CS/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; providing coverage requirements for policies entered
8into after a specified date; providing that policies may
9include deductibles as determined by the board; providing
10requirements for deductibles; requiring associations to
11exercise best efforts to obtain and maintain certain kinds
12of insurance; providing requirements for hazard insurance
13policies; requiring owners to provide evidence of a
14currently 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; authorizing the
21amendment of the condominium declaration by the
22association for certain purposes; specifying
23responsibility for repair or reconstruction work under
24specified circumstances; providing an exception; amending
25s. 718.115, F.S.; specifying common responsibilities of
26the association and unit owners; amending s. 718.116,
27F.S.; providing persons that may request a certificate
28signed by an officer or agent of the association stating
29all assessments and other moneys owed to the association;
30providing requirements for the charging of certain fees by
31the board; amending s. 718.117, F.S.; revising priority
32standards for the distribution of certain proceeds from
33any sale of condominium properties and assets; creating s.
34720.3087, F.S.; providing requirements for the request and
35provision of estoppel certificates; providing an effective
36date.
37
38Be It Enacted by the Legislature of the State of Florida:
39
40     Section 1.  Subsection (11) of section 718.111, Florida
41Statutes, is amended to read:
42     718.111  The association.--
43(Substantial rewording of subsection. See
44s. 718.111(11), F.S., for current text.)
45     (11)  INSURANCE.--In order to protect the health, safety,
46and welfare of the people of this state and to ensure
47consistency in the provision of insurance coverage to
48condominiums and their unit owners, this subsection shall be
49deemed to apply to every residential condominium in the state,
50regardless of the date of its declaration of condominium. It is
51the intent of the Legislature to encourage lower or stable
52insurance premiums for associations described in this
53subsection.
54     (a)  Adequate hazard insurance, regardless of any
55requirement in the declaration of condominium for coverage by
56the association for full insurable value, replacement cost, or
57similar coverages, shall be based upon the replacement cost of
58the property to be insured as determined by an independent
59insurance appraisal or update of a prior appraisal. The full
60insurable value shall be determined not less frequently than
61every 36 months.
62     1.  An association or group of associations may provide
63adequate hazard insurance through a self-insurance fund that
64complies with the requirements of ss. 624.460-624.488.
65     2.  An association may also provide adequate hazard
66insurance coverage individually or for a group of no fewer than
67three communities created and operating under this chapter,
68chapter 719, chapter 720, or chapter 721 by obtaining and
69maintaining for such communities insurance coverage sufficient
70to cover an amount equal to the probable maximum loss for the
71communities for a 250-year windstorm event. Such probable
72maximum loss must be determined through the use of a competent
73model that has been accepted by the Florida Commission on
74Hurricane Loss Projection Methodology. No policy or program
75providing such coverage shall be issued or renewed after July 1,
762008, unless it has been reviewed and approved by the Office of
77Insurance Regulation. The review and approval shall include
78approval of the policy and related forms pursuant to ss. 627.410
79and 627.411, approval of the rates pursuant to s. 627.062, a
80determination that the loss model approved by the commission was
81accurately and appropriately applied to the insured structures
82to determine the 250-year probable maximum loss, and a
83determination that complete and accurate disclosure of all
84material provisions is provided to condominium unit owners prior
85to execution of the agreement by a condominium association.
86     3.  In determining the adequate hazard insurance, an
87association may consider deductibles as determined by this
88subsection.
89     (b)  If an association is controlled by a developer, the
90association shall exercise best efforts to obtain and maintain
91adequate hazard insurance. Failure to obtain and maintain
92adequate hazard insurance during any period of control by a
93developer constitutes a breach of fiduciary responsibility by
94the members of the board of directors of the association
95appointed by the developer unless such members can show that
96despite such failure they have made their best efforts to obtain
97and maintain such insurance.
98     (c)  Policies may include deductibles as determined by the
99board.
100     1.  The deductibles shall be consistent with industry
101standards and prevailing practice for communities of like size
102and age and having similar construction as facilities in the
103locale where the condominium property is situated.
104     2.  The deductibles may be based upon available funds,
105including reserve accounts, or predetermined assessment
106authority at the time the insurance is obtained.
107     3.  At a meeting of the board, which shall be open to all
108unit owners in the manner set forth in s. 718.112(2)(e), the
109board shall establish the level of deductibles based upon the
110level of available funds and predetermined assessment authority.
111The notice of such meeting shall state the proposed deductibles,
112the available funds, and the assessment authority relied upon by
113the board and shall estimate any potential assessment amount
114against each unit, if any. The meeting described in this
115subparagraph may be held in conjunction with a meeting to
116consider the proposed budget or an amendment to the proposed
117budget.
118     (d)  An association controlled by unit owners and operating
119a residential condominium shall use its best efforts to obtain
120and maintain adequate insurance to protect the association, the
121association property, the common elements, and the condominium
122property required to be insured by the association pursuant to
123this subsection.
124     (e)  The declaration of condominium as originally recorded,
125or as amended pursuant to procedures provided in the
126declaration, may require that condominium property consisting of
127freestanding buildings where there is no more than one building
128in or on such unit need not be insured by the association if the
129declaration requires the unit owner to obtain adequate insurance
130for the condominium property. An association may also obtain and
131maintain liability insurance for directors and officers,
132insurance for the benefit of association employees, and flood
133insurance for common elements, association property, and units.
134     (f)1.  Every hazard insurance policy issued or renewed on
135or after January 1, 2009, to protect the condominium shall
136provide primary coverage for:
137     a.  All portions of the condominium property as originally
138installed or any replacement of like kind and quality, in
139accordance with the original plans and specifications.
140     b.  All alterations or additions made to the condominium
141property or association property pursuant to s. 718.113(2).
142     2.  The coverage shall exclude all personal property within
143the unit or limited common elements, and floor, wall, and
144ceiling coverings, electrical fixtures, appliances, water
145heaters, water filters, built-in cabinets and countertops, and
146window treatments, including curtains, drapes, blinds, hardware,
147and similar window treatment components, or replacements of any
148such items.
149     3.  This paragraph is intended to establish the property or
150casualty insuring responsibilities of the association and the
151individual unit owner and does not serve to broaden or extend
152the perils of coverage afforded by any insurance contract
153provided to the individual unit owner.
154     (g)  Every hazard insurance policy issued or renewed on or
155after January 1, 2009, to an individual unit owner shall provide
156that the coverage afforded by such policy is in excess of the
157amount recoverable under any other policy covering the same
158property and shall include special assessment coverage of not
159less than $2,000 per occurrence. Each insurance policy issued to
160an individual unit owner providing such coverage shall be
161without rights of subrogation against the condominium
162association that operates the condominium in which such unit
163owner's unit is located.
164     1.  All improvements or additions to the condominium
165property that benefit less than all unit owners shall be insured
166by any unit owners having the use of such property or may be
167insured by the association at the cost and expense of the unit
168owners having the use of such property.
169     2.  The association shall require each unit owner to
170provide evidence of a currently effective policy of hazard and
171liability insurance upon request but not more frequently than
172annually. Upon the failure of a unit owner to provide a
173certificate of insurance issued by an insurer approved to write
174such insurance in this state within 30 days after a written
175request, the association is entitled but is not obligated to
176purchase a policy of insurance on behalf of an owner and the
177cost of such policy, together with reconstruction costs
178undertaken by the association but which are the responsibility
179of the unit owner, may be collected in the manner provided for
180collection of assessments in s. 718.116.
181     3.  All reconstruction work after a casualty loss shall be
182undertaken by the association except as otherwise permitted in
183this subparagraph. A unit owner may undertake reconstruction
184work on portions of the unit with the prior written consent of
185the board of administration, which may be conditioned upon the
186approval of the repair methods, the qualifications of the
187proposed contractor, and the contract that is used for that
188purpose. A unit owner shall obtain all required governmental
189permits and approvals prior to commencing reconstruction.
190     4.  Unit owners shall be responsible for the cost of
191reconstruction of any portion of the condominium property for
192which the unit owner is required to carry casualty insurance and
193any such reconstruction work undertaken by the association shall
194be chargeable to the unit and enforceable as an assessment
195pursuant to s. 718.116. The association is designated as an
196additional named insured and loss payee on all casualty
197insurance policies issued to unit owners in the condominium
198operated by the association.
199     5.  A multicondominium association may elect by a majority
200vote of the collective members of the condominiums operated by
201the association to operate such condominiums as a single
202condominium for purposes of insurance matters, including, but
203not limited to, the purchase of the hazard insurance required by
204this section and the apportionment of deductibles and damages in
205excess of coverage. The election to aggregate the treatment of
206insurance premiums, deductibles, and excess damages shall be
207treated as an amendment to the declaration of all condominiums
208operated by the association and the costs of insurance shall be
209stated in the association budget. The amendments shall be
210recorded as required by s. 718.110.
211     (h)  The association shall obtain and maintain adequate
212insurance or fidelity bonding of all persons who control or
213disburse funds of the association. The insurance policy or
214fidelity bond must cover the maximum funds that will be in the
215custody of the association or its management agent at any one
216time. As used in this paragraph, the term "persons who control
217or disburse funds of the association" includes, but is not
218limited to, those individuals authorized to sign checks and the
219president, secretary, and treasurer of the association. The
220association shall bear the cost of bonding.
221     (i)  An association may amend the declaration of
222condominium, without regard to any requirement for mortgagee
223approval of amendments affecting insurance requirements, to
224conform the declaration of condominium to the coverage
225requirements of this subsection.
226     (j)  Any portion of the condominium property the
227association is required to insure against casualty loss pursuant
228to paragraph (f) that is damaged by a casualty shall be
229reconstructed, repaired, or replaced as necessary by the
230association as a common expense. All hazard insurance
231deductibles, uninsured losses, and other damages in excess of
232hazard insurance coverage under the hazard insurance policies
233maintained by the association shall be a common expense of the
234condominium, provided:
235     1.  A unit owner shall be responsible for the costs of
236repair or replacement of any portion of the condominium property
237not paid for by insurance proceeds when such damage is caused by
238intentional conduct, negligence, or failure to comply with the
239terms of the declaration or the rules of the association by a
240unit owner, the members of his or her family, or unit occupants,
241tenants, guests, or invitees and without compromise of the
242subrogation rights of any insurer as set forth in paragraph (g).
243     2.  The provisions of subparagraph 1. relating to the
244financial responsibility of a unit owner for the costs of
245repairing or replacing other portions of the condominium
246property also apply to the costs of repairing or replacing
247personal property of other unit owners or the association as
248well as other property, whether real or personal, the unit
249owners are required to insure under paragraph (g).
250     3.  To the extent the cost of repair or reconstruction for
251which the unit owner is responsible under this paragraph is
252reimbursed to the association by insurance proceeds and to the
253extent the association has collected the cost of such repair or
254reconstruction from the unit owner, the association shall
255reimburse the unit owner without the waiver of any rights of
256subrogation.
257     4.  The association is not obligated to pay for repair or
258reconstruction or repairs of casualty losses as a common expense
259when the casualty losses were known or should have been known to
260a unit owner and were not reported to the association until
261after the insurance claim of the association for that casualty
262loss has been settled and resolved with finality or is
263considered untimely filed by the insurer and denied on that
264basis.
265     (k)  An association may, upon the approval of a majority of
266the total voting interests in the association, opt out of the
267provisions of paragraph (j) for the allocation of repair or
268reconstruction expenses and allocate repair or reconstruction
269expenses in the manner provided in the declaration as originally
270recorded or as amended. Such vote may be approved by the voting
271interests of the association without regard to any mortgagee
272consent requirements.
273     (l)  In a multicondominium association that has not
274consolidated its financial operations under subsection (6), any
275condominium operated by the association may opt out of the
276provisions of paragraph (j) with the approval of a majority of
277the total voting interests in that condominium. Such vote may be
278approved by the voting interests without regard to any mortgagee
279consent requirements.
280     (m)  Any association or condominium voting to opt out of
281the guidelines for repair or reconstruction expenses in
282paragraph (j) shall record a notice setting forth the date of
283the opt-out vote and the official records book and page at which
284the declaration is recorded. The opt out shall be effective upon
285the date of recording of the notice in the public records by the
286association. An association that has voted to opt out of
287paragraph (j) may reverse that decision by the same vote
288required under paragraphs (k) and (l), and notice of such
289reversal shall be recorded in the official records.
290     (n)  An association shall not be obligated to pay for any
291reconstruction or repair expenses due to casualty loss to any
292improvements installed by a current or former unit owner or by
293the developer when the improvement benefits only the unit for
294which it was installed and is not part of the standard
295improvements installed by the developer on all units as part of
296original construction, whether or not such improvement is
297located within the unit, except to the extent of any insurance
298recovery specifically for any such improvements.
299     (o)  The provisions of this subsection shall not apply to
300timeshare condominium associations. Insurance for timeshare
301condominium associations shall be maintained pursuant to s.
302721.165.
303     Section 2.  Paragraph (a) of subsection (1) of section
304718.115, Florida Statutes, is amended to read:
305     718.115  Common expenses and common surplus.--
306     (1)(a)  Common expenses include the expenses of the
307operation, maintenance, repair, replacement, or protection of
308the common elements and association property, costs of carrying
309out the powers and duties of the association, and any other
310expense, whether or not included in the foregoing, designated as
311common expense by this chapter, the declaration, the documents
312creating the association, or the bylaws. Common expenses also
313include reasonable transportation services, insurance for
314directors and officers, road maintenance and operation expenses,
315in-house communications, and security services, which are
316reasonably related to the general benefit of the unit owners
317even if such expenses do not attach to the common elements or
318property of the condominium. However, such common expenses must
319either have been services or items provided on or after the date
320control of the association is transferred from the developer to
321the unit owners or must be services or items provided for in the
322condominium documents or bylaws. Unless the manner of payment or
323allocation of expenses is otherwise addressed in the declaration
324of condominium, the expenses of any items or services required
325by federal, state, or local government or required by any other
326governmental entity to be installed, maintained, or supplied to
327the condominium property by the association, including, but not
328limited to, fire safety equipment, or water and sewer service
329where a master meter serves the condominium, shall be common
330expenses whether or not such items or services are specifically
331identified as common expenses in the declaration of condominium
332or articles of incorporation or bylaws of the association. Such
333statement is intended to clarify existing law.
334     Section 3.  Subsection (8) of section 718.116, Florida
335Statutes, is amended to read:
336     718.116  Assessments; liability; lien and priority;
337interest; collection.--
338     (8)  Within 15 days after receiving a written request
339therefor from a unit owner or a designee of a unit owner
340purchaser, or unit mortgagee or a designee of a unit mortgagee,
341the association shall provide a certificate signed by an officer
342or agent of the association stating all assessments and other
343moneys owed to the association by the unit owner with respect to
344the condominium parcel.
345     (a)  Any person other than the owner who relies upon such
346certificate shall be protected thereby.
347     (b)  A summary proceeding pursuant to s. 51.011 may be
348brought to compel compliance with this subsection, and in any
349such action the prevailing party is entitled to recover
350reasonable attorney's fees.
351     (c)  Notwithstanding any limitation on transfer fees
352contained in s. 718.112(2)(i), the association or its authorized
353agent may charge a reasonable fee for the preparation of the
354certificate, which fee shall be set forth in the certificate.
355     (d)  The authority to charge a fee for a certificate under
356this section shall be established by written resolution adopted
357by the board or provided by written management, bookkeeping, or
358maintenance contract. The fee is payable upon the preparation of
359the certificate. If the certificate is requested in conjunction
360with the sale or mortgage of a unit, the closing does not occur,
361and no later than 30 days after the closing date for which the
362certificate was sought the preparer receives from a payor who is
363not the unit owner a written request accompanied with reasonable
364documentation that the sale did not occur, then the fee shall be
365refunded to that payor within 30 days after the preparer's
366receipt of the refund request. The amount of the refund shall
367then become the obligation of the unit owner, which sum is
368collectable from the unit owner in the same manner as an
369assessment as provided in this section.
370     Section 4.  Paragraph (c) of subsection (17) of section
371718.117, Florida Statutes, is amended to read:
372     718.117  Termination of condominium.--
373     (17)  DISTRIBUTION.--
374     (c)  The proceeds from any sale of condominium property or
375association property and any remaining condominium property or
376association property, common surplus, and other assets shall be
377distributed in the following priority:
378     1.  To pay the reasonable termination trustee's fees and
379costs and accounting fees and costs.
380     2.  To lienholders of liens recorded prior to the recording
381of the declaration.
382     3.  To purchase-money lienholders on units to the extent
383necessary to satisfy their liens, but in no event shall the
384distribution exceed a unit's share of the proceeds.
385     4.  To lienholders of liens of the association which have
386been consented to under s. 718.121(1).
387     5.  To creditors of the association, as their interests
388appear.
389     6.  To unit owners, the proceeds of any sale of condominium
390property subject to satisfaction of liens on each unit in their
391order of priority, in shares specified in the plan of
392termination, unless objected to by a unit owner or lienor as
393provided in paragraph (b).
394     7.  To unit owners, the remaining condominium property,
395subject to satisfaction of liens on each unit in their order of
396priority, in shares specified in the plan of termination, unless
397objected to by a unit owner or a lienor as provided in paragraph
398(b).
399     8.  To unit owners, the proceeds of any sale of association
400property, the remaining association property, common surplus,
401and other assets of the association, subject to satisfaction of
402liens on each unit in their order of priority, in shares
403specified in the plan of termination, unless objected to by a
404unit owner or a lienor as provided in paragraph (b).
405     Section 5.  Section 720.3087, Florida Statutes, is created
406to read:
407     720.3087  Estoppel certificates.--Within 15 days after
408receiving a written request therefor from a parcel owner or the
409designee of a parcel owner, or a parcel mortgagee or the
410designee of a parcel mortgagee, the association shall provide a
411certificate signed by an officer or agent of the association
412stating all assessments and other moneys owed to the association
413by the parcel owner with respect to the parcel.
414     (1)  Any person other than the parcel owner who relies upon
415such certificate shall be protected thereby.
416     (2)  A summary procedure pursuant to s. 51.011 may be
417brought to compel compliance with this section, and in any such
418action the prevailing party is entitled to recover reasonable
419attorney's fees.
420     (3)  The authority to charge a fee under this section shall
421be established by written resolution adopted by the board in
422advance of the charge or provided by written management,
423bookkeeping, or maintenance contract. The fee shall be payable
424upon the preparation of the certificate; and, if the certificate
425is requested in conjunction with the sale or mortgage of the
426parcel and the closing does not take place, the fee shall be
427promptly refunded upon written notice from the person requesting
428the certificate stating that the sale or mortgage was not
429effectuated. The fee for a certificate in conjunction with a
430sale or mortgage that is not effectuated and a refund that is
431paid to the party requesting the certificate shall be an
432obligation of the parcel owner and shall be collectible as an
433assessment provided by this chapter.
434     Section 6.  This act shall take effect July 1, 2008.


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