SB 630

The bill relates to Community Associations and prohibits insurance policies from providing specified rights of subrogation under certain circumstances; authorizing a condominium association to extinguish discriminatory restrictions; providing requirements for natural gas fuel stations on property governed by condominium associations; authorizing parties to initiate pre-suit mediation under certain circumstances; revising the allowable uses of certain escrow funds withdrawn by developers, etc.

Subrogation.   The provision in SB 630 amends  627.714, F.S., to prohibit insurance policies from providing specified rights of subrogation under certain circumstances, so that if the ““association’s insurance policy does not provide rights for subrogation against the unit owners in the association, an insurance policy issued to an individual unit owner in the association may not provide rights of subrogation against the condominium association.”

This is something we should support to ensure that the association and unit owner are on same playing field in terms of subrogating rights.

Revised definitions. S 718.103(20) F.S. and s 718.103(21) F.S.

a.    a.    The definition of “multicondominium,” removes the verbiage “real estate development” and in its place and stead, inserts “real property” which are two or more condominiums, all of which are operated by the same association.  718.103(20) F.S.

This makes sense because this clearly defines as the term, “real property” to avoid any vagueness of the term real estate development.

b.    b. The definition of “operation” or “operation of the condominium” amends the administration and management of the condominium property to include “and the association.” 718.103(21) F.S.

The verbiage addition of “and the association,” recognizes that the “operation of the condominium” includes not only administration and management of the condominium property, but also to the association, provides greater clarity to reflect the intentions of the legislature.

Amending 718.111 F.S.  Official Records.  

We should support this provision which amends s. 718.111, F.S. that certain records be maintained for a specified time, including bids of work to be performed or materials, equipment or services to be maintained for at least 1 year after receipt of the bid.    This ensures greater access to records that owners are entitled to view as well as providing a civil penalty if not followed.    Moreover, all other official records must be maintained within the state for at least 7 years, unless otherwise provided by general law and that all official records must be maintained in a manner and format determined by rules of the division so that the records are easily accessible for inspection.     

Official Records to be maintained in a manner and format prescribed by the DBPR.   

This provision will require an association to maintain official records in a specified manner and format.

This is something we should support so that records are easily accessible for inspection and this will benefit all owners who want to inspect Official Records.   Any of the association’s official records that are unavailable must be identified as such on the itemized list. The accuracy of the itemized list must be certified by a manager licensed under part VIII of chapter 468, or a board member if there is no such manager, in a signed statement that, to the best of his or her knowledge and belief, the itemized list is accurate or by execution of a sworn affidavit by the association attesting to its accuracy. The association shall maintain a copy of the itemized list or the affidavit, as appropriate, for at least 7 years. Delivery of the itemized list or the affidavit, as appropriate, to the person requesting the records creates a rebuttable presumption that the association complied with this paragraph. The division may adopt by rule specific requirements

Revising requirements on rebuttable presumption relating to the provision of records.   This provision adds new language “that the failure of an association to provide the records within 10 working days after receipt of a written request that complies with the association's document inspection rule creates a rebuttable presumption that the association willfully failed to comply with this paragraph.”    This new language “that complies with the association's document inspection rule” is interesting because each association may have different inspection rules, or may decide to “change the rules as they go along” and we need further clarification on whether this is in the best interests of the owners. 

Requiring an association to  provide a checklist and sworn affidavit to persons requesting to inspect records and maintain a copy of the checklist for a specified period of time to create a rebuttable presumption for an association that provides such checklist and sworn affidavit.  This provision requires an Association, in response to a statutorily compliant written request  to inspect records, to simultaneously provide  a checklist to the requestor of all records made available for  inspection and copying and a sworn affidavit in which the person  facilitating or handling the association's compliance with the request attests to the veracity of the checklist provided to the requestor.   The checklist must also identify any of the association's official records that were not made available to the requestor. An association providing a checklist and affidavit pursuant to this sub-subparagraph creates a rebuttable presumption that the association has complied with this paragraph.  

While the association can adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying,  they cannot request a member to demonstrate any purpose or state any reason for the inspection.”  While the word “shall” (which is obligatory) rather than “may” (which is permissive) is in this provision, this marks a definite improvement on rights accorded to unit owners and this is a definite win for owners.    Boards and property managers will not be able demand or require that an owner state the purpose of any inspection.

Having a sworn affidavit may prove difficult since many Associations are run by one-person offices.    That will increase labor burden on the Association if the community association manager needs to run out and get things signed by a notary and disrupt projects that the property manager is doing.    And, since a notary only acknowledges someone’s signature, not the contents of the affidavit, it may be better that something on letterhead be used instead of an affidavit.

Moreover, the proposed bill requires condominium associations to give at least 30 days written notice when changing the method of delivery for the statements of account and requiring unit owners to affirmatively acknowledge the changes in such delivery methods electronically or in writing.  In addition, this provision will prohibit condominium associations from requiring the payment of attorney fees relating to past due assessments without first providing a specified notice to unit owners so that the unit owner is afforded an opportunity to pay the amount owed without the assessment of attorney’s fees.

In addition, an association managing a condominium with 150 or more units which does not contain timeshare units shall post digital copies of documents (i.e., DOC, by-laws, rules, etc.) on its website or make such documents available through an application that can be downloaded on a mobile device.   This is something we should support so that availability of documents will be readily available .

Willfully defacing or destroying accounting records.   

We should support this provision.   In many instances, there may be board members, other owners or staff who hinder owners rights to view Official Records, including defacing or destroying accounting records for nefarious purposes. This provision requires any person who knowingly or intentionally   defaces or destroys such records, or who knowingly or intentionally fails with the intent of causing harm to the association or one or more of its members, to be personally subject to a civil penalty under s. 718.501(2)(d) as well as criminal penalties.

Amending s. 718.112, F.S. By-Laws. 

Extinguish discriminatory restrictions.  We should support this provision because it will authorize a condominium association to extinguish discriminatory restrictions in a title transaction restricting the ownership, occupancy, or use of any real property in, or by any natural person on the basis of discriminatory characteristics.  This includes, but is not limited to, race, color, national origin, religion, gender, or physical disability to be deemed unlawful and unenforceable making these restrictions are void and null. 

In addition, a unit owner may request the board to remove covenants or restrictions by the majority vote of the board of directors.   We should support this position ensuring compliance with federal and state regulations designed to prevent discrimination and allow a board to hold a board of directors meetings, and by a majority vote of the board, to remove discriminatory covenants and restrictions from the association’s governing documents.

Calculation used in determining a board member’s term limit.   This provision clarifies that board service that occurs on or after July 1, 2018, is be used when calculating a board member’s term limit.

Requirements for certain notices.  This provision amends that of January 1, 2019, an association managing a condominium with 150 or more units which does not contain timeshare units shall post digital copies of the documents on its website or make such documents available through an application that can be downloaded on a mobile device.

Revising Fees that an association may charge for transfers

The amount of fees will be increased from $100.00 per applicant to $150.00 per applicant.   For clarity, and for purposes of calculating the fee, spouses, a parent or parents and any other dependent other than husband/wife or parent/depend child are considered one applicant.  And, in terms of a renewal lease with the same lessee, no charge shall be made.

Amending s. 718.113, F.S. “Natural Gas Fuel” and “Natural Gas Fuel Vehicle”

This provision defines “natural gas fuel” has the same meaning as in s. 206.9951, and the term “natural gas fuel vehicle” to mean any motor vehicle, as defined in s. 320.01, that is powered by natural gas fuel and clarifies that the requirements for natural gas fuel stations on condominium association property must be within the boundaries of his or her limited common element or exclusively designated parking area.

Amending s. 718.116, F.S.    Expanded timeframe of intention to foreclose lien.

We should support this provision because it expands the timeframe from  30 days to 45 days after the association gives written notice to the unit owner of its intention to foreclose its lien to collect unpaid assessments; and if the notice is not given at least 45 days before the foreclosure action is filed, the association shall not recover attorneys fees. 

Amending 718.121, F.S.  Liens on installation of a natural gas fuel station

We should support this provision which provides that labor and materials associated with the installation of a natural gas fuel station may not serve as the basis for filing a lien against an association but may serve as the basis for filing a lien against a unit owner; and requiring that notices of intent to record a claim of lien specify certain dates (30 days). 

Amending s. 718.1255, F.S.; Alternative Dispute Resolution

This provision, states that prior to the institution of a court litigation, a party to a dispute (other than an election or recall dispute) shall either petition the division for nonbinding arbitration or initiate pre-suit mediation, and if all parties in an arbitration agree to be bound in writing, to make the arbitration binding.

While alternative dispute resolutions are generally favored to avoid court costs and litigation, I think we need to be extremely cautious on this – if an arbitration is not binding and a mediation is not binding, it may be a futile exercise serving only to favor the association’s lawyers in terms of money and time and weaken an owner’s resolve to continue to protect their rights.

Amending 718.1265, F.S.  Emergency Powers of Condominium Associations

We should support this provision, especially now with the advent of COVID-19.   This provision allows the association to conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication with notice given as is practicable. Such notice may be given in any practicable manner, including publication, radio, United States mail, the Internet, electronic transmission, public service announcements, and conspicuous posting on the condominium property or association property or any other means the board deems reasonable under the circumstances.   Notice of board decisions also may be communicated as provided in this paragraph.

In addition, in a state of emergency declared by executive order or proclamation of the Governor (pursuant to s. 252.36), an association may not prohibit unit owners, tenants, guests, agents, or invitees of a unit owner from accessing the unit and the common elements and limited common elements appurtenant thereto with respect to the sale, lease, or other transfer of title of a unit; the purposes of ingress to and egress from the unit and when access is necessary in connection with safety of such person unless a governmental order or determination, or a public health directive from the Centers for Disease Control and Prevention, has been issued prohibiting such access to the unit.   This will protect owners by allowing property to be shown, subject to reasonable restrictions adopted by the association.

Amending s. 718.202, F.S.;  Uses of certain escrow funds withdrawn by developers

We should be inclined to support this position because it limits the amount of escrow funds that can be withdrawn by developers, especially in terms of using such monies for attorneys fees.  This provision defines the term “actual costs” to includes, but is not limited to, expenditures for demolition, site clearing, permit fees, impact fees, and utility reservation fees, as well as architectural, engineering, and surveying fees that directly relate to construction and development of the condominium property. However, no part of these funds may be used for salaries, commissions, or expenses of salespersons; or for advertising, marketing, or promotional purposes; or for loan fees and costs principal and interest on loans, attorney fees, accounting fees, or insurance costs.

Amending s. 718.303, F.S.; Obligations of Owners and Occupants

We should support this provision allowing actions at law, as well as action at equity, or both.  In addition, this provision mandates that requirements for certain fines, (after notice of the approved fine by the fining committee, notice of the approved fine is provided to the parcel owner and, if applicable, to any occupant, licensee, or invitee of the parcel owner) is due five (5) days after the approved fine (is provided to the parcel owner (and, if applicable, to any occupant, licensee, or invitee of the parcel owner) the date of the committee meeting at which the fine is approved. The association must provide written notice of such fine or suspension by mail or hand delivery to the parcel owner and, if applicable, to any occupant tenant, licensee, or invitee of the parcel owner.

Amending s. 718.405, F.S.; Clarifying language multicondominium declarations; providing applicability;

This provision clarifies existing law and applies to associations existing on July 1, 2021.   The provision does not prevent or restrict multicondominium association from adopting a consolidated or combined declaration of condominium if such declaration complies with s. 718.104 and does not serve to merge the condominiums or change the legal descriptions of the condominium parcels as set forth in s. 718.109, unless accomplished in accordance with law.    In addition, the revised definition of “multicondominium,” removes the vagueness of the verbiage “real estate development” and in its place and stead, inserts “real property” which are two or more condominiums, all of which are operated by the same association.  718.103(20) F.S.

Amending s. 718.501, F.S. to revise the jurisdiction of the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation with regard to investigating certain complaints;  defining the term "financial issue"; authorizing the division to make certain rules.

This is an excellent provision that we need to support.     This will allow the division the jurisdiction to investigate complaints including maintenance of official records, and unit owner access to association records pursuant to s. 718.111(12) F.S., as well as financial issues and elections.    This provision also defines the term "financial issue" to include operating budgets; reserve schedules; accounting records under s. 718.111(12)(a)11.; notices of meetings and meeting minutes for budget- or financial statement-related meetings; any assessments for common expenses, fees, or fines; commingling of funds; and any other records necessary to determine the revenues and expenses of the association and also allows the division to adopt additional rules to further define the term "financial issue."

In addition, this provision allows the division to adopt rules to further specify what is included within the meaning of the term “financial issue.”  Although enforcement by DBPR has historically been has weak, this may strengthen its authority and provide some measure of relief if boards and community association managers fail to fulfill their obligations and fiduciary duties.

Amending s. 719.103, F.S.; to revise the definition of the term “unit”

This provision revises the definition of the term “unit” to specify that an interest in a cooperative unit is an interest in real property.

However, a co-operative is not really an interest in real property since the owner receives shares of the association, as well as a proprietary lease.    I think further analysis needs to be made, because if “unit” is an interest in real property, then deeds, real  property transfer taxes and forms will also need to be done.     An alternative is that this provision soley refers to a unit as an interest in real property for purposes of 719.103.

Amending s. 719.104, F.S.; actions prohibited by association relating to inspection of records.

We should support this provision (which mirrors the proposed s. new language in s. 718.111, F.S. discussed above) allowing the association to adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying,  but cannot request a member to demonstrate any purpose or state any reason for the inspection.”  Boards and property managers will not be able demand or require that an

owner state the purpose of any inspection.  Senator Rodriguez supports this provision in her bill.

Amending s. 719.106, F.S. revising provisions relating to a quorum and voting rights for members remotely participating in meetings; revising the procedure to challenge a board member recall; and authorizing cooperative associations to extinguish discriminatory restrictions.

We should support this provision, especially in view of the current COVID crisis.  This provision allows  a board member or committee member participating in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present.  

In addition, we should support the provision which will allow a board member who has been recalled may file a petition under pursuant to s. 719.1255 or file an action in a court of competent jurisdiction challenging the validity of the recall. The petition or action must be filed within 60 days after the recall is deemed certified. The association and the unit owner representative shall be named as the respondents.    At present, the only opportunity for redress of a recall is by filing a petition, and this will allow that the recalled member can avail themselves to seek validity of the recall with the courts.  

This provision also amends discriminatory restriction as provided under s. 712.065, and mirrors the proposed language of s. 718.112 F.S.  We should support this provision because it will authorize a condominium association to extinguish discriminatory restrictions in a title transaction restricting the ownership, occupancy, or use of any real property in, or by any natural person on the basis of discriminatory characteristics.  This includes, but is not limited to, race, color, national origin, religion, gender, or physical disability to be deemed unlawful and unenforceable making these restrictions are void and null.

Amending s. 719.128, F.S. to revising emergency powers for cooperative associations; prohibiting cooperative associations from taking certain actions during a declared state of emergency.

We should support this provision, especially now with the advent of COVID-19.   This provision mirrors s. 718.1265 F.S. and allows the association to conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication with notice given as is practicable. Such notice may be given in any practicable manner, including publication, radio, United States mail, the Internet, electronic transmission, public service announcements, and conspicuous posting on the condominium property or association property or any other means the board deems reasonable under the circumstances.   Notice of board decisions also may be communicated as provided in this paragraph.

In addition, in a state of emergency declared by executive order or proclamation of the Governor (pursuant to s. 252.36), an association may not prohibit unit owners, tenants, guests, agents, or invitees of a unit owner from accessing the unit and the common elements and limited common elements appurtenant thereto with respect to the sale, lease, or other transfer of title of a unit; the purposes of ingress to and egress from the unit and when access is necessary in connection with safety of such person unless a governmental order or determination, or a public health directive from the Centers for Disease Control and Prevention, has been issued prohibiting such access to the unit.   This will protect owners by allowing property to be shown , subject to reasonable restrictions adopted by the association.

Amending s. 720.301, F.S. revising the term “governing documents.”

This provision deletes 720.301(c) since 720.301(a) and (b) incorporate all of the information included in (c).  I do not see any opposition or support on this issue.

Amending s. 720.303, F.S. authorizing an association to adopt procedures for electronic meeting notices; revising the documents that constitute the official records of an association; revising the circumstances under which a specified statement must be included in an association’s financial report; revising requirements for such statement; revising the circumstances under which an association is deemed to have provided for reserve accounts; revising the procedure to challenge a board member recall;

Authorizing an association to adopt procedures for electronic meeting notices.  This provision basically mirrors the proposed new language of s 718.F1265 an F.S. and s. 719.128 F.S.   Basically, this provision states that in addition to any of the authorized means of providing notice of a meeting of the board, the association may, by rule, adopt a procedure for conspicuously posting the meeting notice and the agenda on the association’s website or an application that can be downloaded on a mobile device for at least the minimum period of time for which a notice of a meeting is also required to be physically posted on the association property. Any rule adopted must, in addition to other matters, include a requirement that the association send an electronic notice to members whose e-mail addresses are included in the association’s official records in the same manner as is required for a notice of a meeting of the members. Such notice must include a hyperlink to the website or such mobile application on which the meeting notice is posted.

Revising the documents that constitute the official records of an association.

Mirroring s. 718. F.S., Official records now include, ballots, sign-in sheets, voting proxies, and all other written records, papers and electronic records relating to voting by parcel owners, which must be maintained for at least 1 year after the date of the election, vote, or meeting and all other written records of the association not specifically included in this subsection the foregoing which are related to the operation of the association. 

Revising the circumstances under which a specified statement must be included in an association’s financial report; revising requirements for such statement; revising the circumstances under which an association is deemed to have provided for reserve accounts.

This provision states that if the budget of the association does not provide for funding accounts for deferred maintenance, and the declaration of covenants, articles, or bylaws do not obligate the developer to create reserves, and the association is responsible for the repair and maintenance of capital improvements that may result in a special assessment if reserves are not provided or not fully funded, then each required financial report for the preceding fiscal year must include a statement in conspicuous type advising that the budget does not provide for fully reserve accounts for capital expenditures and deferred maintenance.  In addition, approval of a majority of the total voting interests by vote of the members at a meeting, or by written consent, will allow the association to elect to provide for fully funded reserve accounts pursuant to 720.30

Revising the procedure to challenge a board member recall;

This provision mirrors the language proposed in s. 718.112 and s 718.1255, F.S. and s. 719.106, F.S. and we should support this.   This provision states if the board determines not to certify the written agreement or written ballots to recall a director or directors of the board or does not certify the recall by a vote at a meeting, the board shall, within 5 full business days after the meeting, file an action with a court of competent jurisdiction or file with the department a petition for binding arbitration under the applicable procedures in ss. 718.112(2)(j) and s 718.1255, F.S.

Amending s. 720.305, F.S.; providing requirements for certain fines levied by a board of administration.

This provision mirrors the proposed language in s. 718.303, F.S., that requirements for certain fines, (after notice of the approved fine by the fining committee, notice of the approved fine is provided to the parcel owner and, if applicable, to any occupant, licensee, or invitee of the parcel owner) is due five (5) days after the approved fine (is provided to the parcel owner (and, if applicable, to any occupant, licensee, or invitee of the parcel owner) the date of the committee meeting at which the fine is approved. The association must provide written notice of such fine or suspension by mail or hand delivery to the parcel owner and, if applicable, to any occupant tenant, licensee, or invitee of the parcel owner.

Amending s. 720.306, F.S.; revising requirements for providing certain notices; providing limitations on associations when a parcel owner attempts to rent or lease his or her parcel; defining the term “affiliated entity”; amending the procedure for election disputes;

This provision states that notices may be delivered or mailed to delivered “to the address identified as the parcel owner’s mailing address in the official records of the association as required under s. 720.303”.  This provision deletes the verbiage on delivering and mailing notices “on the property appraiser’s website for the county in which the parcel is located.”   This may make it easier for associations to comply with their own official records, rather than having to go to the property appraiser’s website.   

This provision also allows that an association may amend its governing documents to prohibit or regulate rental durations that are for terms of less than 6 months and to prohibit a parcel owner from renting his or parcel more than three times in a calendar year, and that  such amendments will apply to all parcel owners. 

In addition, the provision states that the governing document, rule, or regulation enacted after July 1, 2021, which prohibits a parcel owner from renting his or her parcel, alters the authorized duration of a rental term, or specifies or limits the number of times that a parcel owner may rent his or her parcel during a specified period, applies only to a parcel owner who consents, individually or through a representative, to the amendment, and to parcel owners who acquire title to a parcel after the effective date of the amendment.

The provision also defines “affiliated entity”  as “an entity that controls, is controlled by, or is under common control with the parcel owner or that becomes a parent or successor entity by reason of transfer, merger, consolidation, public offering, reorganization, dissolution or sale of stock, or transfer of membership partnership interests”. For a conveyance to be recognized as one made to an affiliated entity, the entity must furnish the association a document certifying that this paragraph applies, as well as providing any organizational documents for the parcel owner and the affiliated entity that support the representations in the certificate, as requested by the association.

Amending s. 720.311, F.S.; revising the dispute resolution requirements for election disputes and recall disputes;

This provision is in  accordance with the provisions of ss. 718.112(2)(j) and 718.1255 and the rules adopted by the division.  The provision provides that the department shall conduct binding arbitration  of election disputes between a member and an association in accordance with  to s. 718.1255 and rules adopted by the division.   Election disputes and  recall disputes are not eligible for presuit mediation; these disputes must shall be arbitrated by the department or filed in a court of competent jurisdiction. The department shall adopt rules to effectuate the purposes of this section.  

Amending s. 720.3075, F.S.; authorizing homeowners’ associations to extinguish discriminatory restrictions;

We should support this provision which amends discriminatory restriction as provided under s. 712.065, and mirrors the proposed language of s. 718.112 , F.S. and s. 719.106, F.S.    This will authorize the homeowner association to extinguish discriminatory restrictions in a title transaction restricting the ownership, occupancy, or use of any real property in, or by any natural person on the basis of discriminatory characteristics.  This includes, but is not limited to, race, color, national origin, religion, gender, or physical disability to be deemed unlawful and unenforceable making these restrictions are void and null.

Amending s. 720.316, F.S.; revising emergency powers of homeowners’ associations; prohibiting homeowners’ associations from taking certain actions during a declared state of emergency; providing an effective date.

We should support this provision, especially now with the advent of COVID-19.   This provision allows the association to conduct board meetings, committee meetings, elections, and membership meetings, in whole or in part, by telephone, real-time videoconferencing, or similar real-time electronic or video communication with notice given as is practicable. Such notice may be given in any practicable manner, including publication, radio, United States mail, the Internet, electronic transmission, public service announcements, and conspicuous posting on the condominium property or association property or any other means the board deems reasonable under the circumstances.   Notice of board decisions also may be communicated as provided in this paragraph.

In addition, in a state of emergency declared by executive order or proclamation of the Governor (pursuant to s. 252.36), an association may not prohibit unit owners, tenants, guests, agents, or invitees of a unit owner from accessing the unit and the common elements and limited common elements appurtenant thereto with respect to the sale, lease, or other transfer of title of a unit; the purposes of ingress to and egress from the unit and when access is necessary in connection with safety of such person unless a governmental order or determination, or a public health directive from the Centers for Disease Control and Prevention, has been issued prohibiting such access to the unit.   This will protect owners by allowing property to be shown, subject to reasonable restrictions adopted by the association.

ORIGINAL FILED VERSION OF SB 630