HB 7031

1	A bill to be entitled
2	An act relating to real property; amending s. 215.555,
3	F.S.; redefining the term "covered policy" for purposes of
4	the Florida Hurricane Catastrophe Fund to include
5	commercial self-insurance funds; amending s. 624.462,
6	F.S.; providing that any applicant or fund participant may
7	select an agent of choice without restriction by the fund;
8	providing that a commercial self-insurance fund shall be
9	an insurer for the purpose of assessments levied by the
10	Florida Hurricane Catastrophe Fund or Citizens Property
11	Insurance Group; requiring the office to establish the
12	method for determining the inputted premium that is
13	subject to assessment; amending s. 718.103, F.S.;
14	redefining the term "land"; amending s. 718.111, F.S.;
15	specifying that requirements relating to the acquisition
16	and maintenance of adequate insurance apply to all
17	residential condominiums; amending s. 718.115, F.S.;
18	providing that common expenses include the costs of
19	certain insurance or self-insurance; amending s. 718.116,
20	F.S.; requiring notice of special assessments for certain
21	insurance; amending s. 718.503, F.S.; requiring additional
22	disclosures in contracts for sale or lease of residential
23	units; requiring copies of budgets to be furnished to
24	buyers when a closing occurs more than 12 months after an
25	offering circular is filed with the state; amending s.
26	718.504, F.S.; requiring certain information relating to
27	the budget to be included in the offering circular;
28	requiring that an association budget be prepared in good
29	faith; amending s. 718.616, F.S.; requiring that certain
30	disclosures be compiled in a report; revising the items
31	required to be disclosed; requiring supplemental reports
32	in certain situations; amending s. 718.618, F.S.; revising
33	certain requirements for reserve accounts; revising the
34	method of computing the amounts required to fund
35	additional converter reserve accounts; deleting references
36	to specific items that are covered by an implied warranty
37	of fitness in the absence of reserve accounts; requiring
38	that a developer disclose in a contract of sale compliance
39	with certain obligations regarding the maintenance of
40	improvements; amending s. 719.104, F.S.; providing for
41	cooperative associations and similar organizations to
42	acquire and maintain windstorm insurance; amending s.
43	719.107, F.S.; providing that common expenses include
44	costs of certain insurance; amending s. 719.108, F.S.;
45	providing for notice of special assessments levied in
46	conjunction with certain insurance; amending s. 719.503,
47	F.S.; requiring additional disclosures in contracts for
48	sale or lease of residential units; requiring copies of
49	budgets to be furnished to buyers when a closing occurs
50	more than 12 months after an offering circular is filed
51	with the state; amending s. 719.504, F.S.; requiring
52	certain information relating to the budget to be included
53	in the offering circular; requiring that an association
54	budget be prepared in good faith; amending s. 720.303,
55	F.S.; providing for homeowners' associations to acquire
56	and maintain windstorm insurance; amending s. 720.308,
57	F.S.; providing for homeowners' associations to levy
58	assessments for insurance; providing an effective date.
59
60	Be It Enacted by the Legislature of the State of Florida:
61
62	Section 1.  Paragraph (c) of subsection (2) of section
63	215.555, Florida Statutes, as amended by section 2 of chapter
64	2007-1, Laws of Florida, is amended to read:
65	215.555  Florida Hurricane Catastrophe Fund.--
66	(2)  DEFINITIONS.--As used in this section:
67	(c)  "Covered policy" means any insurance policy covering
68	residential property in this state, including, but not limited
69	to, any homeowner's, mobile home owner's, farm owner's,
70	condominium association, condominium unit owner's, tenant's, or
71	apartment building policy, or any other policy covering a
72	residential structure or its contents issued by any authorized
73	insurer, including a commercial self-insurance fund holding a
74	certificate of authority issued by the Office of Insurance
75	Regulation under s. 624.462, the Citizens Property Insurance
76	Corporation, and any joint underwriting association or similar
77	entity created under pursuant to law. The term "covered policy"
78	includes any collateral protection insurance policy covering
79	personal residences which protects both the borrower's and the
80	lender's financial interests, in an amount at least equal to the
81	coverage for the dwelling in place under the lapsed homeowner's
82	policy, if such policy can be accurately reported as required in
83	subsection (5). Additionally, covered policies include policies
84	covering the peril of wind removed from the Florida Residential
85	Property and Casualty Joint Underwriting Association or from the
86	Citizens Property Insurance Corporation, created under pursuant
87	to s. 627.351(6), or from the Florida Windstorm Underwriting
88	Association, created under pursuant to s. 627.351(2), by an
89	authorized insurer under the terms and conditions of an executed
90	assumption agreement between the authorized insurer and such
91	association or Citizens Property Insurance Corporation. Each
92	assumption agreement between the association and such authorized
93	insurer or Citizens Property Insurance Corporation must be
94	approved by the Office of Insurance Regulation before prior to
95	the effective date of the assumption, and the Office of
96	Insurance Regulation must provide written notification to the
97	board within 15 working days after such approval. "Covered
98	policy" does not include any policy that excludes wind coverage
99	or hurricane coverage or any reinsurance agreement and does not
100	include any policy otherwise meeting this definition which is
101	issued by a surplus lines insurer or a reinsurer. All commercial
102	residential excess policies and all deductible buy-back policies
103	that, based on sound actuarial principles, require individual
104	ratemaking shall be excluded by rule if the actuarial soundness
105	of the fund is not jeopardized. For this purpose, the term
106	"excess policy" means a policy that provides insurance
107	protection for large commercial property risks and that provides
108	a layer of coverage above a primary layer insured by another
109	insurer.
110	Section 2.  Subsections (2) and (5) of section 624.462,
111	Florida Statutes, as amended, by section 12 of chapter 2007-1,
112	Laws of Florida, are amended to read:
113	624.462  Commercial self-insurance funds.--
114	(2)  As used in ss. 624.460-624.488, "commercial self-
115	insurance fund" or "fund" means a group of members, operating
116	individually and collectively through a trust or corporation,
117	that must be:
118	(a)  Established by:
119	1.  A not-for-profit trade association, industry
120	association, or professional association of employers or
121	professionals which has a constitution or bylaws, which is
122	incorporated under the laws of this state, and which has been
123	organized for purposes other than that of obtaining or providing
124	insurance and operated in good faith for a continuous period of
125	1 year;
126	2.  A self-insurance trust fund organized pursuant to s.
127	627.357 and maintained in good faith for a continuous period of
128	1 year for purposes other than that of obtaining or providing
129	insurance pursuant to this section. Each member of a commercial
130	self-insurance trust fund established pursuant to this
131	subsection must maintain membership in the self-insurance trust
132	fund organized pursuant to s. 627.357;
133	3.  A group of 10 or more health care providers, as defined
134	in s. 627.351(4)(h), for purposes of providing medical
135	malpractice coverage; or
136	4.  A not-for-profit group comprised of one or more
137	community associations responsible for operating at least 50
138	residential parcels or units created and operating under chapter
139	718, chapter 719, chapter 720, chapter 721, or chapter 723 which
140	restricts its membership to community associations only and
141	which has been organized and maintained in good faith for the
142	purpose of pooling and spreading the liabilities of its group
143	members relating to property or casualty risk or surety
144	insurance which, in accordance with applicable provisions of
145	part I of chapter 626, appoints resident general lines agents
146	only, and which does not prevent, impede, or restrict any
147	applicant or fund participant from maintaining or selecting an
148	agent of choice. The fund may not refuse to appoint the agent of
149	record for any fund applicant or fund member and may not favor
150	one or more such appointed agents over other appointed agents.
151	(b)1.  In the case of funds established pursuant to
152	subparagraph (a)2. or subparagraph (a)4., operated pursuant to a
153	trust agreement by a board of trustees which shall have complete
154	fiscal control over the fund and which shall be responsible for
155	all operations of the fund.  The majority of the trustees shall
156	be owners, partners, officers, directors, or employees of one or
157	more members of the fund.  The trustees shall have the authority
158	to approve applications of members for participation in the fund
159	and to contract with an authorized administrator or servicing
160	company to administer the day-to-day affairs of the fund.
161	2.  In the case of funds established pursuant to
162	subparagraph (a)1. or subparagraph (a)3., operated pursuant to a
163	trust agreement by a board of trustees or as a corporation by a
164	board of directors which board shall:
165	a.  Be responsible to members of the fund or beneficiaries
166	of the trust or policyholders of the corporation;
167	b.  Appoint independent certified public accountants, legal
168	counsel, actuaries, and investment advisers as needed;
169	c.  Approve payment of dividends to members;
170	d.  Approve changes in corporate structure; and
171	e.  Have the authority to contract with an administrator
172	authorized under s. 626.88 to administer the day-to-day affairs
173	of the fund including, but not limited to, marketing,
174	underwriting, billing, collection, claims administration, safety
175	and loss prevention, reinsurance, policy issuance, accounting,
176	regulatory reporting, and general administration.  The fees or
177	compensation for services under such contract shall be
178	comparable to the costs for similar services incurred by
179	insurers writing the same lines of insurance, or where available
180	such expenses as filed by boards, bureaus, and associations
181	designated by insurers to file such data. A majority of the
182	trustees or directors shall be owners, partners, officers,
183	directors, or employees of one or more members of the fund.
184	(5)  A commercial self-insurance fund created under
185	subparagraph (2)(a)4. shall be an insurer for the purpose of any
186	assessments levied by the Florida Hurricane Catastrophe Fund as
187	provided under s. 215.555 or by the Citizens Property Insurance
188	Corporation as provided under s. 627.351(6)(b)3. The office
189	shall establish the method for determining the imputed premium
190	that is subject to any such assessment. must participate in the
191	Florida Self-Insurance Fund Guaranty Association.
192	Section 3.  Subsection (18) of section 718.103, Florida
193	Statutes, is amended to read:
194	718.103  Definitions.--As used in this chapter, the term:
195	(18)  "Land" means the surface of a legally described
196	parcel of real property and includes, unless otherwise specified
197	in the declaration and whether separate from or including such
198	surface, airspace lying above and subterranean space lying below
199	such surface. However, if so defined in the declaration, the
200	term "land" may mean all or any portion of the airspace or
201	subterranean space between two legally identifiable elevations
202	and may exclude the surface of a parcel of real property and may
203	mean any combination of the foregoing, whether or not
204	contiguous, or may mean a condominium unit.
205	Section 4.  Subsection (11) of section 718.111, Florida
206	Statutes, as amended by section 37 of chapter 2007-1, Laws of
207	Florida, is amended to read:
208	718.111  The association.--
209	(11)  INSURANCE.--In order to protect the safety, health,
210	and welfare of the people of the State of Florida and to ensure
211	consistency in the provision of insurance coverage to
212	condominiums and their unit owners, paragraphs (a), (b), and (c)
213	are deemed to apply to every residential condominium in the
214	state, regardless of the date of its declaration of condominium.
215	It is the intent of the Legislature to encourage lower or stable
216	insurance premiums for associations described in this section.
217	Therefore, the Legislature requires a report to be prepared by
218	the Office of Insurance Regulation of the Department of
219	Financial Services for publication 18 months from the effective
220	date of this act, evaluating premium increases or decreases for
221	associations, unit owner premium increases or decreases,
222	recommended changes to better define common areas, or any other
223	information the Office of Insurance Regulation deems
224	appropriate.
225	(a)  A unit-owner controlled association operating a
226	residential condominium shall use its best efforts to obtain and
227	maintain adequate insurance to protect the association, the
228	association property, the common elements, and the condominium
229	property required to be insured by the association pursuant to
230	paragraph (b). If the association is developer controlled, the
231	association shall exercise due diligence to obtain and maintain
232	such insurance. Failure to obtain and maintain adequate
233	insurance during any period of developer control shall
234	constitute a breach of fiduciary responsibility by the
235	developer-appointed members of the board of directors of the
236	association, unless said members can show that despite such
237	failure, they have exercised due diligence. The declaration of
238	condominium as originally recorded, or amended pursuant to
239	procedures provided therein, may require that condominium
240	property consisting of freestanding buildings where there is no
241	more than one building in or on such unit need not be insured by
242	the association if the declaration requires the unit owner to
243	obtain adequate insurance for the condominium property. An
244	association may also obtain and maintain liability insurance for
245	directors and officers, insurance for the benefit of association
246	employees, and flood insurance for common elements, association
247	property, and units. Adequate insurance, regardless of any
248	requirement in the declaration of condominium for coverage by
249	the association for "full insurable value," "replacement cost,"
250	or the like, may include reasonable deductibles as determined by
251	the board based upon available funds or predetermined assessment
252	authority at the time that the insurance is obtained.
253	1.  Windstorm insurance coverage for a group of no fewer
254	than three communities created and operating under this chapter,
255	chapter 719, chapter 720, or chapter 721 may be obtained and
256	maintained for the communities if the insurance coverage is
257	sufficient to cover an amount equal to the probable maximum loss
258	for the communities for a 250-year windstorm event. Such
259	probable maximum loss must be determined through the use of a
260	competent model that has been accepted by the Florida Commission
261	on Hurricane Loss Projection Methodology. Such insurance
262	coverage is deemed adequate windstorm insurance for the purposes
263	of this section.
264	2.  An association or group of associations may self-insure
265	against claims against the association, the association
266	property, and the condominium property required to be insured by
267	an association, upon compliance with the applicable provisions
268	of ss. 624.460-624.488, which shall be considered adequate
269	insurance for the purposes of this section. A copy of each
270	policy of insurance in effect shall be made available for
271	inspection by unit owners at reasonable times.
272	(b)  Every hazard insurance policy issued or renewed on or
273	after January 1, 2004, to protect the condominium shall provide
274	primary coverage for:
275	1.  All portions of the condominium property located
276	outside the units;
277	2.  The condominium property located inside the units as
278	such property was initially installed, or replacements thereof
279	of like kind and quality and in accordance with the original
280	plans and specifications or, if the original plans and
281	specifications are not available, as they existed at the time
282	the unit was initially conveyed; and
283	3.  All portions of the condominium property for which the
284	declaration of condominium requires coverage by the association.
285
286	Anything to the contrary notwithstanding, the terms "condominium
287	property," "building," "improvements," "insurable improvements,"
288	"common elements," "association property," or any other term
289	found in the declaration of condominium which defines the scope
290	of property or casualty insurance that a condominium association
291	must obtain shall exclude all floor, wall, and ceiling
292	coverings, electrical fixtures, appliances, air conditioner or
293	heating equipment, water heaters, water filters, built-in
294	cabinets and countertops, and window treatments, including
295	curtains, drapes, blinds, hardware, and similar window treatment
296	components, or replacements of any of the foregoing which are
297	located within the boundaries of a unit and serve only one unit
298	and all air conditioning compressors that service only an
299	individual unit, whether or not located within the unit
300	boundaries. The foregoing is intended to establish the property
301	or casualty insuring responsibilities of the association and
302	those of the individual unit owner and do not serve to broaden
303	or extend the perils of coverage afforded by any insurance
304	contract provided to the individual unit owner. Beginning
305	January 1, 2004, the association shall have the authority to
306	amend the declaration of condominium, without regard to any
307	requirement for mortgagee approval of amendments affecting
308	insurance requirements, to conform the declaration of
309	condominium to the coverage requirements of this section.
310	(c)  Every hazard insurance policy issued or renewed on or
311	after January 1, 2004, to an individual unit owner shall provide
312	that the coverage afforded by such policy is excess over the
313	amount recoverable under any other policy covering the same
314	property. Each insurance policy issued to an individual unit
315	owner providing such coverage shall be without rights of
316	subrogation against the condominium association that operates
317	the condominium in which such unit owner's unit is located. All
318	real or personal property located within the boundaries of the
319	unit owner's unit which is excluded from the coverage to be
320	provided by the association as set forth in paragraph (b) shall
321	be insured by the individual unit owner.
322	(d)  The association shall obtain and maintain adequate
323	insurance or fidelity bonding of all persons who control or
324	disburse funds of the association. The insurance policy or
325	fidelity bond must cover the maximum funds that will be in the
326	custody of the association or its management agent at any one
327	time. As used in this paragraph, the term "persons who control
328	or disburse funds of the association" includes, but is not
329	limited to, those individuals authorized to sign checks and the
330	president, secretary, and treasurer of the association. The
331	association shall bear the cost of bonding.
332	Section 5.  Present paragraph (f) of subsection (1) of
333	section 718.115, Florida Statutes, is redesignated as paragraph
334	(g), and a new paragraph (f) is added to that subsection, to
335	read:
336	718.115  Common expenses and common surplus.--
337	(1)
338	(f)  Common expenses include the costs of insurance
339	acquired by the association under the authority of s.
340	718.111(11), including costs and contingent expenses required to
341	participate in a self-insurance fund authorized and approved
342	pursuant to s. 624.462.
343	Section 6.  Subsection (10) of section 718.116, Florida
344	Statutes, is amended to read:
345	718.116  Assessments; liability; lien and priority;
346	interest; collection.--
347	(10)  The specific purpose or purposes of any special
348	assessment, including any contingent special assessment levied
349	in conjunction with the purchase of an insurance policy
350	authorized by s. 718.111(11), approved in accordance with the
351	condominium documents shall be set forth in a written notice of
352	such assessment sent or delivered to each unit owner. The funds
353	collected pursuant to a special assessment shall be used only
354	for the specific purpose or purposes set forth in such notice.
355	However, upon completion of such specific purpose or purposes,
356	any excess funds will be considered common surplus, and may, at
357	the discretion of the board, either be returned to the unit
358	owners or applied as a credit toward future assessments.
359	Section 7.  Paragraph (a) of subsection (1) of section
360	718.503, Florida Statutes, is amended, and paragraph (c) is
361	added to that subsection, to read:
362	718.503  Developer disclosure prior to sale; nondeveloper
363	unit owner disclosure prior to sale; voidability.--
364	(1)  DEVELOPER DISCLOSURE.--
365	(a)  Contents of contracts.--Any contract for the sale of a
366	residential unit or a lease thereof for an unexpired term of
367	more than 5 years shall:
368	1.  Contain the following legend in conspicuous type: THIS
369	AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF
370	THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF
371	EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER
372	OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY
373	THE DEVELOPER UNDER SECTION 718.503, FLORIDA STATUTES. THIS
374	AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE
375	OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE
376	OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY
377	ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO
378	THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS
379	SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR
380	A PERIOD OF NOT MORE THAN 15 DAYS AFTER THE BUYER HAS RECEIVED
381	ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT
382	SHALL TERMINATE AT CLOSING. FIGURES CONTAINED IN ANY BUDGET
383	DELIVERED TO THE BUYER PREPARED IN ACCORDANCE WITH THE
384	CONDOMINIUM ACT ARE ESTIMATES ONLY AND REPRESENT AN
385	APPROXIMATION OF FUTURE EXPENSES BASED ON FACTS AND
386	CIRCUMSTANCES EXISTING AT THE TIME OF THE PREPARATION OF THE
387	BUDGET BY THE DEVELOPER. ACTUAL COSTS OF SUCH ITEMS MAY EXCEED
388	THE ESTIMATED COSTS. SUCH CHANGES IN COST DO NOT CONSTITUTE
389	MATERIAL ADVERSE CHANGES IN THE OFFERING.
390	2.  Contain the following caveat in conspicuous type on the
391	first page of the contract: ORAL REPRESENTATIONS CANNOT BE
392	RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE
393	DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE MADE
394	TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION 718.503,
395	FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR
396	LESSEE.
397	3.  If the unit has been occupied by someone other than the
398	buyer, contain a statement that the unit has been occupied.
399	4.  If the contract is for the sale or transfer of a unit
400	subject to a lease, include as an exhibit a copy of the executed
401	lease and shall contain within the text in conspicuous type: THE
402	UNIT IS SUBJECT TO A LEASE (OR SUBLEASE).
403	5.  If the contract is for the lease of a unit for a term
404	of 5 years or more, include as an exhibit a copy of the proposed
405	lease.
406	6.  If the contract is for the sale or lease of a unit that
407	is subject to a lien for rent payable under a lease of a
408	recreational facility or other commonly used facility, contain
409	within the text the following statement in conspicuous type:
410	THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT IS SUBJECT TO A
411	LIEN FOR RENT PAYABLE UNDER A LEASE OF COMMONLY USED FACILITIES.
412	FAILURE TO PAY RENT MAY RESULT IN FORECLOSURE OF THE LIEN.
413	7.  State the name and address of the escrow agent required
414	by s. 718.202 and state that the purchaser may obtain a receipt
415	for his or her deposit from the escrow agent upon request.
416	8.  If the contract is for the sale or transfer of a unit
417	in a condominium in which timeshare estates have been or may be
418	created, contain within the text in conspicuous type: UNITS IN
419	THIS CONDOMINIUM ARE SUBJECT TO TIMESHARE ESTATES. The contract
420	for the sale of a fee interest in a timeshare estate shall also
421	contain, in conspicuous type, the following: FOR THE PURPOSE OF
422	AD VALOREM TAXES OR SPECIAL ASSESSMENTS LEVIED BY TAXING
423	AUTHORITIES AGAINST A FEE INTEREST IN A TIMESHARE ESTATE, THE
424	MANAGING ENTITY IS GENERALLY CONSIDERED THE TAXPAYER UNDER
425	FLORIDA LAW. YOU HAVE THE RIGHT TO CHALLENGE AN ASSESSMENT BY A
426	TAXING AUTHORITY RELATING TO YOUR TIMESHARE ESTATE PURSUANT TO
427	THE PROVISIONS OF CHAPTER 194, FLORIDA STATUTES.
428	(c)  Subsequent estimates; when provided.--If the closing
429	on a contract occurs more than 12 months after the filing of the
430	offering circular with the division, the developer shall provide
431	a copy of the current estimated operating budget of the
432	association to the buyer at closing, which shall not be
433	considered an amendment that modifies the offering provided any
434	changes to the association's budget from the budget given to the
435	buyer at the time of contract signing were the result of matters
436	beyond the developer's control. Changes in budgets of any master
437	association, recreation association, or club and similar budgets
438	for entities other than the association shall likewise not be
439	considered amendments that modify the offering. It is the intent
440	of this paragraph to clarify existing law.
441	Section 8.  Present paragraph (d) of subsection (21) of
442	section 718.504, Florida Statutes, is redesignated as paragraph
443	(f), and new paragraphs (d) and (e) are added to that
444	subsection, to read:
445	718.504  Prospectus or offering circular.--Every developer
446	of a residential condominium which contains more than 20
447	residential units, or which is part of a group of residential
448	condominiums which will be served by property to be used in
449	common by unit owners of more than 20 residential units, shall
450	prepare a prospectus or offering circular and file it with the
451	Division of Florida Land Sales, Condominiums, and Mobile Homes
452	prior to entering into an enforceable contract of purchase and
453	sale of any unit or lease of a unit for more than 5 years and
454	shall furnish a copy of the prospectus or offering circular to
455	each buyer. In addition to the prospectus or offering circular,
456	each buyer shall be furnished a separate page entitled
457	"Frequently Asked Questions and Answers," which shall be in
458	accordance with a format approved by the division and a copy of
459	the financial information required by s. 718.111. This page
460	shall, in readable language, inform prospective purchasers
461	regarding their voting rights and unit use restrictions,
462	including restrictions on the leasing of a unit; shall indicate
463	whether and in what amount the unit owners or the association is
464	obligated to pay rent or land use fees for recreational or other
465	commonly used facilities; shall contain a statement identifying
466	that amount of assessment which, pursuant to the budget, would
467	be levied upon each unit type, exclusive of any special
468	assessments, and which shall further identify the basis upon
469	which assessments are levied, whether monthly, quarterly, or
470	otherwise; shall state and identify any court cases in which the
471	association is currently a party of record in which the
472	association may face liability in excess of $100,000; and which
473	shall further state whether membership in a recreational
474	facilities association is mandatory, and if so, shall identify
475	the fees currently charged per unit type. The division shall by
476	rule require such other disclosure as in its judgment will
477	assist prospective purchasers. The prospectus or offering
478	circular may include more than one condominium, although not all
479	such units are being offered for sale as of the date of the
480	prospectus or offering circular. The prospectus or offering
481	circular must contain the following information:
482	(21)  An estimated operating budget for the condominium and
483	the association, and a schedule of the unit owner's expenses
484	shall be attached as an exhibit and shall contain the following
485	information:
486	(d)  The following statement in conspicuous type: THE
487	BUDGET CONTAINED IN THIS OFFERING CIRCULAR HAS BEEN PREPARED IN
488	ACCORDANCE WITH THE CONDOMINIUM ACT AND IS A GOOD FAITH ESTIMATE
489	ONLY AND REPRESENTS AN APPROXIMATION OF FUTURE EXPENSES BASED ON
490	FACTS AND CIRCUMSTANCES EXISTING AT THE TIME OF ITS PREPARATION.
491	ACTUAL COSTS OF SUCH ITEMS MAY EXCEED THE ESTIMATED COSTS. SUCH
492	CHANGES IN COST DO NOT CONSTITUTE MATERIAL ADVERSE CHANGES IN
493	THE OFFERING.
494	(e)  Each budget for an association prepared by a developer
495	consistent with this subsection shall be prepared in good faith
496	and shall reflect accurate estimated amounts for the required
497	items in paragraph (c) at the time of the filing of the offering
498	circular with the division, and subsequent increased amounts of
499	any item included in the association's estimated budget that are
500	beyond the control of the developer shall not be considered an
501	amendment that would give rise to rescission rights set forth in
502	s. 718.503(1)(a) or (b), nor shall such increases modify, void,
503	or otherwise affect any guarantee of the developer contained in
504	the offering circular or any purchase contract. It is the intent
505	of this paragraph to clarify existing law.
506	Section 9.  Section 718.616, Florida Statutes, is amended
507	to read:
508	718.616  Disclosure of condition of building and estimated
509	replacement costs and notification of municipalities.--
510	(1)  Each developer of a residential condominium created by
511	converting existing, previously occupied improvements to such
512	form of ownership shall prepare a report that discloses disclose
513	the condition of the improvements and the condition of certain
514	components and their current estimated replacement costs as of
515	the date of the report.
516	(2)  The following information shall be stated concerning
517	the improvements:
518	(a)  The date and type of construction.
519	(b)  The prior use.
520	(c)  Whether there is termite damage or infestation and
521	whether the termite damage or infestation, if any, has been
522	properly treated. The statement shall be substantiated by
523	including, as an exhibit, an inspection report by a certified
524	pest control operator.
525	(3)(a)  Disclosure of condition shall be made for each of
526	the following components that the existing improvements may
527	include:
528	1.  Roof.
529	2.  Structure.
530	3.  Fireproofing and Fire protection systems.
531	4.  Elevators.
532	5.  Heating and cooling systems.
533	6.  Plumbing.
534	7.  Electrical systems.
535	8.  Swimming pool.
536	9.  Seawalls, pilings, and docks.
537	10.  Pavement and concrete, including roadways, walkways,
538	and parking areas.
539	11.  Drainage systems.
540	12.  Irrigation systems.
541	(b)  For each component, the following information shall be
542	disclosed and substantiated by attaching a copy of a certificate
543	under seal of an architect or engineer authorized to practice in
544	this state:
545	1.  The age of the component as of the date of the report.
546	2.  The estimated remaining useful life of the component as
547	of the date of the report.
548	3.  The estimated current replacement cost of the component
549	as of the date of the report, expressed:
550	a.  As a total amount; and
551	b.  As a per-unit amount, based upon each unit's
552	proportional share of the common expenses.
553	4.  The structural and functional soundness of the
554	component.
555	(c)  Each unit owner and the association are third-party
556	beneficiaries of the report.
557	(d)  A supplemental report shall be prepared for any
558	structure or component that is renovated or repaired after
559	completion of the original report and prior to the recording of
560	the declaration of condominium. If the declaration is not
561	recorded within 1 year after the date of the original report,
562	the developer shall update the report annually prior to
563	recording the declaration of condominium.
564	(e)  The report may not contain representations on behalf
565	of the development concerning future improvements or repairs and
566	must be limited to the current condition of the improvements.
567	(4)  If the proposed condominium is situated within a
568	municipality, the disclosure shall include a letter from the
569	municipality acknowledging that the municipality has been
570	notified of the proposed creation of a residential condominium
571	by conversion of existing, previously occupied improvements and,
572	in any county, as defined in s. 125.011(1), acknowledging
573	compliance with applicable zoning requirements as determined by
574	the municipality.
575	Section 10.  Section 718.618, Florida Statutes, is amended
576	to read:
577	718.618  Converter reserve accounts; warranties.--
578	(1)  When existing improvements are converted to ownership
579	as a residential condominium, the developer shall establish
580	converter reserve accounts for capital expenditures and deferred
581	maintenance, or give warranties as provided by subsection (6),
582	or post a surety bond as provided by subsection (7). The
583	developer shall fund the converter reserve accounts in amounts
584	calculated as follows:
585	(a)1.  When the existing improvements include an air-
586	conditioning system serving more than one unit or property which
587	the association is responsible to repair, maintain, or replace,
588	the developer shall fund an air-conditioning reserve account.
589	The amount of the reserve account shall be the product of the
590	estimated current replacement cost of the system, as disclosed
591	and substantiated pursuant to s. 718.616(3)(b), multiplied by a
592	fraction, the numerator of which shall be the lesser of the age
593	of the system in years or 9, and the denominator of which shall
594	be 10. When such air-conditioning system is within 1,000 yards
595	of the seacoast, the numerator shall be the lesser of the age of
596	the system in years or 3, and the denominator shall be 4.
597	2.  The developer shall fund a plumbing reserve account.
598	The amount of the funding shall be the product of the estimated
599	current replacement cost of the plumbing component, as disclosed
600	and substantiated pursuant to s. 718.616(3)(b), multiplied by a
601	fraction, the numerator of which shall be the lesser of the age
602	of the plumbing in years or 36, and the denominator of which
603	shall be 40.
604	3.  The developer shall fund a roof reserve account. The
605	amount of the funding shall be the product of the estimated
606	current replacement cost of the roofing component, as disclosed
607	and substantiated pursuant to s. 718.616(3)(b), multiplied by a
608	fraction, the numerator of which shall be the lesser of the age
609	of the roof in years or the numerator listed in the following
610	table. The denominator of the fraction shall be determined based
611	on the roof type, as follows:
612
	Roof Type Numerator Denominator
613
	a. Built-up roof without insulation 4 5
614
	b. Built-up roof with insulation 4 5
615
	c. Cement tile roof 45 50
616
	d. Asphalt shingle roof 14 15
617
	e. Copper roof
618
	f. Wood shingle roof 9 10
619
	g. All other types 18 20
620
621	(b)  The age of any component or structure for which the
622	developer is required to fund a reserve account shall be
623	measured in years, rounded to the nearest whole year. The amount
624	of converter reserves to be funded by the developer for each
625	structure or component shall be based on the age of the
626	structure or component as disclosed in the inspection report.
627	The architect or engineer shall determine the age of the
628	component from the later of:
629	1.  The date when the component or structure was replaced
630	or substantially renewed, if the replacement or renewal of the
631	component at least met the requirements of the then-applicable
632	building code; or
633	2.  The date when the installation or construction of the
634	existing component or structure was completed.
635	(c)  When the age of a component or structure is to be
636	measured from the date of replacement or renewal, the developer
637	shall provide the division with a certificate, under the seal of
638	an architect or engineer authorized to practice in this state,
639	verifying:
640	1.  The date of the replacement or renewal; and
641	2.  That the replacement or renewal at least met the
642	requirements of the then-applicable building code.
643	(d)  In addition to establishing the reserve accounts
644	specified above, the developer shall establish those other
645	reserve accounts required by s. 718.112(2)(f), and shall fund
646	those accounts in accordance with the formula provided therein.
647	The vote to waive or reduce the funding or reserves required by
648	s. 718.112(2)(f) does not affect or negate the obligations
649	arising under this section.
650	(2)(a)  The developer shall fund the reserve account
651	required by subsection (1), on a pro rata basis upon the sale of
652	each unit. The developer shall deposit in the reserve account
653	not less than a percentage of the total amount to be deposited
654	in the reserve account equal to the percentage of ownership of
655	the common elements allocable to the unit sold. When a developer
656	deposits amounts in excess of the minimum reserve account
657	funding, later deposits may be reduced to the extent of the
658	excess funding. For the purposes of this subsection, a unit is
659	considered sold when a fee interest in the unit is transferred
660	to a third party or the unit is leased for a period in excess of
661	5 years.
662	(b)  When an association makes an expenditure of converter
663	reserve account funds before the developer has sold all units,
664	the developer shall make a deposit in the reserve account. Such
665	deposit shall be at least equal to that portion of the
666	expenditure which would be charged against the reserve account
667	deposit that would have been made for any such unit had the unit
668	been sold. Such deposit may be reduced to the extent the
669	developer has funded the reserve account in excess of the
670	minimum reserve account funding required by this subsection.
671	This paragraph applies only when the developer has funded
672	reserve accounts as provided by paragraph (a).
673	(3)  The use of reserve account funds, as provided in this
674	section, is limited as follows:
675	(a)  Reserve account funds may be spent prior to the
676	assumption of control of the association by unit owners other
677	than the developer; and
678	(b)  Reserve account funds may be expended only for repair
679	or replacement of the specific components for which the funds
680	were deposited, unless, after assumption of control of the
681	association by unit owners other than the developer, it is
682	determined by three-fourths of the voting interests in the
683	condominium to expend the funds for other purposes.
684	(4)  The developer shall establish the reserve account, as
685	provided in this section, in the name of the association at a
686	bank, savings and loan association, or trust company located in
687	this state.
688	(5)  A developer may establish and fund additional
689	converter reserve accounts. The amount of funding shall be the
690	product of the estimated current replacement cost of a
691	component, as disclosed and substantiated pursuant to s.
692	718.616(3)(b), multiplied by a fraction, the numerator of which
693	is the age of the component in years and the denominator of
694	which is the total estimated life of the component in years.
695	(6)  A developer makes no implied warranties when existing
696	improvements are converted to ownership as a residential
697	condominium and reserve accounts are funded in accordance with
698	this section. As an alternative to establishing such reserve
699	accounts, or when a developer fails to establish the reserve
700	accounts in accordance with this section, the developer shall be
701	deemed to have granted to the purchaser of each unit an implied
702	warranty of fitness and merchantability for the purposes or uses
703	intended, as to the roof and structural components of the
704	improvements; as to fireproofing and fire protection systems;
705	and as to mechanical, electrical, and plumbing elements serving
706	the improvements, except mechanical elements serving only one
707	unit. The warranty shall be for a period beginning with the
708	notice of intended conversion and continuing for 3 years
709	thereafter, or the recording of the declaration to condominium
710	and continuing for 3 years thereafter, or 1 year after owners
711	other than the developer obtain control of the association,
712	whichever occurs last, but in no event more than 5 years.
713	(a)  The warranty provided for in this section is
714	conditioned upon routine maintenance being performed, unless the
715	maintenance is an obligation of the developer or a developer-
716	controlled association.
717	(b)  The warranty shall inure to the benefit of each owner
718	and successor owner.
719	(c)  Existing improvements converted to residential
720	condominium may be covered by an insured warranty program
721	underwritten by an insurance company authorized to do business
722	in this state, if such warranty program meets the minimum
723	requirements of this chapter. To the degree that the warranty
724	program does not meet the minimum requirements of this chapter,
725	such requirements shall apply.
726	(7)  When a developer desires to post a surety bond, the
727	developer shall, after notification to the buyer, acquire a
728	surety bond issued by a company licensed to do business in this
729	state, if such a bond is readily available in the open market,
730	in an amount which would be equal to the total amount of all
731	reserve accounts required under subsection (1), payable to the
732	association.
733	(8)  The amended provisions of this section do not affect a
734	conversion of existing improvements when a developer has filed a
735	notice of intended conversion and the documents required by s.
736	718.503 or s. 718.504, as applicable, with the division prior to
737	the effective date of this law, provided:
738	(a)  The documents are proper for filing purposes.
739	(b)  The developer, not later than 6 months after such
740	filing:
741	1.  Records a declaration for such filing in accordance
742	with part I.
743	2.  Gives a notice of intended conversion.
744	(9)  This section applies only to the conversion of
745	existing improvements where construction of the improvement was
746	commenced prior to its designation by the developer as a
747	condominium. In such circumstances, s. 718.203 does not apply.
748	(10)  A developer who sells a condominium parcel that is
749	subject to this part shall disclose in conspicuous type in the
750	contract of sale whether the developer has established converter
751	reserve accounts, provided a warranty of fitness and
752	merchantability, or posted a surety bond for purposes of
753	complying with this section.
754	Section 11.  Subsection (3) of section 719.104, Florida
755	Statutes, is amended to read:
756	719.104  Cooperatives; access to units; records; financial
757	reports; assessments; purchase of leases.--
758	(3)  INSURANCE.--The association shall use its best efforts
759	to obtain and maintain adequate insurance to protect the
760	association property. The association may also obtain and
761	maintain liability insurance for directors and officers,
762	insurance for the benefit of association employees, and flood
763	insurance. A copy of each policy of insurance in effect shall be
764	made available for inspection by unit owners at reasonable
765	times.
766	(a)  Windstorm insurance coverage for a group of no fewer
767	than three communities created and operating under chapter 718,
768	this chapter, chapter 720, or chapter 721 may be obtained and
769	maintained for the communities if the insurance coverage is
770	sufficient to cover an amount equal to the probable maximum loss
771	for the communities for a 250-year windstorm event. Such
772	probable maximum loss must be determined through the use of a
773	competent model that has been accepted by the Florida Commission
774	on Hurricane Loss Projection Methodology. Such insurance
775	coverage is deemed adequate windstorm insurance for the purposes
776	of this section.
777	(b)  An association or group of associations may self-
778	insure against claims against the association, the association
779	property, and the cooperative property required to be insured by
780	an association, upon compliance with the applicable provisions
781	of ss. 624.460-624.488, which shall be considered adequate
782	insurance for purposes of this section.
783	Section 12.  Paragraph (e) is added to subsection (1) of
784	section 719.107, Florida Statutes, to read:
785	719.107  Common expenses; assessment.--
786	(1)
787	(e)  Common expenses include the costs of insurance
788	acquired by the association under the authority of s.
789	719.104(3), including costs and contingent expenses required to
790	participate in a self-insurance fund authorized and approved
791	pursuant to s. 624.462.
792	Section 13.  Subsection (9) of section 719.108, Florida
793	Statutes, is amended to read:
794	719.108  Rents and assessments; liability; lien and
795	priority; interest; collection; cooperative ownership.--
796	(9)  The specific purposes of any special assessment,
797	including any contingent special assessment levied in
798	conjunction with the purchase of an insurance policy authorized
799	by s. 719.104(3), approved in accordance with the cooperative
800	documents shall be set forth in a written notice of such
801	assessment sent or delivered to each unit owner. The funds
802	collected pursuant to a special assessment shall be used only
803	for the specific purpose or purposes set forth in such notice or
804	returned to the unit owners. However, upon completion of such
805	specific purposes, any excess funds shall be considered common
806	surplus and may, at the discretion of the board, either be
807	returned to the unit owners or applied as a credit toward future
808	assessments.
809	Section 14.  Paragraph (a) of subsection (1) of section
810	719.503, Florida Statutes, is amended, and paragraph (c) is
811	added to that subsection, to read:
812	719.503  Disclosure prior to sale.--
813	(1)  DEVELOPER DISCLOSURE.--
814	(a)  Contents of contracts.--Any contracts for the sale of
815	a unit or a lease thereof for an unexpired term of more than 5
816	years shall contain:
817	1.  The following legend in conspicuous type: THIS
818	AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF
819	THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF
820	EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER
821	OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY
822	THE DEVELOPER UNDER SECTION 719.503, FLORIDA STATUTES. THIS
823	AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE
824	OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE
825	OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY
826	ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO
827	THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS
828	SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR
829	A PERIOD OF NOT MORE THAN 15 DAYS AFTER THE BUYER HAS RECEIVED
830	ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT
831	SHALL TERMINATE AT CLOSING. FIGURES CONTAINED IN ANY BUDGET
832	DELIVERED TO THE BUYER PREPARED IN ACCORDANCE WITH THE
833	COOPERATIVE ACT ARE ESTIMATES ONLY AND REPRESENT AN
834	APPROXIMATION OF FUTURE EXPENSES BASED ON FACTS AND
835	CIRCUMSTANCES EXISTING AT THE TIME OF THE PREPARATION OF THE
836	BUDGET BY THE DEVELOPER. ACTUAL COSTS OF SUCH ITEMS MAY EXCEED
837	THE ESTIMATED COSTS. SUCH CHANGES IN COST DO NOT CONSTITUTE
838	MATERIAL ADVERSE CHANGES IN THE OFFERING.
839	2.  The following caveat in conspicuous type shall be
840	placed upon the first page of the contract: ORAL REPRESENTATIONS
841	CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS
842	OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD
843	BE MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION
844	719.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A
845	BUYER OR LESSEE.
846	3.  If the unit has been occupied by someone other than the
847	buyer, a statement that the unit has been occupied.
848	4.  If the contract is for the sale or transfer of a unit
849	subject to a lease, the contract shall include as an exhibit a
850	copy of the executed lease and shall contain within the text in
851	conspicuous type: THE UNIT IS SUBJECT TO A LEASE (OR SUBLEASE).
852	5.  If the contract is for the lease of a unit for a term
853	of 5 years or more, the contract shall include as an exhibit a
854	copy of the proposed lease.
855	6.  If the contract is for the sale or lease of a unit that
856	is subject to a lien for rent payable under a lease of a
857	recreational facility or other common areas, the contract shall
858	contain within the text the following statement in conspicuous
859	type: THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT IS
860	SUBJECT TO A LIEN FOR RENT PAYABLE UNDER A LEASE OF COMMON
861	AREAS. FAILURE TO PAY RENT MAY RESULT IN FORECLOSURE OF THE
862	LIEN.
863	7.  The contract shall state the name and address of the
864	escrow agent required by s. 719.202 and shall state that the
865	purchaser may obtain a receipt for his or her deposit from the
866	escrow agent, upon request.
867	8.  If the contract is for the sale or transfer of a unit
868	in a cooperative in which timeshare estates have been or may be
869	created, the following text in conspicuous type: UNITS IN THIS
870	COOPERATIVE ARE SUBJECT TO TIMESHARE ESTATES. The contract for
871	the sale of a timeshare estate must also contain, in conspicuous
872	type, the following: FOR THE PURPOSE OF AD VALOREM TAXES OR
873	SPECIAL ASSESSMENTS LEVIED BY TAXING AUTHORITIES AGAINST A
874	TIMESHARE ESTATE, THE MANAGING ENTITY IS GENERALLY CONSIDERED
875	THE TAXPAYER UNDER FLORIDA LAW. YOU HAVE THE RIGHT TO CHALLENGE
876	AN ASSESSMENT BY A TAXING AUTHORITY RELATING TO YOUR TIMESHARE
877	ESTATE PURSUANT TO THE PROVISIONS OF CHAPTER 194, FLORIDA
878	STATUTES.
879	(c)  Subsequent estimates; when provided.--If the closing
880	on a contract occurs more than 12 months after the filing of the
881	offering circular with the division, the developer shall provide
882	a copy of the current estimated operating budget of the
883	association to the buyer at closing, which shall not be
884	considered an amendment that modifies the offering provided any
885	changes to the association's budget from the budget given to the
886	buyer at the time of contract signing were the result of matters
887	beyond the developer's control. Changes in budgets of any master
888	association, recreation association, or club and similar budgets
889	for entities other than the association shall likewise not be
890	considered amendments that modify the offering. It is the intent
891	of this paragraph to clarify existing law.
892	Section 15.  Present paragraph (d) of subsection (20) of
893	section 719.504, Florida Statutes, is redesignated as paragraph
894	(f), and new paragraphs (d) and (e) are added to that
895	subsection, to read:
896	719.504  Prospectus or offering circular.--Every developer
897	of a residential cooperative which contains more than 20
898	residential units, or which is part of a group of residential
899	cooperatives which will be served by property to be used in
900	common by unit owners of more than 20 residential units, shall
901	prepare a prospectus or offering circular and file it with the
902	Division of Florida Land Sales, Condominiums, and Mobile Homes
903	prior to entering into an enforceable contract of purchase and
904	sale of any unit or lease of a unit for more than 5 years and
905	shall furnish a copy of the prospectus or offering circular to
906	each buyer. In addition to the prospectus or offering circular,
907	each buyer shall be furnished a separate page entitled
908	"Frequently Asked Questions and Answers," which must be in
909	accordance with a format approved by the division. This page
910	must, in readable language: inform prospective purchasers
911	regarding their voting rights and unit use restrictions,
912	including restrictions on the leasing of a unit; indicate
913	whether and in what amount the unit owners or the association is
914	obligated to pay rent or land use fees for recreational or other
915	commonly used facilities; contain a statement identifying that
916	amount of assessment which, pursuant to the budget, would be
917	levied upon each unit type, exclusive of any special
918	assessments, and which identifies the basis upon which
919	assessments are levied, whether monthly, quarterly, or
920	otherwise; state and identify any court cases in which the
921	association is currently a party of record in which the
922	association may face liability in excess of $100,000; and state
923	whether membership in a recreational facilities association is
924	mandatory and, if so, identify the fees currently charged per
925	unit type. The division shall by rule require such other
926	disclosure as in its judgment will assist prospective
927	purchasers. The prospectus or offering circular may include more
928	than one cooperative, although not all such units are being
929	offered for sale as of the date of the prospectus or offering
930	circular. The prospectus or offering circular must contain the
931	following information:
932	(20)  An estimated operating budget for the cooperative and
933	the association, and a schedule of the unit owner's expenses
934	shall be attached as an exhibit and shall contain the following
935	information:
936	(d)  The following statement in conspicuous type: THE
937	BUDGET CONTAINED IN THIS OFFERING CIRCULAR HAS BEEN PREPARED IN
938	ACCORDANCE WITH THE COOPERATIVE ACT AND IS A GOOD FAITH ESTIMATE
939	ONLY AND REPRESENTS AN APPROXIMATION OF FUTURE EXPENSES BASED ON
940	FACTS AND CIRCUMSTANCES EXISTING AT THE TIME OF ITS PREPARATION.
941	ACTUAL COSTS OF SUCH ITEMS MAY EXCEED THE ESTIMATED COSTS. SUCH
942	CHANGES IN COST DO NOT CONSTITUTE MATERIAL ADVERSE CHANGES IN
943	THE OFFERING.
944	(e)  Each budget for an association prepared by a developer
945	consistent with this subsection shall be prepared in good faith
946	and shall reflect accurate estimated amounts for the required
947	items in paragraph (c) at the time of the filing of the offering
948	circular with the division, and subsequent increased amounts of
949	any item included in the association's estimated budget that are
950	beyond the control of the developer shall not be considered an
951	amendment that would give rise to rescission rights set forth in
952	s. 719.503(1)(a) or (b), nor shall such increases modify, void,
953	or otherwise affect any guarantee of the developer contained in
954	the offering circular or any purchase contract. It is the intent
955	of this paragraph to clarify existing law.
956	Section 16.  Subsection (11) is added to section 720.303,
957	Florida Statutes, to read:
958	720.303  Association powers and duties; meetings of board;
959	official records; budgets; financial reporting; association
960	funds; recalls.--
961	(11)  WINDSTORM INSURANCE.--Windstorm insurance coverage
962	for a group of no fewer than three communities created and
963	operating under chapter 718, chapter 719, this chapter, or
964	chapter 721 may be obtained and maintained for the communities
965	if the insurance coverage is sufficient to cover an amount equal
966	to the probable maximum loss for the communities for a 250-year
967	windstorm event. Such probable maximum loss must be determined
968	through the use of a competent model that has been accepted by
969	the Florida Commission on Hurricane Loss Projection Methodology.
970	Such insurance coverage is deemed adequate windstorm coverage
971	for purposes of this chapter.
972	Section 17.  Section 720.308, Florida Statutes, is amended
973	to read:
974	720.308  Assessments and charges.--For any community
975	created after October 1, 1995, the governing documents must
976	describe the manner in which expenses are shared and specify the
977	member's proportional share thereof.
978	(1)  Assessments levied pursuant to the annual budget or
979	special assessment must be in the member's proportional share of
980	expenses as described in the governing document, which share may
981	be different among classes of parcels based upon the state of
982	development thereof, levels of services received by the
983	applicable members, or other relevant factors.
984	(2)  While the developer is in control of the homeowners'
985	association, it may be excused from payment of its share of the
986	operating expenses and assessments related to its parcels for
987	any period of time for which the developer has, in the
988	declaration, obligated itself to pay any operating expenses
989	incurred that exceed the assessments receivable from other
990	members and other income of the association.
991	(3)  Assessments or contingent assessments may be levied by
992	the board of directors of the association to secure the
993	obligation of the homeowners' association for insurance acquired
994	from a self-insurance fund authorized and operating pursuant to
995	s. 624.462.
996	(4)  This section does not apply to an association, no
997	matter when created, if the association is created in a
998	community that is included in an effective development-of-
999	regional-impact development order as of October 1, 1995 the
1000	effective date of this act, together with any approved
1001	modifications thereto.
1002	Section 18.  This act shall take effect upon becoming a
1003	law.

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