Florida Community Association Law Update

Hello to all and thank you for logging in. My name is Michael Chapnick and I am a Florida community association attorney. This blog will discuss issues pertaining to Florida condominiums, homeowners associations, and other common interest communities. I would like to begin by sharing a summary I have prepared regarding changes to community association law which were adopted during the 2008 session. Thank you again, and I look forward to reading your posts.
Regards,
Michael E. Chapnick, Esq.
____________________________________________________________________

The Florida Legislature was extremely busy this past 2008 Regular Session in making several changes to Florida’s Condominium Act (F.S. 718) and Homeowners Act (F.S. 720), which will directly impact community associations.

Members in any type of community association should read this 2008 Legal Update carefully and consult with your community association attorney to determine the potential impact of these legislative changes on your community, or the need to amend certain sections of your governing documents that have now become unenforceable.

SENATE BILL 1378
On May 28, 2008 the Bill was approved by the Governor. Effective July 1, 2008.

§720.304(2)(a)(b)(c), F.S. – Right of Owners to Peaceably Assemble; Display of Flag; SLAPP Suits Prohibited (amended by Section 1 of SB1378)
All parcel owners may display:
1 portable, removable U.S. flag or official flag of the State of Florida in a respectful manner, and
1 portable, removable official flag in a respectful manner, not larger than 4 1/2 feet by 6 feet, which represents the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard, or a POW-MIA flag.
All parcel owners may erect:
A freestanding flagpole no more than 20 feet high on any portion of the homeowner’s real property. The flagpole must not obstruct sightlines at intersections and must not be erected within or upon an easement.

SENATE BILL 1986
On June 17, 2008, the Bill was approved by the Governor. Effective date is July 1, 2008.

These changes are to the Homeowners Association Act (F.S. 720):

§720.3085(1), F.S. – Payment for Assessments; Lien claims (added by Section 1 of SB 1986)
New section which contains provisions regarding liens for nonpayment of assessments. Specifically, when authorized by the governing documents, an association has a lien on each parcel to secure the payment of assessments and other amounts provided by this section, which lien is effective from and dates back to the date on which the Declaration was recorded (except for first mortgagees where the lien is effective from and after the recording of a claim of lien in the public records of the county where the parcel is located).
§720.3085(1)(b), F.S. – Payment for Assessments; Lien claims (added by Section 1 of SB 1986)
Provides the form for a Notice of Contest of Lien where a parcel owner or the parcel owner’s agent or attorney can require the association to enforce a recorded claim of lien against his or her parcel. After the Notice of Contest of Lien has been filed and the clerk of the circuit court has served notice upon the association, the association has 90 days in which to file an action to enforce the lien or else the lien is void.

§720.3085(1)(c), F.S. – Payment for Assessments; Lien claims (added by Section 1 of SB 1986)
Provides that the association can also bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. In addition the association is entitled to recover its reasonable attorney’s fees.

§720.3085(1)(d), F.S. – Payment for Assessments; Lien claims (added by Section 1 of SB 1986)
Provides that if a parcel owner remains in possession of the parcel after a foreclosure judgment has been entered, the court can require the parcel owner to pay a reasonable rent for the parcel. If a parcel is rented or leased during the pendancy of the foreclosure action, the association is entitled to the appointment of a receiver to collect the rent. The expense of the receiver must be paid by the party who does not prevail in the foreclosure action.

§720.3085(2)(c), F.S. – Payment for Assessments; Lien claims (amended by Section 1 of SB1986)
Changes provisions regarding the liability of first mortgagees for unpaid assessments. More specifically, the liability of a first mortgagee who acquires lesser of (i) the parcel’s unpaid assessments that accrued or came due during the twelve (12) months immediately preceding the acquisition of title or (ii) one percent (1%) of the original mortgage debt. The limitation on first mortgagee liability applies only if the first mortgagee filed suit against the parcel owner and initially joined the association as a defendant in the mortgagee foreclosure action.

§720.3085(4)(a), F.S. – Payment for Assessments; Lien claims (amended by Section 1 of SB 1986)
Provides that an association may not file a lien against a parcel unless it first gives forty-five (45) days written notice or demand to the parcel owner to make payment for all amounts due and owing for any interest, late charges, and costs in addition to reasonable attorney’s fees in a lien foreclosure action. The 45 day period begins the day after the date the notice is deposited in the mail.

§720.3085(6)(a)(b)(c), F.S. – Payment for Assessments; Lien claims (amended by Section 1 of SB 1986)
“Qualifying Offer” means a written offer to pay all amount secured by the lien of the association plus amount accruing during the pendancy of the offer.
Statutory form must be used and it must be notarized.
“Qualifying Offer” is voidable at the election of the association, if a parcel becomes the subject of a mortgage foreclosure or a notice of tax certificate sale while the “Qualifying Offer” is pending.
“Qualifying Offer” may only be submitted if trial or trial docket for lien foreclosure action is not set within 30 days.
§ “Qualifying Offer” is void, if the parcel owner becomes a debtor in bankruptcy proceedings while a “Qualifying Offer” is pending.
§ A parcel owner must deliver a copy of the filed “Qualifying Offer” either by hand delivery, obtaining a written receipt of by certified mail, return receipt requested.
§ Filing a “Qualifying Offer” stays the foreclosure proceedings no more than 60 days from the date of service of the “Qualifying Offer” and no earlier than 30 days before the date of trial, arbitration, or the beginning of trial docket, whichever occurs first.

House Bill 601
On June 30, 2008, the Bill was approved by the Governor. Effective date July 1, 2008, unless otherwise specified.

These changes are to the Condominium Act (F.S. 718):

§718.111(1)(b), F.S. – The Association (amended by Section 1 of HB 601)

Officer or Director:
A director of the association who abstains from voting on any action taken on any corporate matter will be presumed to have taken no position with regard to the action.

§718.111(11), F.S. – The Association (amended by Section 3 of HB 601)

Insurance:
Adequate hazard insurance must be based upon the replacement cost of the property to be insured as determined by an independent insurance appraisal or update of a prior appraisal. The full insurable value must be determined at least once every 36 months.

Self-Insurance:
Any association may self-insure its hazard coverage provided they comply with F.S. 624.460-624.488 and any policies and rates are reviewed by Office of Insurance Regulation in addition to disclosing all material terms to unit owners before any agreement is executed.

Deductibles:
When determining the adequate amount of hazard insurance coverage, the association can consider deductibles.
The board may determine a deductible based on reserves, available funds and assessment authority, but must have a meeting open to all unit owners to determine the deductible and the notice must state the proposed deductible and an estimate of the potential assessment.
The association can also provide adequate hazard insurance coverage for a group of no fewer than 3 communities by obtaining and maintaining coverage sufficient to cover an amount equal to the probable maximum loss for the communities for a 250 year windstorm event.

Officer or Director:
A developer controlled association must exercise its best efforts to obtain and maintain insurance as described above. Failure to obtain and maintain adequate hazard insurance constitutes a breach of fiduciary duty, unless the members can show that despite such failure, they have made their best efforts to maintain the required coverage.
An association controlled by unit owners operating as a residential condominium will use its best efforts to obtain and maintain adequate insurance to protect the association.
The board shall require each owner to provide a “Certificate of Insurance” once per year and if the unit owner fails to produce same within 30 days the association may purchase an insurance policy on the owner’s behalf and collect the costs for such policy as a special assessment against that owner.

Hazard Policy Requirements:
Every hazard insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:
All portions of the condo property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.
All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).
Coverage must exclude:
All personal property within the unit
Limited common elements,
Floor, wall, and ceiling coverings,
Electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and
Window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing.
Every unit owner hazard insurance policy issued or renewed on or after January 1, 2009, must contain a provision stating that the coverage is excess coverage over the amount recoverable under any other policy covering the same property.
Policies must include special assessment coverage of no less than $2,000 per occurrence. A unit owner insurance policy providing such coverage does not provide rights of subrogation against the condominium association operating the condominium in which such individual’s unit is located.

Limited Common Elements:
All improvements or additions to the condominium property that benefit fewer than all unit owners must be insured by the unit owner or owners having the use thereof, or may be insured by the association at the cost and expense of the unit owners having the use thereof.

Repair Post-Casualty:
All reconstruction work after a casualty loss must be undertaken by the association except as otherwise authorized in this section.
A unit owner can undertake reconstruction work on portions of the unit with the prior written consent of the board of administration. However, such work can be conditioned upon the approval of the repair methods, the qualifications of the proposed contractor, or the contract that is used for that purpose. A unit owner must obtain all required governmental permits and approvals prior to commencing reconstruction.
Unit owners are responsible for the cost of reconstruction of any portions of the condominium property for which the unit owner is required to carry casualty insurance, and any such reconstruction work undertaken by the association shall be chargeable to the unit owner and enforceable as an assessment.

Multi-Condominium Association:
A multicondominium association can elect, by a majority vote of the collective members of the condominiums operated by the association, to operate such condominiums as a single condominium for purposes of insurance matters, including, but not limited to, the purchase of the hazard insurance required by this section and the apportionment of deductibles and damages in excess of coverage.
Any election to collectively insure such condominium association requires an amendment to the declaration before such action is taken and must be so disclosed in the master association budget, and the association budgets respectively. The amendments must be recorded.

Fidelity Insurance:
The association must maintain insurance or fidelity bonding of all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. The term “persons who control or disburse funds of the association” includes, but is not limited to, those individuals authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association must bear the cost of any such bonding.
The association can amend the declaration of condominium without regard to any requirement for approval by mortgagees of amendments affecting insurance requirements for the purpose of conforming the declaration of condominium to the coverage requirements of this subsection.
Any portion of the condominium property required to be insured by the association against casualty loss which is damaged by casualty shall be reconstructed, repaired, or replaced as necessary by the association as a common expense.
All hazard insurance deductibles, uninsured losses, and other damages in excess of hazard insurance coverage under the hazard insurance policies maintained by the association are a common expense of the condominium EXCEPT:
A unit owner is responsible for the costs of
Repair or replacement of any portion of the condominium property not paid by insurance proceeds, if such damage is caused by intentional conduct, negligence, or failure to comply with the terms of the declaration or the rules of the association by a unit owner, the members of his or her family, unit occupants, tenants, guests, or invitees, without compromise of the subrogation rights of any insurer.
Repairing or replacing personal property of other unit owners or the association, as well as other property, whether real or personal, if such damage is caused by intentional conduct, negligence, or failure to comply with the terms of the declaration or the rules of the association by a unit owner, the members of his or her family, unit occupants, tenants, guests, or invitees, without compromise of the subrogation rights of any insurer.
To the extent the cost of repair or reconstruction for which the unit owner is responsible is reimbursed to the association by insurance proceeds, and, to the extent the association has collected the cost of such repair or reconstruction from the unit owner without the waiver of any rights of subrogation.
The association is not obligated to pay for repair or reconstruction or repairs of casualty losses as a common expense if the casualty losses were known or should have been known to a unit owner and were not reported to the association until after the insurance claim of the association for that casualty was settled or resolved with finality, or denied on the basis that it was untimely filed.

Opt-Out Procedures:
Any association (including a multicondominium), may, opt out of the insurance requirements of F.S. 718.111(j)(1)-(4) if there is an approval of a majority of the total voting interest in the association. Such vote may be approved by the voting interests of the association without regard to any mortgagee consent requirements.
An effective “Opt-Out Amendment” must contain the following:
A recorded “Opt-Out Notice” in the public records of the county where the condominium is located setting forth the date of the opt-out vote and the official records book and page of the declaration of condominium
These provisions shall not apply to timeshare condominium association. Insurance for timeshare condominium association will be maintained pursuant to s. 721.165.
§718.115(1)(a), F.S. – Common Expenses and Common Surplus (amended by Section 4 of HB 601)
Common expenses includes the following:
The costs of repairs for condominium property that must be insured by the association,
Deductibles, uninsured losses, and other damages in excess of coverage within the hazard policy maintained by the association,
Any item or serve required by any federal, state, or local governmental entity to be installed, maintained, or supplied to the condominium property by the association (e.g., fire safety equipment, water and sewer service where a master meter)

§718.116(8), F.S. – Assessments, Liability, Lien and Priority, Interest, Collection (amended by Section 5 of HB 601)
An association has 15 days after the date on which a receipt for an estoppel certificate is received to provide a unit owner or his or her designee or a mortgagee an estoppel certificate stating the amount of assessments and other moneys owed to the association by the owner or the mortgagee. Such estoppel certificate shall be signed by an officer or authorized agent of the association when so requested.
An association or its authorized agent can charge a reasonable fee for the preparation of the certificate, but the fee must be included on the face of the certificate and the authority to charge such fee must be found in a board resolution or in the management contract.
Estoppel certificate fees shall be refunded if the sale or transfer does not close if the prospective unit owner provides written notice 30 days after the scheduled closing date.
The association has 30 days to refund a prospective purchasers estoppel certificate fee.

§718.117, F.S. – Termination of Condominium (amended by Section 6 of HB 601)
Changes the distribution process of proceeds from any sale of condominium property regarding purchase-money lienholders. Purchase money lienholders are allowed proceeds to the extent necessary to satisfy their liens, but the distribution cannot exceed a unit owner’s share of the proceeds.

§718.501, F.S. – Powers and Duties of Division of Florida Condominiums, Timeshares, and Mobile Homes (amended by Section 48 of HB 601)
Division powers shall include the ability to
Issue an emergency cease and desist order, effective for 90 days, if the Division finds that a developer, association, officer, or member of the board of administration, or its assignees or agents, if violating or is about to violate any provisions of Chapter 718, F.S., any rule adopted or order issued by the Division, or any written agreement entered into with the Division, and presents an immediate danger to the public requiring an immediate final order.
Petition the court for the appointment of a receiver or conservator,
Petition for a restitution order,
Impose a civil penalty ranging from $500.00 to $5,000.00 after obtaining a court order for a violation and the court may also impose attorney’s fees and if the Division prevails, the costs of investigation,
Contract with other agencies,
Accept grants in aid from any source

§498.009 – Offices (renumbered by Section 34 of HB 601)
This section is renumbered as §718.50512

§498.013 – Seal and Authentication of Records (renumbered by Section 36 of HB 601)
This section is renumbered as §718.50154

These changes are to the Homeowners Association Act (F.S. 720):

§720.30851 – Estoppel Certificates (added by Section 7 of HB 601)
This newly added section is identical to Section 718.116(8) for Condominiums as described above.

Miscellaneous:

§20.165 – Department of Business and Professional Regulations (amended by Section 8 of HB 601)
The Division will now be known as “The Division of Florida Condominiums, Timeshares, and Mobile Homes.”
The Division of Technology, Licensure, and Testing is now known as “The Division of Technology.”

House Bill 995
On May 1, 2008, the Bill was approved by the Governor. Effective date October 1, 2008, unless otherwise specified.

These changes are to the Community Association Management Act (F.S. 468):

§468.431 – Definitions (amended by Section 1 of HB 995)
New definition for “Community Association Management Firm” (“CAM Firm”): a corporation, limited liability company, partnership, trust, association, sole proprietorship, or other similar organization engaging in the business of CAM for the purpose of providing any of the services described in §468.431(2).






§468.4315 – Regulatory Council of Community Association Managers (amended by Section 2 of HB 995)
The Regulatory Council of Community Association Managers

Residents of the State of Florida
2 Members, must not be or ever have been connected with the business of CAM, and must not be prohibited from serving because the member is or has been a resident or board member of a community association.
Licensed CAMs
5 Members, one of who can be a CAM employed by a timeshare managing entity as described in §468.438 and §721.13, who have held an active license for at least 5 years.
TOTAL MEMBERS
7 Members

The council can establish a public education program relating to professional CAM.
Members of the council must serve without compensation, but are entitled to receive per diem and travel expenses while carrying out business approved by the council.
The responsibilities of the council will include, but not limited to:
Receiving input regarding issues of concerns with respect to CAM and recommendations.
Reviewing, evaluating, and advising the Division concerning revisions and adoption of rules affecting CAM.
Recommending improvements, if needed, in the education programs offered by the Division.

§468.432 – Licensure of Community Association Managers and Community Association Management Firms; Exceptions (amended by Section 3 of HB 995)
As of January 1, 2009, CAM Firms:
Must be properly licensed if they manage over 10 units or have an annual budget in excess of $100,000.00 by applying to the Department on an approved form together with the application and licensure fee as required by §468.435(1)(a)(c).
Must be actively registered and authorized to do business in Florida.
Must notify the Department within 30 days after any change of information contained in the application.
Must designate a licensed CAM who shall be required to respond to all inquiries from and investigations by the Division or Department.
Must employ only licensed persons.
CAM-Firms licenses will expire on September 30 of odd-numbered years and will be renewed every 2 years along with the renewal fee.
If the license of at least one individual active CAM member is not in force, the license of the CAM-Firm is canceled automatically during that time.

§468.433 – Licensure by Examination (amended by Section 4 of HB 995)
The Department can refuse to certify an applicant only if:
There is a substantial connection between the lack of good moral character of the applicant and the professional responsibilities of a CAM; and
The finding by the Department of lack of good moral character is supported by clear and convincing evidence; or
The applicant is found to have provided management services requiring licensure without the requisite license.

§468.436 – Disciplinary Proceedings (added by Section 5 of HB 995)
The Department will investigate complaints and allegations of a violation filed against a CAM or CAM-Firms and forwarded from other Divisions under the Department of Business and Professional Regulations.
Within 30 days after receipt of a complaint, the Department will acknowledge the complaint in writing and notify the complainant whether the complaint is within the jurisdiction of the Department and whether additional information is needed.
The Department will conduct an investigation and within 90 days after the receipt of the original complaint or of a timely request for additional information, take action upon the complaint.
Failure to complete the investigation within 90 days does not prevent the Department from:
Continuing the investigation
Accepting or considering evidence obtained or received after 90 days, and
Taking administrative action if reasonable cause exists to believe a violation occurred.
If an investigation is not completed within the time limits, the Department on a monthly basis, notify the complainant in writing of the status of the investigation and will inform the complainant of any rights to a hearing pursuant to §120.569 and §120.57.
There is ground for disciplinary action if there is a contract, on behalf of an association, with an entity in which the licensee has a financial interest that is not disclosed.

These changes are to the Condominium Act (F.S. 718):

§718.111 – The Association (amended by Section 6 of HB 995)

Officers, Directors, and Agent:
A director who is present at a meeting of its board at which action on any corporate matter is taken will be presumed to have assented to the action unless he or she votes against such action. If the director abstains from voting, he/she will be presumed to have taken no position with regard to the action.
An officer, director or agent will discharge his/her duties in:
Good faith;
With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
In a manner he/she reasonably believes to be in the interests of the association.
An officer, director, or agent will be liable for monetary damages as provided in s. 617.0834 if the breach of, or failure to perform, his/her duties constitutes:
A violation of criminal law,
A transaction from which the officer or director derived an improper personal benefit, either directly or indirectly, or
A recklessness or an act or omission that was in bad faith, with malicious purpose, or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.

Official Records:
Any person who knowingly or intentionally defaces, destroys accounting records or fails to create or maintain account records is personally subject to a civil penalty.
A copy of the inspection report must be kept as official records of the association.
The official records of the association must be maintained within the state for at least 7 years.
The records of the association must be made available to a unit owner within 45 miles of the condominium property or within the county in which the condominium property is located (does not apply to a timeshare condominium)
The association can offer the option of making the records of the association available to a unit owner either electronically via the Internet or by allowing the records to be viewed in electronic format on a computer screen and printed upon request.
The following are not accessible to unit owners:
Social security numbers,
Driver’s license numbers,
Credit card numbers, and
Other personal identifying information of any person.

Financial Reporting:
New provision that instructs the Division of Florida Condominiums, Timeshares, and Mobile Homes to, among other things, include in their rules uniform accounting principles and standards to be used by all associations. Such rules are to include standards for stating at least a summary of the reserves, including whether the reserves are being funded at a level sufficient to prevent the need for a special assessment and, if not, the amount of assessments necessary to bring the reserves up to the level necessary to avoid a special assessment.
The person preparing the financial reports must be entitled to rely on an inspection report prepared for or provided to the association.
Any audit or review prepared must be paid for by the developer if done prior to turnover of control of the association.
An association cannot waive the financial reporting requirements for more than 3 consecutive years.

§718.112 – Bylaws (amended by Section 7 of HB 995)

Quorum, Voting Requirements, Proxies:
Units owned by an association:
Cannot be counted toward a quorum
Cannot vote, and
Do not have consent rights.

Board of Administration Meeting:
If 20% of the voting interests petition the board to address an item of business, the board at the next regular board meeting or at a special meeting will place the item on the agenda. However it cannot be later than 60 days after the receipt of the petition.
Notice of any meeting where regular or special assessments are to be considered for any reason will specifically state:
That assessments will be considered and
The nature, estimated cost, and description of the purposes for the assessments.

Unit Owner Meetings:
There will be an annual meeting of the unit owners held at the location provided in the association bylaws and, if the bylaws are silent as to the location, the meeting will be held within 45 miles of the condominium property. However, the 45 mile restriction does not apply to an association governing a timeshare condominium.
The terms of all members of the board will expire at the annual meeting and such board members may stand for reelection unless otherwise permitted by the bylaws.
In the event that the bylaws permit staggered terms of no more than 2 years and upon approval of a majority of the total voting interests, the association board members can serve 2-year staggered terms.
If no one has interest in or demonstrates an intention to run for the position of a board member whose term has expired, then the board member whose term has expired will be automatically reappointed to the board of administration and does not need to stand for reelection.
In a condominium association of more than 10 units, co-owners of a unit can not serve as members of the board of directors at the same time.
A person who has done the following is not eligible for board membership, unless the felon’s civil rights have been restored for a period of no less than 5 years as of the date on which such person seeks election to the board:
Suspended or removed by the Division, or
Who is delinquent in the payment of any fee or assessment more than 90 days shall be deemed to have abandoned the office.
Who has been convicted of any felony or any offense in another jurisdiction that would be considered a felony if committed in this state is not eligible for board membership, unless the felon’s civil rights have been restored for a period of no less than 5 years as of the date on which such person seeks election to the board.
Not less than 60 days before a scheduled election, the association must provide each unit owner with a first notice of the date of the election along with a certification form provided by the division attesting that he or she has read and understands, to the best of his or her ability, the governing documents of the association and the provisions of this chapter and any applicable rules.
A board can now hold an election to fill the vacancy, unless the association governs 10 units or less and has opted out of the statutory election process by which case the bylaws of the association control.
An association of 10 or fewer units can now, by affirmative vote of a majority of the total voting interests, provide for different voting and election procedures in its bylaws.

Annual Budgets:
The proposed annual budget is changed to reflect the estimated revenues and expenses.
Proxy questions relating to
Waiving or reducing the funding of reserves, or
Using existing reserve funds for purposes other than purposes for which is intended
Must contain the following statement in capitalized, bold letters in a font size larger than any other used on the face of the proxy ballot:

“WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.”

Director or Officer Delinquencies:
A director or officer more than 90 days delinquent in the payment of regular assessments will be deemed to have abandoned the office, creating a vacancy in the office to be filled according to law.

Director and Officer Offenses:
A director or officer charged with a felony theft or embezzlement offense involving the association’s funds or property will be removed from office.
While the director/officer has the criminal charge pending, he or she may not be appointed or elected to a position as director/officer, but if the charges are resolved without a finding of guilt, the director/officer will be reinstated for the remainder of his or her term of office.

§718.1124 – Failure to Fill Vacancies on Board of Administration Sufficient to Constitute a Quorum; Appointment of Receiver Upon Petition of Unit Owners (amended by Section 8 of HB 995)
Provides a statutory form for “Notice of Intent to Apply for Receivership” wherein if an association fails to fill vacancies on the board, any unit owner may give notice of his or her intent to apply to the circuit court with jurisdiction over the condominium.
The “Notice of Intent to Apply for Receivership” must be provided by the unit owner to the association by certified mail or personal delivery and
Must be posted in a conspicuous place on the condominium property,
Must be provided by the unit owner to every other unit owner of the association by certified mail or personal delivery, and
Must be posted and mailed or delivered at least 30 days prior to the filing of a petition seeking receivership.
If the association fails to fill the vacancy within 30 days after the notice is posted, mailed or delivered, the unit owner may proceed with the petition.
If a receiver is appointed, all unit owners shall be given written notice of such appointment as provided in §718.127 and the court will relieve the receiver once the association fills the vacancy on the board.

§718.113 – Maintenance; Limitation upon Improvement; Display of Flag; Hurricane Shutters; Display of Religious Decorations (amended by Section 9 of HB 995)
The title to this section now includes “Display of Religious Decorations”

Hurricane Shutters:
The board can now install hurricane shutters/protection that complies with or exceeds the applicable building code, except that a vote of the owners is not required if the maintenance, repair, and replacement of hurricane shutters or other forms of hurricane protection are the responsibility of the association pursuant to the declaration. However, where hurricane protection has been previously installed, the board may not install hurricane shutters or other hurricane protection.
The association will be responsible for the maintenance, repair, and replacement of the hurricane shutters/protection if it is the responsibility of the association pursuant to the declaration. If pursuant to the declaration, the hurricane shutters/protection is the responsibility of the unit owners, then the maintenance, repair, and replacement of the hurricane shutters/protection is the responsibility of the unit owners
If approval is required by the documents, a board will not refuse to approve the installation or replacement of hurricane shutters by a unit owner conforming to the specifications adopted by the board.
If the condominium is greater than 3 stories in height, at least every 5 years, and within 5 years if not available for inspection on October 1, 2008, the board shall have the condominium building inspected to provide a report under seal of a licensed architect or engineer attesting to required maintenance, useful life, and replacement costs of the common elements. This requirement can be waived by a majority of the voting interests present at a properly called meeting of the association, but such meeting must occur prior to the end of the 5-year period and is effective only for that 5-year period.

Display of Religious Decorations:
An association cannot refuse the request of a unit owner for the attachment on the mantle or frame of the door of the unit owner a religious object not to exceed 3 inches wide, 6 inches high, and 1.5 inches deep.

§718.115 – Common Expenses and Common Surplus (amended by Section 10 of HB 995)

Hurricane Shutters:
If the association is responsible for the maintenance, repair, and replacement of the hurricane shutters or other hurricane protection, then it will constitute a common expense.
If not, the cost of the installation of the hurricane shutters or other hurricane protection will not be a common expense, but shall be charged individually to the unit owners based on the cost of installation of the hurricane shutters or other hurricane protection appurtenant to the unit.
A unit owner who has previously installed hurricane shutters or other hurricane protection will receive a credit (equal to the pro rata portion of the assessed installation cost assigned to each unit) as long as the hurricane shutters or hurricane protection or laminated glass complies with the current applicable building code.

§718.117 – Termination of Condominium (amended by Section 11 of HB 995)

Natural Disasters:
If after a natural disaster, any interested person petitions the circuit court to appoint a receiver and a receiver is appointed, the court will direct the receiver to provide to written notice to all unit owners of his/her appointment as receiver.
The notice will be mailed or delivered within 10 days after the appointment to the address used by the county property appraiser.

§718.121 – Liens (added by Section 12 of HB 995)
No lien can be filed by the association against a condominium unit until 30 days after the date on which a notice of intent to file a lien has been delivered to the owner by certified mail, return receipt requested, and by first-class U.S. mail to the owner at the last known address in the records of the association.
However, if the address is outside the U.S., then notice must be sent (i) first-class U.S. mail to the unit and (ii) to the international address by regular mail.
Upon mailing, delivery of the notice is given.



§718.1224 – Prohibition Against SLAPP Suits (added by Section 13 of HB 995)
It is the intent of the Legislature that SLAPP suits be expeditiously disposed of by the courts.
A condominium unit owner may petition the court for an order dismissing the action or granting final judgment in favor of that condominium unit owner.
The court can award damages and treble damages arising from the governmental entity’s, individual’s or business organization’s violation.
A court will award the prevailing party reasonable attorney’s fees and costs incurred.
Condominium associations cannot expend association funds in prosecuting a SLAPP suit against a condominium unit owner.

§718.1265 – Association Emergency Powers (added by Section 15 of HB 995)
The Board of Administration, in response to damage caused by an event for which a state of emergency is declared pursuant to §252.36, can, but not required to, exercise the following powers:
Conduct board meetings and membership meetings without satisfying the notice requirement;
Cancel and reschedule any association meeting;
Name assistant officers who are not directors, which will have the same authority as the executive officers to whom they are assistants during the state of emergency to accommodate the incapacity or unavailability of any officer of the association;
Relocate the association’s principal office or designate alternative principal offices;
Enter into agreements with local counties and municipalities to assist counties and municipalities with debris removal;
Implement a disaster plan before or immediately following the event for which a state of emergency is declared which may include, shutting down or off elevators, electricity, water, sewer, or security systems; or air conditioners;
Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine any portion of the condominium property unavailable for entry or occupancy by unit owners, family members, tenants, guests, agents, or invitees to protect the health, safety, or welfare of such persons;
Require the evacuation of the condominium property in the event of a mandatory evacuation order in the locale in which the condominium is located. If any unit owner or other occupant fail or refuse to evacuate, the association will be immune from liability or injury to persons or property arising from such failure or refusal;
Based upon advice of emergency management officials or upon the advice of licensed professionals retained by the board, determine whether the condominium property can be safely inhabited or occupied. Such determination is not conclusive as to any determination of habitability;
Mitigate further damage, including taking action to contract for the removal of debris and to prevent or mitigate the spread of fungus, including, but not limited to, mold, or mildew, by removing and disposing of wet drywall, insulation, carpet, cabinetry, or other fixtures on or within the condominium property from a unit;
Contract, on behalf of any unit owner or owners, for items or services for which the owners are otherwise individually responsible for, but which are necessary to prevent further damage to the condominium property. In such event, the unit owner is responsible for reimbursement of actual cost and the association can use its lien authority to enforce collection;
Levy special assessments without a vote of the owners;
Without unit owners’ approval, borrow money and pledge association assets as collateral to fund emergency repairs;
These special powers are limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the unit owners, unit owners’ family, tenants, guests, agents, or invitees.

§718.127 – Receivership Notification (added by Section 16 of HB 995)
If a receiver is appointed, the court will direct the receiver to provide to written notice to all unit owners of his/her appointment as receiver.
The notice will be mailed or delivered within 10 days after the appointment to the address used by the county property appraiser.

§718.301 – Transfer of Association Control; Claims of Defect by Association (amended and added by Section 17 of HB 995)
There are two additional scenarios where unit owners other than the developer are entitled to elect not less than a majority of the members of the board of administration of an association:
When the developer files a petition seeking protection in bankruptcy;
When a receiver for the developer is appointed by a circuit court and is not discharged within 30 days after such appointment;
Not more than 90 days after turnover, the developer will deliver to the association, at the developer’s expense, a Turnover Inspection Report (which will be included in the official records) under seal of an authorized architect or engineer, attesting to required maintenance, useful life, and replacement costs of the following common elements:
- Roof - Structures
- Fireproofing and Fire protection Systems - Elevators
- Heating and Cooling Systems - Plumbing
- Swimming Pool or Spa Equipment - Electrical Systems
- Pavement and Parking Areas - Seawalls
- Drainage Systems - Painting
- Irrigation Systems









§718.3025 – Agreements for Operation, Maintenance, or Management of Condominiums; Specific Requirements (added by Section 18 of HB 995)
Disclosures of any financial or ownership interest a board member or any party providing maintenance or management services to the association holds with the contracting party must be made in order for the contract to be valid and enforceable.

§718.3026 – Contracts for Products and Services; In Writing; Bids; Exceptions (amended and added by Section 19 of HB 995)
Associations with 10 or fewer units can opt out of the provisions of this section if 2/3 of the unit owners vote to do so.
The Association must comply with §617.0832 regarding any contract/transaction between an association and
1 or more of its directors, or
Any other corporation, firm, association, or entity where 1 or more of its directors are directors or officers, or are financially interested,
The disclosures must be entered into the written minutes of the meeting.
Approval of the contract/transaction must require an affirmative vote of 2/3 of the directors present.
At the next regular/special meeting, the existence of the contract/transaction will be brought up for a vote and can be canceled by a majority vote of the members present.
If the contract/transaction is canceled, the association will be liable only for the reasonable value of goods and services provided up to the time of cancellation.

§718.303 – Obligations of Owners; Waiver; Levy of Fine Against Unit by Association (amended by Section 20 of HB 995)
The hearing, to allow the unit owner the opportunity to discuss the violation before a fine is levied, must be held before a committee of other unit owners who are neither board members nor persons residing in a board member’s household.

§718.501 – Authority, Responsibility and Duties of Division of Florida Condominiums, Timeshares, and Mobile Homes (amended by Section 21 of HB 995)

Developer-Controlled Condominiums:
Division has complete jurisdiction to investigate complaints and enforce compliance with provisions of chapter 718 regarding associations under developer control including complaints against the developers.
If a developer fails to pay any restitution determined by the Division to be owed, plus any accrued interest within 30 days after expiration of any appellate time period of a final order requiring payment of restitution or the conclusion of any appeal thereof, whichever is later, the Division will bring an action in circuit or county court on behalf of the association.
The Division can temporarily revoke its acceptance of the filing for the developer until payment of restitution.
Once turnover has occurred, the Division will only have jurisdiction to investigate complaints related to financial issues, elections, and unit owner access to association records.

The Division shall:
Shall order the removal of an individual as an officer or from the board of administration or as an officer of the association who willfully and knowingly violates a provision of this chapter, a rule adopted pursuant hereto, or a final order of the Division; and can prohibit the individual from serving as an officer or on the board of a community association for a period of time.
Shall issue a subpoena requiring production of the requested records where the records are kept, if a unit owner presents the Division with proof that the unit owner has requested access to official records in writing by certified mail, and that after 10 days the unit owner again made the same request for access to official records in writing by certified mail, and that more than 10 days has elapsed since the second request and the association has still failed or refused to provide access to official records as required.
Shall provide training and educational programs for condominium association board members and unit owners.
Under the Division’s discretion, training can include web-based electronic media, and live training and seminars in various locations throughout the state.
Shall review and approve education and training programs offered by providers and will maintain a current list of approved programs and providers and will make such list available to board members and unit owners in a reasonable and cost-effective manner.
Shall refer to local law enforcement authorities any person whom the Division believes has altered, destroyed, concealed, or removed any record, document, or thing required to be kept or maintained with the purpose to impair its verity or availability in the department’s investigation.

NOTE: condominium association directors, officers, and employees; condominium developers; CAMs; and CAM-Firms have an ongoing duty to reasonably cooperate with the Division in any investigation.

§718.5012 – Ombudsman; Powers and Duties (added by Section 22 of HB 995)
An ombudsman has the power to assist with the resolution of disputes between (i) unit owners and the association, or (ii) unit owners when the dispute is not within the jurisdiction of the Division.

§718.50151 – Community Association Living Study Council; Membership Functions (amended by Section 23 of HB 995)
The Community Association Living Study Council will be created as of October 1, every 5 years, commencing October 1, 2008, and will exist for a 6-month term.
The directors of the Division will appoint an ex officio nonvoting member.
The Legislature intends that the persons appointed represent a cross-section of persons interested in community association issues.
Two revised functions which the council will have:
Receive, from the public, input regarding issues of concern with respect to community association living, including living in condominiums, cooperatives, and homeowners’ associations. The council will make recommendations for changes in the law related to community association living.
Review, evaluate, and advise the Legislature concerning revisions and improvements to the laws relating to condominiums, cooperatives, and homeowners’ association.

§718.503 – Developer Disclosure Prior to Sale; Non-developer Unit Owner Disclosure Prior to Sale; Voidability (amended by Section 24 of HB 995)

Non-Developer Disclosure:
In addition to other documents, on and after January 1, 2009, the prospective purchaser will also be entitled to receive from the seller a copy of a Governance Form. Such form will be provided by the Division summarizing governance of condominium associations. In addition to such other information as the Division considers helpful to a prospective purchaser in understanding association governance, the Governance Form will address the following subjects:
The role of the board in conducting the day to day affairs of the association on behalf of, and in the best interests of, the owners.
The board’s responsibility to provide advance notice of board and membership meetings.
The rights of owners to attend and speak at board membership meetings.
The responsibility of the board and of owners with respect to maintenance of the condominium property.
The responsibility of the board and owners to abide by the condominium documents, this chapter, rules adopted by the division, and reasonable rules adopted by the board.
Owners’ rights to inspect and copy association records and the limitations on such rights.
Remedies available to owners with respect to actions by the board which may be abusive or beyond the board’s power and authority.
The right of the board to hire a property management firm, subject to its own primary responsibility for such management.
The responsibility of owners with regard to payment of regular or special assessments necessary for the operation of the property and the potential consequences of failure to pay such assessments.
The voting rights of owners.
Rights and obligations of the board in enforcement of rules in the condominium documents and rules adopted by the board.
The Governance Form will also include the following statement in conspicuous type:
“This publication is intended as an informal education overview of condominium governance. In the event of a conflict, the provisions of chapter 718, Florida Statutes, rules adopted by the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation, the provisions of the condominium documents, and reasonable rules adopted by the condominium association’s board of administration prevail over the contents of this publication.”

HOUSE BILL 697
On June 17, 2008, the Bill was approved by the Governor. Effective date is July 1, 2008.

These changes are to the Florida Condominium Act (F.S. 718):

§718.113(6), F.S. – Maintenance; limitation upon improvement; display of flag; hurricane shutters. (added by Section 26 of HB 697)

Condominium boards may, without membership approval, install solar collectors, clothslines, or other devices based upon renewable energy sources in or on the common elements or association property.

HOUSE BILL 1105
On June 17, 2008, the Bill was approved by the Governor. Effective date is July 1, 2008.

§718.1124(1), F.S.

If an association fails to fill vacancies on the board sufficient to constitute a quorum, any unit owner may give notice of intent to apply to the circuit court for a receiver.
Sets forth statutory notice of intent to apply for receivership.
Notice must be sent by certified mail or personally delivered to association and every member and posted at least 30 days prior to filing petition.

§718.117, F.S. Termination of Condominium.

After a natural disaster, if the identity of directors, or their right to serve, is in doubt, if they are deceased, unable, or unwilling to act, any unit owner may petition the circuit court to either determine identity of directors or appoint a receiver.
If a receiver is appointed, receiver must provide all unit owners with written notice of his/her appointment, notice to be mailed or delivered within 10 days of appointment.

§718.121, F.S. Liens.

No lien may be filed until 30 days after the date on which notice of intent to file a lien has been delivered to the unit owner.
Notice must be sent by certified and regular mail.
Delivery is deemed given upon mailing as required by Section.

§718.127, F.S. Receivership Notification.

Upon appointment of a receiver for any reason, notice provisions as provided in §718.117, F.S. are required.

§719.108. Rents and assessments; liability; lien and priority; interest; collection; cooperative ownership.

No lien may be filed until 30 days after the date on which notice of intent to file a lien has been served on the unit owner by certified mail or by personal service as provided by Chapter 48 and F.R.C.P.

§719.1124, F.S. Failure to fill vacancies on board; appointment of receiver.

Mirrors §717.1124, F.S.

§719.127, F.S. Receivership Notification.

Mirrors §718.127, F.S.

§720.305(4), F.S. – Failure to fill sufficient number of vacancies on board to constitute a quorum; appointment of receiver upon petition of any member.

Deleted.

§720.3053, F.S. Failure to fill vacancies on board sufficient to constitute a quorum; appointment of receiver upon petition of member.

Mirrors §718.1124(1), F.S.

§720.313, F.S. Receivership Notification.

Mirrors §718.127, F.S.

DISCLAIMER OF LIABILITY

This 2008 Legal Update is intended for the sole purpose of informing our clients and prospective clients about changes in the law that may impact them, their businesses or the industries in which they operate. While we have taken every step to ensure the information contained herein is accurate, neither the author, Chapnick Community Association Law, P.A., nor its attorneys or staff, is responsible for any errors or omissions, or for the results obtained from the use of this information. Furthermore, we are not responsible for the applicability of any such information to your particular situation, and we recommend that you consult your attorney before implementing any of the ideas contained in this 2008 Legal Update. Furnishing this 2008 Legal Update to a recipient is not intended to, and does not create an attorney-client relationship with Chapnick Community Association Law, PA. The information does not constitute legal advice and is not intended to be a substitute for legal counsel. If you have questions regarding any information presented here, please contact Chapnick Community Association Law P.A., Michael E. Chapnick, Esq., at (866) 942-6636.