Florida Senate - 2008 CS for SB 2084

By the Committee on Regulated Industries; and Senator Villalobos

580-05748-08 20082084c1

A bill to be entitled

An act relating to community associations; amending s.

468.431, F.S.; revising and providing definitions;

amending s. 468.4315, F.S.; redesignating the Regulatory

Council of Community Association Managers as the Board of

Community Association Managers; revising membership

criteria for members of the board; requiring the board to

establish a public education program; providing that board

members shall serve without compensation but are entitled

to per diem and travel expenses; providing

responsibilities of the board; amending s. 468.432, F.S.;

providing for licensure of community association

management firms; providing application, licensure, and

fee requirements; amending s. 468.433, F.S.; providing for

the refusal of applicant certification under certain

circumstances; conforming terminology; amending ss.

468.4337 and 468.4338, F.S.; conforming terminology to

changes made by the act; amending s. 468.435, F.S.;

conforming terminology to changes made by the act;

removing statutory fee ranges; authorizing the board to

establish specified fees; requiring the board to adopt

rules establishing such fees; amending s. 468.436, F.S.;

requiring that the Department of Business and Professional

Regulation investigate certain complaints and allegations;

providing complaint and investigation procedures;

conforming cross-references and terminology; providing

grounds for which disciplinary actions may be taken;

authorizing the department to impose specified penalties

on a community association management firm; authorizing

the department to reissue the license of a disciplined

community association manager or firm under certain

circumstances; amending s. 718.110, F.S.; revising

instances under which a declaration may be amended;

requiring a majority vote of owners for approval of an

amendment to a declaration; deleting a provision requiring

amendments to declarations recorded after a specified date

to be approved by more than four-fifths of the voting

interests; amending s. 718.111, F.S.; providing duties of

officers, directors, and agents of a condominium

association and liability for monetary damages under

certain circumstances; deleting legislative intent

relating to insurance premiums for associations; providing

policy requirements for windstorm insurance for

condominium associations; providing deductible

requirements; providing that a copy of the inspection

report shall be maintained as an official record of the

association; requiring official records of the association

to be maintained for at least 5 years and to be made

available at certain locations and in specified formats;

providing civil and criminal sanctions, including

sanctions against any person who knowingly or

intentionally defaces, destroys, or fails to create or

maintain accounting records; requiring the association to

maintain certain documents; prohibiting accessibility to

certain personal identifying information of unit owners by

fellow unit owners; requiring the Division of Florida Land

Sales, Condominiums, and Mobile Homes to adopt certain

rules; requiring certain audits and reports to be paid for

by the developer if done prior to turnover of control of

the association; restricting a condominium association

from waiving a financial report for more than 2

consecutive years; amending s. 718.112, F.S.; prohibiting

votes allocated to units owned by the association from

being cast by proxy, ballot, or otherwise, for any

purpose; providing an exception that proxies may be used

to establish a quorum; requiring the board to address

certain agenda items proposed by a petition of a specified

percentage of the unit owners; revising notice

requirements for meetings to consider assessments;

providing requirements for the location of annual unit

owner meetings; revising terms of service for board

members; prohibiting certain persons from serving on the

board; providing exceptions; requiring the association to

provide a certification form to unit owners for specified

purposes; removing a provision allowing an association to

provide for different voting and election procedures in

its bylaws; revising annual budget requirements; requiring

proxy questions relating to reserves to contain a certain

statement; authorizing the association to use reserve

funds for nonscheduled purposes under certain conditions;

revising methods by which the bylaws may be amended;

providing for the removal of board members under certain

circumstances; providing that directors delinquent in

certain payments owed in excess of certain periods of time

be suspended from office or deemed to have abandoned their

offices; providing that directors charged with certain

offenses involving an association's funds or property be

suspended from office pending resolution of the charge;

amending s. 718.113, F.S.; authorizing the board to

install specified hurricane protection; providing that no

obligation of the board to close or cause to be closed any

hurricane shutters is created; prohibiting any

restrictions from being placed on the closing of hurricane

shutters unless the board and association assume such

responsibility when appropriate; requiring the board to

have condominium buildings periodically inspected for

specified purposes; prohibiting the board from adopting

rules or regulations impairing certain rights or

prohibiting reasonable accommodation for religious

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practices; creating s. 718.1224, F.S.; prohibiting certain

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lawsuits arising from unit owners' appearances and

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presentations before a governmental entity; providing a

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definition; providing for award of damages and attorney

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fees; prohibiting associations from expending association

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funds in prosecuting such a suit against a unit owner;

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amending s. 718.1255, F.S.; revising legislative intent

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concerning alternative dispute resolution; amending s.

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718.301, F.S.; requiring developers to provide certain

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documents to the association within a specified time after

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turnover of control of the association; amending s.

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718.3025, F.S.; providing maintenance and management

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services contract disclosure requirements; amending s.

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718.3026, F.S.; removing a provision authorizing

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associations to opt out of certain provisions relating to

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contracts for products and services; removing provisions

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relating to competitive bid requirements for contracts

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executed before a specified date; amending s. 718.501,

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F.S.; providing authority and responsibilities of the

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division; revising who constitutes an agent for purposes

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of cease and desist orders issued by the division;

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requiring the division to bring an action against a

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developer under certain circumstances; providing the

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division with certain powers; requiring the division to

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issue a subpoena under certain circumstances; requiring

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the division to maintain a list of condominium association

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board member and unit owner training programs and program

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providers; deleting obsolete language; amending s.

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718.50151, F.S.; revising membership requirements for the

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Advisory Council on Condominiums; providing an effective

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date.

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

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Section 1. Section 468.431, Florida Statutes, is amended to

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read:

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468.431 Definitions.--As used in this part:

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(1) "Board" means the Board of Community Association

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Managers.

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(2)(1) "Community association" means a residential

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homeowners' association in which membership is a condition of

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ownership of a unit in a planned unit development, or of a lot

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for a home or a mobile home, or of a townhouse, villa,

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condominium, cooperative, or other residential unit which is part

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of a residential development scheme and which is authorized to

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impose a fee which may become a lien on the parcel.

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(3)(2) "Community association management" means any of the

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following practices requiring substantial specialized knowledge,

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judgment, and managerial skill when done for remuneration and

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when the association or associations served contain more than 50

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units or have an annual budget or budgets in excess of $100,000:

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controlling or disbursing funds of a community association,

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preparing budgets or other financial documents for a community

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association, assisting in the noticing or conduct of community

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association meetings, and coordinating maintenance for the

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residential development and other day-to-day services involved

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with the operation of a community association. A person who

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performs clerical or ministerial functions under the direct

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supervision and control of a licensed manager or who is charged

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only with performing the maintenance of a community association

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and who does not assist in any of the management services

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described in this subsection is not required to be licensed under

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this part.

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(4) "Community association management firm" means a

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corporation, limited liability company, partnership, trust,

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association, sole proprietorship, or other similar organization

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engaging in the business of community association management for

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the purpose of providing any of the services described in

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subsection (3).

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(5)(3) "Community association manager" means a natural

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person who is licensed pursuant to this part to perform community

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association management services.

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(4) "Council" means the Regulatory Council of Community

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Association Managers.

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(6)(5) "Department" means the Department of Business and

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Professional Regulation.

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(7) "Division" means the Division of Florida Land Sales,

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Condominiums, and Mobile Homes.

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Section 2. Section 468.4315, Florida Statutes, is amended

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to read:

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468.4315 Board Regulatory Council of Community Association

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Managers.--

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(1) The Board Regulatory Council of Community Association

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Managers is created within the department and shall consist of

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seven members appointed by the Governor and confirmed by the

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Senate.

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(a) Five members of the board council shall be licensed

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community association managers, one of whom may shall be a

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community association manager employed by a timeshare managing

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entity as described in ss. 468.438 and 721.13, who have held an

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active license for at least 5 years. The remaining two board

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council members shall be residents of this state, and must not be

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or ever have been connected with the business of community

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association management, and are not prohibited from serving

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because the member is or has been a resident or board member of a

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community association.

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(b) The Governor shall appoint members for terms of 4

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years. Such members shall serve until their successors are

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appointed. Members' service on the board council shall begin upon

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appointment and shall continue until their successors are

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appointed.

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(2) The board shall council may adopt rules relating to the

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licensure examination, continuing education requirements,

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continuing education providers, fees, and professional practice

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standards to assist the department in carrying out the duties and

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authorities conferred upon the department by this part.

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(3) The board To the extent the council is authorized to

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exercise functions otherwise exercised by a board pursuant to

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chapter 455, the provisions of chapter 455 and s. 20.165 relating

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to regulatory boards shall apply, including, but not limited to,

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provisions relating to board rules and the accountability and

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liability of board members. All proceedings and actions of the

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board council are subject to the provisions of chapter 120. In

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addition, the provisions of chapter 455 and s. 20.165 shall apply

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to the department in carrying out the duties and authorities

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conferred upon the department by this part.

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(4) The board shall establish a public education program

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relating to professional community association management.

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(5) Members of the board shall serve without compensation

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but are entitled to receive per diem and travel expenses pursuant

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to s. 112.061 while carrying out business approved by the board.

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(6) The responsibilities of the board include, but are not

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limited to:

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(a) Receiving input regarding issues of concern with

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respect to community association management and recommendations

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for changes in applicable laws.

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(b) Reviewing, evaluating, and advising the division

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concerning revisions and adoption of rules affecting community

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association management.

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programs offered by the division.

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Section 3. Section 468.432, Florida Statutes, is amended to

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read:

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468.432 Licensure of community association managers and

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community association management firms; exceptions.--

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(1) A person shall not manage or hold herself or himself

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out to the public as being able to manage a community association

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in this state unless she or he is licensed by the department in

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accordance with the provisions of this part. However, nothing in

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this part prohibits any person licensed in this state under any

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other law or court rule from engaging in the profession for which

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she or he is licensed.

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(2) As of January 1, 2009, a community association

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management firm or other similar organization may not engage or

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hold itself out to the public as being able to engage in the

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business of community association management in this state unless

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it is licensed by the department as a community association

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management firm in accordance with the provisions of this part.

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(a) A community association management firm or other

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similar organization desiring to be licensed as a community

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association management firm shall apply to the department on a

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form approved by the department and submit the application and

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licensure fees required by s. 468.435(1)(a) and (c). Each

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community association management firm applying for licensure

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under this subsection must be actively registered and authorized

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to do business in this state.

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(b) Each applicant shall designate on its application a

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licensed community association manager who shall respond to all

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inquires from and investigations by the department or division.

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shall notify the department within 30 days after any change of

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information contained in the application upon which licensure is

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based.

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(d) Community association management firm licenses shall

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expire on September 30 of odd-numbered years and shall be renewed

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every 2 years. An application for renewal shall be accompanied by

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the renewal fee as required by s. 468.435(1)(d).

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(e) The department shall license each applicant whom the

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department certifies as meeting the requirements of this

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subsection.

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(f) If the license of at least one individual active

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community association manager member is not in force, the license

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of the community association management firm or other similar

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organization is canceled automatically during that time.

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(g) Any community association management firm or other

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similar organization agrees by being licensed that it will employ

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only licensed persons in the direct provision of community

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association management services as described in s. 468.431(3).

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(2) Nothing in this part prohibits a corporation,

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partnership, trust, association, or other like organization from

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engaging in the business of community association management

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without being licensed if it employs licensed natural persons in

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the direct provision of community association management

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services. Such corporation, partnership, trust, association, or

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other organization shall also file with the department a

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statement on a form approved by the department that it submits

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itself to the rules of the council and the department and the

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provisions of this part which the department deems applicable.

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Section 4. Section 468.433, Florida Statutes, is amended to

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read:

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468.433 Licensure by examination.--

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(1) A person desiring to be licensed as a community

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association manager shall apply to the department to take the

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licensure examination. Each applicant must file a complete set of

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fingerprints that have been taken by an authorized law

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enforcement officer, which set of fingerprints shall be submitted

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to the Department of Law Enforcement for state processing and to

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the Federal Bureau of Investigation for federal processing. The

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cost of processing shall be borne by the applicant.

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(2) The department shall examine each applicant who is at

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least 18 years of age, who has successfully completed all

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prelicensure education requirements, and who the department

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certifies is of good moral character.

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(a) Good moral character means a personal history of

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honesty, fairness, and respect for the rights of others and for

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the laws of this state and nation.

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(b) The department may refuse to certify an applicant only

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if:

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1. There is a substantial connection between the lack of

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good moral character of the applicant and the professional

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responsibilities of a community association manager; and

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2. The finding by the department of lack of good moral

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character is supported by clear and convincing evidence; and.

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3. The applicant is found to have provided management

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services requiring licensure without the requisite license.

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license because of a lack of good moral character, the department

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shall furnish the applicant a statement containing its findings,

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a complete record of the evidence upon which the determination

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was based, and a notice of the rights of the applicant to a

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rehearing and appeal.

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(d) The board council shall establish by rule the required

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amount of prelicensure education, which shall consist of not more

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than 24 hours of in-person instruction by a department-approved

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provider and which shall cover all areas of the examination

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specified in subsection (3). Such instruction shall be completed

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within 12 months prior to the date of the examination.

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Prelicensure education providers shall be considered continuing

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education providers for purposes of establishing provider

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approval fees. A licensee shall not be required to comply with

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the continuing education requirements of s. 468.4337 prior to the

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first license renewal. The department shall, by rule, set

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standards for exceptions to the requirement of in-person

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instruction in cases of hardship or disability.

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(3) The board council shall approve an examination for

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licensure. The examination must demonstrate that the applicant

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has a fundamental knowledge of state and federal laws relating to

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the operation of all types of community associations and state

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laws relating to corporations and nonprofit corporations, proper

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preparation of community association budgets, proper procedures

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for noticing and conducting community association meetings,

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insurance matters relating to community associations, and

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management skills.

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(4) The department shall issue a license to practice in

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this state as a community association manager to any qualified

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applicant who successfully completes the examination in

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accordance with this section and pays the appropriate fee.

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Section 5. Section 468.4337, Florida Statutes, is amended

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to read:

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468.4337 Continuing education.-- The department may not

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renew a license until the licensee submits proof that the

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licensee has completed the requisite hours of continuing

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education. No more than 10 hours of continuing education annually

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shall be required for renewal of a license. The number of hours,

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criteria, and course content shall be approved by the board

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council by rule.

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Section 6. Section 468.4338, Florida Statutes, is amended

357

to read:

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468.4338 Reactivation; continuing education.-- The board

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council shall prescribe by rule continuing education requirements

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for reactivating a license. The continuing education requirements

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for reactivating a license may not exceed 10 classroom hours for

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each year the license was inactive.

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Section 7. Section 468.435, Florida Statutes, is amended to

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read:

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468.435 Fees; establishment; disposition.--

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(1) The board council shall, by rule, establish fees for

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the described purposes and within the ranges specified in this

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section:

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(a) Application fee: not less than $25, or more than $50.

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(b) Examination fee: not less than $25, or more than $100.

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$100.

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(d) Renewal of license fee: not less than $25, or more than

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$100.

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(e) Delinquent license fee: not less than $25, or more than

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$50.

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(f) Inactive license fee: not less than $10, or more than

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$25.

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(2) Until the board council adopts rules establishing fees

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under subsection (1), the lower amount in each range shall apply.

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(3) Fees collected under this section shall be deposited to

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the credit of the Professional Regulation Trust Fund.

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(4) The board council shall establish fees that are

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adequate to fund the cost to implement the provisions of this

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part. Fees shall be based on the department estimates of the

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revenue required to implement this part and the provisions of law

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with respect to the regulation of community association managers.

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Section 8. Section 468.436, Florida Statutes, is amended to

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read:

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468.436 Disciplinary proceedings.--

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(1) The department shall investigate complaints and

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allegations of a violation of this part or chapter 455, or any

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rule adopted thereunder, which is filed against community

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association managers or firms or forwarded from other divisions

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of the Department of Business and Professional Regulation. After

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a complaint is received, the department shall conduct its inquiry

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with due regard for the interests of the affected parties. Within

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30 days after receipt of a complaint, the department shall

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acknowledge the complaint in writing and notify the complainant

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whether or not the complaint is within the jurisdiction of the

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department and whether or not additional information is needed by

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the department from the complainant. The department shall conduct

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an investigation and shall, within 90 days after receipt of the

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original complaint or of timely requested additional information,

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take action upon the complaint. However, failure to complete the

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investigation within 90 days does not prevent the department from

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continuing the investigation, accepting or considering evidence

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obtained or received after 90 days, or taking administrative

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action if reasonable cause exists to believe that a violation of

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this part or chapter 455 or a rule of the department has

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occurred. If an investigation is not completed within the time

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limits established in this subsection, the department shall, on a

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monthly basis, notify the complainant in writing of the status of

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the investigation. When reporting its action to the complainant,

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the department shall inform the complainant of any right to a

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hearing pursuant to ss. 120.569 and 120.57.

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(2)(1) The following acts constitute grounds for which the

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disciplinary actions in subsection (4) (3) may be taken:

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(a) Violation of any provision of s. 455.227(1).

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(b)1. Violation of any provision of this part.

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2. Violation of any lawful order or rule rendered or

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adopted by the department or the board council.

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3. Being convicted of or pleading nolo contendere to a

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felony in any court in the United States.

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4. Obtaining a license or certification or any other order,

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ruling, or authorization by means of fraud, misrepresentation, or

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concealment of material facts.

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5. Committing acts of gross misconduct or gross negligence

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in connection with the profession.

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6. Contracting, on behalf of an association, with any

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entity in which the licensee has a financial interest that is not

432

disclosed.

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(3)(2) The board council shall specify by rule the acts or

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omissions that constitute a violation of subsection (2) (1).

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(4)(3) When the department finds any community association

436

manager or firm guilty of any of the grounds set forth in

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subsection (2) (1), it may enter an order imposing one or more of

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the following penalties:

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(a) Denial of an application for licensure.

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(b) Revocation or suspension of a license.

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$5,000 for each count or separate offense.

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(d) Issuance of a reprimand.

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(e) Placement of the community association manager on

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probation for a period of time and subject to such conditions as

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the department specifies.

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(f) Restriction of the authorized scope of practice by the

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community association manager.

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(5)(4) The department may shall reissue the license of a

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disciplined community association manager or firm upon

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certification by the department that the disciplined person or

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firm has complied with all of the terms and conditions set forth

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in the final order.

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Section 9. Paragraph (a) of subsection (1) of section

455

718.110, Florida Statutes, is amended to read:

456

718.110 Amendment of declaration; correction of error or

457

omission in declaration by circuit court.--

458

(1)(a) If the declaration fails to provide a method of

459

amendment, The declaration may be amended as to all matters

460

except those described in subsection (4) or subsection (8) if the

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amendment is approved by the owners of not less than a majority

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two-thirds of the units. If the declaration provides a method of

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amendment requiring approval by a majority of the voting

464

interests, or less than a majority of the voting interests, the

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declaration shall prevail. Except as to those matters described

466

in subsection (4) or subsection (8), no declaration recorded

467

after April 1, 1992, shall require that amendments be approved by

468

more than four-fifths of the voting interests.

469

Section 10. Paragraph (d) is added to subsection (1) of

470

section 718.111, Florida Statutes, and subsections (11), (12),

471

and (13) of that section are amended, to read:

472

718.111 The association.--

473

(1) CORPORATE ENTITY.--

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(d) As required by s. 617.0830, an officer, director, or

475

agent shall discharge his or her duties in good faith, with the

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care an ordinarily prudent person in a like position would

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exercise under similar circumstances, and in a manner he or she

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reasonably believes to be in the interests of the association.

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Regardless of any indemnification provision in the documents or

480

contract, an officer, director, or agent is liable for monetary

481

damages as provided in s. 617.0834 if such officer, director, or

482

agent breached or failed to perform his or her duties and the

483

breach of, or failure to perform, his or her duties constitutes a

484

criminal violation of state law as provided in s. 617.0834, a

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transaction from which the officer or director derived an

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improper personal benefit, either directly or indirectly, or

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recklessness or an act or omission performed or omitted in bad

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faith, with malicious purpose, or in a manner exhibiting wanton

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and willful disregard of human rights, safety, or property.

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(11) INSURANCE.--In order to protect the safety, health,

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and welfare of the people of the State of Florida and to ensure

492

consistency in the provision of insurance coverage to

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condominiums and their unit owners, paragraphs (a), (b), and (c)

494

are deemed to apply to every residential condominium in the

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state, regardless of the date of its declaration of condominium.

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It is the intent of the Legislature to encourage lower or stable

497

insurance premiums for associations described in this section.

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Therefore, the Legislature requires a report to be prepared by

499

the Office of Insurance Regulation of the Department of Financial

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Services for publication 18 months from the effective date of

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this act, evaluating premium increases or decreases for

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associations, unit owner premium increases or decreases,

503

recommended changes to better define common areas, or any other

504

information the Office of Insurance Regulation deems appropriate.

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(a) A unit-owner controlled association operating a

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residential condominium shall use its best efforts to obtain and

507

maintain adequate insurance to protect the association, the

508

association property, the common elements, and the condominium

509

property required to be insured by the association pursuant to

510

paragraph (b). If the association is developer controlled, the

511

association shall exercise due diligence to obtain and maintain

512

such insurance. Failure to obtain and maintain adequate insurance

513

during any period of developer control shall constitute a breach

514

of fiduciary responsibility by the developer-appointed members of

515

the board of directors of the association, unless said members

516

can show that despite such failure, they have exercised due

517

diligence. The declaration of condominium as originally recorded,

518

or amended pursuant to procedures provided therein, may require

519

that condominium property consisting of freestanding buildings

520

where there is no more than one building in or on such unit need

521

not be insured by the association if the declaration requires the

522

unit owner to obtain adequate insurance for the condominium

523

property. An association may also obtain and maintain liability

524

insurance for directors and officers, insurance for the benefit

525

of association employees, and flood insurance for common

526

elements, association property, and units. Adequate insurance,

527

regardless of any requirement in the declaration of condominium

528

for coverage by the association for "full insurable value,"

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"replacement cost," or the like, may include reasonable

530

deductibles as determined by the board based upon available funds

531

or predetermined assessment authority at the time that the

532

insurance is obtained.

533

1. Windstorm insurance coverage for a group of no fewer

534

than three communities created and operating under this chapter,

535

chapter 719, chapter 720, or chapter 721 may be obtained and

536

maintained for the communities if the insurance coverage is

537

sufficient to cover an amount equal to the probable maximum loss

538

for the communities for a 250-year windstorm event. Such probable

539

maximum loss must be determined through the use of a competent

540

model that has been accepted by the Florida Commission on

541

Hurricane Loss Projection Methodology, and any policy of

542

insurance coverage issued or renewed after July 1, 2008, must

543

receive prior approval by the Office of Insurance Regulation

544

before coverage is deemed adequate. Such insurance coverage is

545

deemed adequate windstorm insurance for the purposes of this

546

section.

547

2. An association or group of associations may self-insure

548

against claims against the association, the association property,

549

and the condominium property required to be insured by an

550

association, upon compliance with the applicable provisions of

551

ss. 624.460-624.488, which shall be considered adequate insurance

552

for the purposes of this section. A copy of each policy of

553

insurance in effect shall be made available for inspection by

554

unit owners at reasonable times.

555

(b) Every hazard insurance policy issued or renewed on or

556

after January 1, 2004, to protect the condominium shall provide

557

primary coverage for:

558

1. All portions of the condominium property located outside

559

the units;

560

2. The condominium property located inside the units as

561

such property was initially installed, or replacements thereof of

562

like kind and quality and in accordance with the original plans

563

and specifications or, if the original plans and specifications

564

are not available, as they existed at the time the unit was

565

initially conveyed; and

566

3. All portions of the condominium property for which the

567

declaration of condominium requires coverage by the association.

568

569

Anything to the contrary notwithstanding, the terms "condominium

570

property," "building," "improvements," "insurable improvements,"

571

"common elements," "association property," or any other term

572

found in the declaration of condominium which defines the scope

573

of property or casualty insurance that a condominium association

574

must obtain shall exclude all floor, wall, and ceiling coverings,

575

electrical fixtures, appliances, air conditioner or heating

576

equipment, water heaters, water filters, built-in cabinets and

577

countertops, and window treatments, including curtains, drapes,

578

blinds, hardware, and similar window treatment components, or

579

replacements of any of the foregoing which are located within the

580

boundaries of a unit and serve only one unit and all air

581

conditioning compressors that service only an individual unit,

582

whether or not located within the unit boundaries. The foregoing

583

is intended to establish the property or casualty insuring

584

responsibilities of the association and those of the individual

585

unit owner and do not serve to broaden or extend the perils of

586

coverage afforded by any insurance contract provided to the

587

individual unit owner. Beginning January 1, 2004, the association

588

shall have the authority to amend the declaration of condominium,

589

without regard to any requirement for mortgagee approval of

590

amendments affecting insurance requirements, to conform the

591

declaration of condominium to the coverage requirements of this

592

section.

593

594

after January 1, 2004, to an individual unit owner shall provide

595

that the coverage afforded by such policy is excess over the

596

amount recoverable under any other policy covering the same

597

property. Each insurance policy issued to an individual unit

598

owner providing such coverage shall be without rights of

599

subrogation against the condominium association that operates the

600

condominium in which such unit owner's unit is located. All real

601

or personal property located within the boundaries of the unit

602

owner's unit which is excluded from the coverage to be provided

603

by the association as set forth in paragraph (b) shall be insured

604

by the individual unit owner.

605

(d) The association shall obtain and maintain adequate

606

insurance or fidelity bonding of all persons who control or

607

disburse funds of the association. The insurance policy or

608

fidelity bond must cover the maximum funds that will be in the

609

custody of the association or its management agent at any one

610

time. As used in this paragraph, the term "persons who control or

611

disburse funds of the association" includes, but is not limited

612

to, those individuals authorized to sign checks and the

613

president, secretary, and treasurer of the association. The

614

association shall bear the cost of bonding.

615

(e) The association shall pay the deductible for coverage

616

of an element that is the responsibility of the association to

617

repair or replace. The deductible shall be paid by the unit owner

618

if the element is the responsibility of the unit owner to repair

619

or replace. A unit owner policy may not incur another deductible

620

if the deductible has already been exercised on the association

621

policy for the same occurrence.

622

(12) OFFICIAL RECORDS.--

623

(a) From the inception of the association, the association

624

shall maintain each of the following items, when applicable,

625

which shall constitute the official records of the association:

626

1. A copy of the plans, permits, warranties, and other

627

items provided by the developer pursuant to s. 718.301(4).

628

2. A photocopy of the recorded declaration of condominium

629

of each condominium operated by the association and of each

630

amendment to each declaration.

631

3. A photocopy of the recorded bylaws of the association

632

and of each amendment to the bylaws.

633

4. A certified copy of the articles of incorporation of the

634

association, or other documents creating the association, and of

635

each amendment thereto.

636

5. A copy of the current rules of the association.

637

6. A book or books which contain the minutes of all

638

meetings of the association, of the board of administration

639

directors, and of unit owners, which minutes shall be retained

640

for a period of not less than 7 years.

641

7. A current roster of all unit owners and their mailing

642

addresses, unit identifications, voting certifications, and, if

643

known, telephone numbers. The association shall also maintain the

644

electronic mailing addresses and the numbers designated by unit

645

owners for receiving notice sent by electronic transmission of

646

those unit owners consenting to receive notice by electronic

647

transmission. The electronic mailing addresses and numbers

648

provided by unit owners to receive notice by electronic

649

transmission shall be removed from association records when

650

consent to receive notice by electronic transmission is revoked.

651

However, the association is not liable for an erroneous

652

disclosure of the electronic mail address or the number for

653

receiving electronic transmission of notices.

654

8. All current insurance policies of the association and

655

condominiums operated by the association.

656

9. A current copy of any management agreement, lease, or

657

other contract to which the association is a party or under which

658

the association or the unit owners have an obligation or

659

responsibility.

660

10. Bills of sale or transfer for all property owned by the

661

association.

662

11. Accounting records for the association and separate

663

accounting records for each condominium which the association

664

operates. All accounting records shall be maintained for a period

665

of not less than 7 years. Any person who knowingly or

666

intentionally defaces, destroys, or fails to create or maintain

667

accounting records is personally subject to a civil penalty

668

pursuant to s. 718.501(1)(d). The accounting records shall

669

include, but are not limited to:

670

a. Accurate, itemized, and detailed records of all receipts

671

and expenditures.

672

b. A current account and a monthly, bimonthly, or quarterly

673

statement of the account for each unit designating the name of

674

the unit owner, the due date and amount of each assessment, the

675

amount paid upon the account, and the balance due.

676

c. All audits, reviews, accounting statements, and

677

financial reports of the association or condominium.

678

d. All contracts for work to be performed. Bids for work to

679

be performed shall also be considered official records and shall

680

be maintained for a period of 1 year.

681

12. Ballots, sign-in sheets, voting proxies, and all other

682

papers relating to voting by unit owners, which shall be

683

maintained for a period of 1 year from the date of the election,

684

vote, or meeting to which the document relates.

685

13. All rental records, when the association is acting as

686

agent for the rental of condominium units.

687

14. A copy of the current question and answer sheet as

688

described by s. 718.504.

689

15. All other records of the association not specifically

690

included in the foregoing which are related to the operation of

691

the association.

692

16. A copy of the inspection report as provided in s.

693

718.301(4)(p).

694

(b) The official records of the association shall be

695

maintained within the state for at least 5 years. The records of

696

the association shall be made available to a unit owner within 45

697

miles of the condominium property within 5 working days after

698

receipt of written request by the board or its designee. This

699

paragraph may be complied with by having a copy of the official

700

records of the association available for inspection or copying on

701

the condominium property or association property. The association

702

may offer the option of making the records of the association

703

available to a unit owner electronically via the Internet or by

704

allowing the records to be viewed in electronic format on a

705

computer screen and printed upon request.

706

707

inspection by any association member or the authorized

708

representative of such member at all reasonable times. The right

709

to inspect the records includes the right to make or obtain

710

copies, at the reasonable expense, if any, of the association

711

member. The association may adopt reasonable rules regarding the

712

frequency, time, location, notice, and manner of record

713

inspections and copying. The failure of an association to provide

714

the records within 10 working days after receipt of a written

715

request shall create a rebuttable presumption that the

716

association willfully failed to comply with this paragraph. A

717

unit owner who is denied access to official records is entitled

718

to the actual damages or minimum damages for the association's

719

willful failure to comply with this paragraph. The minimum

720

damages shall be $50 per calendar day up to 10 days, the

721

calculation to begin on the 11th working day after receipt of the

722

written request. The failure to permit inspection of the

723

association records as provided herein entitles any person

724

prevailing in an enforcement action to recover reasonable

725

attorney's fees from the person in control of the records who,

726

directly or indirectly, knowingly denied access to the records

727

for inspection. Any person who knowingly or intentionally

728

defaces, destroys, or fails to create or maintain accounting

729

records is personally subject to a civil penalty pursuant to s.

730

718.501(1)(d). The association shall maintain an adequate number

731

of copies of the declaration, articles of incorporation, bylaws,

732

and rules, and all amendments to each of the foregoing, as well

733

as the question and answer sheet provided for in s. 718.504 and

734

year-end financial information required in this section on the

735

condominium property to ensure their availability to unit owners

736

and prospective purchasers, and may charge its actual costs for

737

preparing and furnishing these documents to those requesting the

738

same. Notwithstanding the provisions of this paragraph, the

739

following records shall not be accessible to unit owners:

740

1. Any record protected by the lawyer-client privilege as

741

described in s. 90.502; and any record protected by the work-

742

product privilege, including any record prepared by an

743

association attorney or prepared at the attorney's express

744

direction; which reflects a mental impression, conclusion,

745

litigation strategy, or legal theory of the attorney or the

746

association, and which was prepared exclusively for civil or

747

criminal litigation or for adversarial administrative

748

proceedings, or which was prepared in anticipation of imminent

749

civil or criminal litigation or imminent adversarial

750

administrative proceedings until the conclusion of the litigation

751

or adversarial administrative proceedings.

752

2. Information obtained by an association in connection

753

with the approval of the lease, sale, or other transfer of a

754

unit.

755

3. Medical records of unit owners.

756

4. Social security numbers, driver's license numbers,

757

credit card numbers, and other personal identifying information

758

in possession of the association.

759

(d) The association shall prepare a question and answer

760

sheet as described in s. 718.504, and shall update it annually.

761

(e)1. The association or its authorized agent is not

762

required to provide a prospective purchaser or lienholder with

763

information about the condominium or the association other than

764

information or documents required by this chapter to be made

765

available or disclosed. The association or its authorized agent

766

may charge a reasonable fee to the prospective purchaser,

767

lienholder, or the current unit owner for providing good faith

768

responses to requests for information by or on behalf of a

769

prospective purchaser or lienholder, other than that required by

770

law, if the fee does not exceed $150 plus the reasonable cost of

771

photocopying and any attorney's fees incurred by the association

772

in connection with the response.

773

2. An association and its authorized agent are not liable

774

for providing such information in good faith pursuant to a

775

written request if the person providing the information includes

776

a written statement in substantially the following form: "The

777

responses herein are made in good faith and to the best of my

778

ability as to their accuracy."

779

(13) FINANCIAL REPORTING.--Within 90 days after the end of

780

the fiscal year, or annually on a date provided in the bylaws,

781

the association shall prepare and complete, or contract for the

782

preparation and completion of, a financial report for the

783

preceding fiscal year. Within 21 days after the final financial

784

report is completed by the association or received from the third

785

party, but not later than 120 days after the end of the fiscal

786

year or other date as provided in the bylaws, the association

787

shall mail to each unit owner at the address last furnished to

788

the association by the unit owner, or hand deliver to each unit

789

owner, a copy of the financial report or a notice that a copy of

790

the financial report will be mailed or hand delivered to the unit

791

owner, without charge, upon receipt of a written request from the

792

unit owner. The division shall adopt rules setting forth uniform

793

accounting principles and standards to be used by all

794

associations and shall adopt rules addressing financial reporting

795

requirements for multicondominium associations. The rules shall

796

include, but not be limited to, disclosure of at least a summary

797

of the reserves, including the information as to whether such

798

reserves are being funded at a level sufficient to prevent the

799

need for a special assessment to do the deferred maintenance or

800

replacement as required and, if not, what amount of assessment

801

will be necessary to bring such reserves up to the level that

802

would prevent a special assessment. The person preparing the

803

financial reports may rely on the inspection report as provided

804

for in s. 718.301(4)(p) for verification. The statement shall

805

confirm that the financial operations of the association meet

806

fiscal and fiduciary standards of this chapter. In adopting such

807

rules, the division shall consider the number of members and

808

annual revenues of an association. Financial reports shall be

809

prepared as follows:

810

(a) An association that meets the criteria of this

811

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

812

financial statements in accordance with generally accepted

813

accounting principles. The financial statements shall be based

814

upon the association's total annual revenues, as follows:

815

1. An association with total annual revenues of $100,000 or

816

more, but less than $200,000, shall prepare compiled financial

817

statements.

818

2. An association with total annual revenues of at least

819

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

820

financial statements.

821

3. An association with total annual revenues of $400,000 or

822

more shall prepare audited financial statements.

823

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

824

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

825

expenditures.

826

2. An association which operates less than 50 units,

827

regardless of the association's annual revenues, shall prepare a

828

report of cash receipts and expenditures in lieu of financial

829

statements required by paragraph (a).

830

3. A report of cash receipts and disbursements must

831

disclose the amount of receipts by accounts and receipt

832

classifications and the amount of expenses by accounts and

833

expense classifications, including, but not limited to, the

834

following, as applicable: costs for security, professional and

835

management fees and expenses, taxes, costs for recreation

836

facilities, expenses for refuse collection and utility services,

837

expenses for lawn care, costs for building maintenance and

838

repair, insurance costs, administration and salary expenses, and

839

reserves accumulated and expended for capital expenditures,

840

deferred maintenance, and any other category for which the

841

association maintains reserves.

842

843

without a meeting of or approval by the unit owners:

844

1. Compiled, reviewed, or audited financial statements, if

845

the association is required to prepare a report of cash receipts

846

and expenditures;

847

2. Reviewed or audited financial statements, if the

848

association is required to prepare compiled financial statements;

849

850

3. Audited financial statements if the association is

851

required to prepare reviewed financial statements.

852

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

853

present at a properly called meeting of the association, an

854

association may prepare or cause to be prepared:

855

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

856

compiled, reviewed, or audited financial statement;

857

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

858

financial statement in lieu of a reviewed or audited financial

859

statement; or

860

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

861

financial statement, or a reviewed financial statement in lieu of

862

an audited financial statement.

863

864

Such meeting and approval must occur prior to the end of the

865

fiscal year and is effective only for the fiscal year in which

866

the vote is taken. With respect to an association to which the

867

developer has not turned over control of the association, all

868

unit owners, including the developer, may vote on issues related

869

to the preparation of financial reports for the first 2 fiscal

870

years of the association's operation, beginning with the fiscal

871

year in which the declaration is recorded. Thereafter, all unit

872

owners except the developer may vote on such issues until control

873

is turned over to the association by the developer. Any audit or

874

review prepared under this section shall be paid by the developer

875

if done prior to turnover of control of the association. An

876

association may not waive the financial reporting requirements of

877

this section for more than 2 consecutive years.

878

Section 11. Subsection (2) of section 718.112, Florida

879

Statutes, is amended to read:

880

718.112 Bylaws.--

881

(2) REQUIRED PROVISIONS.--The bylaws shall provide for the

882

following and, if they do not do so, shall be deemed to include

883

the following:

884

(a) Administration.--

885

1. The form of administration of the association shall be

886

described indicating the title of the officers and board of

887

administration and specifying the powers, duties, manner of

888

selection and removal, and compensation, if any, of officers and

889

boards. In the absence of such a provision, the board of

890

administration shall be composed of five members, except in the

891

case of a condominium which has five or fewer units, in which

892

case in a not-for-profit corporation the board shall consist of

893

not fewer than three members. In the absence of provisions to the

894

contrary in the bylaws, the board of administration shall have a

895

president, a secretary, and a treasurer, who shall perform the

896

duties of such officers customarily performed by officers of

897

corporations. Unless prohibited in the bylaws, the board of

898

administration may appoint other officers and grant them the

899

duties it deems appropriate. Unless otherwise provided in the

900

bylaws, the officers shall serve without compensation and at the

901

pleasure of the board of administration. Unless otherwise

902

provided in the bylaws, the members of the board shall serve

903

without compensation.

904

2. When a unit owner files a written inquiry by certified

905

mail with the board of administration, the board shall respond in

906

writing to the unit owner within 30 days of receipt of the

907

inquiry. The board's response shall either give a substantive

908

response to the inquirer, notify the inquirer that a legal

909

opinion has been requested, or notify the inquirer that advice

910

has been requested from the division. If the board requests

911

advice from the division, the board shall, within 10 days of its

912

receipt of the advice, provide in writing a substantive response

913

to the inquirer. If a legal opinion is requested, the board

914

shall, within 60 days after the receipt of the inquiry, provide

915

in writing a substantive response to the inquiry. The failure to

916

provide a substantive response to the inquiry as provided herein

917

precludes the board from recovering attorney's fees and costs in

918

any subsequent litigation, administrative proceeding, or

919

arbitration arising out of the inquiry. The association may

920

through its board of administration adopt reasonable rules and

921

regulations regarding the frequency and manner of responding to

922

unit owner inquiries, one of which may be that the association is

923

only obligated to respond to one written inquiry per unit in any

924

given 30-day period. In such a case, any additional inquiry or

925

inquiries must be responded to in the subsequent 30-day period,

926

or periods, as applicable.

927

(b) Quorum; voting requirements; proxies.--

928

1. Unless a lower number is provided in the bylaws, the

929

percentage of voting interests required to constitute a quorum at

930

a meeting of the members shall be a majority of the voting

931

interests. Unless otherwise provided in this chapter or in the

932

declaration, articles of incorporation, or bylaws, and except as

933

provided in subparagraph (d)3., decisions shall be made by owners

934

of a majority of the voting interests represented at a meeting at

935

which a quorum is present.

936

2. Except as specifically otherwise provided herein, after

937

January 1, 1992, unit owners may not vote by general proxy, but

938

may vote by limited proxies substantially conforming to a limited

939

proxy form adopted by the division. Votes allocated to units

940

owned by the association may not be cast by proxy, ballot, or

941

otherwise for any purpose. However, proxies may be used to

942

establish a quorum. Limited proxies and general proxies may be

943

used to establish a quorum. Limited proxies shall be used for

944

votes taken to waive or reduce reserves in accordance with

945

subparagraph (f)2.; for votes taken to waive the financial

946

reporting requirements of s. 718.111(13); for votes taken to

947

amend the declaration pursuant to s. 718.110; for votes taken to

948

amend the articles of incorporation or bylaws pursuant to this

949

section; and for any other matter for which this chapter requires

950

or permits a vote of the unit owners. Except as provided in

951

paragraph (d), after January 1, 1992, no proxy, limited or

952

general, shall be used in the election of board members. General

953

proxies may be used for other matters for which limited proxies

954

are not required, and may also be used in voting for

955

nonsubstantive changes to items for which a limited proxy is

956

required and given. Notwithstanding the provisions of this

957

subparagraph, unit owners may vote in person at unit owner

958

meetings. Nothing contained herein shall limit the use of general

959

proxies or require the use of limited proxies for any agenda item

960

or election at any meeting of a timeshare condominium

961

association.

962

3. Any proxy given shall be effective only for the specific

963

meeting for which originally given and any lawfully adjourned

964

meetings thereof. In no event shall any proxy be valid for a

965

period longer than 90 days after the date of the first meeting

966

for which it was given. Every proxy is revocable at any time at

967

the pleasure of the unit owner executing it.

968

4. A member of the board of administration or a committee

969

may submit in writing his or her agreement or disagreement with

970

any action taken at a meeting that the member did not attend.

971

This agreement or disagreement may not be used as a vote for or

972

against the action taken and may not be used for the purposes of

973

creating a quorum.

974

5. When any of the board or committee members meet by

975

telephone conference, those board or committee members attending

976

by telephone conference may be counted toward obtaining a quorum

977

and may vote by telephone. A telephone speaker must be used so

978

that the conversation of those board or committee members

979

attending by telephone may be heard by the board or committee

980

members attending in person as well as by any unit owners present

981

at a meeting.

982

983

board of administration at which a quorum of the members is

984

present shall be open to all unit owners. Any unit owner may tape

985

record or videotape meetings of the board of administration. The

986

right to attend such meetings includes the right to speak at such

987

meetings with reference to all designated agenda items. The

988

division shall adopt reasonable rules governing the tape

989

recording and videotaping of the meeting. The association may

990

adopt written reasonable rules governing the frequency, duration,

991

and manner of unit owner statements. Adequate notice of all

992

meetings, which notice shall specifically incorporate an

993

identification of agenda items, shall be posted conspicuously on

994

the condominium property at least 48 continuous hours preceding

995

the meeting except in an emergency. If 20 percent of the voting

996

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

997

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

998

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

999

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

1000

agenda. Any item not included on the notice may be taken up on an

1001

emergency basis by at least a majority plus one of the members of

1002

the board. Such emergency action shall be noticed and ratified at

1003

the next regular meeting of the board. However, written notice of

1004

any meeting at which nonemergency special assessments, or at

1005

which amendment to rules regarding unit use, will be considered

1006

shall be mailed, delivered, or electronically transmitted to the

1007

unit owners and posted conspicuously on the condominium property

1008

not less than 14 days prior to the meeting. Evidence of

1009

compliance with this 14-day notice shall be made by an affidavit

1010

executed by the person providing the notice and filed among the

1011

official records of the association. Upon notice to the unit

1012

owners, the board shall by duly adopted rule designate a specific

1013

location on the condominium property or association property upon

1014

which all notices of board meetings shall be posted. If there is

1015

no condominium property or association property upon which

1016

notices can be posted, notices of board meetings shall be mailed,

1017

delivered, or electronically transmitted at least 14 days before

1018

the meeting to the owner of each unit. In lieu of or in addition

1019

to the physical posting of notice of any meeting of the board of

1020

administration on the condominium property, the association may,

1021

by reasonable rule, adopt a procedure for conspicuously posting

1022

and repeatedly broadcasting the notice and the agenda on a

1023

closed-circuit cable television system serving the condominium

1024

association. However, if broadcast notice is used in lieu of a

1025

notice posted physically on the condominium property, the notice

1026

and agenda must be broadcast at least four times every broadcast

1027

hour of each day that a posted notice is otherwise required under

1028

this section. When broadcast notice is provided, the notice and

1029

agenda must be broadcast in a manner and for a sufficient

1030

continuous length of time so as to allow an average reader to

1031

observe the notice and read and comprehend the entire content of

1032

the notice and the agenda. Notice of any meeting in which regular

1033

or special assessments against unit owners are to be considered

1034

for any reason shall specifically state contain a statement that

1035

assessments will be considered and the nature, estimated cost,

1036

and description of any such assessments. Meetings of a committee

1037

to take final action on behalf of the board or make

1038

recommendations to the board regarding the association budget are

1039

subject to the provisions of this paragraph. Meetings of a

1040

committee that does not take final action on behalf of the board

1041

or make recommendations to the board regarding the association

1042

budget are subject to the provisions of this section, unless

1043

those meetings are exempted from this section by the bylaws of

1044

the association. Notwithstanding any other law, the requirement

1045

that board meetings and committee meetings be open to the unit

1046

owners is inapplicable to meetings between the board or a

1047

committee and the association's attorney, with respect to

1048

proposed or pending litigation, when the meeting is held for the

1049

purpose of seeking or rendering legal advice.

1050

(d) Unit owner meetings.--

1051

1. There shall be an annual meeting of the unit owners held

1052

at the location provided in the association bylaws and, if the

1053

bylaws are silent as to the location, the meeting shall be held

1054

within 30 miles of the condominium property. Unless the bylaws

1055

provide otherwise, a vacancy on the board caused by the

1056

expiration of a director's term shall be filled by electing a new

1057

board member, and the election shall be by secret ballot;

1058

however, if the number of vacancies equals or exceeds the number

1059

of candidates, no election is required. If there is no provision

1060

in the bylaws for terms of the members of the board, The terms of

1061

all members of the board shall expire upon the election of their

1062

successors at the annual meeting and they may stand for

1063

reelection. However, if no person is interested in or

1064

demonstrates an intention to run for the position of a board

1065

member whose term has expired according to the provisions of this

1066

subparagraph, such board member whose term has expired shall be

1067

automatically reappointed to the board of directors and need not

1068

stand for reelection. Coowners of a unit may not serve as members

1069

of the board of directors at the same time. Any unit owner

1070

desiring to be a candidate for board membership shall comply with

1071

subparagraph 3. A person who has been convicted of any felony by

1072

any court of record in the United States and who has not had his

1073

or her right to vote restored pursuant to law in the jurisdiction

1074

of his or her residence is not eligible for board membership

1075

unless such felon's civil rights have been restored for a period

1076

of no less than 5 years as of the date on which such person seeks

1077

election to the board. The validity of an action by the board is

1078

not affected if it is later determined that a member of the board

1079

is ineligible for board membership due to having been convicted

1080

of a felony.

1081

2. The bylaws shall provide the method of calling meetings

1082

of unit owners, including annual meetings. Written notice, which

1083

notice must include an agenda, shall be mailed, hand delivered,

1084

or electronically transmitted to each unit owner at least 14 days

1085

prior to the annual meeting and shall be posted in a conspicuous

1086

place on the condominium property at least 14 continuous days

1087

preceding the annual meeting. Upon notice to the unit owners, the

1088

board shall by duly adopted rule designate a specific location on

1089

the condominium property or association property upon which all

1090

notices of unit owner meetings shall be posted; however, if there

1091

is no condominium property or association property upon which

1092

notices can be posted, this requirement does not apply. In lieu

1093

of or in addition to the physical posting of notice of any

1094

meeting of the unit owners on the condominium property, the

1095

association may, by reasonable rule, adopt a procedure for

1096

conspicuously posting and repeatedly broadcasting the notice and

1097

the agenda on a closed-circuit cable television system serving

1098

the condominium association. However, if broadcast notice is used

1099

in lieu of a notice posted physically on the condominium

1100

property, the notice and agenda must be broadcast at least four

1101

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

1102

otherwise required under this section. When broadcast notice is

1103

provided, the notice and agenda must be broadcast in a manner and

1104

for a sufficient continuous length of time so as to allow an

1105

average reader to observe the notice and read and comprehend the

1106

entire content of the notice and the agenda. Unless a unit owner

1107

waives in writing the right to receive notice of the annual

1108

meeting, such notice shall be hand delivered, mailed, or

1109

electronically transmitted to each unit owner. Notice for

1110

meetings and notice for all other purposes shall be mailed to

1111

each unit owner at the address last furnished to the association

1112

by the unit owner, or hand delivered to each unit owner. However,

1113

if a unit is owned by more than one person, the association shall

1114

provide notice, for meetings and all other purposes, to that one

1115

address which the developer initially identifies for that purpose

1116

and thereafter as one or more of the owners of the unit shall so

1117

advise the association in writing, or if no address is given or

1118

the owners of the unit do not agree, to the address provided on

1119

the deed of record. An officer of the association, or the manager

1120

or other person providing notice of the association meeting,

1121

shall provide an affidavit or United States Postal Service

1122

certificate of mailing, to be included in the official records of

1123

the association affirming that the notice was mailed or hand

1124

delivered, in accordance with this provision.

1125

3. The members of the board shall be elected by written

1126

ballot or voting machine. Proxies shall in no event be used in

1127

electing the board, either in general elections or elections to

1128

fill vacancies caused by recall, resignation, or otherwise,

1129

unless otherwise provided in this chapter. Not less than 60 days

1130

before a scheduled election, the association shall mail, deliver,

1131

or electronically transmit, whether by separate association

1132

mailing or included in another association mailing, delivery, or

1133

transmission, including regularly published newsletters, to each

1134

unit owner entitled to a vote, a first notice of the date of the

1135

election along with a certification form provided by the division

1136

attesting that he or she has read and understands, to the best of

1137

his or her ability, the governing documents of the association

1138

and the provisions of this chapter and any applicable rules. Any

1139

unit owner or other eligible person desiring to be a candidate

1140

for the board must give written notice to the association not

1141

less than 40 days before a scheduled election. Together with the

1142

written notice and agenda as set forth in subparagraph 2., the

1143

association shall mail, deliver, or electronically transmit a

1144

second notice of the election to all unit owners entitled to vote

1145

therein, together with a ballot which shall list all candidates.

1146

Upon request of a candidate, the association shall include an

1147

information sheet, no larger than 81/2 inches by 11 inches, which

1148

must be furnished by the candidate not less than 35 days before

1149

the election, along with the signed certification form provided

1150

for in this subparagraph, to be included with the mailing,

1151

delivery, or transmission of the ballot, with the costs of

1152

mailing, delivery, or electronic transmission and copying to be

1153

borne by the association. The association is not liable for the

1154

contents of the information sheets prepared by the candidates. In

1155

order to reduce costs, the association may print or duplicate the

1156

information sheets on both sides of the paper. The division shall

1157

by rule establish voting procedures consistent with the

1158

provisions contained herein, including rules establishing

1159

procedures for giving notice by electronic transmission and rules

1160

providing for the secrecy of ballots. Elections shall be decided

1161

by a plurality of those ballots cast. There shall be no quorum

1162

requirement; however, at least 20 percent of the eligible voters

1163

must cast a ballot in order to have a valid election of members

1164

of the board. No unit owner shall permit any other person to vote

1165

his or her ballot, and any such ballots improperly cast shall be

1166

deemed invalid, provided any unit owner who violates this

1167

provision may be fined by the association in accordance with s.

1168

718.303. A unit owner who needs assistance in casting the ballot

1169

for the reasons stated in s. 101.051 may obtain assistance in

1170

casting the ballot. The regular election shall occur on the date

1171

of the annual meeting. The provisions of this subparagraph shall

1172

not apply to timeshare condominium associations. Notwithstanding

1173

the provisions of this subparagraph, an election is not required

1174

unless more candidates file notices of intent to run or are

1175

nominated than board vacancies exist.

1176

4. Any approval by unit owners called for by this chapter

1177

or the applicable declaration or bylaws, including, but not

1178

limited to, the approval requirement in s. 718.111(8), shall be

1179

made at a duly noticed meeting of unit owners and shall be

1180

subject to all requirements of this chapter or the applicable

1181

condominium documents relating to unit owner decisionmaking,

1182

except that unit owners may take action by written agreement,

1183

without meetings, on matters for which action by written

1184

agreement without meetings is expressly allowed by the applicable

1185

bylaws or declaration or any statute that provides for such

1186

action.

1187

5. Unit owners may waive notice of specific meetings if

1188

allowed by the applicable bylaws or declaration or any statute.

1189

If authorized by the bylaws, notice of meetings of the board of

1190

administration, unit owner meetings, except unit owner meetings

1191

called to recall board members under paragraph (j), and committee

1192

meetings may be given by electronic transmission to unit owners

1193

who consent to receive notice by electronic transmission.

1194

6. Unit owners shall have the right to participate in

1195

meetings of unit owners with reference to all designated agenda

1196

items. However, the association may adopt reasonable rules

1197

governing the frequency, duration, and manner of unit owner

1198

participation.

1199

7. Any unit owner may tape record or videotape a meeting of

1200

the unit owners subject to reasonable rules adopted by the

1201

division.

1202

8. Unless otherwise provided in the bylaws, any vacancy

1203

occurring on the board before the expiration of a term may be

1204

filled by the affirmative vote of the majority of the remaining

1205

directors, even if the remaining directors constitute less than a

1206

quorum, or by the sole remaining director. In the alternative, a

1207

board may hold an election to fill the vacancy, in which case the

1208

election procedures must conform to the requirements of

1209

subparagraph 3. unless the association has opted out of the

1210

statutory election process, in which case the bylaws of the

1211

association control. Unless otherwise provided in the bylaws, a

1212

board member appointed or elected under this section shall fill

1213

the vacancy for the unexpired term of the seat being filled.

1214

Filling vacancies created by recall is governed by paragraph (j)

1215

and rules adopted by the division.

1216

1217

Notwithstanding subparagraphs (b)2. and (d)3., an association

1218

may, by the affirmative vote of a majority of the total voting

1219

interests, provide for different voting and election procedures

1220

in its bylaws, which vote may be by a proxy specifically

1221

delineating the different voting and election procedures. The

1222

different voting and election procedures may provide for

1223

elections to be conducted by limited or general proxy.

1224

(e) Budget meeting.--

1225

1. Any meeting at which a proposed annual budget of an

1226

association will be considered by the board or unit owners shall

1227

be open to all unit owners. At least 14 days prior to such a

1228

meeting, the board shall hand deliver to each unit owner, mail to

1229

each unit owner at the address last furnished to the association

1230

by the unit owner, or electronically transmit to the location

1231

furnished by the unit owner for that purpose a notice of such

1232

meeting and a copy of the proposed annual budget. An officer or

1233

manager of the association, or other person providing notice of

1234

such meeting, shall execute an affidavit evidencing compliance

1235

with such notice requirement, and such affidavit shall be filed

1236

among the official records of the association.

1237

2.a. If a board adopts in any fiscal year an annual budget

1238

which requires assessments against unit owners which exceed 115

1239

percent of assessments for the preceding fiscal year, the board

1240

shall conduct a special meeting of the unit owners to consider a

1241

substitute budget if the board receives, within 21 days after

1242

adoption of the annual budget, a written request for a special

1243

meeting from at least 10 percent of all voting interests. The

1244

special meeting shall be conducted within 60 days after adoption

1245

of the annual budget. At least 14 days prior to such special

1246

meeting, the board shall hand deliver to each unit owner, or mail

1247

to each unit owner at the address last furnished to the

1248

association, a notice of the meeting. An officer or manager of

1249

the association, or other person providing notice of such meeting

1250

shall execute an affidavit evidencing compliance with this notice

1251

requirement, and such affidavit shall be filed among the official

1252

records of the association. Unit owners may consider and adopt a

1253

substitute budget at the special meeting. A substitute budget is

1254

adopted if approved by a majority of all voting interests unless

1255

the bylaws require adoption by a greater percentage of voting

1256

interests. If there is not a quorum at the special meeting or a

1257

substitute budget is not adopted, the annual budget previously

1258

adopted by the board shall take effect as scheduled.

1259

b. Any determination of whether assessments exceed 115

1260

percent of assessments for the prior fiscal year shall exclude

1261

any authorized provision for reasonable reserves for repair or

1262

replacement of the condominium property, anticipated expenses of

1263

the association which the board does not expect to be incurred on

1264

a regular or annual basis, or assessments for betterments to the

1265

condominium property.

1266

c. If the developer controls the board, assessments shall

1267

not exceed 115 percent of assessments for the prior fiscal year

1268

unless approved by a majority of all voting interests.

1269

(f) Annual budget.--

1270

1. The proposed annual budget of estimated revenues and

1271

common expenses shall be detailed and shall show the amounts

1272

budgeted by accounts and expense classifications, including, if

1273

applicable, but not limited to, those expenses listed in s.

1274

718.504(21). A multicondominium association shall adopt a

1275

separate budget of common expenses for each condominium the

1276

association operates and shall adopt a separate budget of common

1277

expenses for the association. In addition, if the association

1278

maintains limited common elements with the cost to be shared only

1279

by those entitled to use the limited common elements as provided

1280

for in s. 718.113(1), the budget or a schedule attached thereto

1281

shall show amounts budgeted therefor. If, after turnover of

1282

control of the association to the unit owners, any of the

1283

expenses listed in s. 718.504(21) are not applicable, they need

1284

not be listed.

1285

2. In addition to annual operating expenses, the budget

1286

shall include reserve accounts for capital expenditures and

1287

deferred maintenance. These accounts shall include, but are not

1288

limited to, roof replacement, building painting, and pavement

1289

resurfacing, regardless of the amount of deferred maintenance

1290

expense or replacement cost, and for any other item for which the

1291

deferred maintenance expense or replacement cost exceeds $10,000.

1292

The amount to be reserved shall be computed by means of a formula

1293

which is based upon estimated remaining useful life and estimated

1294

replacement cost or deferred maintenance expense of each reserve

1295

item. The association may adjust replacement reserve assessments

1296

annually to take into account any changes in estimates or

1297

extension of the useful life of a reserve item caused by deferred

1298

maintenance. This subsection does not apply to an adopted budget

1299

in which the members of an association have determined, by a

1300

majority vote at a duly called meeting of the association, to

1301

provide no reserves or less reserves than required by this

1302

subsection. However, prior to turnover of control of an

1303

association by a developer to unit owners other than a developer

1304

pursuant to s. 718.301, the developer may vote to waive the

1305

reserves or reduce the funding of reserves for the first 2 fiscal

1306

years of the association's operation, beginning with the fiscal

1307

year in which the initial declaration is recorded, after which

1308

time reserves may be waived or reduced only upon the vote of a

1309

majority of all nondeveloper voting interests voting in person or

1310

by limited proxy at a duly called meeting of the association. If

1311

a meeting of the unit owners has been called to determine whether

1312

to waive or reduce the funding of reserves, and no such result is

1313

achieved or a quorum is not attained, the reserves as included in

1314

the budget shall go into effect. After the turnover, the

1315

developer may vote its voting interest to waive or reduce the

1316

funding of reserves.

1317

3. Reserve funds and any interest accruing thereon shall

1318

remain in the reserve account or accounts, and shall be used only

1319

for authorized reserve expenditures unless their use for other

1320

purposes is approved in advance by a majority vote at a duly

1321

called meeting of the association. Prior to turnover of control

1322

of an association by a developer to unit owners other than the

1323

developer pursuant to s. 718.301, the developer-controlled

1324

association shall not vote to use reserves for purposes other

1325

than that for which they were intended without the approval of a

1326

majority of all nondeveloper voting interests, voting in person

1327

or by limited proxy at a duly called meeting of the association.

1328

4. The only voting interests which are eligible to vote on

1329

questions that involve waiving or reducing the funding of

1330

reserves, or using existing reserve funds for purposes other than

1331

purposes for which the reserves were intended, are the voting

1332

interests of the units subject to assessment to fund the reserves

1333

in question. Proxy questions relating to waiving or reducing the

1334

funding of reserves or using existing reserve funds for purposes

1335

other than purposes for which the reserves were intended shall

1336

contain the following statement in capitalized, bold letters in a

1337

font size larger than any other used on the face of the proxy

1338

ballot: Waiving of reserves, in whole or in part, or allowing

1339

alternate uses of existing reserves may result in unit owner

1340

liability for payment of unanticipated special assessments

1341

regarding those reserve items.

1342

5. Notwithstanding subparagraph 3., the association, after

1343

turnover of control of the association may, in case of a

1344

catastrophic event, use reserve funds for nonscheduled purposes

1345

to mitigate damages or to make the condominium accessible for

1346

repairs.

1347

(g) Assessments.--The manner of collecting from the unit

1348

owners their shares of the common expenses shall be stated in the

1349

bylaws. Assessments shall be made against units not less

1350

frequently than quarterly in an amount which is not less than

1351

that required to provide funds in advance for payment of all of

1352

the anticipated current operating expenses and for all of the

1353

unpaid operating expenses previously incurred. Nothing in this

1354

paragraph shall preclude the right of an association to

1355

accelerate assessments of an owner delinquent in payment of

1356

common expenses. Accelerated assessments shall be due and payable

1357

on the date the claim of lien is filed. Such accelerated

1358

assessments shall include the amounts due for the remainder of

1359

the budget year in which the claim of lien was filed.

1360

(h) Amendment of bylaws.--

1361

1. The method by which the bylaws may be amended consistent

1362

with the provisions of this chapter shall be stated. If the

1363

bylaws fail to provide a method of amendment, the bylaws may be

1364

amended if the amendment is approved by the owners of not less

1365

than a majority of the voting interests present in person or by

1366

proxy at a duly called meeting two-thirds of the voting

1367

interests. If the bylaws provide a method of amendment requiring

1368

approval by a majority of the voting interests, or less than a

1369

majority of the voting interests, the bylaws shall prevail.

1370

2. No bylaw shall be revised or amended by reference to its

1371

title or number only. Proposals to amend existing bylaws shall

1372

contain the full text of the bylaws to be amended; new words

1373

shall be inserted in the text underlined, and words to be deleted

1374

shall be lined through with hyphens. However, if the proposed

1375

change is so extensive that this procedure would hinder, rather

1376

than assist, the understanding of the proposed amendment, it is

1377

not necessary to use underlining and hyphens as indicators of

1378

words added or deleted, but, instead, a notation must be inserted

1379

immediately preceding the proposed amendment in substantially the

1380

following language: "Substantial rewording of bylaw. See bylaw

1381

_____ for present text."

1382

3. Nonmaterial errors or omissions in the bylaw process

1383

will not invalidate an otherwise properly promulgated amendment.

1384

(i) Transfer fees.--No charge shall be made by the

1385

association or any body thereof in connection with the sale,

1386

mortgage, lease, sublease, or other transfer of a unit unless the

1387

association is required to approve such transfer and a fee for

1388

such approval is provided for in the declaration, articles, or

1389

bylaws. Any such fee may be preset, but in no event may such fee

1390

exceed $100 per applicant other than husband/wife or

1391

parent/dependent child, which are considered one applicant.

1392

However, if the lease or sublease is a renewal of a lease or

1393

sublease with the same lessee or sublessee, no charge shall be

1394

made. The foregoing notwithstanding, an association may, if the

1395

authority to do so appears in the declaration or bylaws, require

1396

that a prospective lessee place a security deposit, in an amount

1397

not to exceed the equivalent of 1 month's rent, into an escrow

1398

account maintained by the association. The security deposit shall

1399

protect against damages to the common elements or association

1400

property. Payment of interest, claims against the deposit,

1401

refunds, and disputes under this paragraph shall be handled in

1402

the same fashion as provided in part II of chapter 83.

1403

(j) Recall of board members.--Subject to the provisions of

1404

s. 718.301, any member of the board of administration may be

1405

recalled and removed from office with or without cause by the

1406

vote or agreement in writing by a majority of all the voting

1407

interests. If provided in the bylaws, a board member may also be

1408

removed from the board for cause in the manner provided in the

1409

bylaws. A special meeting of the unit owners to recall a member

1410

or members of the board of administration may be called by 10

1411

percent of the voting interests giving notice of the meeting as

1412

required for a meeting of unit owners, and the notice shall state

1413

the purpose of the meeting. Electronic transmission may not be

1414

used as a method of giving notice of a meeting called in whole or

1415

in part for this purpose.

1416

1. If the recall is approved by a majority of all voting

1417

interests by a vote at a meeting, the recall will be effective as

1418

provided herein. The board shall duly notice and hold a board

1419

meeting within 5 full business days of the adjournment of the

1420

unit owner meeting to recall one or more board members. At the

1421

meeting, the board shall either certify the recall, in which case

1422

such member or members shall be recalled effective immediately

1423

and shall turn over to the board within 5 full business days any

1424

and all records and property of the association in their

1425

possession, or shall proceed as set forth in subparagraph 3.

1426

2. If the proposed recall is by an agreement in writing by

1427

a majority of all voting interests, the agreement in writing or a

1428

copy thereof shall be served on the association by certified mail

1429

or by personal service in the manner authorized by chapter 48 and

1430

the Florida Rules of Civil Procedure. The board of administration

1431

shall duly notice and hold a meeting of the board within 5 full

1432

business days after receipt of the agreement in writing. At the

1433

meeting, the board shall either certify the written agreement to

1434

recall a member or members of the board, in which case such

1435

member or members shall be recalled effective immediately and

1436

shall turn over to the board within 5 full business days any and

1437

all records and property of the association in their possession,

1438

or proceed as described in subparagraph 3.

1439

3. If the board determines not to certify the written

1440

agreement to recall a member or members of the board, or does not

1441

certify the recall by a vote at a meeting, the board shall,

1442

within 5 full business days after the meeting, file with the

1443

division a petition for arbitration pursuant to the procedures in

1444

s. 718.1255. For the purposes of this section, the unit owners

1445

who voted at the meeting or who executed the agreement in writing

1446

shall constitute one party under the petition for arbitration. If

1447

the arbitrator certifies the recall as to any member or members

1448

of the board, the recall will be effective upon mailing of the

1449

final order of arbitration to the association. If the association

1450

fails to comply with the order of the arbitrator, the division

1451

may take action pursuant to s. 718.501. Any member or members so

1452

recalled shall deliver to the board any and all records of the

1453

association in their possession within 5 full business days of

1454

the effective date of the recall.

1455

4. If the board fails to duly notice and hold a board

1456

meeting within 5 full business days of service of an agreement in

1457

writing or within 5 full business days of the adjournment of the

1458

unit owner recall meeting, the recall shall be deemed effective

1459

and the board members so recalled shall immediately turn over to

1460

the board any and all records and property of the association.

1461

5. If a vacancy occurs on the board as a result of a recall

1462

or removal and less than a majority of the board members are

1463

removed, the vacancy may be filled by the affirmative vote of a

1464

majority of the remaining directors, notwithstanding any

1465

provision to the contrary contained in this subsection. If

1466

vacancies occur on the board as a result of a recall and a

1467

majority or more of the board members are removed, the vacancies

1468

shall be filled in accordance with procedural rules to be adopted

1469

by the division, which rules need not be consistent with this

1470

subsection. The rules must provide procedures governing the

1471

conduct of the recall election as well as the operation of the

1472

association during the period after a recall but prior to the

1473

recall election.

1474

(k) Arbitration.--There shall be a provision for mandatory

1475

nonbinding arbitration as provided for in s. 718.1255.

1476

(l) Certificate of compliance.--There shall be a provision

1477

that a certificate of compliance from a licensed electrical

1478

contractor or electrician may be accepted by the association's

1479

board as evidence of compliance of the condominium units with the

1480

applicable fire and life safety code. Notwithstanding the

1481

provisions of chapter 633 or of any other code, statute,

1482

ordinance, administrative rule, or regulation, or any

1483

interpretation of the foregoing, an association, condominium, or

1484

unit owner is not obligated to retrofit the common elements or

1485

units of a residential condominium with a fire sprinkler system

1486

or other engineered lifesafety system in a building that has been

1487

certified for occupancy by the applicable governmental entity, if

1488

the unit owners have voted to forego such retrofitting and

1489

engineered lifesafety system by the affirmative vote of two-

1490

thirds of all voting interests in the affected condominium.

1491

However, a condominium association may not vote to forego the

1492

retrofitting with a fire sprinkler system of common areas in a

1493

high-rise building. For purposes of this subsection, the term

1494

"high-rise building" means a building that is greater than 75

1495

feet in height where the building height is measured from the

1496

lowest level of fire department access to the floor of the

1497

highest occupiable story. For purposes of this subsection, the

1498

term "common areas" means any enclosed hallway, corridor, lobby,

1499

stairwell, or entryway. In no event shall the local authority

1500

having jurisdiction require completion of retrofitting of common

1501

areas with a sprinkler system before the end of 2014.

1502

1. A vote to forego retrofitting may be obtained by limited

1503

proxy or by a ballot personally cast at a duly called membership

1504

meeting, or by execution of a written consent by the member, and

1505

shall be effective upon the recording of a certificate attesting

1506

to such vote in the public records of the county where the

1507

condominium is located. The association shall mail, hand deliver,

1508

or electronically transmit to each unit owner written notice at

1509

least 14 days prior to such membership meeting in which the vote

1510

to forego retrofitting of the required fire sprinkler system is

1511

to take place. Within 30 days after the association's opt-out

1512

vote, notice of the results of the opt-out vote shall be mailed,

1513

hand delivered, or electronically transmitted to all unit owners.

1514

Evidence of compliance with this 30-day notice shall be made by

1515

an affidavit executed by the person providing the notice and

1516

filed among the official records of the association. After such

1517

notice is provided to each owner, a copy of such notice shall be

1518

provided by the current owner to a new owner prior to closing and

1519

shall be provided by a unit owner to a renter prior to signing a

1520

lease.

1521

2. As part of the information collected annually from

1522

condominiums, the division shall require condominium associations

1523

to report the membership vote and recording of a certificate

1524

under this subsection and, if retrofitting has been undertaken,

1525

the per-unit cost of such work. The division shall annually

1526

report to the Division of State Fire Marshal of the Department of

1527

Financial Services the number of condominiums that have elected

1528

to forego retrofitting.

1529

(m) Common elements; limited power to convey.--

1530

1. With respect to condominiums created on or after October

1531

1, 1994, the bylaws shall include a provision granting the

1532

association a limited power to convey a portion of the common

1533

elements to a condemning authority for the purpose of providing

1534

utility easements, right-of-way expansion, or other public

1535

purposes, whether negotiated or as a result of eminent domain

1536

proceedings.

1537

2. In any case where the bylaws are silent as to the

1538

association's power to convey common elements as described in

1539

subparagraph 1., the bylaws shall be deemed to include the

1540

provision described in subparagraph 1.

1541

(n) Director delinquencies.--A director more than 90 days

1542

delinquent in the payment of any fee or assessment shall be

1543

deemed to have abandoned the office, creating a vacancy in the

1544

office to be filled according to state law.

1545

(o) Director offenses.--A director charged with a felony

1546

theft or embezzlement offense involving the association's funds

1547

or property shall be suspended from office pending the resolution

1548

of the charge. At the next board meeting, the board shall appoint

1549

an interim board member, who shall serve in place of the

1550

suspended member until such charges are resolved or the suspended

1551

member resigns.

1552

Section 12. Section 718.113, Florida Statutes, is amended

1553

to read:

1554

718.113 Maintenance; limitation upon improvement; display

1555

of flag; hurricane shutters; display of religious decorations.--

1556

(1) Maintenance of the common elements is the

1557

responsibility of the association. The declaration may provide

1558

that certain limited common elements shall be maintained by those

1559

entitled to use the limited common elements or that the

1560

association shall provide the maintenance, either as a common

1561

expense or with the cost shared only by those entitled to use the

1562

limited common elements. If the maintenance is to be by the

1563

association at the expense of only those entitled to use the

1564

limited common elements, the declaration shall describe in detail

1565

the method of apportioning such costs among those entitled to use

1566

the limited common elements, and the association may use the

1567

provisions of s. 718.116 to enforce payment of the shares of such

1568

costs by the unit owners entitled to use the limited common

1569

elements.

1570

(2)(a) Except as otherwise provided in this section, there

1571

shall be no material alteration or substantial additions to the

1572

common elements or to real property which is association

1573

property, except in a manner provided in the declaration as

1574

originally recorded or as amended under the procedures provided

1575

therein. If the declaration as originally recorded or as amended

1576

under the procedures provided therein does not specify the

1577

procedure for approval of material alterations or substantial

1578

additions, 75 percent of the total voting interests of the

1579

association must approve the alterations or additions.

1580

(b) There shall not be any material alteration of, or

1581

substantial addition to, the common elements of any condominium

1582

operated by a multicondominium association unless approved in the

1583

manner provided in the declaration of the affected condominium or

1584

condominiums as originally recorded or as amended under the

1585

procedures provided therein. If a declaration as originally

1586

recorded or as amended under the procedures provided therein does

1587

not specify a procedure for approving such an alteration or

1588

addition, the approval of 75 percent of the total voting

1589

interests of each affected condominium is required. This

1590

subsection does not prohibit a provision in any declaration,

1591

articles of incorporation, or bylaws as originally recorded or as

1592

amended under the procedures provided therein requiring the

1593

approval of unit owners in any condominium operated by the same

1594

association or requiring board approval before a material

1595

alteration or substantial addition to the common elements is

1596

permitted. This paragraph is intended to clarify existing law and

1597

applies to associations existing on the effective date of this

1598

act.

1599

1600

substantial addition made to association real property operated

1601

by a multicondominium association, except as provided in the

1602

declaration, articles of incorporation, or bylaws as originally

1603

recorded or as amended under the procedures provided therein. If

1604

the declaration, articles of incorporation, or bylaws as

1605

originally recorded or as amended under the procedures provided

1606

therein do not specify the procedure for approving an alteration

1607

or addition to association real property, the approval of 75

1608

percent of the total voting interests of the association is

1609

required. This paragraph is intended to clarify existing law and

1610

applies to associations existing on the effective date of this

1611

act.

1612

(3) A unit owner shall not do anything within his or her

1613

unit or on the common elements which would adversely affect the

1614

safety or soundness of the common elements or any portion of the

1615

association property or condominium property which is to be

1616

maintained by the association.

1617

(4) Any unit owner may display one portable, removable

1618

United States flag in a respectful way and, on Armed Forces Day,

1619

Memorial Day, Flag Day, Independence Day, and Veterans Day, may

1620

display in a respectful way portable, removable official flags,

1621

not larger than 4 1/2 feet by 6 feet, that represent the United

1622

States Army, Navy, Air Force, Marine Corps, or Coast Guard,

1623

regardless of any declaration rules or requirements dealing with

1624

flags or decorations.

1625

(5) Each board of administration shall adopt hurricane

1626

shutter specifications for each building within each condominium

1627

operated by the association which shall include color, style, and

1628

other factors deemed relevant by the board. All specifications

1629

adopted by the board shall comply with the applicable building

1630

code. Notwithstanding any provision to the contrary in the

1631

condominium documents, if approval is required by the documents,

1632

a board shall not refuse to approve the installation or

1633

replacement of hurricane shutters conforming to the

1634

specifications adopted by the board. The board may, subject to

1635

the provisions of s. 718.3026, and the approval of a majority of

1636

voting interests of the condominium, install hurricane shutters

1637

or hurricane protection that complies with or exceeds the

1638

applicable building code and may maintain, repair, or replace

1639

such approved hurricane shutters, whether on or within common

1640

elements, limited common elements, units, or association

1641

property. However, where hurricane protection that complies with

1642

or exceeds the applicable building code or laminated glass or

1643

window film architecturally designed to function as hurricane

1644

protection which complies with the applicable building code has

1645

been installed, the board may not install hurricane shutters. The

1646

board may operate shutters installed pursuant to this subsection

1647

without permission of the unit owners when only where such

1648

operation is necessary to preserve and protect the condominium

1649

property and association property. This subsection does not

1650

create an obligation on behalf of the board or association to

1651

close or cause to be closed any shutters when such protection may

1652

be required. Restriction may not be placed on the closing of

1653

hurricane shutters unless the board and association assume the

1654

responsibility of closing the hurricane shutters when

1655

appropriate. The installation, replacement, operation, repair,

1656

and maintenance of such shutters in accordance with the

1657

procedures set forth herein shall not be deemed a material

1658

alteration to the common elements or association property within

1659

the meaning of this section.

1660

(6) At least every 5 years, and within 5 years if not

1661

available for inspection on July 1, 2008, the board shall have

1662

the condominium buildings inspected to provide an update to the

1663

turnover inspection report under seal of an architect or engineer

1664

authorized to practice in this state attesting to required

1665

maintenance, useful life, and replacement costs of the elements

1666

provided in s. 718.301(4)(p).

1667

(7) The board may not adopt any rule or regulation

1668

impairing any rights guaranteed by the First Amendment to the

1669

Constitution of the United States or s. 3, Art. I of the State

1670

Constitution, including, but not limited to, the free exercise of

1671

religion, or any rules or regulations that conflict with the

1672

provisions of this chapter or the condominium instruments. A rule

1673

or regulation may not prohibit any reasonable accommodation for

1674

religious practices, including the attachment of religiously

1675

mandated objects to the front-door area of a condominium unit.

1676

Section 13. Section 718.1224, Florida Statutes, is created

1677

to read:

1678

718.1224 Prohibition against SLAPP suits.--

1679

(1) It is the intent of the Legislature to protect the

1680

right of condominium unit owners to exercise their rights to

1681

instruct their representatives and petition for redress of

1682

grievances before the various governmental entities of this state

1683

as protected by the First Amendment to the United States

1684

Constitution and s. 5, Art. I of the State Constitution. The

1685

Legislature recognizes that strategic lawsuits against public

1686

participation, or "SLAPP suits" as they are typically referred

1687

to, have occurred when association members are sued by

1688

individuals, business entities, or governmental entities arising

1689

out of a condominium unit owner's appearance and presentation

1690

before a governmental entity on matters related to the

1691

condominium association. However, it is the public policy of this

1692

state that governmental entities, business organizations, and

1693

individuals not engage in SLAPP suits because such actions are

1694

inconsistent with the right of condominium unit owners to

1695

participate in the state's institutions of government. Therefore,

1696

the Legislature finds and declares that prohibiting such lawsuits

1697

by governmental entities, business entities, and individuals

1698

against condominium unit owners who address matters concerning

1699

their condominium association will preserve this fundamental

1700

state policy, preserve the constitutional rights of condominium

1701

unit owners, and ensure the continuation of representative

1702

government in this state. It is the intent of the Legislature

1703

that such lawsuits be expeditiously disposed of by the courts. As

1704

used in this subsection, the term "governmental entity" means the

1705

state, including the executive, legislative, and judicial

1706

branches of government; the independent establishments of the

1707

state, counties, municipalities, districts, authorities, boards,

1708

or commissions; or any agencies of these branches that are

1709

subject to chapter 286.

1710

(2) A governmental entity, business organization, or

1711

individual in this state may not file or cause to be filed

1712

through its employees or agents any lawsuit, cause of action,

1713

claim, cross-claim, or counterclaim against a condominium unit

1714

owner without merit and solely because such condominium unit

1715

owner has exercised the right to instruct his or her

1716

representatives or the right to petition for redress of

1717

grievances before the various governmental entities of this

1718

state, as protected by the First Amendment to the United States

1719

Constitution and s. 5, Art. I of the State Constitution.

1720

(3) A condominium unit owner sued by a governmental entity,

1721

business organization, or individual in violation of this section

1722

has a right to an expeditious resolution of a claim that the suit

1723

is in violation of this section. A condominium unit owner may

1724

petition the court for an order dismissing the action or granting

1725

final judgment in favor of that condominium unit owner. The

1726

petitioner may file a motion for summary judgment, together with

1727

supplemental affidavits, seeking a determination that the

1728

governmental entity's, business organization's, or individual's

1729

lawsuit has been brought in violation of this section. The

1730

governmental entity, business organization, or individual shall

1731

thereafter file its response and any supplemental affidavits. As

1732

soon as practicable, the court shall set a hearing on the

1733

petitioner's motion, which shall be held at the earliest possible

1734

time after the filing of the governmental entity's, business

1735

organization's, or individual's response. The court may award the

1736

condominium unit owner sued by the governmental entity, business

1737

organization, or individual actual damages arising from the

1738

governmental entity's, individual's, or business organization's

1739

violation of this section. A court may treble the damages awarded

1740

to a prevailing condominium unit owner and shall state the basis

1741

for the treble damages award in its judgment. The court shall

1742

award the prevailing party reasonable attorney's fees and costs

1743

incurred in connection with a claim that an action was filed in

1744

violation of this section.

1745

(4) Condominium associations may not expend association

1746

funds in prosecuting a SLAPP suit against a condominium unit

1747

owner.

1748

Section 14. Paragraph (b) of subsection (3) of section

1749

718.1255, Florida Statutes, is amended to read:

1750

718.1255 Alternative dispute resolution; voluntary

1751

mediation; mandatory nonbinding arbitration; legislative

1752

findings.--

1753

(3) LEGISLATIVE FINDINGS.--

1754

(b) The Legislature finds that the courts are becoming

1755

overcrowded with condominium and other disputes, and further

1756

finds that alternative dispute resolution has been making

1757

progress in reducing court dockets and trials and in offering a

1758

more efficient, cost-effective option to court litigation.

1759

However, the Legislature also finds that alternative dispute

1760

resolution should not be used as a mechanism to encourage the

1761

filing of frivolous or nuisance suits.

1762

Section 15. Paragraph (p) is added to subsection (4) of

1763

section 718.301, Florida Statutes, to read:

1764

718.301 Transfer of association control; claims of defect

1765

by association.--

1766

(4) At the time that unit owners other than the developer

1767

elect a majority of the members of the board of administration of

1768

an association, the developer shall relinquish control of the

1769

association, and the unit owners shall accept control.

1770

Simultaneously, or for the purposes of paragraph (c) not more

1771

than 90 days thereafter, the developer shall deliver to the

1772

association, at the developer's expense, all property of the unit

1773

owners and of the association which is held or controlled by the

1774

developer, including, but not limited to, the following items, if

1775

applicable, as to each condominium operated by the association:

1776

(p) A report included in the official records, under seal

1777

of an architect or engineer authorized to practice in this state,

1778

attesting to required maintenance, useful life, and replacement

1779

costs of the following elements comprising a turnover inspection

1780

report:

1781

1. Roof.

1782

2. Structure.

1783

3. Fireproofing and fire-protection systems.

1784

4. Elevators.

1785

5. Heating and cooling systems.

1786

6. Plumbing.

1787

7. Electrical systems.

1788

8. Swimming pool or spa and equipment.

1789

9. Seawalls.

1790

10. Pavement and parking areas.

1791

11. Drainage systems.

1792

12. Painting.

1793

13. Irrigation systems.

1794

Section 16. Paragraph (f) is added to subsection (1) of

1795

section 718.3025, Florida Statutes, to read:

1796

718.3025 Agreements for operation, maintenance, or

1797

management of condominiums; specific requirements.--

1798

(1) No written contract between a party contracting to

1799

provide maintenance or management services and an association

1800

which contract provides for operation, maintenance, or management

1801

of a condominium association or property serving the unit owners

1802

of a condominium shall be valid or enforceable unless the

1803

contract:

1804

(f) Discloses any financial or ownership interest a board

1805

member or any party providing maintenance or management services

1806

to the association holds with the contracting party.

1807

Section 17. Section 718.3026, Florida Statutes, is amended

1808

to read:

1809

718.3026 Contracts for products and services; in writing;

1810

bids; exceptions.-- Associations with less than 100 units may opt

1811

out of the provisions of this section if two-thirds of the unit

1812

owners vote to do so, which opt-out may be accomplished by a

1813

proxy specifically setting forth the exception from this section.

1814

(1) All contracts as further described herein or any

1815

contract that is not to be fully performed within 1 year after

1816

the making thereof, for the purchase, lease, or renting of

1817

materials or equipment to be used by the association in

1818

accomplishing its purposes under this chapter, and all contracts

1819

for the provision of services, shall be in writing. If a contract

1820

for the purchase, lease, or renting of materials or equipment, or

1821

for the provision of services, requires payment by the

1822

association on behalf of any condominium operated by the

1823

association in the aggregate that exceeds 5 percent of the total

1824

annual budget of the association, including reserves, the

1825

association shall obtain competitive bids for the materials,

1826

equipment, or services. Nothing contained herein shall be

1827

construed to require the association to accept the lowest bid.

1828

(2)(a)1. Notwithstanding the foregoing, contracts with

1829

employees of the association, and contracts for attorney,

1830

accountant, architect, community association manager, timeshare

1831

management firm, engineering, and landscape architect services

1832

are not subject to the provisions of this section.

1833

2. A contract executed before January 1, 1992, and any

1834

renewal thereof, is not subject to the competitive bid

1835

requirements of this section. If a contract was awarded under the

1836

competitive bid procedures of this section, any renewal of that

1837

contract is not subject to such competitive bid requirements if

1838

the contract contains a provision that allows the board to cancel

1839

the contract on 30 days' notice. Materials, equipment, or

1840

services provided to a condominium under a local government

1841

franchise agreement by a franchise holder are not subject to the

1842

competitive bid requirements of this section. A contract with a

1843

manager, if made by a competitive bid, may be made for up to 3

1844

years. A condominium whose declaration or bylaws provides for

1845

competitive bidding for services may operate under the provisions

1846

of that declaration or bylaws in lieu of this section if those

1847

provisions are not less stringent than the requirements of this

1848

section.

1849

(b) Nothing contained herein is intended to limit the

1850

ability of an association to obtain needed products and services

1851

in an emergency.

1852

1853

with which the association desires to enter into a contract is

1854

the only source of supply within the county serving the

1855

association.

1856

(d) Nothing contained herein shall excuse a party

1857

contracting to provide maintenance or management services from

1858

compliance with s. 718.3025.

1859

Section 18. Section 718.501, Florida Statutes, is amended

1860

to read:

1861

718.501 Authority, responsibility, Powers and duties of

1862

Division of Florida Land Sales, Condominiums, and Mobile Homes.--

1863

(1) The Division of Florida Land Sales, Condominiums, and

1864

Mobile Homes of the Department of Business and Professional

1865

Regulation, referred to as the "division" in this part, in

1866

addition to other authority, responsibility, powers and duties

1867

prescribed by chapter 498, has the power to enforce and ensure

1868

compliance with the provisions of this chapter and rules

1869

promulgated pursuant hereto relating to the development,

1870

construction, sale, lease, ownership, operation, and management

1871

of residential condominium units. In performing its duties, the

1872

division has the following authority, responsibility, powers and

1873

duties:

1874

(a) The division may make necessary public or private

1875

investigations within or outside this state to determine whether

1876

any person has violated this chapter or any rule or order

1877

hereunder, to aid in the enforcement of this chapter, or to aid

1878

in the adoption of rules or forms hereunder.

1879

(b) The division may require or permit any person to file a

1880

statement in writing, under oath or otherwise, as the division

1881

determines, as to the facts and circumstances concerning a matter

1882

to be investigated.

1883

1884

chapter, the division director or any officer or employee

1885

designated by the division director may administer oaths or

1886

affirmations, subpoena witnesses and compel their attendance,

1887

take evidence, and require the production of any matter which is

1888

relevant to the investigation, including the existence,

1889

description, nature, custody, condition, and location of any

1890

books, documents, or other tangible things and the identity and

1891

location of persons having knowledge of relevant facts or any

1892

other matter reasonably calculated to lead to the discovery of

1893

material evidence. Upon the failure by a person to obey a

1894

subpoena or to answer questions propounded by the investigating

1895

officer and upon reasonable notice to all persons affected

1896

thereby, the division may apply to the circuit court for an order

1897

compelling compliance.

1898

(d) Notwithstanding any remedies available to unit owners

1899

and associations, if the division has reasonable cause to believe

1900

that a violation of any provision of this chapter or rule

1901

promulgated pursuant hereto has occurred, the division may

1902

institute enforcement proceedings in its own name against any

1903

developer, association, officer, or member of the board of

1904

administration, or its assignees or agents, as follows:

1905

1. The division may permit a person whose conduct or

1906

actions may be under investigation to waive formal proceedings

1907

and enter into a consent proceeding whereby orders, rules, or

1908

letters of censure or warning, whether formal or informal, may be

1909

entered against the person.

1910

2. The division may issue an order requiring the developer,

1911

association, officer, or member of the board of administration,

1912

or its assignees or agents, to cease and desist from the unlawful

1913

practice and take such affirmative action as in the judgment of

1914

the division will carry out the purposes of this chapter. Agents

1915

shall include community association managers or other licensed

1916

professionals acting as agents of the association. Such

1917

affirmative action may include, but is not limited to, an order

1918

requiring a developer to pay moneys determined to be owed to a

1919

condominium association.

1920

3. If a developer fails to promptly pay any restitution

1921

determined by the division to be owed, plus any accrued interest

1922

at the highest rate permitted by law, the division shall bring an

1923

action in circuit or county court on behalf of any association,

1924

class of unit owners, lessees, or purchasers for restitution,

1925

declaratory relief, injunctive relief, or any other available

1926

remedy. The division may also temporarily revoke its acceptance

1927

of any other condominium filing by the same developer until

1928

payment is made. The division may bring an action in circuit

1929

court on behalf of a class of unit owners, lessees, or purchasers

1930

for declaratory relief, injunctive relief, or restitution.

1931

4. The division may impose a civil penalty against a

1932

developer or association, or its assignee or agent, for any

1933

violation of this chapter or a rule promulgated pursuant hereto.

1934

The division may impose a civil penalty individually against any

1935

officer or board member who willfully and knowingly violates a

1936

provision of this chapter, a rule adopted pursuant hereto, or a

1937

final order of the division, order the removal of such individual

1938

from the board of directors, and prohibit such individual from

1939

serving on the board of a community association for a period of

1940

time. The term "willfully and knowingly" means that the division

1941

informed the officer or board member that his or her action or

1942

intended action violates this chapter, a rule adopted under this

1943

chapter, or a final order of the division and that the officer or

1944

board member refused to comply with the requirements of this

1945

chapter, a rule adopted under this chapter, or a final order of

1946

the division. The division, prior to initiating formal agency

1947

action under chapter 120, shall afford the officer or board

1948

member an opportunity to voluntarily comply with this chapter, a

1949

rule adopted under this chapter, or a final order of the

1950

division. An officer or board member who complies within 10 days

1951

is not subject to a civil penalty. A penalty may be imposed on

1952

the basis of each day of continuing violation, but in no event

1953

shall the penalty for any offense exceed $5,000. By January 1,

1954

1998, the division shall adopt, by rule, penalty guidelines

1955

applicable to possible violations or to categories of violations

1956

of this chapter or rules adopted by the division. The guidelines

1957

must specify a meaningful range of civil penalties for each such

1958

violation of the statute and rules and must be based upon the

1959

harm caused by the violation, the repetition of the violation,

1960

and upon such other factors deemed relevant by the division. For

1961

example, the division may consider whether the violations were

1962

committed by a developer or owner-controlled association, the

1963

size of the association, and other factors. The guidelines must

1964

designate the possible mitigating or aggravating circumstances

1965

that justify a departure from the range of penalties provided by

1966

the rules. It is the legislative intent that minor violations be

1967

distinguished from those which endanger the health, safety, or

1968

welfare of the condominium residents or other persons and that

1969

such guidelines provide reasonable and meaningful notice to the

1970

public of likely penalties that may be imposed for proscribed

1971

conduct. This subsection does not limit the ability of the

1972

division to informally dispose of administrative actions or

1973

complaints by stipulation, agreed settlement, or consent order.

1974

All amounts collected shall be deposited with the Chief Financial

1975

Officer to the credit of the Division of Florida Land Sales,

1976

Condominiums, and Mobile Homes Trust Fund. If a developer fails

1977

to pay the civil penalty and the amount deemed to be owed to the

1978

association, the division shall thereupon issue an order

1979

directing that such developer cease and desist from further

1980

operation until such time as the civil penalty is paid or may

1981

pursue enforcement of the penalty in a court of competent

1982

jurisdiction. If an association fails to pay the civil penalty,

1983

the division shall thereupon pursue enforcement in a court of

1984

competent jurisdiction, and the order imposing the civil penalty

1985

or the cease and desist order will not become effective until 20

1986

days after the date of such order. Any action commenced by the

1987

division shall be brought in the county in which the division has

1988

its executive offices or in the county where the violation

1989

occurred.

1990

5. Upon a finding of failure to provide access to official

1991

records after two written requests by certified mail by unit

1992

owners, the division shall issue a subpoena requiring production

1993

of the requested records.

1994

(e) The division shall is authorized to prepare and

1995

disseminate a prospectus and other information to assist

1996

prospective owners, purchasers, lessees, and developers of

1997

residential condominiums in assessing the rights, privileges, and

1998

duties pertaining thereto.

1999

(f) The division has authority to adopt rules pursuant to

2000

ss. 120.536(1) and 120.54 to implement and enforce the provisions

2001

of this chapter.

2002

(g) The division shall establish procedures for providing

2003

notice to an association when the division is considering the

2004

issuance of a declaratory statement with respect to the

2005

declaration of condominium or any related document governing in

2006

such condominium community.

2007

(h) The division shall furnish each association which pays

2008

the fees required by paragraph (2)(a) a copy of this act,

2009

subsequent changes to this act on an annual basis, an amended

2010

version of this act as it becomes available from the Secretary of

2011

State's office on a biennial basis, and the rules promulgated

2012

pursuant thereto on an annual basis.

2013

(i) The division shall annually provide each association

2014

with a summary of declaratory statements and formal legal

2015

opinions relating to the operations of condominiums which were

2016

rendered by the division during the previous year.

2017

(j) The division shall provide training programs for

2018

condominium association board members and unit owners. The

2019

division shall maintain a current list of programs and program

2020

providers and shall make such list available to board members and

2021

unit owners.

2022

(k) The division shall maintain a toll-free telephone

2023

number accessible to condominium unit owners.

2024

(l) The division shall develop a program to certify both

2025

volunteer and paid mediators to provide mediation of condominium

2026

disputes. The division shall provide, upon request, a list of

2027

such mediators to any association, unit owner, or other

2028

participant in arbitration proceedings under s. 718.1255

2029

requesting a copy of the list. The division shall include on the

2030

list of volunteer mediators only the names of persons who have

2031

received at least 20 hours of training in mediation techniques or

2032

who have mediated at least 20 disputes. In order to become

2033

initially certified by the division, paid mediators must be

2034

certified by the Supreme Court to mediate court cases in either

2035

county or circuit courts. However, the division may adopt, by

2036

rule, additional factors for the certification of paid mediators,

2037

which factors must be related to experience, education, or

2038

background. Any person initially certified as a paid mediator by

2039

the division must, in order to continue to be certified, comply

2040

with the factors or requirements imposed by rules adopted by the

2041

division.

2042

(m) When a complaint is made, the division shall conduct

2043

its inquiry with due regard to the interests of the affected

2044

parties. Within 30 days after receipt of a complaint, the

2045

division shall acknowledge the complaint in writing and notify

2046

the complainant whether the complaint is within the jurisdiction

2047

of the division and whether additional information is needed by

2048

the division from the complainant. The division shall conduct its

2049

investigation and shall, within 90 days after receipt of the

2050

original complaint or of timely requested additional information,

2051

take action upon the complaint. However, the failure to complete

2052

the investigation within 90 days does not prevent the division

2053

from continuing the investigation, accepting or considering

2054

evidence obtained or received after 90 days, or taking

2055

administrative action if reasonable cause exists to believe that

2056

a violation of this chapter or a rule of the division has

2057

occurred. If an investigation is not completed within the time

2058

limits established in this paragraph, the division shall, on a

2059

monthly basis, notify the complainant in writing of the status of

2060

the investigation. When reporting its action to the complainant,

2061

the division shall inform the complainant of any right to a

2062

hearing pursuant to ss. 120.569 and 120.57.

2063

(2)(a) Effective January 1, 1992, Each condominium

2064

association which operates more than two units shall pay to the

2065

division an annual fee in the amount of $4 for each residential

2066

unit in condominiums operated by the association. If the fee is

2067

not paid by March 1, then the association shall be assessed a

2068

penalty of 10 percent of the amount due, and the association will

2069

not have standing to maintain or defend any action in the courts

2070

of this state until the amount due, plus any penalty, is paid.

2071

(b) All fees shall be deposited in the Division of Florida

2072

Land Sales, Condominiums, and Mobile Homes Trust Fund as provided

2073

by law.

2074

Section 19. Subsection (1) of section 718.50151, Florida

2075

Statutes, is amended to read:

2076

718.50151 Advisory council; membership functions.--

2077

(1) There is created the Advisory Council on Condominiums.

2078

The council shall consist of seven appointed members. Two members

2079

shall be appointed by the President of the Senate, two members

2080

shall be appointed by the Speaker of the House of

2081

Representatives, and three members shall be appointed by the

2082

Governor. At least One member that is appointed by the Governor

2083

may shall represent timeshare condominiums. Members shall be

2084

appointed to 2-year terms; however, one of the persons initially

2085

appointed by the Governor, by the President of the Senate, and by

2086

the Speaker of the House of Representatives shall be appointed to

2087

a 1-year term. The director of the division shall appoint serve

2088

as an ex officio nonvoting member. The Legislature intends that

2089

the persons appointed represent a cross-section of persons

2090

interested in condominium issues. The council shall be located

2091

within the division for administrative purposes. Members of the

2092

council shall serve without compensation but are entitled to

2093

receive per diem and travel expenses pursuant to s. 112.061 while

2094

on official business.

2095

Section 20. This act shall take effect July 1, 2008.

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