Florida Senate - 2016 SB 1122
By Senator Hays
11-00923C-16 20161122__
1 A bill to be entitled
2 An act relating to homeowners’ associations; amending
3 s. 718.509, F.S.; revising the uses of the Florida
4 Condominiums, Timeshares, and Mobile Homes Trust Fund
5 to include reimbursement of costs to the Division of
6 Florida Condominiums, Timeshares, and Mobile Homes for
7 the administration and operation of the Homeowners’
8 Association Act; amending s. 720.303, F.S.; increasing
9 certain fines; providing a cause of action for a
10 member against a community association manager or
11 management firm under certain circumstances;
12 authorizing related fines; prohibiting reimbursement
13 to a community association manager or management firm
14 for certain fines; requiring the community association
15 manager, the management firm, or the association to
16 annually provide a specified report beginning on a
17 specified date, and to resubmit the report under
18 certain circumstances to the Division of Florida
19 Condominiums, Timeshares, and Mobile Homes; revising
20 the dates by which the Department of Business and
21 Professional Regulation must meet certain reporting
22 requirements; extending the scheduled expiration of
23 specified statutory text; amending s. 720.305, F.S.;
24 providing that a fine may not become a lien against a
25 parcel; amending s. 720.307, F.S.; revising the
26 circumstances under which members other than the
27 developer are entitled to elect at least a majority of
28 the board of directors of the association; amending s.
29 720.311, F.S.; providing presuit mediation for
30 election and recall disputes; providing for binding
31 arbitration by the department for certain disputes
32 between a parcel owner and a homeowners’ association;
33 authorizing mediation or arbitration by a mediator or
34 arbitrator, respectively, who has been certified by a
35 county court; creating s. 720.318, F.S.; requiring the
36 department to provide training and educational
37 programs for homeowners’ association members,
38 directors, and officers; providing that the training
39 may include certain methods; authorizing the
40 department to review and approve training and
41 educational programs for members, directors, and
42 officers; requiring the department to maintain a
43 current list of approved programs and providers and to
44 make the list available to homeowners’ associations in
45 a reasonable and cost-effective manner; creating s.
46 720.319, F.S.; authorizing the department to enforce
47 and ensure compliance with the Homeowners’ Association
48 Act and specified rules; providing the department
49 jurisdiction to investigate complaints relating to
50 homeowners’ associations; requiring homeowners’
51 associations to pay a specified fee to cover the
52 administrative and operational costs of the
53 department; prohibiting the department from imposing
54 the fee under certain circumstances; amending s.
55 720.401, F.S.; requiring a seller of a parcel to
56 provide a prospective buyer with specified association
57 documents under certain circumstances; authorizing a
58 prospective buyer to terminate a contract for purchase
59 within a specified timeframe under certain
60 circumstances; amending s. 720.402, F.S.; providing a
61 cause of action against developers by nondeveloper
62 members of a homeowners’ association or the
63 homeowners’ association; providing an effective date.
64
65 Be It Enacted by the Legislature of the State of Florida:
66
67 Section 1. Subsection (1) of section 718.509, Florida
68 Statutes, is amended to read:
69 718.509 Division of Florida Condominiums, Timeshares, and
70 Mobile Homes Trust Fund.—
71 (1) There is created within the State Treasury the Division
72 of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund
73 to be used for the administration and operation of this chapter
74 and chapters 718, 719, 720, 721, and 723 by the division.
75 Section 2. Paragraph (b) of subsection (5) and subsection
76 (13) of section 720.303, Florida Statutes, are amended to read:
77 720.303 Association powers and duties; meetings of board;
78 official records; budgets; financial reporting; association
79 funds; recalls.—
80 (5) INSPECTION AND COPYING OF RECORDS.—The official records
81 shall be maintained within the state for at least 7 years and
82 shall be made available to a parcel owner for inspection or
83 photocopying within 45 miles of the community or within the
84 county in which the association is located within 10 business
85 days after receipt by the board or its designee of a written
86 request. This subsection may be complied with by having a copy
87 of the official records available for inspection or copying in
88 the community or, at the option of the association, by making
89 the records available to a parcel owner electronically via the
90 Internet or by allowing the records to be viewed in electronic
91 format on a computer screen and printed upon request. If the
92 association has a photocopy machine available where the records
93 are maintained, it must provide parcel owners with copies on
94 request during the inspection if the entire request is limited
95 to no more than 25 pages. An association shall allow a member or
96 his or her authorized representative to use a portable device,
97 including a smartphone, tablet, portable scanner, or any other
98 technology capable of scanning or taking photographs, to make an
99 electronic copy of the official records in lieu of the
100 association’s providing the member or his or her authorized
101 representative with a copy of such records. The association may
102 not charge a fee to a member or his or her authorized
103 representative for the use of a portable device.
104 (b) A member who is denied access to official records is
105 entitled to the actual damages or minimum damages for the
106 association’s willful failure to comply with this subsection.
107 The minimum damages are $500 to be $50 per calendar day up to 30
108 10 days, the calculation to begin on the 11th business day after
109 receipt of the written request. If the association delegates to
110 a community association manager or management firm the
111 responsibility to provide members with access to official
112 records, as provided in this section, a member who is denied
113 access to official records by the community association manager
114 or management firm has a cause of action against the community
115 association manager or management firm for the actual or minimum
116 damages provided in this paragraph. A community association
117 manager or management firm may not be reimbursed or otherwise
118 indemnified by the association for payment of any actual or
119 minimum damages provided in this paragraph.
120 (13) REPORTING REQUIREMENT.—The community association
121 manager or management firm, or the association when there is no
122 community association manager or management firm, must submit a
123 shall report to the division by November 22, 2016 2013, and each
124 year thereafter, in a manner and form prescribed by the
125 division.
126 (a) The report must shall include the association’s:
127 1. Legal name.
128 2. Federal employer identification number.
129 3. Mailing and physical addresses.
130 4. Total number of parcels.
131 5. Total amount of revenues and expenses from the
132 association’s annual budget.
133 (b) For associations in which control of the association
134 has not been transitioned to nondeveloper members, as set forth
135 in s. 720.307, the report shall also include the developer’s:
136 1. Legal name.
137 2. Mailing address.
138 3. Total number of parcels owned on the date of reporting.
139 (c) The reporting requirement provided in this subsection
140 shall be a continuing obligation on each association until the
141 required information is reported to the division. The community
142 association manager or management firm, or the association if
143 there is no community association manager or management firm,
144 must resubmit the report required under this subsection upon the
145 occurrence of a material change in the information required to
146 be reported pursuant to paragraphs (a) and (b).
147 (d) By October 1, 2016 2013, the department shall establish
148 and implement a registration system through an Internet website
149 that provides for the reporting requirements of paragraphs (a)
150 and (b).
151 (e) The department shall prepare an annual report of the
152 data reported pursuant to this subsection and present it to the
153 Governor, the President of the Senate, and the Speaker of the
154 House of Representatives by December 1, 2016 2013, and each year
155 thereafter.
156 (f) The division shall adopt rules pursuant to ss.
157 120.536(1) and 120.54 to implement the provisions of this
158 subsection.
159 (g) This subsection shall expire on July 1, 2026 2016,
160 unless reenacted by the Legislature.
161 Section 3. Subsection (2) of section 720.305, Florida
162 Statutes, is amended to read:
163 720.305 Obligations of members; remedies at law or in
164 equity; levy of fines and suspension of use rights.—
165 (2) The association may levy reasonable fines. A fine may
166 not exceed $100 per violation against any member or any member’s
167 tenant, guest, or invitee for the failure of the owner of the
168 parcel or its occupant, licensee, or invitee to comply with any
169 provision of the declaration, the association bylaws, or
170 reasonable rules of the association unless otherwise provided in
171 the governing documents. A fine may be levied by the board for
172 each day of a continuing violation, with a single notice and
173 opportunity for hearing, except that the fine may not exceed
174 $1,000 in the aggregate unless otherwise provided in the
175 governing documents. A fine of less than $1,000 may not become a
176 lien against a parcel. In any action to recover a fine, the
177 prevailing party is entitled to reasonable attorney fees and
178 costs from the nonprevailing party as determined by the court.
179 (a) An association may suspend, for a reasonable period of
180 time, the right of a member, or a member’s tenant, guest, or
181 invitee, to use common areas and facilities for the failure of
182 the owner of the parcel or its occupant, licensee, or invitee to
183 comply with any provision of the declaration, the association
184 bylaws, or reasonable rules of the association. This paragraph
185 does not apply to that portion of common areas used to provide
186 access or utility services to the parcel. A suspension may not
187 prohibit an owner or tenant of a parcel from having vehicular
188 and pedestrian ingress to and egress from the parcel, including,
189 but not limited to, the right to park.
190 (b) A fine or suspension may not be imposed by the board of
191 administration without at least 14 days’ notice to the person
192 sought to be fined or suspended and an opportunity for a hearing
193 before a committee of at least three members appointed by the
194 board who are not officers, directors, or employees of the
195 association, or the spouse, parent, child, brother, or sister of
196 an officer, director, or employee. If the committee, by majority
197 vote, does not approve a proposed fine or suspension, it may not
198 be imposed. The role of the committee is limited to determining
199 whether to confirm or reject the fine or suspension levied by
200 the board. If the board of administration imposes a fine or
201 suspension, the association must provide written notice of such
202 fine or suspension by mail or hand delivery to the parcel owner
203 and, if applicable, to any tenant, licensee, or invitee of the
204 parcel owner.
205 Section 4. Subsection (1) of section 720.307, Florida
206 Statutes, is amended to read:
207 720.307 Transition of association control in a community.
208 With respect to homeowners’ associations:
209 (1) Members other than the developer are entitled to elect
210 at least a majority of the members of the board of directors of
211 the homeowners’ association upon the occurrence of any of the
212 following when the earlier of the following events occurs:
213 (a) For a homeowners’ association consisting of fewer than
214 100 lots, the passage of 3 months after 75 percent of the
215 parcels in all phases of the community which will ultimately be
216 operated by the homeowners’ association have been conveyed to
217 members.
218 (b) For a homeowners’ association consisting of fewer than
219 200 lots, the passage of 10 years after the governing documents
220 of the homeowners’ association are filed with the local
221 government.
222 (c) For a homeowners’ association consisting of 200 or more
223 lots, the earlier of the passage of 20 years after the governing
224 documents of the homeowners’ association are filed with the
225 local government or 3 months after 90 percent of the parcels in
226 all phases of the community which will ultimately be operated by
227 the homeowners’ association have been conveyed to members. Three
228 months after 90 percent of the parcels in all phases of the
229 community that will ultimately be operated by the homeowners’
230 association have been conveyed to members;
231 (h)(b) Conveyance of another Such other percentage of the
232 parcels has been conveyed to members, or the occurrence of such
233 other date or event has occurred, as is set forth in the
234 governing documents in order to comply with the requirements of
235 any governmentally chartered entity with regard to the mortgage
236 financing of parcels.;
237 (d)(c) Abandonment by the developer, or the developer’s
238 failure of Upon the developer abandoning or deserting its
239 responsibility to maintain and complete the amenities or
240 infrastructure as disclosed in the governing documents. There is
241 a rebuttable presumption that the developer has abandoned and
242 deserted the property if the developer has unpaid assessments or
243 guaranteed amounts under s. 720.308 for a period of more than 2
244 years.;
245 (e)(d) Upon the developer Filing by the developer of a
246 petition seeking protection under chapter 7 of the federal
247 Bankruptcy Code.;
248 (f)(e) Loss of Upon the developer losing title to the
249 property by the developer through a foreclosure action or the
250 transfer of a deed in lieu of foreclosure, unless the successor
251 owner has accepted an assignment of developer rights and
252 responsibilities first arising after the date of such
253 assignment.; or
254 (g)(f) Appointment of Upon a receiver for the developer
255 being appointed by a circuit court, if the receiver is and not
256 being discharged within 30 days after such appointment, unless
257 the court determines within 30 days after such appointment that
258 transfer of control would be detrimental to the association or
259 its members.
260
261 For purposes of this section, the term “members other than the
262 developer” does shall not include builders, contractors, or
263 others who purchase a parcel for the purpose of constructing
264 improvements thereon for resale.
265 Section 5. Subsection (1) and paragraph (d) of subsection
266 (2) of section 720.311, Florida Statutes, are amended to read:
267 720.311 Dispute resolution.—
268 (1) The Legislature finds that alternative dispute
269 resolution has made progress in reducing court dockets and
270 trials and in offering a more efficient, cost-effective option
271 to litigation. The filing of any petition for arbitration or the
272 serving of a demand for presuit mediation as provided for in
273 this section shall toll the applicable statute of limitations.
274 Any recall dispute filed with the department pursuant to s.
275 720.303(10) shall be conducted by the department in accordance
276 with the provisions of ss. 718.112(2)(j) and 718.1255 and the
277 rules adopted by the division. In addition, the department shall
278 conduct mandatory binding arbitration of election disputes
279 between a member and an association pursuant to s. 718.1255 and
280 rules adopted by the division. Neither Election disputes and nor
281 recall disputes are eligible for presuit mediation; these
282 disputes shall be arbitrated by the department. At the request
283 of the parcel owner or homeowners’ association, the department
284 shall provide binding arbitration in disputes involving
285 covenants, restrictions, rule enforcement, and duties to
286 maintain and make safe pursuant to the declaration of covenants,
287 rules and regulations, and other governing documents; disputes
288 involving assessments; and disputes involving the official
289 records of the homeowners’ association. At the conclusion of the
290 proceeding, the department shall charge the parties a fee in an
291 amount adequate to cover all costs and expenses incurred by the
292 department in conducting the proceeding. Initially, the
293 petitioner shall remit a filing fee of at least $200 to the
294 department. The fees paid to the department shall become a
295 recoverable cost in the arbitration proceeding, and the
296 prevailing party in an arbitration proceeding shall recover its
297 reasonable costs and attorney attorney’s fees in an amount found
298 reasonable by the arbitrator. The department shall adopt rules
299 to effectuate the purposes of this section.
300 (2)
301 (d) A mediator or arbitrator shall be authorized to conduct
302 mediation or arbitration under this section only if he or she
303 has been certified as a county court or circuit court civil
304 mediator or arbitrator, respectively, pursuant to the
305 requirements established by the Florida Supreme Court.
306 Settlement agreements resulting from mediation do shall not have
307 precedential value in proceedings involving parties other than
308 those participating in the mediation to support either a claim
309 or defense in other disputes.
310 Section 6. Section 720.318, Florida Statutes, is created to
311 read:
312 720.318 Training and educational programs.—The department
313 shall provide training and educational programs for homeowners’
314 association members, directors, and officers. At the
315 department’s discretion, the training and educational programs
316 may include web-based electronic media, live training, and
317 seminars in various locations throughout the state. The
318 department may review and approve training and educational
319 programs for members, directors, and officers of homeowners’
320 associations which are offered by providers. The department
321 shall maintain a current list of approved programs and providers
322 and shall make such list available to homeowners’ associations
323 in a reasonable and cost-effective manner.
324 Section 7. Section 720.319, Florida Statutes, is created to
325 read:
326 720.319 Authority of the department.—
327 (1) The department may enforce and ensure compliance with
328 this chapter and rules relating to records access, financial
329 management, and elections of homeowners’ associations and may
330 investigate any complaint made to the department against a
331 homeowners’ association.
332 (2) Homeowners’ associations must pay to the department an
333 annual fee of $2 per lot to cover the department’s
334 administrative and operational costs in complying with this
335 chapter. The fee must be submitted to the department with the
336 annual report required under s. 720.303(13) and deposited into
337 the Division of Florida Condominiums, Timeshares, and Mobile
338 Homes Trust Fund. However, the department may not impose this
339 fee when it has determined, based on the long-range estimates of
340 such revenue, that the funds collected exceed those required to
341 cover such costs.
342 Section 8. Present subsection (2) of section 720.401,
343 Florida Statutes, is redesignated as subsection (3), and a new
344 subsection (2) is added to that section, to read:
345 720.401 Prospective purchasers subject to association
346 membership requirement; disclosure required; covenants;
347 assessments; contract cancellation.—
348 (2) A seller of a parcel for which membership in a
349 homeowners’ association is a condition of ownership must provide
350 a prospective buyer with the association’s governing documents,
351 including the declaration of covenants, articles and bylaws,
352 rules and regulations, and operating budget for the current
353 year, and any amendment to such documents. The seller must
354 provide the prospective buyer with such documents at least 7
355 days before closing. The prospective buyer may terminate the
356 contract for purchase within 3 days after receipt of such
357 documents.
358 Section 9. Section 720.402, Florida Statutes, is amended to
359 read:
360 720.402 Publication of false and misleading information;
361 developer’s use of homeowners’ association fund prohibited.—
362 (1) Any person who, in reasonable reliance upon any
363 material statement or information that is false or misleading
364 and published by or under authority from the developer in
365 advertising and promotional materials, including, but not
366 limited to, a contract of purchase, the declaration of
367 covenants, exhibits to a declaration of covenants, brochures,
368 and newspaper advertising, pays anything of value toward the
369 purchase of a parcel in a community located in this state has a
370 cause of action to rescind the contract or collect damages from
371 the developer for his or her loss before the closing of the
372 transaction. After the closing of the transaction, the purchaser
373 has a cause of action against the developer for damages under
374 this section from the time of closing until 1 year after the
375 date upon which the last of the events described in paragraphs
376 (a) through (d) occurs:
377 (a) The closing of the transaction;
378 (b) The issuance by the applicable governmental authority
379 of a certificate of occupancy or other evidence of sufficient
380 completion of construction of the purchaser’s residence to allow
381 lawful occupancy of the residence by the purchaser. In counties
382 or municipalities in which certificates of occupancy or other
383 evidences of completion sufficient to allow lawful occupancy are
384 not customarily issued, for the purpose of this section,
385 evidence of lawful occupancy shall be deemed to be given or
386 issued upon the date that such lawful occupancy of the residence
387 may be allowed under prevailing applicable laws, ordinances, or
388 statutes;
389 (c) The completion by the developer of the common areas and
390 such recreational facilities, whether or not the same are common
391 areas, which the developer is obligated to complete or provide
392 under the terms of the written contract, governing documents, or
393 written agreement for purchase or lease of the parcel; or
394 (d) In the event there is not a written contract or
395 agreement for sale or lease of the parcel, then the completion
396 by the developer of the common areas and such recreational
397 facilities, whether or not they are common areas, which the
398 developer would be obligated to complete under any rule of law
399 applicable to the developer’s obligation.
400 (2)(a) A nondeveloper parcel owner has a cause of action
401 against the developer for damages resulting from the developer’s
402 abandonment or failure of his or her responsibility to maintain
403 and complete amenities or infrastructure disclosed in the
404 governing documents, written contract, or written agreement for
405 purchase of the parcel.
406 (b) A nondeveloper parcel owner has a cause of action
407 against the developer for the developer’s failure to perform or
408 comply with any duty or obligation required under the governing
409 documents, written contract, or written agreement for purchase
410 of the parcel.
411 (3) A developer may not use association funds for any
412 purpose not specifically authorized in a homeowners’ association
413 budget adopted in accordance with the governing documents and s.
414 720.303. Any use of association funds by a developer in
415 violation of this section is actionable by a nondeveloper parcel
416 owner or the homeowners’ association. This subsection is
417 intended to clarify existing law and applies to all homeowners’
418 associations existing on July 1, 2016 and created thereafter.
419 (4) Under no circumstances may a cause of action created or
420 recognized under this section survive for a period of more than
421 5 years after the closing of the transaction.
422 (5)(2) In any action for relief under this section, the
423 prevailing party may recover reasonable attorney attorney’s
424 fees. A developer may not expend association funds in the
425 defense of any suit under this section.
426 Section 10. This act shall take effect July 1, 2016.