CS/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; amending s. 718.111, F.S.; requiring coverage
6	for certain personal property to be the responsibility of
7	the condominium unit owner under certain circumstances;
8	revising board meeting notice requirements; requiring
9	insurance policies issued or renewed on or after a
10	specified date to conform to specified loss-assessment
11	coverage requirements; revising and deleting provisions
12	relating to hazard or casualty insurance coverage
13	requirements, to conform; deleting a provision requiring
14	the condominium association to be an additional named
15	insured and loss payee on all casualty insurance policies
16	issued to unit owners in the condominium operated by the
17	association; amending s. 718.112, F.S.; revising
18	requirements for the reappointment of certain board
19	members; revising board eligibility requirements; revising
20	notice requirements for board candidates; extending a
21	period in which condominium common areas do not have to be
22	retrofitted with sprinkler systems; providing that certain
23	directors and officers delinquent in the payment of any
24	fee, fine, or regular or special assessments shall be
25	deemed to have abandoned their office; providing an
26	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. The loss-assessment coverage shall cover the unit
37	owner's share of the master policy deductible and the unit
38	owner's share of an assessment against all condominium unit
39	owners by the association, up to the limit of liability in
40	effect at the time of the loss that results in the assessment.
41	At a minimum, the loss-assessment coverage must cover
42	assessments for a loss to property for a peril insured by the
43	association.
44	Section 2.  Paragraphs (a), (b), (c), (d), (f), (g), (j),
45	and (n) of subsection (11) of section 718.111, Florida Statutes,
46	are amended to read:
47	718.111  The association.--
48	(11)  INSURANCE.--In order to protect the safety, health,
49	and welfare of the people of the State of Florida and to ensure
50	consistency in the provision of insurance coverage to
51	condominiums and their unit owners, this subsection applies to
52	every residential condominium in the state, regardless of the
53	date of its declaration of condominium. It is the intent of the
54	Legislature to encourage lower or stable insurance premiums for
55	associations described in this subsection.
56	(a)  Adequate property hazard insurance, regardless of any
57	requirement in the declaration of condominium for coverage by
58	the association for full insurable value, replacement cost, or
59	similar coverage, shall be based upon the replacement cost of
60	the property to be insured as determined by an independent
61	insurance appraisal or update of a prior appraisal. The
62	replacement cost full insurable value shall be determined at
63	least once every 36 months.
64	1.  An association or group of associations may provide
65	adequate property hazard insurance through a self-insurance fund
66	that complies with the requirements of ss. 624.460-624.488.
67	2.  The association may also provide adequate property
68	hazard insurance coverage for a group of no fewer than three
69	communities created and operating under this chapter, chapter
70	719, chapter 720, or chapter 721 by obtaining and maintaining
71	for such communities insurance coverage sufficient to cover an
72	amount equal to the probable maximum loss for the communities
73	for a 250-year windstorm event. Such probable maximum loss must
74	be determined through the use of a competent model that has been
75	accepted by the Florida Commission on Hurricane Loss Projection
76	Methodology. No policy or program providing such coverage shall
77	be issued or renewed after July 1, 2008, unless it has been
78	reviewed and approved by the Office of Insurance Regulation. The
79	review and approval shall include approval of the policy and
80	related forms pursuant to ss. 627.410 and 627.411, approval of
81	the rates pursuant to s. 627.062, a determination that the loss
82	model approved by the commission was accurately and
83	appropriately applied to the insured structures to determine the
84	250-year probable maximum loss, and a determination that
85	complete and accurate disclosure of all material provisions is
86	provided to condominium unit owners prior to execution of the
87	agreement by a condominium association.
88	3.  When determining the adequate amount of property hazard
89	insurance coverage, the association may consider deductibles as
90	determined by this subsection.
91	(b)  If an association is a developer-controlled
92	association, the association shall exercise its best efforts to
93	obtain and maintain insurance as described in paragraph (a).
94	Failure to obtain and maintain adequate property hazard
95	insurance during any period of developer control constitutes a
96	breach of fiduciary responsibility by the developer-appointed
97	members of the board of directors of the association, unless the
98	members can show that despite such failure, they have made their
99	best efforts to maintain the required coverage.
100	(c)  Policies may include deductibles as determined by the
101	board.
102	1.  The deductibles shall be consistent with industry
103	standards and prevailing practice for communities of similar
104	size and age, and having similar construction and facilities in
105	the locale where the condominium property is situated.
106	2.  The deductibles may be based upon available funds,
107	including reserve accounts, or predetermined assessment
108	authority at the time the insurance is obtained.
109	3.  The board may shall establish the amount of deductibles
110	based upon the level of available funds and predetermined
111	assessment authority at a meeting of the board. Such meeting
112	shall be open to all unit owners in the manner set forth in s.
113	718.112(2)(e). The notice of such meeting must state the
114	proposed deductible and the available funds and the assessment
115	authority relied upon by the board and estimate any potential
116	assessment amount against each unit, if any. The meeting
117	described in this paragraph may be held in conjunction with a
118	meeting to consider the proposed budget or an amendment thereto.
119	(d)  An association controlled by unit owners operating as
120	a residential condominium shall use its best efforts to obtain
121	and maintain adequate property insurance to protect the
122	association, the association property, the common elements, and
123	the condominium property that is required to be insured by the
124	association pursuant to this subsection.
125	(f)  Every property hazard insurance policy issued or
126	renewed on or after January 1, 2009, for the purpose of
127	protecting the condominium shall:
128	1.  Provide primary coverage for:
129	a.1.  All portions of the condominium property as
130	originally installed or replacement of like kind and quality, in
131	accordance with the original plans and specifications.
132	b.2.  All alterations or additions made to the condominium
133	property or association property by the association pursuant to
134	s. 718.113(2).
135	2.3.  The coverage shall Exclude all personal property
136	within the unit or limited common elements, and floor, wall, and
137	ceiling coverings, electrical fixtures, appliances, water
138	heaters, water filters, built-in cabinets and countertops, and
139	window treatments, including curtains, drapes, blinds, hardware,
140	and similar window treatment components, or replacements of any
141	of the foregoing. Such property and any insurance therefor shall
142	be the responsibility of the unit owner, if required by this
143	subsection.
144	(g)  A condominium unit owner's policy issued after October
145	1, 2009, shall conform to the requirements of s. 627.714. Every
146	hazard insurance policy issued or renewed on or after January 1,
147	2009, to an individual unit owner must contain a provision
148	stating that the coverage afforded by such policy is excess
149	coverage over the amount recoverable under any other policy
150	covering the same property. Such policies must include special
151	assessment coverage of no less than $2,000 per occurrence. An
152	insurance policy issued to an individual unit owner providing
153	such coverage does not provide rights of subrogation against the
154	condominium association operating the condominium in which such
155	individual's unit is located.
156	1.  All improvements or additions to the condominium
157	property that benefit fewer than all unit owners shall be
158	insured by the unit owner or owners having the use thereof, or
159	may be insured by the association at the cost and expense of the
160	unit owners having the use thereof.
161	1.2.  If the declaration of condominium, articles of
162	incorporation, or bylaws provide, the association may shall
163	require each owner to provide evidence of a currently effective
164	policy of property hazard and liability insurance upon request,
165	but not more than once per year. Upon the failure of an owner to
166	provide a certificate of insurance issued by an insurer approved
167	to write such insurance in this state within 30 days after the
168	date on which a written request is delivered, the association
169	may purchase a policy of insurance on behalf of an owner. The
170	cost of such a policy, together with reconstruction costs
171	undertaken by the association but which are the responsibility
172	of the unit owner, may be collected in the manner provided for
173	the collection of assessments in s. 718.116.
174	2.3.  All reconstruction work after a property casualty
175	loss shall be undertaken by the association except as otherwise
176	authorized in this section. A unit owner may undertake
177	reconstruction work on portions of the unit with the prior
178	written consent of the board of administration. However, such
179	work may be conditioned upon the approval of the repair methods,
180	the qualifications of the proposed contractor, or the contract
181	that is used for that purpose. A unit owner shall obtain all
182	required governmental permits and approvals prior to commencing
183	reconstruction.
184	3.4.  Unit owners are responsible for the cost of
185	reconstruction of any portions of the condominium property for
186	which the unit owner is required to carry property casualty
187	insurance, and any such reconstruction work undertaken by the
188	association shall be chargeable to the unit owner and
189	enforceable as an assessment pursuant to s. 718.116. The
190	association must be an additional named insured and loss payee
191	on all casualty insurance policies issued to unit owners in the
192	condominium operated by the association.
193	4.5.  A multicondominium association may elect, by a
194	majority vote of the collective members of the condominiums
195	operated by the association, to operate such condominiums as a
196	single condominium for purposes of insurance matters, including,
197	but not limited to, the purchase of the property hazard
198	insurance required by this section and the apportionment of
199	deductibles and damages in excess of coverage. The election to
200	aggregate the treatment of insurance premiums, deductibles, and
201	excess damages constitutes an amendment to the declaration of
202	all condominiums operated by the association, and the costs of
203	insurance shall be stated in the association budget. The
204	amendments shall be recorded as required by s. 718.110.
205	(j)  Any portion of the condominium property required to be
206	insured by the association against property casualty loss
207	pursuant to paragraph (f) which is damaged by casualty shall be
208	reconstructed, repaired, or replaced as necessary by the
209	association as a common expense. All property hazard insurance
210	deductibles, uninsured losses, and other damages in excess of
211	property hazard insurance coverage under the property hazard
212	insurance policies maintained by the association are a common
213	expense of the condominium, except that:
214	1.  A unit owner is responsible for the costs of repair or
215	replacement of any portion of the condominium property not paid
216	by insurance proceeds, if such damage is caused by intentional
217	conduct, negligence, or failure to comply with the terms of the
218	declaration or the rules of the association by a unit owner, the
219	members of his or her family, unit occupants, tenants, guests,
220	or invitees, without compromise of the subrogation rights of any
221	insurer as set forth in paragraph (g).
222	2.  The provisions of subparagraph 1. regarding the
223	financial responsibility of a unit owner for the costs of
224	repairing or replacing other portions of the condominium
225	property also apply to the costs of repair or replacement of
226	personal property of other unit owners or the association, as
227	well as other property, whether real or personal, which the unit
228	owners are required to insure under paragraph (g).
229	3.  To the extent the cost of repair or reconstruction for
230	which the unit owner is responsible under this paragraph is
231	reimbursed to the association by insurance proceeds, and, to the
232	extent the association has collected the cost of such repair or
233	reconstruction from the unit owner, the association shall
234	reimburse the unit owner without the waiver of any rights of
235	subrogation.
236	4.  The association is not obligated to pay for repair or
237	reconstruction or repairs of property casualty losses as a
238	common expense if the property casualty losses were known or
239	should have been known to a unit owner and were not reported to
240	the association until after the insurance claim of the
241	association for that property casualty was settled or resolved
242	with finality, or denied on the basis that it was untimely
243	filed.
244	(n)  The association is not obligated to pay for any
245	reconstruction or repair expenses due to property casualty loss
246	to any improvements installed by a current or former owner of
247	the unit or by the developer if the improvement benefits only
248	the unit for which it was installed and is not part of the
249	standard improvements installed by the developer on all units as
250	part of original construction, whether or not such improvement
251	is located within the unit. This paragraph does not relieve any
252	party of its obligations regarding recovery due under any
253	insurance implemented specifically for any such improvements.
254	Section 3.  Paragraphs (d), (l), and (n) of subsection (2)
255	of section 718.112, Florida Statutes, are amended to read:
256	718.112  Bylaws.--
257	(2)  REQUIRED PROVISIONS.--The bylaws shall provide for the
258	following and, if they do not do so, shall be deemed to include
259	the following:
260	(d)  Unit owner meetings.--
261	1.  There shall be an annual meeting of the unit owners
262	held at the location provided in the association bylaws and, if
263	the bylaws are silent as to the location, the meeting shall be
264	held within 45 miles of the condominium property. However, such
265	distance requirement does not apply to an association governing
266	a timeshare condominium. Unless the bylaws provide otherwise, a
267	vacancy on the board caused by the expiration of a director's
268	term shall be filled by electing a new board member, and the
269	election shall be by secret ballot; however, if the number of
270	vacancies equals or exceeds the number of candidates, no
271	election is required. The terms of all members of the board
272	shall expire at the annual meeting and such board members may
273	stand for reelection unless otherwise permitted by the bylaws.
274	In the event that the bylaws permit staggered terms of no more
275	than 2 years and upon approval of a majority of the total voting
276	interests, the association board members may serve 2-year
277	staggered terms. If the number no person is interested in or
278	demonstrates an intention to run for the position of a board
279	members member whose terms have term has expired according to
280	the provisions of this subparagraph exceeds the number of
281	eligible members showing interest in or demonstrating an
282	intention to run for the vacant positions, each such board
283	member whose term has expired shall become eligible for
284	reappointment be automatically reappointed to the board of
285	administration and need not stand for reelection. In a
286	condominium association of more than 10 units, coowners or co-
287	occupants of a unit may not serve as members of the board of
288	directors at the same time unless they own more than one unit.
289	Any unit owner desiring to be a candidate for board membership
290	shall comply with subparagraph 3. A person who has been
291	suspended or removed by the division under this chapter, or who
292	is delinquent in the payment of any fee, fine, or special or
293	regular assessment as provided in paragraph (n), is not eligible
294	for board membership. A person who has been convicted of any
295	felony in this state or in a United States District or
296	Territorial Court, or who has been convicted of any offense in
297	another jurisdiction that would be considered a felony if
298	committed in this state, is not eligible for board membership
299	unless such felon's civil rights have been restored for a period
300	of no less than 5 years as of the date on which such person
301	seeks election to the board. The validity of an action by the
302	board is not affected if it is later determined that a member of
303	the board is ineligible for board membership due to having been
304	convicted of a felony.
305	2.  The bylaws shall provide the method of calling meetings
306	of unit owners, including annual meetings. Written notice, which
307	notice must include an agenda, shall be mailed, hand delivered,
308	or electronically transmitted to each unit owner at least 14
309	days prior to the annual meeting and shall be posted in a
310	conspicuous place on the condominium property at least 14
311	continuous days preceding the annual meeting. Upon notice to the
312	unit owners, the board shall by duly adopted rule designate a
313	specific location on the condominium property or association
314	property upon which all notices of unit owner meetings shall be
315	posted; however, if there is no condominium property or
316	association property upon which notices can be posted, this
317	requirement does not apply. In lieu of or in addition to the
318	physical posting of notice of any meeting of the unit owners on
319	the condominium property, the association may, by reasonable
320	rule, adopt a procedure for conspicuously posting and repeatedly
321	broadcasting the notice and the agenda on a closed-circuit cable
322	television system serving the condominium association. However,
323	if broadcast notice is used in lieu of a notice posted
324	physically on the condominium property, the notice and agenda
325	must be broadcast at least four times every broadcast hour of
326	each day that a posted notice is otherwise required under this
327	section. When broadcast notice is provided, the notice and
328	agenda must be broadcast in a manner and for a sufficient
329	continuous length of time so as to allow an average reader to
330	observe the notice and read and comprehend the entire content of
331	the notice and the agenda. Unless a unit owner waives in writing
332	the right to receive notice of the annual meeting, such notice
333	shall be hand delivered, mailed, or electronically transmitted
334	to each unit owner. Notice for meetings and notice for all other
335	purposes shall be mailed to each unit owner at the address last
336	furnished to the association by the unit owner, or hand
337	delivered to each unit owner. However, if a unit is owned by
338	more than one person, the association shall provide notice, for
339	meetings and all other purposes, to that one address which the
340	developer initially identifies for that purpose and thereafter
341	as one or more of the owners of the unit shall so advise the
342	association in writing, or if no address is given or the owners
343	of the unit do not agree, to the address provided on the deed of
344	record. An officer of the association, or the manager or other
345	person providing notice of the association meeting, shall
346	provide an affidavit or United States Postal Service certificate
347	of mailing, to be included in the official records of the
348	association affirming that the notice was mailed or hand
349	delivered, in accordance with this provision.
350	3.  The members of the board shall be elected by written
351	ballot or voting machine. Proxies shall in no event be used in
352	electing the board, either in general elections or elections to
353	fill vacancies caused by recall, resignation, or otherwise,
354	unless otherwise provided in this chapter. Not less than 60 days
355	before a scheduled election, the association shall mail,
356	deliver, or electronically transmit, whether by separate
357	association mailing or included in another association mailing,
358	delivery, or transmission, including regularly published
359	newsletters, to each unit owner entitled to a vote, a first
360	notice of the date of the election along with a certification
361	form provided by the division attesting that he or she has read
362	and understands, to the best of his or her ability, the
363	governing documents of the association and the provisions of
364	this chapter and any applicable rules. Any unit owner or other
365	eligible person desiring to be a candidate for the board must
366	give written notice of intent to be a candidate to the
367	association 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.