HB 1249

1
A bill to be entitled
2An act relating to community associations; amending s.
3718.111, F.S.; revising and providing provisions relating
4to condominium and condominium owner insurance coverage;
5authorizing an association or group of associations to
6provide adequate hazard insurance through a self-insurance
7fund; requiring associations to exercise best efforts to
8obtain and maintain certain kinds of insurance; providing
9that policies may include deductibles as determined by the
10board; providing requirements for deductibles; providing
11coverage requirements for policies entered into after a
12specified date; providing requirements for hazard
13insurance policies; requiring owners to provide evidence
14of a currently effective policy of hazard and liability
15insurance upon request by the association; authorizing
16operation of multiple condominiums as a single condominium
17for insurance purposes under certain circumstances;
18requiring an association to obtain and maintain adequate
19insurance or fidelity bonding of all persons who control
20or disburse funds of the association; specifying
21responsibility for repair or reconstruction work under
22specified circumstances; amending s. 718.115, F.S.;
23specifying common expense responsibilities of the
24association and unit owners; amending s. 718.116, F.S.;
25providing persons that may request a certificate signed by
26an officer or agent of the association stating all
27assessments and other moneys owed to the association;
28providing requirements for the charging of certain fees by
29the board; amending s. 718.117, F.S.; revising priority
30standards for the distribution of certain proceeds from
31any sale of condominium properties and assets; creating s.
32720.3087, F.S.; providing requirements for the request and
33provision of estoppel certificates; providing an effective
34date.
35
36Be It Enacted by the Legislature of the State of Florida:
37
38     Section 1.  Subsection (11) of section 718.111, Florida
39Statutes, is amended to read:
40     718.111  The association.--
41(Substantial rewording of subsection. See
42s. 718.111(11), F.S., for current text.)
43     (11)  INSURANCE.--In order to protect the health, safety,
44and welfare of the people of this state and to ensure
45consistency in the provision of insurance coverage to
46condominiums and their unit owners, this subsection shall be
47deemed to apply to every residential condominium in the state,
48regardless of the date of its declaration of condominium. It is
49the intent of the Legislature to encourage lower or stable
50insurance premiums for associations described in this
51subsection.
52     (a)  Adequate hazard insurance, regardless of any
53requirement in the declaration of condominium for coverage by
54the association for full insurable value, replacement cost, or
55similar coverages, shall be based upon the replacement cost of
56the property to be insured as determined by an independent
57insurance appraisal or update of a prior appraisal. The full
58insurable value shall be determined not less frequently than
59every 36 months.
60     1.  An association or group of associations may provide
61adequate hazard insurance through a self-insurance fund that
62complies with the requirements of ss. 624.460-624.488.
63     2.  An association may also provide adequate hazard
64insurance, individually or for a group of no fewer than three
65communities created and operating under this chapter, chapter
66719, chapter 720, or chapter 721, by obtaining and maintaining
67for the communities insurance coverage sufficient to cover an
68amount equal to the probable maximum loss for the communities
69for a 250-year windstorm event, provided such probable maximum
70loss must be determined through the use of a competent model
71that has been accepted by the Florida Commission on Hurricane
72Loss Projection Methodology. Any policy providing such coverage
73issued after July 1, 2008, must be approved by the Office of
74Insurance Regulation before the coverage is deemed adequate.
75     3.  In determining the adequate hazard insurance, an
76association may consider deductibles as determined by this
77subsection.
78     (b)  If an association is controlled by a developer, the
79association shall exercise best efforts to obtain and maintain
80adequate hazard insurance. Failure to obtain and maintain
81adequate hazard insurance during any period of control by a
82developer constitutes a breach of fiduciary responsibility by
83the members of the board of directors of the association
84appointed by the developer unless such members can show that
85despite such failure they have made their best efforts to obtain
86and maintain such insurance.
87     (c)  Policies may include deductibles as determined by the
88board.
89     1.  The deductibles shall be consistent with industry
90standards and prevailing practice for communities of like size
91and age and having similar construction as facilities in the
92locale where the condominium property is situated.
93     2.  The deductibles may be based upon available funds,
94including reserve accounts, or predetermined assessment
95authority at the time the insurance is obtained.
96     3.  At a meeting of the board, which shall be open to all
97unit owners in the manner set forth in s. 718.112(2)(e), the
98board shall establish the level of deductibles based upon the
99level of available funds and predetermined assessment authority.
100The notice of such meeting shall state the proposed deductibles,
101the available funds, and the assessment authority relied upon by
102the board and shall estimate any potential assessment amount
103against each unit, if any. The meeting described in this
104subparagraph may be held in conjunction with a meeting to
105consider the proposed budget or an amendment to the proposed
106budget.
107     (d)  An association controlled by unit owners and operating
108a residential condominium shall use its best efforts to obtain
109and maintain adequate insurance to protect the association, the
110association property, the common elements, and the condominium
111property required to be insured by the association pursuant to
112this subsection.
113     (e)  The declaration of condominium as originally recorded,
114or as amended pursuant to procedures provided in the
115declaration, may require that condominium property consisting of
116freestanding buildings where there is no more than one building
117in or on such unit need not be insured by the association if the
118declaration requires the unit owner to obtain adequate insurance
119for the condominium property. An association may also obtain and
120maintain liability insurance for directors and officers,
121insurance for the benefit of association employees, and flood
122insurance for common elements, association property, and units.
123     (f)1.  Every hazard insurance policy issued or renewed on
124or after January 1, 2009, to protect the condominium shall
125provide primary coverage for:
126     a.  All portions of the condominium property as originally
127installed or any replacement of like kind and quality, in
128accordance with the original plans and specifications.
129     b.  All alterations or additions made to the condominium
130property or association property pursuant to s. 718.113(2).
131     2.  The coverage shall exclude all personal property within
132the unit or limited common elements, and floor, wall, and
133ceiling coverings, electrical fixtures, appliances, water
134heaters, water filters, built-in cabinets and countertops, and
135window treatments, including curtains, drapes, blinds, hardware,
136and similar window treatment components, or replacements of any
137such items.
138     3.  This paragraph is intended to establish the property or
139casualty insuring responsibilities of the association and the
140individual unit owner and does not serve to broaden or extend
141the perils of coverage afforded by any insurance contract
142provided to the individual unit owner.
143     (g)  Every hazard insurance policy issued or renewed on or
144after January 1, 2009, to an individual unit owner shall provide
145that the coverage afforded by such policy is in excess of the
146amount recoverable under any other policy covering the same
147property and shall include special assessment coverage of not
148less than $2,000 per occurrence. Each insurance policy issued to
149an individual unit owner providing such coverage shall be
150without rights of subrogation against the condominium
151association that operates the condominium in which such unit
152owner's unit is located.
153     1.  All improvements or additions to the condominium
154property that benefit less than all unit owners shall be insured
155by any unit owners having the use of such property or may be
156insured by the association at the cost and expense of the unit
157owners having the use of such property.
158     2.  The association shall require each unit owner to
159provide evidence of a currently effective policy of hazard and
160liability insurance upon request but not more frequently than
161annually. Upon the failure of a unit owner to provide a
162certificate of insurance issued by an insurer approved to write
163such insurance in this state within 30 days after a written
164request, the association is entitled but is not obligated to
165purchase a policy of insurance on behalf of an owner and the
166cost of such policy, together with reconstruction costs
167undertaken by the association but which are the responsibility
168of the unit owner, may be collected in the manner provided for
169collection of assessments in s. 718.116.
170     3.  All reconstruction work after a casualty loss shall be
171undertaken by the association except as otherwise permitted in
172this subparagraph. A unit owner may undertake reconstruction
173work on portions of the unit with the prior written consent of
174the board of administration, which may be conditioned upon the
175approval of the repair methods, the qualifications of the
176proposed contractor, and the contract that is used for that
177purpose. A unit owner shall obtain all required governmental
178permits and approvals prior to commencing reconstruction.
179     4.  Unit owners shall be responsible for the cost of
180reconstruction of any portion of the condominium property for
181which the unit owner is required to carry casualty insurance and
182any such reconstruction work undertaken by the association shall
183be chargeable to the unit and enforceable as an assessment
184pursuant to s. 718.116. The association is designated as an
185additional named insured and loss payee on all casualty
186insurance policies issued to unit owners in the condominium
187operated by the association.
188     5.  A multicondominium association may elect by a majority
189vote of the collective members of the condominiums operated by
190the association to operate such condominiums as a single
191condominium for purposes of insurance matters, including, but
192not limited to, the purchase of the hazard insurance required by
193this section and the apportionment of deductibles and damages in
194excess of coverage. The election to aggregate the treatment of
195insurance premiums, deductibles, and excess damages shall be
196treated as an amendment to the declaration of all condominiums
197operated by the association and the costs of insurance shall be
198stated in the association budget. The amendments shall be
199recorded as required by s. 718.110.
200     (h)  The association shall obtain and maintain adequate
201insurance or fidelity bonding of all persons who control or
202disburse funds of the association. The insurance policy or
203fidelity bond must cover the maximum funds that will be in the
204custody of the association or its management agent at any one
205time. As used in this paragraph, the term "persons who control
206or disburse funds of the association" includes, but is not
207limited to, those individuals authorized to sign checks and the
208president, secretary, and treasurer of the association. The
209association shall bear the cost of bonding.
210     (i)  An association may amend the declaration of
211condominium, without regard to any requirement for mortgagee
212approval of amendments affecting insurance requirements, to
213conform the declaration of condominium to the coverage
214requirements of this subsection.
215     (j)  Any portion of the condominium property the
216association is required to insure against casualty loss pursuant
217to paragraph (f) that is damaged by a casualty shall be
218reconstructed, repaired, or replaced as necessary by the
219association as a common expense. All hazard insurance
220deductibles, uninsured losses, and other damages in excess of
221hazard insurance coverage under the hazard insurance policies
222maintained by the association shall be a common expense of the
223condominium, provided:
224     1.  A unit owner shall be responsible for the costs of
225repair or replacement of any portion of the condominium property
226not paid for by insurance proceeds when such damage is caused by
227intentional conduct, negligence, or failure to comply with the
228terms of the declaration or the rules of the association by a
229unit owner, the members of his or her family, or unit occupants,
230tenants, guests, or invitees and without compromise of the
231subrogation rights of any insurer as set forth in paragraph (g).
232     2.  The provisions of subparagraph 1. relating to the
233financial responsibility of a unit owner for the costs of
234repairing or replacing other portions of the condominium
235property also apply to the costs of repairing or replacing
236personal property of other unit owners or the association as
237well as other property, whether real or personal, the unit
238owners are required to insure under paragraph (g).
239     3.  To the extent the cost of repair or reconstruction for
240which the unit owner is responsible under this paragraph is
241reimbursed to the association by insurance proceeds and to the
242extent the association has collected the cost of such repair or
243reconstruction from the unit owner, the association shall
244reimburse the unit owner without the waiver of any rights of
245subrogation.
246     4.  The association is not obligated to pay for repair or
247reconstruction or repairs of casualty losses as a common expense
248when the casualty losses were known or should have been known to
249a unit owner and were not reported to the association until
250after the insurance claim of the association for that casualty
251loss has been settled and resolved with finality or is
252considered untimely filed by the insurer and denied on that
253basis.
254     (k)  An association may, upon the approval of a majority of
255the total voting interests in the association, opt out of the
256provisions of paragraph (j) for the allocation of repair or
257reconstruction expenses and allocate repair or reconstruction
258expenses in the manner provided in the declaration as originally
259recorded or as amended. Such vote may be approved by the voting
260interests of the association without regard to any mortgagee
261consent requirements.
262     (l)  In a multicondominium association that has not
263consolidated its financial operations under subsection (6), any
264condominium operated by the association may opt out of the
265provisions of paragraph (j) with the approval of a majority of
266the total voting interests in that condominium. Such vote may be
267approved by the voting interests without regard to any mortgagee
268consent requirements.
269     (m)  Any association or condominium voting to opt out of
270the guidelines for repair or reconstruction expenses in
271paragraph (j) shall record a notice setting forth the date of
272the opt-out vote and the official records book and page at which
273the declaration is recorded. The opt out shall be effective upon
274the date of recording of the notice in the public records by the
275association. An association that has voted to opt out of
276paragraph (j) may reverse that decision by the same vote
277required under paragraphs (k) and (l), and notice of such
278reversal shall be recorded in the official records.
279     (n)  An association shall not be obligated to pay for any
280reconstruction or repair expenses due to casualty loss to any
281improvements installed by a current or former unit owner or by
282the developer when the improvement benefits only the unit for
283which it was installed and is not part of the standard
284improvements installed by the developer on all units as part of
285original construction, whether or not such improvement is
286located within the unit, except to the extent of any insurance
287recovery specifically for any such improvements.
288     Section 2.  Paragraph (a) of subsection (1) of section
289718.115, Florida Statutes, is amended to read:
290     718.115  Common expenses and common surplus.--
291     (1)(a)  Common expenses include the expenses of the
292operation, maintenance, repair, replacement, or protection of
293the common elements and association property, costs of carrying
294out the powers and duties of the association, and any other
295expense, whether or not included in the foregoing, designated as
296common expense by this chapter, the declaration, the documents
297creating the association, or the bylaws. Common expenses also
298include reasonable transportation services, insurance for
299directors and officers, road maintenance and operation expenses,
300in-house communications, and security services, which are
301reasonably related to the general benefit of the unit owners
302even if such expenses do not attach to the common elements or
303property of the condominium. However, such common expenses must
304either have been services or items provided on or after the date
305control of the association is transferred from the developer to
306the unit owners or must be services or items provided for in the
307condominium documents or bylaws. Unless the manner of payment or
308allocation of expenses is otherwise addressed in the declaration
309of condominium, the expenses of any items or services required
310by federal, state, or local government or required by any other
311governmental entity to be installed, maintained, or supplied to
312the condominium property by the association, including, but not
313limited to, fire safety equipment, or water and sewer service
314where a master meter serves the condominium, shall be common
315expenses whether or not such items or services are specifically
316identified as common expenses in the declaration of condominium
317or articles of incorporation or bylaws of the association. Such
318statement is intended to clarify existing law.
319     Section 3.  Subsection (8) of section 718.116, Florida
320Statutes, is amended to read:
321     718.116  Assessments; liability; lien and priority;
322interest; collection.--
323     (8)  Within 15 days after receiving a written request
324therefor from a unit owner or a designee of a unit owner
325purchaser, or unit mortgagee or a designee of a unit mortgagee,
326the association shall provide a certificate signed by an officer
327or agent of the association stating all assessments and other
328moneys owed to the association by the unit owner with respect to
329the condominium parcel.
330     (a)  Any person other than the owner who relies upon such
331certificate shall be protected thereby.
332     (b)  A summary proceeding pursuant to s. 51.011 may be
333brought to compel compliance with this subsection, and in any
334such action the prevailing party is entitled to recover
335reasonable attorney's fees.
336     (c)  Notwithstanding any limitation on transfer fees
337contained in s. 718.112(2)(i), the association or its authorized
338agent may charge a reasonable fee for the preparation of the
339certificate, which fee shall be set forth in the certificate.
340     (d)  The authority to charge a fee under this section shall
341be established by written resolution adopted by the board in
342advance of the charge or provided by written management,
343bookkeeping, or maintenance contract. The fee shall be payable
344upon the preparation of the certificate; and, if the certificate
345is requested in conjunction with the sale or mortgage of the
346unit and the closing does not take place, the fee shall be
347promptly refunded upon written notice from the person requesting
348the certificate stating that the sale or mortgage was not
349effectuated. The fee for a certificate in conjunction with a
350sale or mortgage that is not effectuated and a refund that is
351paid to the party requesting the certificate shall be an
352obligation of the unit owner and shall be collectible in the
353same manner as an assessment provided by this section.
354     Section 4.  Paragraph (c) of subsection (17) of section
355718.117, Florida Statutes, is amended to read:
356     718.117  Termination of condominium.--
357     (17)  DISTRIBUTION.--
358     (c)  The proceeds from any sale of condominium property or
359association property and any remaining condominium property or
360association property, common surplus, and other assets shall be
361distributed in the following priority:
362     1.  To pay the reasonable termination trustee's fees and
363costs and accounting fees and costs.
364     2.  To lienholders of liens recorded prior to the recording
365of the declaration.
366     3.  To purchase-money lienholders on units to the extent
367necessary to satisfy their liens, but in no event shall the
368distribution exceed a unit's share of the proceeds.
369     4.  To lienholders of liens of the association which have
370been consented to under s. 718.121(1).
371     5.  To creditors of the association, as their interests
372appear.
373     6.  To unit owners, the proceeds of any sale of condominium
374property subject to satisfaction of liens on each unit in their
375order of priority, in shares specified in the plan of
376termination, unless objected to by a unit owner or lienor as
377provided in paragraph (b).
378     7.  To unit owners, the remaining condominium property,
379subject to satisfaction of liens on each unit in their order of
380priority, in shares specified in the plan of termination, unless
381objected to by a unit owner or a lienor as provided in paragraph
382(b).
383     8.  To unit owners, the proceeds of any sale of association
384property, the remaining association property, common surplus,
385and other assets of the association, subject to satisfaction of
386liens on each unit in their order of priority, in shares
387specified in the plan of termination, unless objected to by a
388unit owner or a lienor as provided in paragraph (b).
389     Section 5.  Section 720.3087, Florida Statutes, is created
390to read:
391     720.3087  Estoppel certificates.--Within 15 days after
392receiving a written request therefor from a parcel owner or the
393designee of a parcel owner, or a parcel mortgagee or the
394designee of a parcel mortgagee, the association shall provide a
395certificate signed by an officer or agent of the association
396stating all assessments and other moneys owed to the association
397by the parcel owner with respect to the parcel.
398     (1)  Any person other than the parcel owner who relies upon
399such certificate shall be protected thereby.
400     (2)  A summary procedure pursuant to s. 51.011 may be
401brought to compel compliance with this section, and in any such
402action the prevailing party is entitled to recover reasonable
403attorney's fees.
404     (3)  The authority to charge a fee under this section shall
405be established by written resolution adopted by the board in
406advance of the charge or provided by written management,
407bookkeeping, or maintenance contract. The fee shall be payable
408upon the preparation of the certificate; and, if the certificate
409is requested in conjunction with the sale or mortgage of the
410parcel and the closing does not take place, the fee shall be
411promptly refunded upon written notice from the person requesting
412the certificate stating that the sale or mortgage was not
413effectuated. The fee for a certificate in conjunction with a
414sale or mortgage that is not effectuated and a refund that is
415paid to the party requesting the certificate shall be an
416obligation of the parcel owner and shall be collectible as an
417assessment provided by this chapter.
418     Section 6.  This act shall take effect July 1, 2008.


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