional facilities or amenities if
11 the declaration and prospectus for each condominium to be
12 operated by the association contains the following statement
13 in conspicuous type and in substantially the following form:
14 RECREATIONAL FACILITIES MAY BE EXPANDED OR ADDED WITHOUT
15 CONSENT OF UNIT OWNERS OR THE ASSOCIATION.
16 (d) The voting rights of the unit owners in the
17 election of directors and in other multicondominium
18 association affairs when a vote of the owners is taken,
19 including, but not limited to, a statement as to whether each
20 unit owner will have a right to personally cast his or her own
21 vote in all matters voted upon.
22 (4) This section does not prevent or restrict the
23 formation of a multicondominium by the merger or consolidation
24 of two or more condominium associations. Mergers or
25 consolidations of associations shall be accomplished in
26 accordance with this chapter, the declarations of the
27 condominiums being merged or consolidated, and chapter 617.
28 Section 718.110(4) does not apply to amendments to
29 declarations necessary to effect a merger or consolidation.
30 This section is intended to clarify existing law and applies
31 to associations existing on the effective date of this act.
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1 Section 11. Subsection (2) of section 718.503, Florida
2 Statutes, is amended to read:
3 718.503 Developer disclosure prior to sale;
4 nondeveloper unit owner disclosure prior to sale;
5 voidability.--
6 (2) NONDEVELOPER DISCLOSURE.--
7 (a) Each unit owner who is not a developer as defined
8 by this chapter shall comply with the provisions of this
9 subsection prior to the sale of his or her unit. Each
10 prospective purchaser who has entered into a contract for the
11 purchase of a condominium unit is entitled, at the seller's
12 expense, to a current copy of the declaration of condominium,
13 articles of incorporation of the association, bylaws, and
14 rules of the association, as well as a copy of the question
15 and answer sheet provided for by s. 718.504 and a copy of the
16 financial information required by s. 718.111.
17 (b) If a person licensed under part I of chapter 475
18 provides to or otherwise obtains for a prospective purchaser
19 the documents described in this subsection, the person is not
20 liable for any error or inaccuracy contained in the documents.
21 (c) Each contract entered into after July 1, 1992, for
22 the resale of a residential unit shall contain in conspicuous
23 type either:
24 1. A clause which states: THE BUYER HEREBY
25 ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF
26 THE DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION OF
27 THE ASSOCIATION, BYLAWS, RULES OF THE ASSOCIATION, AND A COPY
28 OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND THE
29 QUESTION AND ANSWER SHEET MORE THAN 3 DAYS, EXCLUDING
30 SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO EXECUTION OF
31 THIS CONTRACT; or
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1 2. A clause which states: THIS AGREEMENT IS VOIDABLE
2 BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION
3 TO CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND
4 LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT
5 BY THE BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE
6 DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION, BYLAWS,
7 AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT
8 YEAR-END FINANCIAL INFORMATION AND QUESTION AND ANSWER SHEET
9 IF SO REQUESTED IN WRITING. ANY PURPORTED WAIVER OF THESE
10 VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND
11 THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3 DAYS,
12 EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE
13 BUYER RECEIVES THE DECLARATION, ARTICLES OF INCORPORATION,
14 BYLAWS, AND RULES, AND QUESTION AND ANSWER SHEET IF REQUESTED
15 IN WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL
16 TERMINATE AT CLOSING.
17
18 A contract that does not conform to the requirements of this
19 paragraph is voidable at the option of the purchaser prior to
20 closing.
21 Section 12. Subsection (15) of section 718.504,
22 Florida Statutes, is amended to read:
23 718.504 Prospectus or offering circular.--Every
24 developer of a residential condominium which contains more
25 than 20 residential units, or which is part of a group of
26 residential condominiums which will be served by property to
27 be used in common by unit owners of more than 20 residential
28 units, shall prepare a prospectus or offering circular and
29 file it with the Division of Florida Land Sales, Condominiums,
30 and Mobile Homes prior to entering into an enforceable
31 contract of purchase and sale of any unit or lease of a unit
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1 for more than 5 years and shall furnish a copy of the
2 prospectus or offering circular to each buyer. In addition to
3 the prospectus or offering circular, each buyer shall be
4 furnished a separate page entitled "Frequently Asked Questions
5 and Answers," which shall be in accordance with a format
6 approved by the division and a copy of the financial
7 information required by s. 718.111. This page shall, in
8 readable language, inform prospective purchasers regarding
9 their voting rights and unit use restrictions, including
10 restrictions on the leasing of a unit; shall indicate whether
11 and in what amount the unit owners or the association is
12 obligated to pay rent or land use fees for recreational or
13 other commonly used facilities; shall contain a statement
14 identifying that amount of assessment which, pursuant to the
15 budget, would be levied upon each unit type, exclusive of any
16 special assessments, and which shall further identify the
17 basis upon which assessments are levied, whether monthly,
18 quarterly, or otherwise; shall state and identify any court
19 cases in which the association is currently a party of record
20 in which the association may face liability in excess of
21 $100,000; and which shall further state whether membership in
22 a recreational facilities association is mandatory, and if so,
23 shall identify the fees currently charged per unit type. The
24 division shall by rule require such other disclosure as in its
25 judgment will assist prospective purchasers. The prospectus or
26 offering circular may include more than one condominium,
27 although not all such units are being offered for sale as of
28 the date of the prospectus or offering circular. The
29 prospectus or offering circular must contain the following
30 information:
31
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1 (15) If a the condominium created on or after July 1,
2 2000, is or may become part of a multicondominium, the
3 following information must be provided:
4 (a) A statement in conspicuous type in substantially
5 the following form: THIS CONDOMINIUM IS (MAY BE) PART OF A
6 MULTICONDOMINIUM DEVELOPMENT IN WHICH OTHER CONDOMINIUMS WILL
7 (MAY) BE OPERATED BY THE SAME ASSOCIATION. Immediately
8 following this statement, the location in the prospectus or
9 offering circular and its exhibits where the multicondominium
10 aspects of the offering are described must be stated.
11 (b) A summary of the provisions in the declaration,
12 articles of incorporation, and bylaws which establish and
13 provide for the operation of the multicondominium, including a
14 statement as to whether unit owners in the condominium will
15 have the right to use recreational or other facilities located
16 or planned to be located in other condominiums operated by the
17 same association, and the manner of sharing the common
18 expenses related to such facilities.
19 (c) A statement of the minimum and maximum number of
20 condominiums, and the minimum and maximum number of units in
21 each of those condominiums, which will or may be operated by
22 the association, and the latest date by which the exact number
23 will be finally determined.
24 (d) A statement as to whether any of the condominiums
25 in the multicondominium may include units intended to be used
26 for nonresidential purposes and the purpose or purposes
27 permitted for such use.
28 (e) A general description of the location and
29 approximate acreage of any land on which any additional
30 condominiums to be operated by the association may be located.
31 Section 13. This act shall take effect July 1, 2001.
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1 *****************************************
2 HOUSE SUMMARY
3
Revises provisions of law with respect to condominiums
4 to:
1. Provide for the expedited handling of any
5 allegation of an irregularity in the election of any
director of the board of administration.
6 2. Provide for the application of amendments to
condominium bylaws, declaration, and other documents
7 affecting unit owners.
3. Revise language with respect to disclosure
8 requirements for the sale of described condominiums to
remove the requirement that question and answer sheets be
9 part of the closing documents.
10 See bill for details.
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