Senate Bill sb0902c2

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    By the Committees on Judiciary; Regulated Industries; and
    Senator Jones




    590-2505-07

  1                      A bill to be entitled

  2         An act relating to community associations;

  3         creating s. 712.11, F.S.; providing for the

  4         revival of certain covenants that have lapsed;

  5         amending s. 718.106, F.S.; prohibiting local

  6         governments from limiting the access of certain

  7         persons to beaches adjacent to or adjoining

  8         condominium property; providing an exception;

  9         amending s. 718.110, F.S.; revising provisions

10         relating to the amendment of declarations;

11         providing legislative findings and a finding of

12         compelling state interest; providing criteria

13         for consent to an amendment; requiring notice

14         regarding proposed amendments to mortgagees;

15         providing criteria for notification; providing

16         for voiding certain amendments; amending s.

17         718.114, F.S.; providing that certain

18         leaseholds, memberships, or other possessory or

19         use interests shall be considered a material

20         alteration or substantial addition to certain

21         real property; amending s. 718.404, F.S.;

22         providing retroactive application of provisions

23         relating to mixed-use condominiums; amending s.

24         719.103, F.S.; providing a definition; amending

25         s. 719.507, F.S.; prohibiting laws, ordinances,

26         or regulations that apply only to improvements

27         that are or may be subjected to an equity club

28         form of ownership; amending s. 720.302, F.S.;

29         revising governing provisions relating to

30         corporations that operate residential

31         homeowners' associations; amending s. 720.303,

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 1         F.S.; revising application to include certain

 2         meetings; requiring the association to provide

 3         certain information to prospective purchasers

 4         or lienholders; authorizing the association to

 5         charge a reasonable fee for providing certain

 6         information; requiring the budget to provide

 7         for annual operating expenses; authorizing the

 8         budget to include reserve accounts for capital

 9         expenditures and deferred maintenance;

10         providing a formula for calculating the amount

11         to be reserved; authorizing the association to

12         adjust replacement reserve assessments

13         annually; authorizing the developer to vote to

14         waive the reserves or reduce the funding of

15         reserves for a certain period; revising

16         provisions relating to financial reporting;

17         revising time periods in which the association

18         must complete its reporting; repealing s.

19         720.303(2), F.S., as amended, relating to board

20         meetings, to remove conflicting versions of

21         that subsection; creating s. 720.3035, F.S.;

22         providing for architectural control covenants

23         and parcel owner improvements; authorizing the

24         review and approval of plans and

25         specifications; providing limitations;

26         providing rights and privileges for parcel

27         owners as set forth in the declaration of

28         covenants; amending s. 720.305, F.S.; providing

29         that, where a member is entitled to collect

30         attorney's fees against the association, the

31         member may also recover additional amounts as

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 1         determined by the court; amending s. 720.306,

 2         F.S.; providing that certain mergers or

 3         consolidations of an association shall not be

 4         considered a material or adverse alteration of

 5         the proportionate voting interest appurtenant

 6         to a parcel; amending s. 720.307, F.S.;

 7         requiring developers to deliver financial

 8         records to the board in any transition of

 9         association control to members; requiring

10         certain information to be included in the

11         records and for the records to be prepared in a

12         specified manner; amending s. 720.308, F.S.;

13         providing circumstances under which a guarantee

14         of common expenses shall be effective;

15         providing for approval of the guarantee by

16         association members; providing for a guarantee

17         period and extension thereof; requiring the

18         stated dollar amount of the guarantee to be an

19         exact dollar amount for each parcel identified

20         in the declaration; providing payments required

21         from the guarantor to be determined in a

22         certain manner; providing a formula to

23         determine the guarantor's total financial

24         obligation to the association; providing that

25         certain expenses incurred in the production of

26         certain revenues shall not be included in the

27         operating expenses; amending s. 720.311, F.S.;

28         revising provisions relating to dispute

29         resolution; providing that the filing of any

30         petition for arbitration or the serving of an

31         offer for presuit mediation shall toll the

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 1         applicable statute of limitations; providing

 2         that certain disputes between an association

 3         and a parcel owner shall be subject to presuit

 4         mediation; revising provisions to conform;

 5         providing that temporary injunctive relief may

 6         be sought in certain disputes subject to

 7         presuit mediation; authorizing the court to

 8         refer the parties to mediation under certain

 9         circumstances; requiring the aggrieved party to

10         serve on the responding party a written offer

11         to participate in presuit mediation; providing

12         a form for such offer; providing that service

13         of the offer is effected by the sending of such

14         an offer in a certain manner; providing that

15         the prevailing party in any subsequent

16         arbitration or litigation proceedings is

17         entitled to seek recovery of all costs and

18         attorney's fees incurred in the presuit

19         mediation process; requiring the mediator or

20         arbitrator to meet certain certification

21         requirements; removing a requirement relating

22         to development of an education program to

23         increase awareness of the operation of

24         homeowners' associations and the use of

25         alternative dispute resolution techniques;

26         providing effective dates.

27  

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

29  

30         Section 1.  Section 712.11, Florida Statutes, is

31  created to read:

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 1         712.11  Covenant revitalization.--A homeowners'

 2  association not otherwise subject to chapter 720 may use the

 3  procedures set forth in ss. 720.403-720.407 to revive

 4  covenants that have lapsed under the terms of this chapter.

 5         Section 2.  Subsection (5) is added to section 718.106,

 6  Florida Statutes, to read:

 7         718.106  Condominium parcels; appurtenances; possession

 8  and enjoyment.--

 9         (5)  A local government may not adopt an ordinance or

10  regulation that prohibits condominium unit owners or their

11  guests, licensees, or invitees from pedestrian access to a

12  public beach contiguous to a condominium property, except

13  where necessary to protect public health, safety, or natural

14  resources. This subsection does not prohibit a governmental

15  entity from enacting regulations governing activities taking

16  place on the beach.

17         Section 3.  Effective October 1, 2007, subsection (11)

18  of section 718.110, Florida Statutes, is amended to read:

19         718.110  Amendment of declaration; correction of error

20  or omission in declaration by circuit court.--

21         (11)  The Legislature finds that the procurement of

22  mortgagee consent to amendments that do not affect the rights

23  or interests of mortgagees is an unreasonable and substantial

24  logistical and financial burden on the unit owners and that

25  there is a compelling state interest in enabling the members

26  of a condominium association to approve amendments to the

27  condominium documents through legal means. Accordingly, and

28  notwithstanding any provision to the contrary contained in

29  this section:

30         (a)  As to any mortgage recorded on or after October 1,

31  2007, any provision in the declaration, articles of

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 1  incorporation, or bylaws that requires recorded after April 1,

 2  1992, may not require the consent or joinder of some or all

 3  mortgagees of units or any other portion of the condominium

 4  property to or in amendments to the declaration, articles of

 5  incorporation, or bylaws or for any other matter shall be

 6  enforceable only as to the following matters: unless the

 7  requirement is limited to amendments materially affecting the

 8  rights or interests of the mortgagees, or as otherwise

 9  required by the Federal National Mortgage Association or the

10  Federal Home Loan Mortgage Corporation, and unless the

11  requirement provides that such consent may not be unreasonably

12  withheld. It shall be presumed that, except as to

13         1.  Those matters described in subsections (4) and

14  (8).,

15         2.  Amendments to the declaration, articles of

16  incorporation, or bylaws that adversely affect the priority of

17  the mortgagee's lien or the mortgagee's rights to foreclose

18  its lien or that otherwise materially affect the rights and

19  interests of the mortgagees.

20         (b)  As to mortgages recorded before October 1, 2007,

21  any existing provisions in the declaration, articles of

22  incorporation, or bylaws requiring mortgagee consent shall be

23  enforceable.

24         (c)  In securing consent or joinder, the association

25  shall be entitled to rely upon the public records to identify

26  the holders of outstanding mortgages. The association may use

27  the address provided in the original recorded mortgage

28  document, unless there is a different address for the holder

29  of the mortgage in a recorded assignment or modification of

30  the mortgage, which recorded assignment or modification must

31  reference the official records book and page on which the

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 1  original mortgage was recorded. Once the association has

 2  identified the recorded mortgages of record, the association

 3  shall, in writing, request of each unit owner whose unit is

 4  encumbered by a mortgage of record any information the owner

 5  has in his or her possession regarding the name and address of

 6  the person to whom mortgage payments are currently being made.

 7  Notice shall be sent to such person if the address provided in

 8  the original recorded mortgage document is different from the

 9  name and address of the mortgagee or assignee of the mortgage

10  as shown by the public record. The association shall be deemed

11  to have complied with this requirement by making the written

12  request of the unit owners required under this paragraph. Any

13  notices required to be sent to the mortgagees under this

14  paragraph shall be sent to all available addresses provided to

15  the association.

16         (d)  Any notice to the mortgagees required under

17  paragraph (c) may be sent by a method that establishes proof

18  of delivery, and any mortgagee who fails to respond within 60

19  days after the date of mailing shall be deemed to have

20  consented to the amendment.

21         (e)  For those amendments requiring mortgagee consent

22  on or after October 1, 2007, do not materially affect the

23  rights or interests of mortgagees. in the event mortgagee

24  consent is provided other than by properly recorded joinder,

25  such consent shall be evidenced by affidavit of the

26  association recorded in the public records of the county where

27  the declaration is recorded. Any amendment adopted without the

28  required consent of a mortgagee shall be voidable only by a

29  mortgagee who was entitled to notice and an opportunity to

30  consent. An action to void an amendment shall be subject to

31  the statute of limitations beginning 5 years after the date of

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 1  discovery as to the amendments described in subparagraphs

 2  (a)1. and 2. and 5 years after the date of recordation of the

 3  certificate of amendment for all other amendments. This

 4  provision shall apply to all mortgages, regardless of the date

 5  of recordation of the mortgage.

 6         (f)  Notwithstanding the provisions of this section,

 7  any amendment or amendments to conform a declaration of

 8  condominium to the insurance coverage provisions in s.

 9  718.111(11) may be made as provided in that section.

10         Section 4.  Section 718.114, Florida Statutes, is

11  amended to read:

12         718.114  Association powers.--An association has the

13  power to enter into agreements, to acquire leaseholds,

14  memberships, and other possessory or use interests in lands or

15  facilities such as country clubs, golf courses, marinas, and

16  other recreational facilities. It has this power whether or

17  not the lands or facilities are contiguous to the lands of the

18  condominium, if they are intended to provide enjoyment,

19  recreation, or other use or benefit to the unit owners. All of

20  these leaseholds, memberships, and other possessory or use

21  interests existing or created at the time of recording the

22  declaration must be stated and fully described in the

23  declaration. Subsequent to the recording of the declaration,

24  agreements acquiring these leaseholds, memberships, or other

25  possessory or use interests not entered into within 12 months

26  following the recording of the declaration shall be considered

27  a material alteration or substantial addition to the real

28  property that is association property, and the association may

29  not acquire or enter into agreements acquiring these

30  leaseholds, memberships, or other possessory or use interests

31  except as authorized by the declaration as provided in s.

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 1  718.113. The declaration may provide that the rental,

 2  membership fees, operations, replacements, and other expenses

 3  are common expenses and may impose covenants and restrictions

 4  concerning their use and may contain other provisions not

 5  inconsistent with this chapter. A condominium association may

 6  conduct bingo games as provided in s. 849.0931.

 7         Section 5.  Subsections (1) and (2) of section 718.404,

 8  Florida Statutes, are amended to read:

 9         718.404  Mixed-use condominiums.--When a condominium

10  consists of both residential and commercial units, the

11  following provisions shall apply:

12         (1)  The condominium documents shall not provide that

13  the owner of any commercial unit shall have the authority to

14  veto amendments to the declaration, articles of incorporation,

15  bylaws, or rules or regulations of the association. This

16  subsection shall apply retroactively as a remedial measure.

17         (2)  Subject to s. 718.301, where the number of

18  residential units in the condominium equals or exceeds 50

19  percent of the total units operated by the association, owners

20  of the residential units shall be entitled to vote for a

21  majority of the seats on the board of administration. This

22  subsection shall apply retroactively as a remedial measure.

23         Section 6.  Subsections (18) through (27) of section

24  719.103, Florida Statutes, are renumbered as subsections (19)

25  through (28), respectively, and a new subsection (18) is added

26  to that section to read:

27         719.103  Definitions.--As used in this chapter:

28         (18)  "Equity facilities club" means a club comprised

29  of recreational facilities in which proprietary membership

30  interests are sold to individuals, which membership interests

31  entitle the individuals to use certain physical facilities

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 1  owned by the equity club. Such physical facilities do not

 2  include a residential unit or accommodation. For purposes of

 3  this definition, the term "accommodation" shall include, but

 4  is not limited to, any apartment, residential cooperative

 5  unit, residential condominium unit, cabin, lodge, hotel or

 6  motel room, or other accommodation designed for overnight

 7  occupancy for one or more individuals.

 8         Section 7.  Section 719.507, Florida Statutes, is

 9  amended to read:

10         719.507  Zoning and building laws, ordinances, and

11  regulations.--All laws, ordinances, and regulations concerning

12  buildings or zoning shall be construed and applied with

13  reference to the nature and use of such property, without

14  regard to the form of ownership. No law, ordinance, or

15  regulation shall establish any requirement concerning the use,

16  location, placement, or construction of buildings or other

17  improvements which are, or may thereafter be, subjected to the

18  cooperative or equity facilities club form of ownership,

19  unless such requirement shall be equally applicable to all

20  buildings and improvements of the same kind not then, or

21  thereafter to be, subjected to the cooperative or equity

22  facilities club form of ownership. This section does not apply

23  if the owner in fee of any land enters into and records a

24  covenant that existing improvements or improvements to be

25  constructed shall not be converted to the cooperative form of

26  residential ownership prior to 5 years after the later of the

27  date of the covenant or completion date of the improvements.

28  Such covenant shall be entered into with the governing body of

29  the municipality in which the land is located or, if the land

30  is not located in a municipality, with the governing body of

31  the county in which the land is located.

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 1         Section 8.  Subsections (4) and (5) of section 720.302,

 2  Florida Statutes, are amended to read:

 3         720.302  Purposes, scope, and application.--

 4         (4)  This chapter does not apply to any association

 5  that is subject to regulation under chapter 718, chapter 719,

 6  or chapter 721; or to any nonmandatory association formed

 7  under chapter 723, except to the extent that a provision of

 8  chapter 718, chapter 719, or chapter 721 is expressly

 9  incorporated into this chapter for the purpose of regulating

10  homeowners' associations.

11         (5)  Unless expressly stated to the contrary,

12  corporations not for profit that operate residential

13  homeowners' associations in this state shall be governed by

14  and subject to chapter 607, if the association was

15  incorporated under that chapter, or to chapter 617, if the

16  association was incorporated under that chapter, and this

17  chapter. This subsection is intended to clarify existing law.

18         Section 9.  Subsections (2), (6), and (7) of section

19  720.303, Florida Statutes, are amended, and paragraph (d) is

20  added to subsection (5) of that section, to read:

21         720.303  Association powers and duties; meetings of

22  board; official records; budgets; financial reporting;

23  association funds; recalls.--

24         (2)  BOARD MEETINGS.--

25         (a)  A meeting of the board of directors of an

26  association occurs whenever a quorum of the board gathers to

27  conduct association business. All meetings of the board must

28  be open to all members except for meetings between the board

29  and its attorney with respect to proposed or pending

30  litigation where the contents of the discussion would

31  otherwise be governed by the attorney-client privilege. The

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 1  provisions of this subsection shall also apply to the meetings

 2  of any committee or other similar body when a final decision

 3  will be made regarding the expenditure of association funds

 4  and to meetings of any body vested with the power to approve

 5  or disapprove architectural decisions with respect to a

 6  specific parcel of residential property owned by a member of

 7  the community.

 8         (b)  Members have the right to attend all meetings of

 9  the board and to speak on any matter placed on the agenda by

10  petition of the voting interests for at least 3 minutes. The

11  association may adopt written reasonable rules expanding the

12  right of members to speak and governing the frequency,

13  duration, and other manner of member statements, which rules

14  must be consistent with this paragraph and may include a

15  sign-up sheet for members wishing to speak. Notwithstanding

16  any other law, the requirement that board meetings and

17  committee meetings be open to the members is inapplicable to

18  meetings between the board or a committee and the

19  association's attorney, with respect to meetings of the board

20  held for the purpose of discussing personnel matters.

21         (c)  The bylaws shall provide for giving notice to

22  parcel owners and members of all board meetings and, if they

23  do not do so, shall be deemed to provide the following:

24         1.  Notices of all board meetings must be posted in a

25  conspicuous place in the community at least 48 hours in

26  advance of a meeting, except in an emergency.  In the

27  alternative, if notice is not posted in a conspicuous place in

28  the community, notice of each board meeting must be mailed or

29  delivered to each member at least 7 days before the meeting,

30  except in an emergency. Notwithstanding this general notice

31  requirement, for communities with more than 100 members, the

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 1  bylaws may provide for a reasonable alternative to posting or

 2  mailing of notice for each board meeting, including

 3  publication of notice, provision of a schedule of board

 4  meetings, or the conspicuous posting and repeated broadcasting

 5  of the notice on a closed-circuit cable television system

 6  serving the homeowners' association. However, if broadcast

 7  notice is used in lieu of a notice posted physically in the

 8  community, the notice must be broadcast at least four times

 9  every broadcast hour of each day that a posted notice is

10  otherwise required. When broadcast notice is provided, the

11  notice and agenda must be broadcast in a manner and for a

12  sufficient continuous length of time so as to allow an average

13  reader to observe the notice and read and comprehend the

14  entire content of the notice and the agenda. The bylaws or

15  amended bylaws may provide for giving notice by electronic

16  transmission in a manner authorized by law for meetings of the

17  board of directors, committee meetings requiring notice under

18  this section, and annual and special meetings of the members;

19  however, a member must consent in writing to receiving notice

20  by electronic transmission.

21         2.  An assessment may not be levied at a board meeting

22  unless the notice of the meeting includes a statement that

23  assessments will be considered and the nature of the

24  assessments. Written notice of any meeting at which special

25  assessments will be considered or at which amendments to rules

26  regarding parcel use will be considered must be mailed,

27  delivered, or electronically transmitted to the members and

28  parcel owners and posted conspicuously on the property or

29  broadcast on closed-circuit cable television not less than 14

30  days before the meeting.

31  

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 1         3.  Directors may not vote by proxy or by secret ballot

 2  at board meetings, except that secret ballots may be used in

 3  the election of officers. This subsection also applies to the

 4  meetings of any committee or other similar body, when a final

 5  decision will be made regarding the expenditure of association

 6  funds, and to any body vested with the power to approve or

 7  disapprove architectural decisions with respect to a specific

 8  parcel of residential property owned by a member of the

 9  community.

10         (d)  If 20 percent of the total voting interests

11  petition the board to address an item of business, the board

12  shall at its next regular board meeting or at a special

13  meeting of the board, but not later than 60 days after the

14  receipt of the petition, take the petitioned item up on an

15  agenda. The board shall give all members notice of the meeting

16  at which the petitioned item shall be addressed in accordance

17  with the 14-day notice requirement pursuant to subparagraph

18  (c)2. Each member shall have the right to speak for at least 3

19  minutes on each matter placed on the agenda by petition,

20  provided that the member signs the sign-up sheet, if one is

21  provided, or submits a written request to speak prior to the

22  meeting. Other than addressing the petitioned item at the

23  meeting, the board is not obligated to take any other action

24  requested by the petition.

25         (5)  INSPECTION AND COPYING OF RECORDS.--The official

26  records shall be maintained within the state and must be open

27  to inspection and available for photocopying by members or

28  their authorized agents at reasonable times and places within

29  10 business days after receipt of a written request for

30  access. This subsection may be complied with by having a copy

31  of the official records available for inspection or copying in

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 1  the community. If the association has a photocopy machine

 2  available where the records are maintained, it must provide

 3  parcel owners with copies on request during the inspection if

 4  the entire request is limited to no more than 25 pages.

 5         (d)  The association or its authorized agent is not

 6  required to provide a prospective purchaser or lienholder with

 7  information about the residential subdivision or the

 8  association other than information or documents required by

 9  this chapter to be made available or disclosed. The

10  association or its authorized agent may charge a reasonable

11  fee to the prospective purchaser or lienholder or the current

12  parcel owner or member for providing good faith responses to

13  requests for information by or on behalf of a prospective

14  purchaser or lienholder, other than that required by law, if

15  the fee does not exceed $150 plus the reasonable cost of

16  photocopying and any attorney's fees incurred by the

17  association in connection with the response.

18         (6)  BUDGETS.--

19         (a)  The association shall prepare an annual budget

20  that sets out the annual operating expenses. The budget must

21  reflect the estimated revenues and expenses for that year and

22  the estimated surplus or deficit as of the end of the current

23  year. The budget must set out separately all fees or charges

24  paid for by the association for recreational amenities,

25  whether owned by the association, the developer, or another

26  person. The association shall provide each member with a copy

27  of the annual budget or a written notice that a copy of the

28  budget is available upon request at no charge to the member.

29  The copy must be provided to the member within the time limits

30  set forth in subsection (5).

31  

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 1         (b)  In addition to annual operating expenses, the

 2  budget may include reserve accounts for capital expenditures

 3  and deferred maintenance for which the association is

 4  responsible to the extent that the governing documents do not

 5  limit increases in assessments, including reserves. If the

 6  budget of the association includes reserve accounts, such

 7  reserves shall be determined, maintained, and waived in the

 8  manner provided in this subsection. Once an association

 9  provides for reserve accounts in the budget, the association

10  shall thereafter determine, maintain, and waive reserves in

11  compliance with this subsection.

12         (c)  If the budget of the association does not provide

13  for reserve accounts governed by this subsection and the

14  association is responsible for the repair and maintenance of

15  capital improvements that may result in a special assessment

16  if reserves are not provided, each financial report for the

17  preceding fiscal year required by subsection (7) shall contain

18  the following statement in conspicuous type: THE BUDGET OF THE

19  ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL

20  EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN

21  SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE

22  ACCOUNTS PURSUANT TO THE PROVISIONS OF SECTION 720.303(6),

23  FLORIDA STATUTES, UPON THE APPROVAL OF NOT LESS THAN A

24  MAJORITY OF THE TOTAL VOTING INTERESTS OF THE ASSOCIATION.

25         (d)  An association shall be deemed to have provided

26  for reserve accounts when reserve accounts have been initially

27  established by the developer or when the membership of the

28  association affirmatively elects to provide for reserves. If

29  reserve accounts are not initially provided for by the

30  developer, the membership of the association may elect to do

31  so upon the affirmative approval of not less than a majority

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 1  of the total voting interests of the association. Such

 2  approval may be attained by vote of the members at a duly

 3  called meeting of the membership or upon a written consent

 4  executed by not less than a majority of the total voting

 5  interests in the community. The approval action of the

 6  membership shall state that reserve accounts shall be provided

 7  for in the budget and designate the components for which the

 8  reserve accounts are to be established. Upon approval by the

 9  membership, the board of directors shall provide for the

10  required reserve accounts for inclusion in the budget in the

11  next fiscal year following the approval and in each year

12  thereafter. Once established as provided in this subsection,

13  the reserve accounts shall be funded or maintained or shall

14  have their funding waived in the manner provided in paragraph

15  (f).

16         (e)  The amount to be reserved in any account

17  established shall be computed by means of a formula that is

18  based upon estimated remaining useful life and estimated

19  replacement cost or deferred maintenance expense of each

20  reserve item. The association may adjust replacement reserve

21  assessments annually to take into account any changes in

22  estimates of cost or useful life of a reserve item.

23         (f)  Once a reserve account or reserve accounts are

24  established, the membership of the association, upon a

25  majority vote at a meeting at which a quorum is present, may

26  provide for no reserves or less reserves than required by this

27  section. If a meeting of the unit owners has been called to

28  determine whether to waive or reduce the funding of reserves

29  and no such result is achieved or a quorum is not present, the

30  reserves as included in the budget shall go into effect. After

31  the turnover, the developer may vote its voting interest to

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 1  waive or reduce the funding of reserves. Any vote taken

 2  pursuant to this subsection to waive or reduce reserves shall

 3  be applicable only to one budget year.

 4         (g)  Funding formulas for reserves authorized by this

 5  section shall be based on either a separate analysis of each

 6  of the required assets or a pooled analysis of two or more of

 7  the required assets.

 8         1.  If the association maintains separate reserve

 9  accounts for each of the required assets, the amount of the

10  contribution to each reserve account shall be the sum of the

11  following two calculations:

12         a.  The total amount necessary, if any, to bring a

13  negative component balance to zero.

14         b.  The total estimated deferred maintenance expense or

15  estimated replacement cost of the reserve component less the

16  estimated balance of the reserve component as of the beginning

17  of the period for which the budget will be in effect. The

18  remainder, if greater than zero, shall be divided by the

19  estimated remaining useful life of the component.

20  

21  The formula may be adjusted each year for changes in estimates

22  and deferred maintenance performed during the year and may

23  include factors such as inflation and earnings on invested

24  funds.

25         2.  If the association maintains a pooled account of

26  two or more of the required reserve assets, the amount of the

27  contribution to the pooled reserve account as disclosed on the

28  proposed budget shall not be less than that required to ensure

29  that the balance on hand at the beginning of the period for

30  which the budget will go into effect plus the projected annual

31  cash inflows over the remaining estimated useful life of all

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 1  of the assets that make up the reserve pool are equal to or

 2  greater than the projected annual cash outflows over the

 3  remaining estimated useful lives of all of the assets that

 4  make up the reserve pool, based on the current reserve

 5  analysis. The projected annual cash inflows may include

 6  estimated earnings from investment of principal. The reserve

 7  funding formula shall not include any type of balloon

 8  payments.

 9         (h)  Reserve funds and any interest accruing thereon

10  shall remain in the reserve account or accounts and shall be

11  used only for authorized reserve expenditures unless their use

12  for other purposes is approved in advance by a majority vote

13  at a meeting at which a quorum is present. Prior to turnover

14  of control of an association by a developer to parcel owners,

15  the developer-controlled association shall not vote to use

16  reserves for purposes other than those for which they were

17  intended without the approval of a majority of all

18  nondeveloper voting interests voting in person or by limited

19  proxy at a duly called meeting of the association.

20         (7)  FINANCIAL REPORTING.--Within 90 days after the end

21  of the fiscal year, or annually on the date provided in the

22  bylaws, the association shall prepare and complete, or

23  contract with a third party for the preparation and completion

24  of, a financial report for the preceding fiscal year. Within

25  21 days after the final financial report is completed by the

26  association or received from the third party, but not later

27  than 120 days after the end of the fiscal year or other date

28  as provided in the bylaws, the association shall prepare an

29  annual financial report within 60 days after the close of the

30  fiscal year. The association shall, within the time limits set

31  forth in subsection (5), provide each member with a copy of

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 1  the annual financial report or a written notice that a copy of

 2  the financial report is available upon request at no charge to

 3  the member. Financial reports shall be prepared as follows:

 4         (a)  An association that meets the criteria of this

 5  paragraph shall prepare or cause to be prepared a complete set

 6  of financial statements in accordance with generally accepted

 7  accounting principles as adopted by the Board of Accountancy.

 8  The financial statements shall be based upon the association's

 9  total annual revenues, as follows:

10         1.  An association with total annual revenues of

11  $100,000 or more, but less than $200,000, shall prepare

12  compiled financial statements.

13         2.  An association with total annual revenues of at

14  least $200,000, but less than $400,000, shall prepare reviewed

15  financial statements.

16         3.  An association with total annual revenues of

17  $400,000 or more shall prepare audited financial statements.

18         (b)1.  An association with total annual revenues of

19  less than $100,000 shall prepare a report of cash receipts and

20  expenditures.

21         2.  An association in a community of fewer than 50

22  parcels, regardless of the association's annual revenues, may

23  prepare a report of cash receipts and expenditures in lieu of

24  financial statements required by paragraph (a) unless the

25  governing documents provide otherwise.

26         3.  A report of cash receipts and disbursement must

27  disclose the amount of receipts by accounts and receipt

28  classifications and the amount of expenses by accounts and

29  expense classifications, including, but not limited to, the

30  following, as applicable: costs for security, professional,

31  and management fees and expenses; taxes; costs for recreation

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 1  facilities; expenses for refuse collection and utility

 2  services; expenses for lawn care; costs for building

 3  maintenance and repair; insurance costs; administration and

 4  salary expenses; and reserves if maintained by the

 5  association.

 6         (c)  If 20 percent of the parcel owners petition the

 7  board for a level of financial reporting higher than that

 8  required by this section, the association shall duly notice

 9  and hold a meeting of members within 30 days of receipt of the

10  petition for the purpose of voting on raising the level of

11  reporting for that fiscal year. Upon approval of a majority of

12  the total voting interests of the parcel owners, the

13  association shall prepare or cause to be prepared, shall amend

14  the budget or adopt a special assessment to pay for the

15  financial report regardless of any provision to the contrary

16  in the governing documents, and shall provide within 90 days

17  of the meeting or the end of the fiscal year, whichever occurs

18  later:

19         1.  Compiled, reviewed, or audited financial

20  statements, if the association is otherwise required to

21  prepare a report of cash receipts and expenditures;

22         2.  Reviewed or audited financial statements, if the

23  association is otherwise required to prepare compiled

24  financial statements; or

25         3.  Audited financial statements if the association is

26  otherwise required to prepare reviewed financial statements.

27         (d)  If approved by a majority of the voting interests

28  present at a properly called meeting of the association, an

29  association may prepare or cause to be prepared:

30         1.  A report of cash receipts and expenditures in lieu

31  of a compiled, reviewed, or audited financial statement;

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 1         2.  A report of cash receipts and expenditures or a

 2  compiled financial statement in lieu of a reviewed or audited

 3  financial statement; or

 4         3.  A report of cash receipts and expenditures, a

 5  compiled financial statement, or a reviewed financial

 6  statement in lieu of an audited financial statement.

 7         Section 10.  Subsection (2) of section 720.303, Florida

 8  Statutes, as amended by section 2 of chapter 2004-345 and

 9  section 15 of chapter 2004-353, Laws of Florida, is repealed.

10         Section 11.  Section 720.3035, Florida Statutes, is

11  created to read:

12         720.3035  Architectural control covenants; parcel owner

13  improvements; rights and privileges.--

14         (1)  The authority of an association or any

15  architectural, construction improvement, or other such similar

16  committee of an association to review and approve plans and

17  specifications for the location, size, type, or appearance of

18  any structure or other improvement on a parcel, or to enforce

19  standards for the external appearance of any structure or

20  improvement located on a parcel, shall be permitted only to

21  the extent that the authority is specifically stated or

22  reasonably inferred as to such location, size, type, or

23  appearance in the declaration of covenants or other published

24  guidelines and standards authorized by the declaration of

25  covenants.

26         (2)  If the declaration of covenants or other published

27  guidelines and standards authorized by the declaration of

28  covenants provides options for the use of material, the size

29  of the structure or improvement, the design of the structure

30  or improvement, or the location of the structure or

31  improvement on the parcel, neither the association nor any

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 1  architectural, construction improvement, or other such similar

 2  committee of the association shall restrict the right of a

 3  parcel owner to select from the options provided in the

 4  declaration of covenants or other published guidelines and

 5  standards authorized by the declaration of covenants.

 6         (3)  Unless otherwise specifically stated in the

 7  declaration of covenants or other published guidelines and

 8  standards authorized by the declaration of covenants, each

 9  parcel shall be deemed to have only one front for purposes of

10  determining the required front setback even if the parcel is

11  bounded by a roadway or other easement on more than one side.

12  When the declaration of covenants or other published

13  guidelines and standards authorized by the declaration of

14  covenants do not provide for specific setback limitations, the

15  applicable county or municipal setback limitations shall

16  apply, and neither the association nor any architectural,

17  construction improvement, or other such similar committee of

18  the association shall enforce or attempt to enforce any

19  setback limitation that is inconsistent with the applicable

20  county or municipal standard or standards.

21         (4)  Each parcel owner shall be entitled to the rights

22  and privileges set forth in the declaration of covenants or

23  other published guidelines and standards authorized by the

24  declaration of covenants concerning the architectural use of

25  the parcel, and the construction of permitted structures and

26  improvements on the parcel and such rights and privileges

27  shall not be unreasonably infringed upon or impaired by the

28  association or any architectural, construction improvement, or

29  other such similar committee of the association. If the

30  association or any architectural, construction improvement, or

31  other such similar committee of the association should

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 1  unreasonably, knowingly, and willfully infringe upon or impair

 2  the rights and privileges set forth in the declaration of

 3  covenants or other published guidelines and standards

 4  authorized by the declaration of covenants, the adversely

 5  affected parcel owner shall be entitled to recover damages

 6  caused by such infringement or impairment, including any costs

 7  and reasonable attorney's fees incurred in preserving or

 8  restoring the rights and privileges of the parcel owner set

 9  forth in the declaration of covenants or other published

10  guidelines and standards authorized by the declaration of

11  covenants.

12         (5)  Neither the association nor any architectural,

13  construction improvement, or other such similar committee of

14  the association shall enforce any policy or restriction that

15  is inconsistent with the rights and privileges of a parcel

16  owner set forth in the declaration of covenants or other

17  published guidelines and standards authorized by the

18  declaration of covenants, whether uniformly applied or not.

19  Neither the association nor any architectural, construction

20  improvement, or other such similar committee of the

21  association may rely upon a policy or restriction that is

22  inconsistent with the declaration of covenants or other

23  published guidelines and standards authorized by the

24  declaration of covenants, whether uniformly applied or not, in

25  defense of any action taken in the name of or on behalf of the

26  association against a parcel owner.

27         Section 12.  Subsection (1) of section 720.305, Florida

28  Statutes, is amended to read:

29         720.305  Obligations of members; remedies at law or in

30  equity; levy of fines and suspension of use rights; failure to

31  fill sufficient number of vacancies on board of directors to

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 1  constitute a quorum; appointment of receiver upon petition of

 2  any member.--

 3         (1)  Each member and the member's tenants, guests, and

 4  invitees, and each association, are governed by, and must

 5  comply with, this chapter, the governing documents of the

 6  community, and the rules of the association. Actions at law or

 7  in equity, or both, to redress alleged failure or refusal to

 8  comply with these provisions may be brought by the association

 9  or by any member against:

10         (a)  The association;

11         (b)  A member;

12         (c)  Any director or officer of an association who

13  willfully and knowingly fails to comply with these provisions;

14  and

15         (d)  Any tenants, guests, or invitees occupying a

16  parcel or using the common areas.

17  

18  The prevailing party in any such litigation is entitled to

19  recover reasonable attorney's fees and costs. A member

20  prevailing in an action between the association and the member

21  under this section, in addition to recovering his or her

22  reasonable attorney's fees, may recover additional amounts as

23  determined by the court to be necessary to reimburse the

24  member for his or her share of assessments levied by the

25  association to fund its expenses of the litigation. This

26  relief does not exclude other remedies provided by law. This

27  section does not deprive any person of any other available

28  right or remedy.

29         Section 13.  Paragraph (c) of subsection (1) of section

30  720.306, Florida Statutes, is amended to read:

31  

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 1         720.306  Meetings of members; voting and election

 2  procedures; amendments.--

 3         (1)  QUORUM; AMENDMENTS.--

 4         (c)  Unless otherwise provided in the governing

 5  documents as originally recorded or permitted by this chapter

 6  or chapter 617, an amendment may not materially and adversely

 7  alter the proportionate voting interest appurtenant to a

 8  parcel or increase the proportion or percentage by which a

 9  parcel shares in the common expenses of the association unless

10  the record parcel owner and all record owners of liens on the

11  parcels join in the execution of the amendment. For purposes

12  of this section, a change in quorum requirements is not an

13  alteration of voting interests. The merger or consolidation of

14  one or more associations under a plan of merger or

15  consolidation under chapter 607 or chapter 617 shall not be

16  considered a material or adverse alteration of the

17  proportionate voting interest appurtenant to a parcel.

18         Section 14.  Paragraph (t) is added to subsection (3)

19  of section 720.307, Florida Statutes, to read:

20         720.307  Transition of association control in a

21  community.--With respect to homeowners' associations:

22         (3)  At the time the members are entitled to elect at

23  least a majority of the board of directors of the homeowners'

24  association, the developer shall, at the developer's expense,

25  within no more than 90 days deliver the following documents to

26  the board:

27         (t)  The financial records, including financial

28  statements of the association, and source documents from the

29  incorporation of the association through the date of turnover.

30  The records shall be audited by an independent certified

31  public accountant for the period from the incorporation of the

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 1  association or from the period covered by the last audit, if

 2  an audit has been performed for each fiscal year since

 3  incorporation. All financial statements shall be prepared in

 4  accordance with generally accepted accounting principles and

 5  shall be audited in accordance with generally accepted

 6  auditing standards, as prescribed by the Board of Accountancy,

 7  pursuant to chapter 473. The certified public accountant

 8  performing the audit shall examine to the extent necessary

 9  supporting documents and records, including the cash

10  disbursements and related paid invoices to determine if

11  expenditures were for association purposes and the billings,

12  cash receipts, and related records of the association to

13  determine that the developer was charged and paid the proper

14  amounts of assessments. This paragraph applies to associations

15  with a date of incorporation after December 31, 2007.

16         Section 15.  Section 720.308, Florida Statutes, is

17  amended to read:

18         720.308  Assessments and charges.--

19         (1)  ASSESSMENTS.--For any community created after

20  October 1, 1995, the governing documents must describe the

21  manner in which expenses are shared and specify the member's

22  proportional share thereof. Assessments levied pursuant to the

23  annual budget or special assessment must be in the member's

24  proportional share of expenses as described in the governing

25  document, which share may be different among classes of

26  parcels based upon the state of development thereof, levels of

27  services received by the applicable members, or other relevant

28  factors. While the developer is in control of the homeowners'

29  association, it may be excused from payment of its share of

30  the operating expenses and assessments related to its parcels

31  for any period of time for which the developer has, in the

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 1  declaration, obligated itself to pay any operating expenses

 2  incurred that exceed the assessments receivable from other

 3  members and other income of the association. This section does

 4  not apply to an association, no matter when created, if the

 5  association is created in a community that is included in an

 6  effective development-of-regional-impact development order as

 7  of the effective date of this act, together with any approved

 8  modifications thereto.

 9         (2)  GUARANTEES OF COMMON EXPENSES.--

10         (a)  Establishment of a guarantee.--If a guarantee of

11  the assessments of parcel owners is not included in the

12  purchase contracts or declaration, any agreement establishing

13  a guarantee shall only be effective upon the approval of a

14  majority of the voting interests of the members other than the

15  developer. Approval shall be expressed at a meeting of the

16  members voting in person or by limited proxy or by agreement

17  in writing without a meeting if provided in the bylaws. Such

18  guarantee must meet the requirements of this section.

19         (b)  Guarantee period.--The period of time for the

20  guarantee shall be indicated by a specific beginning and

21  ending date or event.

22         1.  The ending date or event shall be the same for all

23  of the members of an association, including members in

24  different phases of the development.

25         2.  The guarantee may provide for different intervals

26  of time during a guarantee period with different dollar

27  amounts for each such interval.

28         3.  The guarantee may provide that after the initial

29  stated period, the developer has an option to extend the

30  guarantee for one or more additional stated periods. The

31  extension of a guarantee is limited to extending the ending

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 1  date or event; therefore, the developer does not have the

 2  option of changing the level of assessments guaranteed.

 3         (3)  MAXIMUM LEVEL OF ASSESSMENTS.--The stated dollar

 4  amount of the guarantee shall be an exact dollar amount for

 5  each parcel identified in the declaration. Regardless of the

 6  stated dollar amount of the guarantee, assessments charged to

 7  a member shall not exceed the maximum obligation of the member

 8  based on the total amount of the adopted budget and the

 9  member's proportionate share of the expenses as described in

10  the governing documents.

11         (4)  CASH FUNDING REQUIREMENTS DURING GUARANTEE.--The

12  cash payments required from the guarantor during the guarantee

13  period shall be determined as follows:

14         (a)  If at any time during the guarantee period the

15  funds collected from member assessments at the guaranteed

16  level and other revenues collected by the association are not

17  sufficient to provide payment, on a timely basis, of all

18  assessments, including the full funding of the reserves unless

19  properly waived, the guarantor shall advance sufficient cash

20  to the association at the time such payments are due.

21         (b)  Expenses incurred in the production of

22  nonassessment revenues, not in excess of the nonassessment

23  revenues, shall not be included in the assessments. If the

24  expenses attributable to nonassessment revenues exceed

25  nonassessment revenues, only the excess expenses must be

26  funded by the guarantor. Interest earned on the investment of

27  association funds may be used to pay the income tax expense

28  incurred as a result of the investment; such expense shall not

29  be charged to the guarantor; and the net investment income

30  shall be retained by the association. Each such

31  nonassessment-revenue-generating activity shall be considered

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 1  separately. Any portion of the parcel assessment which is

 2  budgeted for designated capital contributions of the

 3  association shall not be used to pay operating expenses.

 4         (5)  CALCULATION OF GUARANTOR'S FINAL OBLIGATION.--The

 5  guarantor's total financial obligation to the association at

 6  the end of the guarantee period shall be determined on the

 7  accrual basis using the following formula: the guarantor shall

 8  pay any deficits that exceed the guaranteed amount, less the

 9  total regular periodic assessments earned by the association

10  from the members other than the guarantor during the guarantee

11  period regardless of whether the actual level charged was less

12  than the maximum guaranteed amount.

13         (6)  EXPENSES.--Expenses incurred in the production of

14  nonassessment revenues, not in excess of the nonassessment

15  revenues, shall not be included in the operating expenses. If

16  the expenses attributable to nonassessment revenues exceed

17  nonassessment revenues, only the excess expenses must be

18  funded by the guarantor. Interest earned on the investment of

19  association funds may be used to pay the income tax expense

20  incurred as a result of the investment; such expense shall not

21  be charged to the guarantor; and the net investment income

22  shall be retained by the association. Each such

23  nonassessment-revenue-generating activity shall be considered

24  separately. Any portion of the parcel assessment which is

25  budgeted for designated capital contributions of the

26  association shall not be used to pay operating expenses.

27         Section 16.  Section 720.311, Florida Statutes, is

28  amended to read:

29         720.311  Dispute resolution.--

30         (1)  The Legislature finds that alternative dispute

31  resolution has made progress in reducing court dockets and

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 1  trials and in offering a more efficient, cost-effective option

 2  to litigation. The filing of any petition for mediation or

 3  arbitration or the serving of a demand for presuit mediation

 4  as provided for in this section shall toll the applicable

 5  statute of limitations. Any recall dispute filed with the

 6  department pursuant to s. 720.303(10) shall be conducted by

 7  the department in accordance with the provisions of ss.

 8  718.112(2)(j) and 718.1255 and the rules adopted by the

 9  division. In addition, the department shall conduct mandatory

10  binding arbitration of election disputes between a member and

11  an association pursuant to s. 718.1255 and rules adopted by

12  the division. Neither election disputes nor recall disputes

13  are eligible for presuit mediation; these disputes shall be

14  arbitrated by the department. At the conclusion of the

15  proceeding, the department shall charge the parties a fee in

16  an amount adequate to cover all costs and expenses incurred by

17  the department in conducting the proceeding. Initially, the

18  petitioner shall remit a filing fee of at least $200 to the

19  department. The fees paid to the department shall become a

20  recoverable cost in the arbitration proceeding, and the

21  prevailing party in an arbitration proceeding shall recover

22  its reasonable costs and attorney's fees in an amount found

23  reasonable by the arbitrator. The department shall adopt rules

24  to effectuate the purposes of this section.

25         (2)(a)  Disputes between an association and a parcel

26  owner regarding use of or changes to the parcel or the common

27  areas and other covenant enforcement disputes, disputes

28  regarding amendments to the association documents, disputes

29  regarding meetings of the board and committees appointed by

30  the board, membership meetings not including election

31  meetings, and access to the official records of the

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 1  association shall be the subject of a demand filed with the

 2  department for presuit mandatory mediation served by an

 3  aggrieved party before the dispute is filed in court. Presuit

 4  mediation proceedings must be conducted in accordance with the

 5  applicable Florida Rules of Civil Procedure, and these

 6  proceedings are privileged and confidential to the same extent

 7  as court-ordered mediation. Disputes subject to presuit

 8  mediation under this section shall not include the collection

 9  of any assessment, fine, or other financial obligation,

10  including attorney's fees and costs, claimed to be due or any

11  action to enforce a prior mediation settlement agreement

12  between the parties. Also, in any dispute subject to presuit

13  mediation under this section where emergency relief is

14  required, a motion for temporary injunctive relief may be

15  filed with the court without first complying with the presuit

16  mediation requirements of this section. After any issues

17  regarding emergency or temporary relief are resolved, the

18  court may either refer the parties to a mediation program

19  administered by the courts or require mediation under this

20  section. An arbitrator or judge may not consider any

21  information or evidence arising from the presuit mediation

22  proceeding except in a proceeding to impose sanctions for

23  failure to attend a presuit mediation session or to enforce a

24  mediated settlement agreement. Persons who are not parties to

25  the dispute may not attend the presuit mediation conference

26  without the consent of all parties, except for counsel for the

27  parties and a corporate representative designated by the

28  association. When mediation is attended by a quorum of the

29  board, such mediation is not a board meeting for purposes of

30  notice and participation set forth in s. 720.303. An aggrieved

31  party shall serve on the responding party a written demand to

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 1  participate in presuit mediation in substantially the

 2  following form:

 3  

 4         STATUTORY OFFER TO PARTICIPATE IN PRESUIT MEDIATION

 5  

 6         The alleged aggrieved party,__________________,

 7         hereby demands that _________________, as the

 8         responding party, engage in mandatory presuit

 9         mediation in connection with the following

10         disputes, which by statute are of a type that

11         are subject to presuit mediation:

12  

13         (List specific nature of the dispute or

14         disputes to be mediated and the authority

15         supporting a finding of a violation as to each

16         dispute.)

17  

18         Pursuant to section 720.311, Florida Statutes,

19         this demand to resolve the dispute through

20         presuit mediation is required before a lawsuit

21         can be filed concerning the dispute. Pursuant

22         to the statute, the parties are required to

23         engage in presuit mediation with a neutral

24         third-party mediator in order to attempt to

25         resolve this dispute without court action, and

26         the aggrieved party demands that you likewise

27         agree to this process. If you fail to

28         participate in the mediation process, suit may

29         be brought against you without further warning.

30  

31  

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 1         The process of mediation involves a supervised

 2         negotiation process in which a trained, neutral

 3         third-party mediator meets with both parties

 4         and assists them in exploring possible

 5         opportunities for resolving part or all of the

 6         dispute. By agreeing to participate in presuit

 7         mediation, you are not bound in any way to

 8         change your position. Furthermore, the mediator

 9         has no authority to make any decisions in this

10         matter or to determine who is right or wrong

11         and merely acts as a facilitator to ensure that

12         each party understands the position of the

13         other party and that all options for reasonable

14         settlement are fully explored.

15  

16         If an agreement is reached, it shall be reduced

17         to writing and becomes a binding and

18         enforceable commitment of the parties. A

19         resolution of one or more disputes in this

20         fashion avoids the need to litigate these

21         issues in court. The failure to reach an

22         agreement, or the failure of a party to

23         participate in the process, results in the

24         mediator declaring an impasse in the mediation,

25         after which the aggrieved party may proceed to

26         court on all outstanding, unsettled disputes.

27         If you have failed or refused to participate in

28         the entire mediation process, you will not be

29         entitled to recover attorney's fees, even if

30         you prevail.

31  

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 1         The aggrieved party has selected and hereby

 2         lists five certified mediators who we believe

 3         to be neutral and qualified to mediate the

 4         dispute. You have the right to select any one

 5         of these mediators. The fact that one party may

 6         be familiar with one or more of the listed

 7         mediators does not mean that the mediator

 8         cannot act as a neutral and impartial

 9         facilitator. Any mediator who cannot act in

10         this capacity is required ethically to decline

11         to accept engagement. The mediators that we

12         suggest, and their current hourly rates, are as

13         follows:

14  

15         (List the names, addresses, telephone numbers,

16         and hourly rates of the mediators. Other

17         pertinent information about the background of

18         the mediators may be included as an

19         attachment.)

20  

21         You may contact the offices of these mediators

22         to confirm that the listed mediators will be

23         neutral and will not show any favoritism toward

24         either party. The Florida Supreme Court can

25         provide you a list of certified mediators.

26  

27         Unless otherwise agreed by the parties, section

28         720.311(2)(b), Florida Statutes, requires that

29         the parties share the costs of presuit

30         mediation equally, including the fee charged by

31         the mediator. An average mediation may require

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 1         three to four hours of the mediator's time,

 2         including some preparation time, and the

 3         parties would need to share equally the

 4         mediator's fees as well as their own attorney's

 5         fees if they choose to employ an attorney in

 6         connection with the mediation. However, use of

 7         an attorney is not required and is at the

 8         option of each party. The mediators may require

 9         the advance payment of some or all of the

10         anticipated fees. The aggrieved party hereby

11         agrees to pay or prepay one-half of the

12         mediator's estimated fees and to forward this

13         amount or such other reasonable advance

14         deposits as the mediator requires for this

15         purpose. Any funds deposited will be returned

16         to you if these are in excess of your share of

17         the fees incurred.

18  

19         To begin your participation in presuit

20         mediation to try to resolve the dispute and

21         avoid further legal action, please sign below

22         and clearly indicate which mediator is

23         acceptable to you. We will then ask the

24         mediator to schedule a mutually convenient time

25         and place for the mediation conference to be

26         held. The mediation conference must be held

27         within ninety (90) days of this date, unless

28         extended by mutual written agreement. In the

29         event that you fail to respond within 20 days

30         from the date of this letter, or if you fail to

31         agree to at least one of the mediators that we

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 1         have suggested or to pay or prepay to the

 2         mediator one-half of the costs involved, the

 3         aggrieved party will be authorized to proceed

 4         with the filing of a lawsuit against you

 5         without further notice and may seek an award of

 6         attorney's fees or costs incurred in attempting

 7         to obtain mediation.

 8  

 9         Therefore, please give this matter your

10         immediate attention. By law, your response must

11         be mailed by certified mail, return receipt

12         requested, and by first-class mail to the

13         address shown on this demand.

14  

15         _____________________

16         _____________________

17  

18         RESPONDING PARTY: YOUR SIGNATURE INDICATES YOUR

19         AGREEMENT TO THAT CHOICE.

20  

21                   AGREEMENT TO MEDIATE

22  

23         The undersigned hereby agrees to participate in

24         presuit mediation and agrees to attend a

25         mediation conducted by the following mediator

26         or mediators who are listed above as someone

27         who would be acceptable to mediate this

28         dispute:

29  

30         (List acceptable mediator or mediators.)

31  

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 1         I/we further agree to pay or prepay one-half of

 2         the mediator's fees and to forward such advance

 3         deposits as the mediator may require for this

 4         purpose.

 5  

 6         _______________________

 7         Signature of responding party #1

 8  

 9         _______________________

10         Telephone contact information

11  

12         _______________________

13         Signature and telephone contact information of

14         responding party #2 (if applicable)(if property

15         is owned by more than one person, all owners

16         must sign)

17  

18         (b)  Service of the statutory demand to participate in

19  presuit mediation shall be effected by sending a letter in

20  substantial conformity with the above form by certified mail,

21  return receipt requested, with an additional copy being sent

22  by regular first-class mail, to the address of the responding

23  party as it last appears on the books and records of the

24  association. The responding party has 20 days from the date of

25  the mailing of the statutory demand to serve a response to the

26  aggrieved party in writing. The response shall be served by

27  certified mail, return receipt requested, with an additional

28  copy being sent by regular first-class mail, to the address

29  shown on the statutory demand. Notwithstanding the foregoing,

30  once the parties have agreed on a mediator, the mediator may

31  reschedule the mediation for a date and time mutually

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 1  convenient to the parties. The department shall conduct the

 2  proceedings through the use of department mediators or refer

 3  the disputes to private mediators who have been duly certified

 4  by the department as provided in paragraph (c). The parties

 5  shall share the costs of presuit mediation equally, including

 6  the fee charged by the mediator, if any, unless the parties

 7  agree otherwise, and the mediator may require advance payment

 8  of its reasonable fees and costs. The failure of any party to

 9  respond to a demand or response, to agree upon a mediator, to

10  make payment of fees and costs within the time established by

11  the mediator, or to appear for a scheduled mediation session

12  without the approval of the mediator, shall constitute the

13  failure or refusal to participate in the mediation process and

14  shall operate as an impasse in the presuit mediation by such

15  party, entitling the other party to proceed in court and to

16  seek an award of the costs and fees associated with the

17  mediation. Additionally, notwithstanding the provisions of any

18  other law or document, persons who fail or refuse to

19  participate in the entire mediation process may not recover

20  attorney's fees and costs in subsequent litigation relating to

21  the dispute. If any presuit mediation session cannot be

22  scheduled and conducted within 90 days after the offer to

23  participate in mediation was filed, an impasse shall be deemed

24  to have occurred unless both parties agree to extend this

25  deadline. If a department mediator is used, the department may

26  charge such fee as is necessary to pay expenses of the

27  mediation, including, but not limited to, the salary and

28  benefits of the mediator and any travel expenses incurred. The

29  petitioner shall initially file with the department upon

30  filing the disputes, a filing fee of $200, which shall be used

31  to defray the costs of the mediation. At the conclusion of the

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 1  mediation, the department shall charge to the parties, to be

 2  shared equally unless otherwise agreed by the parties, such

 3  further fees as are necessary to fully reimburse the

 4  department for all expenses incurred in the mediation.

 5         (c)(b)  If presuit mediation as described in paragraph

 6  (a) is not successful in resolving all issues between the

 7  parties, the parties may file the unresolved dispute in a

 8  court of competent jurisdiction or elect to enter into binding

 9  or nonbinding arbitration pursuant to the procedures set forth

10  in s. 718.1255 and rules adopted by the division, with the

11  arbitration proceeding to be conducted by a department

12  arbitrator or by a private arbitrator certified by the

13  department. If all parties do not agree to arbitration

14  proceedings following an unsuccessful presuit mediation, any

15  party may file the dispute in court. A final order resulting

16  from nonbinding arbitration is final and enforceable in the

17  courts if a complaint for trial de novo is not filed in a

18  court of competent jurisdiction within 30 days after entry of

19  the order. As to any issue or dispute that is not resolved at

20  presuit mediation, and as to any issue that is settled at

21  presuit mediation but is thereafter subject to an action

22  seeking enforcement of the mediation settlement, the

23  prevailing party in any subsequent arbitration or litigation

24  proceeding shall be entitled to seek recovery of all costs and

25  attorney's fees incurred in the presuit mediation process.

26         (d)(c)  The department shall develop a certification

27  and training program for private mediators and private

28  arbitrators which shall emphasize experience and expertise in

29  the area of the operation of community associations. A

30  mediator or arbitrator shall be authorized to conduct

31  mediation or arbitration under this section certified by the

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 1  department only if he or she has been certified as a circuit

 2  court civil mediator or arbitrator, respectively, pursuant to

 3  the requirements established attended at least 20 hours of

 4  training in mediation or arbitration, as appropriate, and only

 5  if the applicant has mediated or arbitrated at least 10

 6  disputes involving community associations within 5 years prior

 7  to the date of the application, or has mediated or arbitrated

 8  10 disputes in any area within 5 years prior to the date of

 9  application and has completed 20 hours of training in

10  community association disputes. In order to be certified by

11  the department, any mediator must also be certified by the

12  Florida Supreme Court. Settlement agreements resulting from

13  mediation shall not have precedential value in proceedings

14  involving parties other than those participating in the

15  mediation to support either a claim or defense in other

16  disputes. The department may conduct the training and

17  certification program within the department or may contract

18  with an outside vendor to perform the training or

19  certification. The expenses of operating the training and

20  certification and training program shall be paid by the moneys

21  and filing fees generated by the arbitration of recall and

22  election disputes and by the mediation of those disputes

23  referred to in this subsection and by the training fees.

24         (e)(d)  The presuit mediation procedures provided by

25  this subsection may be used by a Florida corporation

26  responsible for the operation of a community in which the

27  voting members are parcel owners or their representatives, in

28  which membership in the corporation is not a mandatory

29  condition of parcel ownership, or which is not authorized to

30  impose an assessment that may become a lien on the parcel.

31  

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 1         (3)  The department shall develop an education program

 2  to assist homeowners, associations, board members, and

 3  managers in understanding and increasing awareness of the

 4  operation of homeowners' associations pursuant to this chapter

 5  and in understanding the use of alternative dispute resolution

 6  techniques in resolving disputes between parcel owners and

 7  associations or between owners. Such education program may

 8  include the development of pamphlets and other written

 9  instructional guides, the holding of classes and meetings by

10  department employees or outside vendors, as the department

11  determines, and the creation and maintenance of a website

12  containing instructional materials. The expenses of operating

13  the education program shall be initially paid by the moneys

14  and filing fees generated by the arbitration of recall and

15  election disputes and by the mediation of those disputes

16  referred to in this subsection.

17         Section 17.  Except as otherwise expressly provided in

18  this act, this act shall take effect July 1, 2007.

19  

20          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
21                          CS for SB 902

22                                 

23  The committee substitute provides a local government the
    authority to prohibit condominium unit owners or their guests,
24  licensees, or invitees access to a public beach contiguous to
    a condominium property, as long as the prohibition is
25  necessary to protect public health, safety, or natural
    resources.
26  

27  

28  

29  

30  

31  

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