More Positive Momentum for Condo/HOA/Co-op Legislation
There are only a few short weeks left for Florida's elected officials to pass meaningful legislation and at this point in the session it seems that the HB 561/SB 1196 Bill Package is the most likely to pass. These bills are in a constant state of flux and the information below only highlights major points in the bills (as of April 15, 2010). We encourage you to review the full text of the bills by accessing the Senate’s website here for HB 561 and here for SB 1196 and likewise encourage CALL members to contact the appropriate legislators by using the Legislator Connect feature on its website (www.callbp.com). Here are a few highlights from the bills:
Fire Alarm Systems: - Amending s. 633.0215, F.S.
Buildings less than four stories with exterior means of egress and exterior corridors will not have to install a manual fire alarm system (per Section 9.6, Life Safety Code in the Florida Fire Prevention Code).
Fire Sprinkler Retrofit - Amending s. 718.112 and s. 719.1055(5), F.S
Full “opt-out” will be permitted with affirmative vote of two-thirds (2/3rds) of the entire membership. Will only permit reconsideration of opt-out vote once every three years at a special meeting called by a petition of 10% of the voting interests.
Extends deadlines for associations that don’t opt out to the end of 2019.
Elevators – Amending s. 553.509(2) and 399.02, F.S., (Phase II Firefighters’ Service)
Allows for a five (5) year delay to retrofit with a special access key for elevators in condominiums and cooperatives unless the elevator is replaced or requires major modification. Allows associations to "opt-out" of elevator operation by alternative power source with affirmative vote of majority of owners of condominium.
Designation of Limited Common Elements by Amendment - Creates s. 718.110(14), F.S. - only in SB 1196
Allows association to designate limited common elements by amendment, so long as the building component is designed for use by specific owners.
Official Records – s. 718.111(12), F.S.
- Individual director liability for failure to maintain or destruction of official records is limited to cases where there is intent to harm the association or one or more of its members.
- Association not liable for unit owner misuse of information obtained from official records.
- Exempts personnel records (disciplinary, payroll, health and insurance records) from unit owner access.
- E-mail addresses, telephone numbers, emergency contact information, and any unit owner contact information other than the addresses to send notices are exempt from unit owner access.
- Association’s electronic or computer security data, including passwords, software and operating systems are exempt from unit owner access.
Common Expenses - Amending s. 718.115(1)(d)1., F.S.
Communication services (as defined in Chapter 202), information services, and internet services obtained pursuant to a bulk contract shall be deemed a common expense. (In HB 561 contracts entered into for these services by the developer or prior to transition may be canceled within 120 days of the transition meeting.)
HB 561 also creates new §718.112(3), F.S. that allows the bylaws of umbrella organizations governing a minimum of 1000 units to employ a marketing firm for the community as a common expense.
Board Eligibility – Amending s. 718.112(2)(d), F.S.
Co-owners in condominiums with more than 10 units cannot serve together unless they own more than one unit or there are not enough volunteers to fill all slots. Does not apply to timeshare condominiums.
Requires directors to supply association with new certification form or take a state-approved education class. Directors are suspended until they comply.
Collections and Foreclosures – Amending s. 718.116 and s. 719.109(3), F.S
Changes mortgagee liability cap from 6 months to 12 months after acquisition of title by foreclosure (or deed in lieu) but retains 1% cap.
Association may demand a tenant pay rent to the association to satisfy delinquency for that condominium unit with written notice to the unit owner. Landlord/owner must provide tenant with credit for any amounts paid to association. Association can evict tenant that fails to comply.
Enforcement Mechanism – Amending s. 718.303, F.S.
- Allows suspension of use rights if owner is more than 90 days past due. Cannot suspend use of limited common elements, utility service, parking spaces, elevators or impede access to/from unit.
- Requires board to vote on suspension/fine at duly noticed board meeting and advance notification to the unit owner.
- Allows association to suspend voting rights after 90 days of non-payment.
Filling Vacancies on Board – Creating s. 719.106 (1) 6, F.S.
Vacancies are filled for remainder of the term by vote of majority of remaining directors, even if less than a quorum or only one director. In the alternative, the Board may hold an election to fill the vacancy.
There are many more provisions - click below for additional content and come back to this site for information on changes to the Homeowners' Association Act (Chapter 720, Florida Statutes) and updates directly from Tallahassee.
Insurance - Creates 627.714, F.S; Amends s. 718.111(11), F.S.
- All HO-6 policies issued or renewed after July 1, 2010, to include at least $2,000 in property loss assessment coverage with deductible of $250 per property loss.
- References to “hazard” insurance and “casualty” insurance are changed to “property” insurance.
- Master insurance policy must be based on the “replacement cost” of the property to be insured, which must be determined at least once every 36 months.
- Changes requirements for notice of board meeting to set deductible (still requires 14 days notice).
- Removes language regarding insurance of “improvements” that benefit fewer than all the owners
- Eliminates the requirement for owners to provide proof of hazard and liability insurance to the association and the association’s right to “force place” insurance.
- Eliminates requirement that Association must be an additional named insured and loss payee on all HO-6 casualty insurance policies issued to unit owners in the condominium.
Termination of Condominium - Amends 718.117(2) (a) 1., F.S. & 718.117(19), F.S.
Termination on the basis of economic waste defined as cost of construction/repairs/renovation exceeds the combined fair market value of the units in the condominium after completion of the construction/repairs.
Bulk Buyers – Creates s. 718.701-708, F.S.
This is the “Distressed Condominium Relief Act (also known as bulk-buyer law). Defines the terms “bulk buyer” and “bulk assignee”. Defines obligations of bulk buyers and bulk assignees with respect to warranties, post-transition audits, converter reserves, transfer of control, disclosures to buyers, etc.
Financial Reporting Requirements – s. 718.111(13), F.S.
Associations that operate fewer than 75 units, regardless of the association’s annual revenues, shall prepare a report of cash receipts and expenditures instead of financial statements (currently applicable to associations of fewer than 50 units).
DBPR to adopt rules including standards for presenting a summary of association reserves & a good faith estimate of the annual amount of money required for the association to fully fund reserves for each reserve item based on a straight-line accounting method. This disclosure is not applicable to reserves funded via the pooling method.
Rental Amendments - Amends s. 718.110(13), F.S.
Clarifies that any amendment prohibiting unit owners from renting their units; altering permitted lease terms or the number of rentals during a specified period applies only to unit owners who consent to amendment and unit owners who acquire title to their units after effective date of amendment.
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