Florida Senate - 2010                       CS for CS for SB 840
       By the Committees on Community Affairs; and Regulated
       Industries; and Senators Sobel, Gelber, and Aronberg
       578-03170-10                                           2010840c2
    1                        A bill to be entitled                      
    2         An act relating to community associations; amending s.
    3         718.103, F.S.; redefining the term “developer”;
    4         amending s. 718.501, F.S.; specifying that the
    5         Division of Florida Condominiums, Timeshares, and
    6         Mobile Homes of the Department of Business and
    7         Professional Regulation has jurisdiction with respect
    8         to bulk assignees and bulk buyers; creating part VII
    9         of ch. 718, F.S.; creating the “Distressed Condominium
   10         Relief Act”; providing legislative findings and
   11         intent; defining the terms “bulk assignee” and “bulk
   12         buyer”; providing for the assignment of developer
   13         rights by a bulk assignee; specifying liabilities of
   14         bulk assignees and bulk buyers; providing exceptions;
   15         providing additional responsibilities of bulk
   16         assignees and bulk buyers; authorizing certain
   17         entities to assign developer rights to a bulk
   18         assignee; limiting the number of bulk assignees at any
   19         given time; providing for the transfer of control of a
   20         board of administration to unit owners; providing
   21         effects of such transfer on parcels acquired by a bulk
   22         assignee; providing obligations of a bulk assignee
   23         upon the transfer of control of a board of
   24         administration; requiring that a bulk assignee certify
   25         certain information in writing; providing for the
   26         resolution of a conflict between specified provisions
   27         of state law; providing that the failure of a bulk
   28         assignee or bulk buyer to comply with specified
   29         provisions of state law results in the loss of certain
   30         protections and exemptions; requiring that a bulk
   31         assignee or bulk buyer file certain information with
   32         the Division of Florida Condominiums, Timeshares, and
   33         Mobile Homes before offering any units for sale or
   34         lease in excess of a specified term; requiring that a
   35         copy of such information be provided to a prospective
   36         purchaser or tenant; requiring that certain contracts
   37         and disclosure statements contain specified
   38         statements; requiring that a bulk assignee or bulk
   39         buyer comply with certain disclosure requirements;
   40         prohibiting a bulk assignee from authorizing certain
   41         actions on behalf of an association while the bulk
   42         assignee is in control of the board of administration
   43         of the association; requiring that a bulk assignee or
   44         bulk buyer comply with certain laws with respect to
   45         contracts entered into by the association while the
   46         bulk assignee or bulk buyer was in control of the
   47         board of administration; providing parcel owners with
   48         specified protections regarding certain contracts;
   49         requiring that a bulk buyer comply with certain
   50         requirements regarding the transfer of a parcel;
   51         prohibiting a person from being classified as a bulk
   52         assignee or bulk buyer unless condominium parcels were
   53         acquired before a specified date; providing that the
   54         assignment of developer rights to a bulk assignee does
   55         not release a developer from certain liabilities;
   56         providing an effective date.
   58  Be It Enacted by the Legislature of the State of Florida:
   60         Section 1. Subsection (16) of section 718.103, Florida
   61  Statutes, is amended to read:
   62         718.103 Definitions.—As used in this chapter, the term:
   63         (16) “Developer” means a person who creates a condominium
   64  or offers condominium parcels for sale or lease in the ordinary
   65  course of business, but does not include:
   66         (a) An owner or lessee of a condominium or cooperative unit
   67  who has acquired the unit for his or her own occupancy;, nor
   68  does it include
   69         (b) A cooperative association that which creates a
   70  condominium by conversion of an existing residential cooperative
   71  after control of the association has been transferred to the
   72  unit owners if, following the conversion, the unit owners will
   73  be the same persons who were unit owners of the cooperative and
   74  no units are offered for sale or lease to the public as part of
   75  the plan of conversion;.
   76         (c)A bulk assignee or bulk buyer as defined in s. 718.703;
   77  or
   78         (d) A state, county, or municipal entity is not a developer
   79  for any purposes under this act when it is acting as a lessor
   80  and not otherwise named as a developer in the declaration of
   81  condominium association.
   82         Section 2. Subsection (1) of section 718.501, Florida
   83  Statutes, is amended to read:
   84         718.501 Authority, responsibility, and duties of Division
   85  of Florida Condominiums, Timeshares, and Mobile Homes.—
   86         (1) The Division of Florida Condominiums, Timeshares, and
   87  Mobile Homes of the Department of Business and Professional
   88  Regulation, referred to as the “division” in this part, has the
   89  power to enforce and ensure compliance with the provisions of
   90  this chapter and rules relating to the development,
   91  construction, sale, lease, ownership, operation, and management
   92  of residential condominium units. In performing its duties, the
   93  division has complete jurisdiction to investigate complaints and
   94  enforce compliance with the provisions of this chapter with
   95  respect to associations that are still under developer control
   96  or the control of a bulk assignee or bulk buyer pursuant to part
   97  VII of this chapter and complaints against developers, bulk
   98  assignees, or bulk buyers involving improper turnover or failure
   99  to turnover, pursuant to s. 718.301. However, after turnover has
  100  occurred, the division has shall only have jurisdiction to
  101  investigate complaints related only to financial issues,
  102  elections, and unit owner access to association records pursuant
  103  to s. 718.111(12).
  104         (a)1. The division may make necessary public or private
  105  investigations within or outside this state to determine whether
  106  any person has violated this chapter or any rule or order
  107  hereunder, to aid in the enforcement of this chapter, or to aid
  108  in the adoption of rules or forms hereunder.
  109         2. The division may submit any official written report,
  110  worksheet, or other related paper, or a duly certified copy
  111  thereof, compiled, prepared, drafted, or otherwise made by and
  112  duly authenticated by a financial examiner or analyst to be
  113  admitted as competent evidence in any hearing in which the
  114  financial examiner or analyst is available for cross-examination
  115  and attests under oath that such documents were prepared as a
  116  result of an examination or inspection conducted pursuant to
  117  this chapter.
  118         (b) The division may require or permit any person to file a
  119  statement in writing, under oath or otherwise, as the division
  120  determines, as to the facts and circumstances concerning a
  121  matter to be investigated.
  122         (c) For the purpose of any investigation under this
  123  chapter, the division director or any officer or employee
  124  designated by the division director may administer oaths or
  125  affirmations, subpoena witnesses and compel their attendance,
  126  take evidence, and require the production of any matter which is
  127  relevant to the investigation, including the existence,
  128  description, nature, custody, condition, and location of any
  129  books, documents, or other tangible things and the identity and
  130  location of persons having knowledge of relevant facts or any
  131  other matter reasonably calculated to lead to the discovery of
  132  material evidence. Upon the failure by a person to obey a
  133  subpoena or to answer questions propounded by the investigating
  134  officer and upon reasonable notice to all persons affected
  135  thereby, the division may apply to the circuit court for an
  136  order compelling compliance.
  137         (d) Notwithstanding any remedies available to unit owners
  138  and associations, if the division has reasonable cause to
  139  believe that a violation of any provision of this chapter or
  140  related rule has occurred, the division may institute
  141  enforcement proceedings in its own name against any developer,
  142  bulk assignee, bulk buyer, association, officer, or member of
  143  the board of administration, or its assignees or agents, as
  144  follows:
  145         1. The division may permit a person whose conduct or
  146  actions may be under investigation to waive formal proceedings
  147  and enter into a consent proceeding whereby orders, rules, or
  148  letters of censure or warning, whether formal or informal, may
  149  be entered against the person.
  150         2. The division may issue an order requiring the developer,
  151  bulk assignee, bulk buyer, association, developer-designated
  152  officer, or developer-designated member of the board of
  153  administration, developer-designated assignees or agents, bulk
  154  assignee-designated assignees or agents, bulk buyer-designated
  155  assignees or agents, community association manager, or community
  156  association management firm to cease and desist from the
  157  unlawful practice and take such affirmative action as in the
  158  judgment of the division will carry out the purposes of this
  159  chapter. If the division finds that a developer, bulk assignee,
  160  bulk buyer, association, officer, or member of the board of
  161  administration, or its assignees or agents, is violating or is
  162  about to violate any provision of this chapter, any rule adopted
  163  or order issued by the division, or any written agreement
  164  entered into with the division, and presents an immediate danger
  165  to the public requiring an immediate final order, it may issue
  166  an emergency cease and desist order reciting with particularity
  167  the facts underlying such findings. The emergency cease and
  168  desist order is effective for 90 days. If the division begins
  169  nonemergency cease and desist proceedings, the emergency cease
  170  and desist order remains effective until the conclusion of the
  171  proceedings under ss. 120.569 and 120.57.
  172         3. If a developer, bulk assignee, or bulk buyer, fails to
  173  pay any restitution determined by the division to be owed, plus
  174  any accrued interest at the highest rate permitted by law,
  175  within 30 days after expiration of any appellate time period of
  176  a final order requiring payment of restitution or the conclusion
  177  of any appeal thereof, whichever is later, the division must
  178  shall bring an action in circuit or county court on behalf of
  179  any association, class of unit owners, lessees, or purchasers
  180  for restitution, declaratory relief, injunctive relief, or any
  181  other available remedy. The division may also temporarily revoke
  182  its acceptance of the filing for the developer to which the
  183  restitution relates until payment of restitution is made.
  184         4. The division may petition the court for the appointment
  185  of a receiver or conservator. If appointed, the receiver or
  186  conservator may take action to implement the court order to
  187  ensure the performance of the order and to remedy any breach
  188  thereof. In addition to all other means provided by law for the
  189  enforcement of an injunction or temporary restraining order, the
  190  circuit court may impound or sequester the property of a party
  191  defendant, including books, papers, documents, and related
  192  records, and allow the examination and use of the property by
  193  the division and a court-appointed receiver or conservator.
  194         5. The division may apply to the circuit court for an order
  195  of restitution whereby the defendant in an action brought
  196  pursuant to subparagraph 4. shall be ordered to make restitution
  197  of those sums shown by the division to have been obtained by the
  198  defendant in violation of this chapter. Such restitution shall,
  199  at the option of the court, be payable to the conservator or
  200  receiver appointed pursuant to subparagraph 4. or directly to
  201  the persons whose funds or assets were obtained in violation of
  202  this chapter.
  203         6. The division may impose a civil penalty against a
  204  developer, bulk assignee, or bulk buyer, or association, or its
  205  assignee or agent, for any violation of this chapter or a rule
  206  adopted under this chapter. The division may impose a civil
  207  penalty individually against any officer or board member who
  208  willfully and knowingly violates a provision of this chapter,
  209  adopted rule, or a final order of the division; may order the
  210  removal of such individual as an officer or from the board of
  211  administration or as an officer of the association; and may
  212  prohibit such individual from serving as an officer or on the
  213  board of a community association for a period of time. The term
  214  “willfully and knowingly” means that the division informed the
  215  officer or board member that his or her action or intended
  216  action violates this chapter, a rule adopted under this chapter,
  217  or a final order of the division and that the officer or board
  218  member refused to comply with the requirements of this chapter,
  219  a rule adopted under this chapter, or a final order of the
  220  division. The division, before prior to initiating formal agency
  221  action under chapter 120, must shall afford the officer or board
  222  member an opportunity to voluntarily comply with this chapter, a
  223  rule adopted under this chapter, or a final order of the
  224  division. An officer or board member who complies within 10 days
  225  is not subject to a civil penalty. A penalty may be imposed on
  226  the basis of each day of continuing violation, but in no event
  227  shall the penalty for any offense may not exceed $5,000. By
  228  January 1, 1998, the division shall adopt, by rule, penalty
  229  guidelines applicable to possible violations or to categories of
  230  violations of this chapter or rules adopted by the division. The
  231  guidelines must specify a meaningful range of civil penalties
  232  for each such violation of the statute and rules and must be
  233  based upon the harm caused by the violation, the repetition of
  234  the violation, and upon such other factors deemed relevant by
  235  the division. For example, the division may consider whether the
  236  violations were committed by a developer, bulk assignee, or bulk
  237  buyer, or owner-controlled association, the size of the
  238  association, and other factors. The guidelines must designate
  239  the possible mitigating or aggravating circumstances that
  240  justify a departure from the range of penalties provided by the
  241  rules. It is the legislative intent that minor violations be
  242  distinguished from those which endanger the health, safety, or
  243  welfare of the condominium residents or other persons and that
  244  such guidelines provide reasonable and meaningful notice to the
  245  public of likely penalties that may be imposed for proscribed
  246  conduct. This subsection does not limit the ability of the
  247  division to informally dispose of administrative actions or
  248  complaints by stipulation, agreed settlement, or consent order.
  249  All amounts collected shall be deposited with the Chief
  250  Financial Officer to the credit of the Division of Florida
  251  Condominiums, Timeshares, and Mobile Homes Trust Fund. If a
  252  developer, bulk assignee, or bulk buyer fails to pay the civil
  253  penalty and the amount deemed to be owed to the association, the
  254  division shall issue an order directing that such developer,
  255  bulk assignee, or bulk buyer cease and desist from further
  256  operation until such time as the civil penalty is paid or may
  257  pursue enforcement of the penalty in a court of competent
  258  jurisdiction. If an association fails to pay the civil penalty,
  259  the division shall pursue enforcement in a court of competent
  260  jurisdiction, and the order imposing the civil penalty or the
  261  cease and desist order will not become effective until 20 days
  262  after the date of such order. Any action commenced by the
  263  division shall be brought in the county in which the division
  264  has its executive offices or in the county where the violation
  265  occurred.
  266         7. If a unit owner presents the division with proof that
  267  the unit owner has requested access to official records in
  268  writing by certified mail, and that after 10 days the unit owner
  269  again made the same request for access to official records in
  270  writing by certified mail, and that more than 10 days has
  271  elapsed since the second request and the association has still
  272  failed or refused to provide access to official records as
  273  required by this chapter, the division shall issue a subpoena
  274  requiring production of the requested records where the records
  275  are kept pursuant to s. 718.112.
  276         8. In addition to subparagraph 6., the division may seek
  277  the imposition of a civil penalty through the circuit court for
  278  any violation for which the division may issue a notice to show
  279  cause under paragraph (r). The civil penalty shall be at least
  280  $500 but no more than $5,000 for each violation. The court may
  281  also award to the prevailing party court costs and reasonable
  282  attorney’s fees and, if the division prevails, may also award
  283  reasonable costs of investigation.
  284         (e) The division may prepare and disseminate a prospectus
  285  and other information to assist prospective owners, purchasers,
  286  lessees, and developers of residential condominiums in assessing
  287  the rights, privileges, and duties pertaining thereto.
  288         (f) The division has authority to adopt rules pursuant to
  289  ss. 120.536(1) and 120.54 to implement and enforce the
  290  provisions of this chapter.
  291         (g) The division shall establish procedures for providing
  292  notice to an association and the developer, bulk assignee, or
  293  bulk buyer during the period in which where the developer, bulk
  294  assignee, or bulk buyer controls the association if when the
  295  division is considering the issuance of a declaratory statement
  296  with respect to the declaration of condominium or any related
  297  document governing in such condominium community.
  298         (h) The division shall furnish each association which pays
  299  the fees required by paragraph (2)(a) a copy of this act,
  300  subsequent changes to this act on an annual basis, an amended
  301  version of this act as it becomes available from the Secretary
  302  of State’s office on a biennial basis, and the rules adopted
  303  thereto on an annual basis.
  304         (i) The division shall annually provide each association
  305  with a summary of declaratory statements and formal legal
  306  opinions relating to the operations of condominiums which were
  307  rendered by the division during the previous year.
  308         (j) The division shall provide training and educational
  309  programs for condominium association board members and unit
  310  owners. The training may, in the division’s discretion, include
  311  web-based electronic media, and live training and seminars in
  312  various locations throughout the state. The division may shall
  313  have the authority to review and approve education and training
  314  programs for board members and unit owners offered by providers
  315  and shall maintain a current list of approved programs and
  316  providers and shall make such list available to board members
  317  and unit owners in a reasonable and cost-effective manner.
  318         (k) The division shall maintain a toll-free telephone
  319  number accessible to condominium unit owners.
  320         (l) The division shall develop a program to certify both
  321  volunteer and paid mediators to provide mediation of condominium
  322  disputes. The division shall provide, upon request, a list of
  323  such mediators to any association, unit owner, or other
  324  participant in arbitration proceedings under s. 718.1255
  325  requesting a copy of the list. The division shall include on the
  326  list of volunteer mediators only the names of persons who have
  327  received at least 20 hours of training in mediation techniques
  328  or who have mediated at least 20 disputes. In order to become
  329  initially certified by the division, paid mediators must be
  330  certified by the Supreme Court to mediate court cases in county
  331  or circuit courts. However, the division may adopt, by rule,
  332  additional factors for the certification of paid mediators,
  333  which factors must be related to experience, education, or
  334  background. Any person initially certified as a paid mediator by
  335  the division must, in order to continue to be certified, comply
  336  with the factors or requirements imposed by rules adopted by the
  337  division.
  338         (m) When a complaint is made, the division must shall
  339  conduct its inquiry with due regard to the interests of the
  340  affected parties. Within 30 days after receipt of a complaint,
  341  the division shall acknowledge the complaint in writing and
  342  notify the complainant whether the complaint is within the
  343  jurisdiction of the division and whether additional information
  344  is needed by the division from the complainant. The division
  345  shall conduct its investigation and shall, within 90 days after
  346  receipt of the original complaint or of timely requested
  347  additional information, take action upon the complaint. However,
  348  the failure to complete the investigation within 90 days does
  349  not prevent the division from continuing the investigation,
  350  accepting or considering evidence obtained or received after 90
  351  days, or taking administrative action if reasonable cause exists
  352  to believe that a violation of this chapter or a rule of the
  353  division has occurred. If an investigation is not completed
  354  within the time limits established in this paragraph, the
  355  division shall, on a monthly basis, notify the complainant in
  356  writing of the status of the investigation. When reporting its
  357  action to the complainant, the division shall inform the
  358  complainant of any right to a hearing pursuant to ss. 120.569
  359  and 120.57.
  360         (n) Condominium association directors, officers, and
  361  employees; condominium developers; condominium bulk assignees
  362  and bulk buyers, community association managers; and community
  363  association management firms have an ongoing duty to reasonably
  364  cooperate with the division in any investigation pursuant to
  365  this section. The division shall refer to local law enforcement
  366  authorities any person whom the division believes has altered,
  367  destroyed, concealed, or removed any record, document, or thing
  368  required to be kept or maintained by this chapter with the
  369  purpose to impair its verity or availability in the department’s
  370  investigation.
  371         (o) The division may:
  372         1. Contract with agencies in this state or other
  373  jurisdictions to perform investigative functions; or
  374         2. Accept grants-in-aid from any source.
  375         (p) The division shall cooperate with similar agencies in
  376  other jurisdictions to establish uniform filing procedures and
  377  forms, public offering statements, advertising standards, and
  378  rules and common administrative practices.
  379         (q) The division shall consider notice to a developer, bulk
  380  assignee, or bulk buyer to be complete when it is delivered to
  381  the developer’s address of the developer, bulk assignee, or bulk
  382  buyer currently on file with the division.
  383         (r) In addition to its enforcement authority, the division
  384  may issue a notice to show cause, which shall provide for a
  385  hearing, upon written request, in accordance with chapter 120.
  386         (s) The division shall submit to the Governor, the
  387  President of the Senate, the Speaker of the House of
  388  Representatives, and the chairs of the legislative
  389  appropriations committees an annual report that includes, but
  390  need not be limited to, the number of training programs provided
  391  for condominium association board members and unit owners, the
  392  number of complaints received by type, the number and percent of
  393  complaints acknowledged in writing within 30 days and the number
  394  and percent of investigations acted upon within 90 days in
  395  accordance with paragraph (m), and the number of investigations
  396  exceeding the 90-day requirement. The annual report shall also
  397  include an evaluation of the division’s core business processes
  398  and make recommendations for improvements, including statutory
  399  changes. The report shall be submitted by September 30 following
  400  the end of the fiscal year.
  401         Section 3. Part VII of chapter 718, Florida Statutes,
  402  consisting of sections 718.701, 718.702, 718.703, 718.704,
  403  718.705, 718.706, 718.707, and 718.708, is created to read:
  404         718.701Short title.—This part may be cited as the
  405  “Distressed Condominium Relief Act.”
  406         718.702Legislative intent.—
  407         (1)The Legislature acknowledges the massive downturn in
  408  the condominium market which has transpired throughout the state
  409  and the impact of such downturn on developers, lenders, unit
  410  owners, and condominium associations. Numerous condominium
  411  projects have either failed or are in the process of failing,
  412  whereby the condominium has a small percentage of third-party
  413  unit owners as compared to the unsold inventory of units. As a
  414  result of the inability to find purchasers for this inventory of
  415  units, which results in part from the devaluing of real estate
  416  in this state, developers are unable to satisfy the requirements
  417  of their lenders, leading to defaults on mortgages.
  418  Consequently, lenders are faced with the task of finding a
  419  solution to the problem in order to be paid for their
  420  investments.
  421         (2)The Legislature recognizes that all of the factors
  422  listed in this section lead to condominiums becoming distressed,
  423  resulting in detriment to the unit owners and the condominium
  424  association on account of the resulting shortage of assessment
  425  moneys available to support the financial requirements for
  426  proper maintenance of the condominium. Such shortage and the
  427  resulting lack of proper maintenance further erodes property
  428  values. The Legislature finds that individuals and entities
  429  within this state and in other states have expressed interest in
  430  purchasing unsold inventory in one or more condominium projects,
  431  but are reticent to do so because of accompanying liabilities
  432  inherited from the original developer, which are by definition
  433  imputed to the successor purchaser, including a foreclosing
  434  mortgagee. This results in the potential purchaser having
  435  unknown and unquantifiable risks, and potential successor
  436  purchasers are unwilling to accept such risks. The result is
  437  that condominium projects stagnate, leaving all parties involved
  438  at an impasse without the ability to find a solution.
  439         (3)The Legislature finds and declares that it is the
  440  public policy of this state to protect the interests of
  441  developers, lenders, unit owners, and condominium associations
  442  with regard to distressed condominiums, and that there is a need
  443  for relief from certain provisions of the Florida Condominium
  444  Act geared toward enabling economic opportunities within these
  445  condominiums for successor purchasers, including foreclosing
  446  mortgagees. Such relief would benefit existing unit owners and
  447  condominium associations. The Legislature further finds and
  448  declares that this situation cannot be open-ended without
  449  potentially prejudicing the rights of unit owners and
  450  condominium associations, and thereby declares that the
  451  provisions of this part shall be used by purchasers of
  452  condominium inventory for a specific and defined period.
  453         718.703Definitions.—As used in this part, the term:
  454         (1)“Bulk assignee” means a person who:
  455         (a)Acquires more than seven condominium parcels as set
  456  forth in s. 718.707; and
  457         (b)Receives an assignment of some or all of the rights of
  458  the developer as are set forth in the declaration of condominium
  459  or in this chapter by a written instrument recorded as an
  460  exhibit to the deed or as a separate instrument in the public
  461  records of the county in which the condominium is located.
  462         (2)“Bulk buyer” means a person who acquires more than
  463  seven condominium parcels as set forth in s. 718.707 but who
  464  does not receive an assignment of any developer rights other
  465  than the right to conduct sales, leasing, and marketing
  466  activities within the condominium; the right to be exempt from
  467  the payment of working capital contributions to the condominium
  468  association arising out of, or in connection with, the bulk
  469  buyer’s acquisition of a bulk number of units; and the right to
  470  be exempt from any rights of first refusal which may be held by
  471  the condominium association and would otherwise be applicable to
  472  subsequent transfers of title from the bulk buyer to any third
  473  party purchaser concerning one or more units.
  474         718.704Assignment and assumption of developer rights by
  475  bulk assignee; bulk buyer.—
  476         (1)A bulk assignee is deemed to have assumed and is liable
  477  for all duties and responsibilities of the developer under the
  478  declaration and this chapter, except:
  479         (a)Warranties of the developer under s. 718.203(1) or s.
  480  718.618, except for design, construction, development, or repair
  481  work performed by or on behalf of such bulk assignee;
  482         (b)The obligation to:
  483         1.Fund converter reserves under s. 718.618 for a unit that
  484  was not acquired by the bulk assignee; or
  485         2.Provide converter warranties on any portion of the
  486  condominium property except as may be expressly provided by the
  487  bulk assignee in the contract for purchase and sale executed
  488  with a purchaser and pertaining to any design, construction,
  489  development, or repair work performed by or on behalf of the
  490  bulk assignee;
  491         (c)The requirement to provide the association with a
  492  cumulative audit of the association’s finances from the date of
  493  formation of the condominium association as required by s.
  494  718.301(4)(c). However, the bulk assignee shall provide an audit
  495  for the period for which the bulk assignee elects a majority of
  496  the members of the board of administration;
  497         (d)Any liability arising out of or in connection with
  498  actions taken by the board of administration or the developer
  499  appointed directors before the bulk assignee elects a majority
  500  of the members of the board of administration; and
  501         (e)Any liability for or arising out of the developer’s
  502  failure to fund previous assessments or to resolve budgetary
  503  deficits in relation to a developer’s right to guarantee
  504  assessments, except as otherwise provided in subsection (2).
  506  Further, the bulk assignee is responsible for delivering
  507  documents and materials in accordance with s. 718.705(3). A bulk
  508  assignee may expressly assume some or all of the obligations of
  509  the developer described in paragraphs (a)-(e).
  510         (2)A bulk assignee receiving the assignment of the rights
  511  of the developer to guarantee the level of assessments and fund
  512  budgetary deficits pursuant to s. 718.116 is deemed to have
  513  assumed and is liable for all obligations of the developer with
  514  respect to such guarantee, including any applicable funding of
  515  reserves to the extent required by law, for as long as the
  516  guarantee remains in effect. A bulk assignee not receiving an
  517  assignment of the right of the developer to guarantee the level
  518  of assessments and fund budgetary deficits pursuant to s.
  519  718.116 or a bulk buyer is not deemed to have assumed and is not
  520  liable for the obligations of the developer with respect to such
  521  guarantee, but is responsible for payment of assessments in the
  522  same manner as all other owners of condominium parcels.
  523         (3)A bulk buyer is liable for the duties and
  524  responsibilities of the developer under the declaration and this
  525  chapter only to the extent provided in this part, together with
  526  any other duties or responsibilities of the developer expressly
  527  assumed in writing by the bulk buyer.
  528         (4)An acquirer of condominium parcels is not considered a
  529  bulk assignee or a bulk buyer if the transfer to such acquirer
  530  was made before the effective date of this part with the intent
  531  to hinder, delay, or defraud any purchaser, unit owner, or the
  532  association, or if the acquirer is a person who would constitute
  533  an insider under s. 726.102(7).
  534         (5)An assignment of developer rights to a bulk assignee
  535  may be made by the developer, a previous bulk assignee, or a
  536  court of competent jurisdiction acting on behalf of the
  537  developer or the previous bulk assignee. At any particular time,
  538  there may be no more than one bulk assignee within a
  539  condominium, but there may be more than one bulk buyer. If more
  540  than one acquirer of condominium parcels in the same condominium
  541  receives an assignment of developer rights from the same person,
  542  the bulk assignee is the acquirer whose instrument of assignment
  543  is recorded first in applicable public records.
  544         718.705Board of administration; transfer of control.—
  545         (1)For purposes of determining the timing for transfer of
  546  control of the board of administration of the association to
  547  unit owners other than the developer under s. 718.301(1)(a) and
  548  (b), if a bulk assignee is entitled to elect a majority of the
  549  members of the board, a condominium parcel acquired by the bulk
  550  assignee is not deemed to be conveyed to a purchaser, or to be
  551  owned by an owner other than the developer, until such
  552  condominium parcel is conveyed to an owner who is not a bulk
  553  assignee.
  554         (2)Unless control of the board of administration of the
  555  association has already been relinquished pursuant to s.
  556  718.301(1), the bulk assignee must relinquish control of the
  557  association pursuant to s. 718.301 and this part, as if the bulk
  558  assignee were the developer.
  559         (3)When a bulk assignee relinquishes control of the board
  560  of administration as set forth in s. 718.301, the bulk assignee
  561  must deliver all of those items required by s. 718.301(4).
  562  However, the bulk assignee is not required to deliver items and
  563  documents not in the possession of the bulk assignee during the
  564  period during which the bulk assignee was entitled to elect at
  565  least a majority of the members of the board of administration.
  566  In conjunction with acquisition of condominium parcels, a bulk
  567  assignee shall undertake a good faith effort to obtain the
  568  documents and materials required to be provided to the
  569  association pursuant to s. 718.301(4). To the extent the bulk
  570  assignee is not able to obtain all of such documents and
  571  materials, the bulk assignee shall certify in writing to the
  572  association the names or descriptions of the documents and
  573  materials that were not obtainable by the bulk assignee.
  574  Delivery of the certificate relieves the bulk assignee of
  575  responsibility for the delivery of the documents and materials
  576  referenced in the certificate as otherwise required under ss.
  577  718.112 and 718.301 and this part. The responsibility of the
  578  bulk assignee for the audit required by s. 718.301(4) commences
  579  as of the date on which the bulk assignee elected a majority of
  580  the members of the board of administration.
  581         (4)If a conflict arises between the provisions or
  582  application of this section and s. 718.301, this section
  583  prevails.
  584         (5)Failure of a bulk assignee or bulk buyer to
  585  substantially comply with all the requirements contained in this
  586  part shall result in the loss of any and all protections or
  587  exemptions provided under this part.
  588         718.706Specific provisions pertaining to offering of units
  589  by a bulk assignee or bulk buyer.—
  590         (1)Before offering any units for sale or for lease for a
  591  term exceeding 5 years, a bulk assignee or a bulk buyer shall
  592  file the following documents with the division and provide such
  593  documents to a prospective purchaser or tenant:
  594         (a)An updated prospectus or offering circular, or a
  595  supplement to the prospectus or offering circular, filed by the
  596  creating developer prepared in accordance with s. 718.504, which
  597  must include the form of contract for sale and for lease in
  598  compliance with s. 718.503(2);
  599         (b)An updated Frequently Asked Questions and Answers
  600  sheet;
  601         (c)The executed escrow agreement if required under s.
  602  718.202; and
  603         (d)The financial information required by s. 718.111(13).
  604  However, if a financial information report does not exist for
  605  the fiscal year before acquisition of title by the bulk assignee
  606  or bulk buyer, or accounting records cannot be obtained in good
  607  faith by the bulk assignee or the bulk buyer which would permit
  608  preparation of the required financial information report, the
  609  bulk assignee or bulk buyer is excused from the requirement of
  610  this paragraph. However, the bulk assignee or bulk buyer must
  611  include in the purchase contract the following statement in
  612  conspicuous type:
  619         (2)Before offering any units for sale or for lease for a
  620  term exceeding 5 years, a bulk assignee must file with the
  621  division and provide to a prospective purchaser a disclosure
  622  statement that must include, but is not limited to:
  623         (a)A description of any rights of the developer which have
  624  been assigned to the bulk assignee;
  625         (b)The following statement in conspicuous type:
  628         DEVELOPER UNDER S. 718.203(1) OR S. 718.618, AS
  631         OF SELLER; and
  632         (c)If the condominium is a conversion subject to part VI,
  633  the following statement in conspicuous type:
  643         (3)A bulk assignee, while it is in control of the board of
  644  administration of the association, may not authorize, on behalf
  645  of the association:
  646         (a)The waiver of reserves or the reduction of funding of
  647  the reserves pursuant to s. 718.112(2)(f)2., unless approved by
  648  a majority of the voting interests not controlled by the
  649  developer, bulk assignee, and bulk buyer; or
  650         (b)The use of reserve expenditures for other purposes
  651  pursuant to s. 718.112(2)(f)3., unless approved by a majority of
  652  the voting interests not controlled by the developer, bulk
  653  assignee, and bulk buyer.
  654         (4)A bulk assignee or a bulk buyer shall comply with all
  655  the requirements of s. 718.302 regarding any contracts entered
  656  into by the association during the period the bulk assignee or
  657  bulk buyer maintains control of the board of administration.
  658  Unit owners shall be afforded all the protections contained in
  659  s. 718.302 regarding agreements entered into by the association
  660  before unit owners other than the developer, bulk assignee, or
  661  bulk buyer elected a majority of the board of administration.
  662         (5)A bulk buyer shall comply with the requirements
  663  contained in the declaration regarding any transfer of a unit,
  664  including sales, leases, and subleases. A bulk buyer is not
  665  entitled to any exemptions afforded a developer or successor
  666  developer under this chapter regarding any transfer of a unit,
  667  including sales, leases, or subleases.
  668         718.707Time limitation for classification as bulk assignee
  669  or bulk buyer.—A person acquiring condominium parcels may not be
  670  classified as a bulk assignee or bulk buyer unless the
  671  condominium parcels were acquired before July 1, 2012. The date
  672  of such acquisition shall be determined by the date of recording
  673  of a deed or other instrument of conveyance for such parcels in
  674  the public records of the county in which the condominium is
  675  located, or by the date of issuance of a certificate of title in
  676  a foreclosure proceeding with respect to such condominium
  677  parcels.
  678         718.708Liability of developers and others.—An assignment
  679  of developer rights to a bulk assignee or bulk buyer does not
  680  release the creating developer from any liabilities under the
  681  declaration or this chapter. This part does not limit the
  682  liability of the creating developer for claims brought by unit
  683  owners, bulk assignees, or bulk buyers for violations of this
  684  chapter by the creating developer, unless specifically excluded
  685  in this part. Nothing contained within this part waives,
  686  releases, compromises, or limits the liability of contractors,
  687  subcontractors, materialmen, manufacturers, architects,
  688  engineers, or any participant in the design or construction of a
  689  condominium for any claim brought by an association, unit
  690  owners, bulk assignees, or bulk buyers arising from the design
  691  of the condominium, construction defects, misrepresentations
  692  associated with condominium property, or violations of this
  693  chapter, unless specifically excluded in this part.
  694         Section 4. This act shall take effect upon becoming a law.