Florida Senate - 2017 COMMITTEE AMENDMENT
Bill No. SB 1520
Ì403398KÎ403398
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
04/05/2017 .
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The Committee on Regulated Industries (Latvala) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsections (1) and (3) of section 718.117,
6 Florida Statutes, are amended, and subsection (21) is added to
7 that section, to read:
8 718.117 Termination of condominium.—
9 (1) LEGISLATIVE FINDINGS.—The Legislature finds that:
10 (a) Condominiums are created as authorized by statute and
11 are subject to covenants that encumber the land and restrict the
12 use of real property.
13 (b) In some circumstances, the continued enforcement of
14 those covenants that may create economic waste and, areas of
15 disrepair which threaten the safety and welfare of the public,
16 or cause obsolescence of the a condominium property for its
17 intended use and thereby lower property tax values, and the
18 Legislature further finds that it is the public policy of this
19 state to provide by statute a method to preserve the value of
20 the property interests and the rights of alienation thereof that
21 owners have in the condominium property before and after
22 termination.
23 (c) The Legislature further finds that It is contrary to
24 the public policy of this state to require the continued
25 operation of a condominium when to do so constitutes economic
26 waste or when the ability to do so is made impossible by law or
27 regulation.
28 (d) It is in the best interest of the state to provide for
29 termination of the covenants of a declaration of condominium in
30 certain circumstances in order to:
31 1. Ensure the continued maintenance, management, and repair
32 of stormwater management systems, conservation areas, and
33 conservation easements.
34 2. Avoid transferring the expense of maintaining
35 infrastructure serving the condominium property, including, but
36 not limited to, stormwater systems and conservation areas, to
37 the general tax bases of the state and local governments.
38 3. Prevent covenants from impairing the continued
39 productive use of the property.
40 4. Protect state residents from health and safety hazards
41 created by derelict, damaged, obsolete, or abandoned condominium
42 properties.
43 5. Provide fair treatment and just compensation for
44 individuals and preserve property values and the local property
45 tax base.
46 6. Preserve the state’s long history of protecting
47 homestead property and homestead property rights by ensuring
48 that such protection is extended to homestead property owners in
49 the context of a termination of the covenants of a declaration
50 of condominium This section applies to all condominiums in this
51 state in existence on or after July 1, 2007.
52 (3) OPTIONAL TERMINATION.—Except as provided in subsection
53 (2) or unless the declaration provides for a lower percentage,
54 The condominium form of ownership may be terminated for all or a
55 portion of the condominium property pursuant to a plan of
56 termination meeting the requirements of this section and
57 approved by the division. Before a residential association
58 submits a plan to the division, the plan must be approved by at
59 least 80 percent of the total voting interests of the
60 condominium. However, if 5 10 percent or more of the total
61 voting interests of the condominium have rejected the plan of
62 termination by negative vote or by providing written objections,
63 the plan of termination may not proceed.
64 (a) The termination of the condominium form of ownership is
65 subject to the following conditions:
66 1. The total voting interests of the condominium must
67 include all voting interests for the purpose of considering a
68 plan of termination. A voting interest of the condominium may
69 not be suspended for any reason when voting on termination
70 pursuant to this subsection.
71 2. If 5 10 percent or more of the total voting interests of
72 the condominium reject a plan of termination, a subsequent plan
73 of termination pursuant to this subsection may not be considered
74 for 24 18 months after the date of the rejection.
75 (b) This subsection does not apply to any condominium
76 created pursuant to part VI of this chapter until 10 5 years
77 after the recording of the declaration of condominium, unless
78 there is no objection to the plan of termination.
79 (c) For purposes of this subsection, the term “bulk owner”
80 means the single holder of such voting interests or an owner
81 together with a related entity or entities that would be
82 considered an insider, as defined in s. 726.102, holding such
83 voting interests. If the condominium association is a
84 residential association proposed for termination pursuant to
85 this section and, at the time of recording the plan of
86 termination, at least 80 percent of the total voting interests
87 are owned by a bulk owner, the plan of termination is subject to
88 the following conditions and limitations:
89 1. If the former condominium units are offered for lease to
90 the public after the termination, each unit owner in occupancy
91 immediately before the date of recording of the plan of
92 termination may lease his or her former unit and remain in
93 possession of the unit for 12 months after the effective date of
94 the termination on the same terms as similar unit types within
95 the property are being offered to the public. In order to obtain
96 a lease and exercise the right to retain exclusive possession of
97 the unit owner’s former unit, the unit owner must make a written
98 request to the termination trustee to rent the former unit
99 within 90 days after the date the plan of termination is
100 recorded. Any unit owner who fails to timely make such written
101 request and sign a lease within 15 days after being presented
102 with a lease is deemed to have waived his or her right to retain
103 possession of his or her former unit and shall be required to
104 vacate the former unit upon the effective date of the
105 termination, unless otherwise provided in the plan of
106 termination.
107 2. Any former unit owner whose unit was granted homestead
108 exemption status by the applicable county property appraiser as
109 of the date of the recording of the plan of termination shall be
110 paid a relocation payment in an amount equal to 1 percent of the
111 termination proceeds allocated to the owner’s former unit. Any
112 relocation payment payable under this subparagraph shall be paid
113 by the single entity or related entities owning at least 80
114 percent of the total voting interests. Such relocation payment
115 shall be in addition to the termination proceeds for such
116 owner’s former unit and shall be paid no later than 10 days
117 after the former unit owner vacates his or her former unit.
118 3. For their respective units, all unit owners other than
119 the bulk owner must be compensated at least 100 percent of the
120 fair market value of their units. The fair market value shall be
121 determined as of a date that is no earlier than 90 days before
122 the date that the plan of termination is recorded and shall be
123 determined by an independent appraiser selected by the
124 termination trustee. For a person an original purchaser from the
125 developer who rejects the plan of termination and whose unit was
126 granted homestead exemption status by the applicable county
127 property appraiser, or was an owner-occupied operating business,
128 as of the date that the plan of termination is recorded and who
129 is current in payment of both assessments and other monetary
130 obligations to the association and any mortgage encumbering the
131 unit as of the date the plan of termination is recorded, the
132 fair market value for the unit owner rejecting the plan shall be
133 at least the original purchase price paid for the unit. For
134 purposes of this subparagraph, the term “fair market value”
135 means the price of a unit that a seller is willing to accept and
136 a buyer is willing to pay on the open market in an arms-length
137 transaction based on similar units sold in other condominiums,
138 including units sold in bulk purchases but excluding units sold
139 at wholesale or distressed prices. The purchase price of units
140 acquired in bulk following a bankruptcy or foreclosure shall not
141 be considered for purposes of determining fair market value.
142 4. The plan of termination must provide for payment of a
143 first mortgage encumbering a unit to the extent necessary to
144 satisfy the lien, but the payment may not exceed the unit’s
145 share of the proceeds of termination under the plan. If the unit
146 owner is current in payment of both assessments and other
147 monetary obligations to the association and any mortgage
148 encumbering the unit as of the date the plan of termination is
149 recorded, the receipt by the holder of the unit’s share of the
150 proceeds of termination under the plan or the outstanding
151 balance of the mortgage, whichever is less, shall be deemed to
152 have satisfied the first mortgage in full.
153 5. Before a plan of termination is presented to the unit
154 owners for consideration pursuant to this paragraph, the plan
155 must include the following written disclosures in a sworn
156 statement:
157 a. The identity of any person or entity that owns or
158 controls 25 50 percent or more of the units in the condominium
159 and, if the units are owned by an artificial entity or entities,
160 a disclosure of the natural person or persons who, directly or
161 indirectly, manage or control the entity or entities and the
162 natural person or persons who, directly or indirectly, own or
163 control 10 20 percent or more of the artificial entity or
164 entities that constitute the bulk owner.
165 b. The units acquired by any bulk owner, the date each unit
166 was acquired, and the total amount of compensation paid to each
167 prior unit owner by the bulk owner, regardless of whether
168 attributed to the purchase price of the unit.
169 c. The relationship of any board member to the bulk owner
170 or any person or entity affiliated with the bulk owner subject
171 to disclosure pursuant to this subparagraph.
172 d. The factual circumstances that show that the plan
173 complies with the requirements of this section and that the plan
174 supports the expressed public policies of this section.
175 (d) If the members of the board of administration are
176 elected by the bulk owner, unit owners other than the bulk owner
177 may elect at least one-third of the members of the board of
178 administration before the approval of any plan of termination.
179 (e) The division shall examine the plan of termination to
180 determine its procedural sufficiency and, within 45 days after
181 receipt of the initial filing, the division shall notify the
182 association by mail of any procedural deficiencies or that the
183 filing is accepted. If the notice is not given within 45 days
184 after the receipt of the filing, the plan of termination is
185 presumed to be accepted. If the division determines that the
186 conditions required by this section have been met and that the
187 plan complies with the procedural requirements of this section,
188 the division shall authorize the termination, and the
189 termination may proceed pursuant to this section.
190 (f) Subsection (2) does not apply to optional termination
191 pursuant to this subsection.
192 (21) APPLICABILITY.—This section applies to all
193 condominiums in this state in existence on or after July 1,
194 2007.
195 Section 2. The amendments made by this act to s. 718.117,
196 Florida Statutes, are intended to clarify existing law, are
197 remedial in nature and intended to address the rights and
198 liabilities of the affected parties, and apply to all
199 condominiums created under the Condominium Act.
200 Section 3. For the 2017-2018 fiscal year, the sums of
201 $85,006 in recurring funds and $4,046 in nonrecurring funds from
202 the Division of Florida Condominiums, Timeshares, and Mobile
203 Homes Trust Fund are appropriated to the Department of Business
204 and Professional Regulation, and one full-time equivalent
205 position with associated salary rate of 56,791 is authorized,
206 for the purpose of implementing this act.
207 Section 4. This act shall take effect July 1, 2017.
208
209 ================= T I T L E A M E N D M E N T ================
210 And the title is amended as follows:
211 Delete everything before the enacting clause
212 and insert:
213 A bill to be entitled
214 An act relating to termination of a condominium
215 association; amending s. 718.117, F.S.; revising
216 legislative findings; requiring a plan of termination
217 to be approved by the Division of Florida
218 Condominiums, Timeshares, and Mobile Homes of the
219 Department of Business and Professional Regulation and
220 meet specified requirements for a condominium form of
221 ownership to be terminated for all or a portion of the
222 condominium property under certain circumstances;
223 revising voting requirements for the rejection of a
224 plan of termination; increasing the amount of time
225 before a new plan of termination may be considered
226 after a previous rejection under certain conditions;
227 revising the requirements to qualify for payment as a
228 homestead owner; revising and providing notice
229 requirements; requiring the division to examine a plan
230 of termination and provide specified notice within a
231 certain timeframe; providing applicability; specifying
232 that a plan of termination is presumed to be accepted
233 if notice is not provided within the specified
234 timeframe; providing an appropriation and authorizing
235 a position; providing an effective date.