HB 419

1	A bill to be entitled
2	An act relating to condominiums; creating s. 627.714,
3	F.S.; requiring coverage under a condominium unit owner's
4	policy to include a specified amount of loss assessment
5	coverage; providing notice requirements for certain
6	coverage; amending s. 718.111, F.S.; requiring coverage
7	for certain personal property to be the responsibility of
8	the condominium unit owner; revising board meeting notice
9	requirements; requiring insurance policies issued or
10	renewed on or after a specified date to conform to
11	specified loss assessment coverage requirements; revising
12	and deleting provisions relating to hazard or casualty
13	insurance coverage requirements, to conform; deleting a
14	provision requiring the condominium association to be an
15	additional named insured and loss payee on all casualty
16	insurance policies issued to unit owners in the
17	condominium operated by the association; amending s.
18	718.112, F.S.; revising requirements for the reappointment
19	of certain board members; revising board eligibility
20	requirements; revising notice requirements for board
21	candidates; extending a period in which condominium common
22	areas do not have to be retrofitted with sprinkler
23	systems; providing that certain directors and officers
24	delinquent in the payment of any fee, fine, or regular or
25	special assessments shall be deemed to have abandoned
26	their office; providing an effective date.
27
28	Be It Enacted by the Legislature of the State of Florida:
29
30	Section 1.  Section 627.714, Florida Statutes, is created
31	to read:
32	627.714  Condominium unit owner's coverage; loss assessment
33	coverage required.--For policies issued or renewed on or after
34	October 1, 2009, coverage under a condominium unit owner's
35	policy shall include loss assessment coverage of at least
36	$2,000. Every property insurance policy issued or renewed on or
37	after January 1, 2009, to an individual unit owner must contain
38	a provision stating that the coverage afforded by such policy is
39	excess coverage over the amount recoverable under any other
40	policy covering the same property.
41	Section 2.  Paragraphs (a), (b), (c), (d), (f), (g), (j),
42	and (n) of subsection (11) of section 718.111, Florida Statutes,
43	are amended to read:
44	718.111  The association.--
45	(11)  INSURANCE.--In order to protect the safety, health,
46	and welfare of the people of the State of Florida and to ensure
47	consistency in the provision of insurance coverage to
48	condominiums and their unit owners, this subsection applies to
49	every residential condominium in the state, regardless of the
50	date of its declaration of condominium. It is the intent of the
51	Legislature to encourage lower or stable insurance premiums for
52	associations described in this subsection.
53	(a)  Adequate property hazard insurance, regardless of any
54	requirement in the declaration of condominium for coverage by
55	the association for full insurable value, replacement cost, or
56	similar coverage, shall be based upon the replacement cost of
57	the property to be insured as determined by an independent
58	insurance appraisal or update of a prior appraisal. The
59	replacement cost full insurable value shall be determined at
60	least once every 36 months.
61	1.  An association or group of associations may provide
62	adequate property hazard insurance through a self-insurance fund
63	that complies with the requirements of ss. 624.460-624.488.
64	2.  The association may also provide adequate property
65	hazard insurance coverage for a group of no fewer than three
66	communities created and operating under this chapter, chapter
67	719, chapter 720, or chapter 721 by obtaining and maintaining
68	for such communities insurance coverage sufficient to cover an
69	amount equal to the probable maximum loss for the communities
70	for a 250-year windstorm event. Such probable maximum loss must
71	be determined through the use of a competent model that has been
72	accepted by the Florida Commission on Hurricane Loss Projection
73	Methodology. No policy or program providing such coverage shall
74	be issued or renewed after July 1, 2008, unless it has been
75	reviewed and approved by the Office of Insurance Regulation. The
76	review and approval shall include approval of the policy and
77	related forms pursuant to ss. 627.410 and 627.411, approval of
78	the rates pursuant to s. 627.062, a determination that the loss
79	model approved by the commission was accurately and
80	appropriately applied to the insured structures to determine the
81	250-year probable maximum loss, and a determination that
82	complete and accurate disclosure of all material provisions is
83	provided to condominium unit owners prior to execution of the
84	agreement by a condominium association.
85	3.  When determining the adequate amount of property hazard
86	insurance coverage, the association may consider deductibles as
87	determined by this subsection.
88	(b)  If an association is a developer-controlled
89	association, the association shall exercise its best efforts to
90	obtain and maintain insurance as described in paragraph (a).
91	Failure to obtain and maintain adequate property hazard
92	insurance during any period of developer control constitutes a
93	breach of fiduciary responsibility by the developer-appointed
94	members of the board of directors of the association, unless the
95	members can show that despite such failure, they have made their
96	best efforts to maintain the required coverage.
97	(c)  Policies may include deductibles as determined by the
98	board.
99	1.  The deductibles shall be consistent with industry
100	standards and prevailing practice for communities of similar
101	size and age, and having similar construction and facilities in
102	the locale where the condominium property is situated.
103	2.  The deductibles may be based upon available funds,
104	including reserve accounts, or predetermined assessment
105	authority at the time the insurance is obtained.
106	3.  The board shall establish the amount of deductibles
107	based upon the level of available funds and predetermined
108	assessment authority at a meeting of the board. Such meeting
109	shall be open to all unit owners in the manner set forth in s.
110	718.112(2)(e). The notice of such meeting must state the
111	proposed deductible and the available funds and the assessment
112	authority relied upon by the board and estimate any potential
113	assessment amount against each unit, if any. The meeting
114	described in this paragraph may be held in conjunction with a
115	meeting to consider the proposed budget or an amendment thereto.
116	(d)  An association controlled by unit owners operating as
117	a residential condominium shall use its best efforts to obtain
118	and maintain adequate property insurance to protect the
119	association, the association property, the common elements, and
120	the condominium property that is required to be insured by the
121	association pursuant to this subsection.
122	(f)  Every property hazard insurance policy issued or
123	renewed on or after January 1, 2009, for the purpose of
124	protecting the condominium shall:
125	1.  Provide primary coverage for:
126	a.1.  All portions of the condominium property as
127	originally installed or replacement of like kind and quality, in
128	accordance with the original plans and specifications.
129	b.2.  All alterations or additions made to the condominium
130	property or association property pursuant to s. 718.113(2).
131	2.3.  The coverage shall Exclude all personal property
132	within the unit or limited common elements, and floor, wall, and
133	ceiling coverings, electrical fixtures, appliances, water
134	heaters, water filters, built-in cabinets and countertops, and
135	window treatments, including curtains, drapes, blinds, hardware,
136	and similar window treatment components, or replacements of any
137	of the foregoing. Such property and any insurance therefor shall
138	be the responsibility of the unit owner.
139	(g)  A condominium unit owner's policy issued after October
140	1, 2009, shall conform to the requirements of s. 627.714. Every
141	hazard insurance policy issued or renewed on or after January 1,
142	2009, to an individual unit owner must contain a provision
143	stating that the coverage afforded by such policy is excess
144	coverage over the amount recoverable under any other policy
145	covering the same property. Such policies must include special
146	assessment coverage of no less than $2,000 per occurrence. An
147	insurance policy issued to an individual unit owner providing
148	such coverage does not provide rights of subrogation against the
149	condominium association operating the condominium in which such
150	individual's unit is located.
151	1.  All improvements or additions to the condominium
152	property that benefit fewer than all unit owners shall be
153	insured by the unit owner or owners having the use thereof, or
154	may be insured by the association at the cost and expense of the
155	unit owners having the use thereof.
156	1.2.  The association may shall require each owner to
157	provide evidence of a currently effective policy of property
158	hazard and liability insurance upon request, but not more than
159	once per year. Upon the failure of an owner to provide a
160	certificate of insurance issued by an insurer approved to write
161	such insurance in this state within 30 days after the date on
162	which a written request is delivered, the association may
163	purchase a policy of insurance on behalf of an owner. The cost
164	of such a policy, together with reconstruction costs undertaken
165	by the association but which are the responsibility of the unit
166	owner, may be collected in the manner provided for the
167	collection of assessments in s. 718.116.
168	2.3.  All reconstruction work after a property casualty
169	loss shall be undertaken by the association except as otherwise
170	authorized in this section. A unit owner may undertake
171	reconstruction work on portions of the unit with the prior
172	written consent of the board of administration. However, such
173	work may be conditioned upon the approval of the repair methods,
174	the qualifications of the proposed contractor, or the contract
175	that is used for that purpose. A unit owner shall obtain all
176	required governmental permits and approvals prior to commencing
177	reconstruction.
178	3.4.  Unit owners are responsible for the cost of
179	reconstruction of any portions of the condominium property for
180	which the unit owner is required to carry property casualty
181	insurance, and any such reconstruction work undertaken by the
182	association shall be chargeable to the unit owner and
183	enforceable as an assessment pursuant to s. 718.116. The
184	association must be an additional named insured and loss payee
185	on all casualty insurance policies issued to unit owners in the
186	condominium operated by the association.
187	4.5.  A multicondominium association may elect, by a
188	majority vote of the collective members of the condominiums
189	operated by the association, to operate such condominiums as a
190	single condominium for purposes of insurance matters, including,
191	but not limited to, the purchase of the property hazard
192	insurance required by this section and the apportionment of
193	deductibles and damages in excess of coverage. The election to
194	aggregate the treatment of insurance premiums, deductibles, and
195	excess damages constitutes an amendment to the declaration of
196	all condominiums operated by the association, and the costs of
197	insurance shall be stated in the association budget. The
198	amendments shall be recorded as required by s. 718.110.
199	(j)  Any portion of the condominium property required to be
200	insured by the association against property casualty loss
201	pursuant to paragraph (f) which is damaged by casualty shall be
202	reconstructed, repaired, or replaced as necessary by the
203	association as a common expense. All property hazard insurance
204	deductibles, uninsured losses, and other damages in excess of
205	property hazard insurance coverage under the property hazard
206	insurance policies maintained by the association are a common
207	expense of the condominium, except that:
208	1.  A unit owner is responsible for the costs of repair or
209	replacement of any portion of the condominium property not paid
210	by insurance proceeds, if such damage is caused by intentional
211	conduct, negligence, or failure to comply with the terms of the
212	declaration or the rules of the association by a unit owner, the
213	members of his or her family, unit occupants, tenants, guests,
214	or invitees, without compromise of the subrogation rights of any
215	insurer as set forth in paragraph (g).
216	2.  The provisions of subparagraph 1. regarding the
217	financial responsibility of a unit owner for the costs of
218	repairing or replacing other portions of the condominium
219	property also apply to the costs of repair or replacement of
220	personal property of other unit owners or the association, as
221	well as other property, whether real or personal, which the unit
222	owners are required to insure under paragraph (g).
223	3.  To the extent the cost of repair or reconstruction for
224	which the unit owner is responsible under this paragraph is
225	reimbursed to the association by insurance proceeds, and, to the
226	extent the association has collected the cost of such repair or
227	reconstruction from the unit owner, the association shall
228	reimburse the unit owner without the waiver of any rights of
229	subrogation.
230	4.  The association is not obligated to pay for repair or
231	reconstruction or repairs of property casualty losses as a
232	common expense if the property casualty losses were known or
233	should have been known to a unit owner and were not reported to
234	the association until after the insurance claim of the
235	association for that property casualty was settled or resolved
236	with finality, or denied on the basis that it was untimely
237	filed.
238	(n)  The association is not obligated to pay for any
239	reconstruction or repair expenses due to property casualty loss
240	to any improvements installed by a current or former owner of
241	the unit or by the developer if the improvement benefits only
242	the unit for which it was installed and is not part of the
243	standard improvements installed by the developer on all units as
244	part of original construction, whether or not such improvement
245	is located within the unit. This paragraph does not relieve any
246	party of its obligations regarding recovery due under any
247	insurance implemented specifically for any such improvements.
248	Section 3.  Paragraphs (d), (l), and (n) of subsection (2)
249	of section 718.112, Florida Statutes, are amended to read:
250	718.112  Bylaws.--
251	(2)  REQUIRED PROVISIONS.--The bylaws shall provide for the
252	following and, if they do not do so, shall be deemed to include
253	the following:
254	(d)  Unit owner meetings.--
255	1.  There shall be an annual meeting of the unit owners
256	held at the location provided in the association bylaws and, if
257	the bylaws are silent as to the location, the meeting shall be
258	held within 45 miles of the condominium property. However, such
259	distance requirement does not apply to an association governing
260	a timeshare condominium. Unless the bylaws provide otherwise, a
261	vacancy on the board caused by the expiration of a director's
262	term shall be filled by electing a new board member, and the
263	election shall be by secret ballot; however, if the number of
264	vacancies equals or exceeds the number of candidates, no
265	election is required. The terms of all members of the board
266	shall expire at the annual meeting and such board members may
267	stand for reelection unless otherwise permitted by the bylaws.
268	In the event that the bylaws permit staggered terms of no more
269	than 2 years and upon approval of a majority of the total voting
270	interests, the association board members may serve 2-year
271	staggered terms. If the number no person is interested in or
272	demonstrates an intention to run for the position of a board
273	members member whose terms have term has expired according to
274	the provisions of this subparagraph exceeds the number of
275	eligible members showing interest in or demonstrating an
276	intention to run for the vacant positions, each such board
277	member whose term has expired shall become eligible for
278	reappointment be automatically reappointed to the board of
279	administration and need not stand for reelection. In a
280	condominium association of more than 10 units, coowners or co-
281	occupants of a unit may not serve as members of the board of
282	directors at the same time unless they own more than one unit.
283	Any unit owner desiring to be a candidate for board membership
284	shall comply with subparagraph 3. A person who has been
285	suspended or removed by the division under this chapter, or who
286	is delinquent in the payment of any fee, fine, or special or
287	regular assessment as provided in paragraph (n), is not eligible
288	for board membership. A person who has been convicted of any
289	felony in this state or in a United States District or
290	Territorial Court, or who has been convicted of any offense in
291	another jurisdiction that would be considered a felony if
292	committed in this state, is not eligible for board membership
293	unless such felon's civil rights have been restored for a period
294	of no less than 5 years as of the date on which such person
295	seeks election to the board. The validity of an action by the
296	board is not affected if it is later determined that a member of
297	the board is ineligible for board membership due to having been
298	convicted of a felony.
299	2.  The bylaws shall provide the method of calling meetings
300	of unit owners, including annual meetings. Written notice, which
301	notice must include an agenda, shall be mailed, hand delivered,
302	or electronically transmitted to each unit owner at least 14
303	days prior to the annual meeting and shall be posted in a
304	conspicuous place on the condominium property at least 14
305	continuous days preceding the annual meeting. Upon notice to the
306	unit owners, the board shall by duly adopted rule designate a
307	specific location on the condominium property or association
308	property upon which all notices of unit owner meetings shall be
309	posted; however, if there is no condominium property or
310	association property upon which notices can be posted, this
311	requirement does not apply. In lieu of or in addition to the
312	physical posting of notice of any meeting of the unit owners on
313	the condominium property, the association may, by reasonable
314	rule, adopt a procedure for conspicuously posting and repeatedly
315	broadcasting the notice and the agenda on a closed-circuit cable
316	television system serving the condominium association. However,
317	if broadcast notice is used in lieu of a notice posted
318	physically on the condominium property, the notice and agenda
319	must be broadcast at least four times every broadcast hour of
320	each day that a posted notice is otherwise required under this
321	section. When broadcast notice is provided, the notice and
322	agenda must be broadcast in a manner and for a sufficient
323	continuous length of time so as to allow an average reader to
324	observe the notice and read and comprehend the entire content of
325	the notice and the agenda. Unless a unit owner waives in writing
326	the right to receive notice of the annual meeting, such notice
327	shall be hand delivered, mailed, or electronically transmitted
328	to each unit owner. Notice for meetings and notice for all other
329	purposes shall be mailed to each unit owner at the address last
330	furnished to the association by the unit owner, or hand
331	delivered to each unit owner. However, if a unit is owned by
332	more than one person, the association shall provide notice, for
333	meetings and all other purposes, to that one address which the
334	developer initially identifies for that purpose and thereafter
335	as one or more of the owners of the unit shall so advise the
336	association in writing, or if no address is given or the owners
337	of the unit do not agree, to the address provided on the deed of
338	record. An officer of the association, or the manager or other
339	person providing notice of the association meeting, shall
340	provide an affidavit or United States Postal Service certificate
341	of mailing, to be included in the official records of the
342	association affirming that the notice was mailed or hand
343	delivered, in accordance with this provision.
344	3.  The members of the board shall be elected by written
345	ballot or voting machine. Proxies shall in no event be used in
346	electing the board, either in general elections or elections to
347	fill vacancies caused by recall, resignation, or otherwise,
348	unless otherwise provided in this chapter. Not less than 60 days
349	before a scheduled election, the association shall mail,
350	deliver, or electronically transmit, whether by separate
351	association mailing or included in another association mailing,
352	delivery, or transmission, including regularly published
353	newsletters, to each unit owner entitled to a vote, a first
354	notice of the date of the election along with a certification
355	form provided by the division attesting that he or she has read
356	and understands, to the best of his or her ability, the
357	governing documents of the association and the provisions of
358	this chapter and any applicable rules. Any unit owner or other
359	eligible person desiring to be a candidate for the board must
360	provide a give written notice of intent to be a candidate to the
361	association, which must contain a certification, on a form
362	provided by the division, attesting that he or she has read and
363	understands, to the best of his or her ability, the governing
364	documents of the association and the provisions of this chapter
365	and any applicable rules. The notice of intent to be a candidate
366	and the certification must be acknowledged and signed by the
367	candidate not less than 40 days before a scheduled election.
368	Together with the written notice and agenda as set forth in
369	subparagraph 2., the association shall mail, deliver, or
370	electronically transmit a second notice of the election to all
371	unit owners entitled to vote therein, together with a ballot
372	which shall list all candidates. Upon request of a candidate,
373	the association shall include an information sheet, no larger
374	than 8 1/2 81/2 inches by 11 inches, which must be furnished by
375	the candidate not less than 35 days before the election, shall
376	along with the signed certification form provided for in this
377	subparagraph, to be included with the mailing, delivery, or
378	transmission of the ballot, with the costs of mailing, delivery,
379	or electronic transmission and copying to be borne by the
380	association. The association is not liable for the contents of
381	the information sheets prepared by the candidates. In order to
382	reduce costs, the association may print or duplicate the
383	information sheets on both sides of the paper. The division
384	shall by rule establish voting procedures consistent with the
385	provisions contained herein, including rules establishing
386	procedures for giving notice by electronic transmission and
387	rules providing for the secrecy of ballots. Elections shall be
388	decided by a plurality of those ballots cast. There shall be no
389	quorum requirement; however, at least 20 percent of the eligible
390	voters must cast a ballot in order to have a valid election of
391	members of the board. No unit owner shall permit any other
392	person to vote his or her ballot, and any such ballots
393	improperly cast shall be deemed invalid, provided any unit owner
394	who violates this provision may be fined by the association in
395	accordance with s. 718.303. A unit owner who needs assistance in
396	casting the ballot for the reasons stated in s. 101.051 may
397	obtain assistance in casting the ballot. The regular election
398	shall occur on the date of the annual meeting. The provisions of
399	this subparagraph shall not apply to timeshare condominium
400	associations. Notwithstanding the provisions of this
401	subparagraph, an election is not required unless more candidates
402	file notices of intent to run or are nominated than board
403	vacancies exist.
404	4.  Any approval by unit owners called for by this chapter
405	or the applicable declaration or bylaws, including, but not
406	limited to, the approval requirement in s. 718.111(8), shall be
407	made at a duly noticed meeting of unit owners and shall be
408	subject to all requirements of this chapter or the applicable
409	condominium documents relating to unit owner decisionmaking,
410	except that unit owners may take action by written agreement,
411	without meetings, on matters for which action by written
412	agreement without meetings is expressly allowed by the
413	applicable bylaws or declaration or any statute that provides
414	for such action.
415	5.  Unit owners may waive notice of specific meetings if
416	allowed by the applicable bylaws or declaration or any statute.
417	If authorized by the bylaws, notice of meetings of the board of
418	administration, unit owner meetings, except unit owner meetings
419	called to recall board members under paragraph (j), and
420	committee meetings may be given by electronic transmission to
421	unit owners who consent to receive notice by electronic
422	transmission.
423	6.  Unit owners shall have the right to participate in
424	meetings of unit owners with reference to all designated agenda
425	items. However, the association may adopt reasonable rules
426	governing the frequency, duration, and manner of unit owner
427	participation.
428	7.  Any unit owner may tape record or videotape a meeting
429	of the unit owners subject to reasonable rules adopted by the
430	division.
431	8.  Unless otherwise provided in the bylaws, any vacancy
432	occurring on the board before the expiration of a term may be
433	filled by the affirmative vote of the majority of the remaining
434	directors, even if the remaining directors constitute less than
435	a quorum, or by the sole remaining director. In the alternative,
436	a board may hold an election to fill the vacancy, in which case
437	the election procedures must conform to the requirements of
438	subparagraph 3. unless the association governs 10 units or less
439	and has opted out of the statutory election process, in which
440	case the bylaws of the association control. Unless otherwise
441	provided in the bylaws, a board member appointed or elected
442	under this section shall fill the vacancy for the unexpired term
443	of the seat being filled. Filling vacancies created by recall is
444	governed by paragraph (j) and rules adopted by the division.
445
446	Notwithstanding subparagraphs (b)2. and (d)3., an association of
447	10 or fewer units may, by the affirmative vote of a majority of
448	the total voting interests, provide for different voting and
449	election procedures in its bylaws, which vote may be by a proxy
450	specifically delineating the different voting and election
451	procedures. The different voting and election procedures may
452	provide for elections to be conducted by limited or general
453	proxy.
454	(l)  Certificate of compliance.--There shall be a provision
455	that a certificate of compliance from a licensed electrical
456	contractor or electrician may be accepted by the association's
457	board as evidence of compliance of the condominium units with
458	the applicable fire and life safety code. Notwithstanding the
459	provisions of chapter 633 or of any other code, statute,
460	ordinance, administrative rule, or regulation, or any
461	interpretation of the foregoing, an association, condominium, or
462	unit owner is not obligated to retrofit the common elements or
463	units of a residential condominium with a fire sprinkler system
464	or other engineered lifesafety system in a building that has
465	been certified for occupancy by the applicable governmental
466	entity, if the unit owners have voted to forego such
467	retrofitting and engineered lifesafety system by the affirmative
468	vote of two-thirds of all voting interests in the affected
469	condominium. However, a condominium association may not vote to
470	forego the retrofitting with a fire sprinkler system of common
471	areas in a high-rise building. For purposes of this subsection,
472	the term "high-rise building" means a building that is greater
473	than 75 feet in height where the building height is measured
474	from the lowest level of fire department access to the floor of
475	the highest occupiable story. For purposes of this subsection,
476	the term "common areas" means any enclosed hallway, corridor,
477	lobby, stairwell, or entryway. In no event shall the local
478	authority having jurisdiction require completion of retrofitting
479	of common areas with a sprinkler system before the end of 2025
480	2014.
481	1.  A vote to forego retrofitting may be obtained by
482	limited proxy or by a ballot personally cast at a duly called
483	membership meeting, or by execution of a written consent by the
484	member, and shall be effective upon the recording of a
485	certificate attesting to such vote in the public records of the
486	county where the condominium is located. The association shall
487	mail, hand deliver, or electronically transmit to each unit
488	owner written notice at least 14 days prior to such membership
489	meeting in which the vote to forego retrofitting of the required
490	fire sprinkler system is to take place. Within 30 days after the
491	association's opt-out vote, notice of the results of the opt-out
492	vote shall be mailed, hand delivered, or electronically
493	transmitted to all unit owners. Evidence of compliance with this
494	30-day notice shall be made by an affidavit executed by the
495	person providing the notice and filed among the official records
496	of the association. After such notice is provided to each owner,
497	a copy of such notice shall be provided by the current owner to
498	a new owner prior to closing and shall be provided by a unit
499	owner to a renter prior to signing a lease.
500	2.  As part of the information collected annually from
501	condominiums, the division shall require condominium
502	associations to report the membership vote and recording of a
503	certificate under this subsection and, if retrofitting has been
504	undertaken, the per-unit cost of such work. The division shall
505	annually report to the Division of State Fire Marshal of the
506	Department of Financial Services the number of condominiums that
507	have elected to forego retrofitting.
508	(n)  Director or officer delinquencies.--A director or
509	officer more than 90 days delinquent in the payment of any fee,
510	fine, or regular or special assessments shall be deemed to have
511	abandoned the office, creating a vacancy in the office to be
512	filled according to law.
513	Section 4.  This act shall take effect October 1, 2009.

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