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HB 115 Includes Major Changes for Condominium and Homeowners Associations; Disciplinary Actions Against Managers for Misconduct or Negligence; Provides for Suspension of Use and Voting Rights in Condominiums; Authorizes Filing Liens for Fines, Etc.

 Representatives Ambler and Robaina filed HB 115,  this week.  HB 115 is a bill devoted to community association issues.  The bill contains numerous provisions designed to improve community associations' collection efforts as well as protections for homeowners by mandating specific notice of the intent to take certain actions and requiring the ombudsman to create additional educational materials.  The bill also addresses distressed condominium and bulk purchaser/subsequent developer issues. 

The full text of the bill is 106 pages long.

Some of the highlights include:

• Procedures to authorize a loan or line of credit;
• 24 hours notice before entering a unit for any purpose (other than an emergency);
• The ability to demand rent paid by a tenant directly, without Court action;
• The ability to evict a tenant if the tenant fails to pay rent;
• The ability to prohibit owners from using common elements if they are more than 90 days delinquent in paying assessments;
• The ability to suspend members' voting rights;
• A "Florida Condominium Handbook";
• Prohibiting fees in HOAs in connection with sale, lease or other transfer of a parcel;
• Removing the prohibition against filing a Lien for fines over $1,000 for HOAs; and
• Substantially revised dispute resolution procedures for HOAs.

 The Community Association Leadership Lobby ("CALL") and other organizations are likely to publish more detailed information about the bill and its potential impact on community association operations.  Please refer back to this site for further information pertaining to specific portions of the bill.

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Amendment to SB 880  approved by Community Affairs Committee intends to encourage purchase of remaining inventory by limiting liability.

Last week the Community Affairs Committee advanced SB 880 with a significant amendment entitled the “Distressed Condominium Relief Act”.

If the bill becomes law, new Section 718.702, Florida Statutes sets forth the legislative intent for the protections afforded to “bulk assignees” and “bulk buyers” of condominium units.

“Bulk assignees” are defined as purchasers of more than 7 units who receive an assignment of some or all of the rights of the developer of the project. “Bulk buyers” are also defined as purchasers of more than 7 units, but have not obtained an assignment (other than rights to conduct sales, leasing and marketing activities within the condominium).

Bulk assignees are not responsible for implied warranties, the obligation to fund converter reserves for units owned by others or honor conversion warranties. Bulk assignees will not have to provide the Association with a full transition audit and will not have to fund developer guarantees or assessment obligations, unless they receive an assignment of the right to guarantee assessment levels and therefore take on the obligation to fund budget deficits.

This section of the proposed bill provides for three distinct methods of assignment of development rights, to wit:

• By the Developer;
• By a previous Bulk Assignee; or
• By a Court.

While bulk assignees are required to deliver any of the documents identified in Section 718.301(4), Florida Statutes in their possession or control to the association upon transition, they are not liable for production or delivery of documents and other materials normally required as part of the transition process, if they cannot obtain them after a “good faith” effort.

Both bulk buyers and bulk assignees need to update the prospectus, the Frequently Asked Questions and Answers Sheet, the required form of escrow agreement (if applicable) and financial information pertaining to the Association.  Disclosure statements, identifying the rights assigned and warranty limitations, are also required.

The legislative history suggests these provisions are necessary to encourage the purchase of remaining inventory in failed projects. 

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