| 1 |
A bill to be entitled |
| 2 |
An act relating to community
associations; creating s. |
| 3 |
712.11, F.S.; providing for the revival
of certain |
| 4 |
covenants that have lapsed; amending s.
718.106, F.S.; |
| 5 |
prohibiting local governments from
limiting the access of |
| 6 |
certain persons to beaches adjacent to
or adjoining |
| 7 |
condominium property; amending s.
718.110, F.S.; revising |
| 8 |
provisions relating to the amendment of
declarations; |
| 9 |
providing legislative findings and a
finding of compelling |
| 10 |
state interest; providing criteria for
consent to an |
| 11 |
amendment; requiring notice regarding
proposed amendments |
| 12 |
to mortgagees; providing criteria for
notification; |
| 13 |
providing for voiding certain
amendments; amending s. |
| 14 |
718.112, F.S.; revising the
implementation date for |
| 15 |
retrofitting of common areas with a
sprinkler system; |
| 16 |
amending s. 718.114, F.S.; providing
that certain |
| 17 |
leaseholds, memberships, or other
possessory or use |
| 18 |
interests shall be considered a
material alteration or |
| 19 |
substantial addition to certain real
property; amending s. |
| 20 |
718.404, F.S.; providing retroactive
application of |
| 21 |
provisions relating to mixed-use
condominiums; amending s. |
| 22 |
719.103, F.S.; providing a definition;
amending s. |
| 23 |
719.507, F.S.; prohibiting laws,
ordinances, or |
| 24 |
regulations that apply only to
improvements that are or |
| 25 |
may be subjected to an equity club form
of ownership; |
| 26 |
amending s. 720.302, F.S.; revising
governing provisions |
| 27 |
relating to corporations that operate
residential |
| 28 |
homeowners' associations; amending s.
720.303, F.S.; |
| 29 |
revising application to include certain
meetings; |
| 30 |
requiring the association to provide
certain information |
| 31 |
to prospective purchasers or
lienholders; authorizing the |
| 32 |
association to charge a reasonable fee
for providing |
| 33 |
certain information; requiring the
budget to provide for |
| 34 |
annual operating expenses; authorizing
the budget to |
| 35 |
include reserve accounts for capital
expenditures and |
| 36 |
deferred maintenance; providing a
formula for calculating |
| 37 |
the amount to be reserved; authorizing
the association to |
| 38 |
adjust replacement reserve assessments
annually; |
| 39 |
authorizing the developer to vote to
waive the reserves or |
| 40 |
reduce the funding of reserves for a
certain period; |
| 41 |
revising provisions relating to
financial reporting; |
| 42 |
revising time periods in which the
association must |
| 43 |
complete its reporting; repealing s.
720.303(2), F.S., as |
| 44 |
amended, relating to board meetings, to
remove conflicting |
| 45 |
versions of that subsection; creating
s. 720.3035, F.S.; |
| 46 |
providing for architectural control
covenants and parcel |
| 47 |
owner improvements; authorizing the
review and approval of |
| 48 |
plans and specifications; providing
limitations; providing |
| 49 |
rights and privileges for parcel owners
as set forth in |
| 50 |
the declaration of covenants; amending
s. 720.305, F.S.; |
| 51 |
providing that, where a member is
entitled to collect |
| 52 |
attorney's fees against the
association, the member may |
| 53 |
also recover additional amounts as
determined by the |
| 54 |
court; amending s. 720.306, F.S.;
providing that certain |
| 55 |
mergers or consolidations of an
association shall not be |
| 56 |
considered a material or adverse
alteration of the |
| 57 |
proportionate voting interest
appurtenant to a parcel; |
| 58 |
amending s. 720.307, F.S.; requiring
developers to deliver |
| 59 |
financial records to the board in any
transition of |
| 60 |
association control to members;
requiring certain |
| 61 |
information to be included in the
records and for the |
| 62 |
records to be prepared in a specified
manner; amending s. |
| 63 |
720.308, F.S.; providing circumstances
under which a |
| 64 |
guarantee of common expenses shall be
effective; providing |
| 65 |
for approval of the guarantee by
association members; |
| 66 |
providing for a guarantee period and
extension thereof; |
| 67 |
requiring the stated dollar amount of
the guarantee to be |
| 68 |
an exact dollar amount for each parcel
identified in the |
| 69 |
declaration; providing payments
required from the |
| 70 |
guarantor to be determined in a certain
manner; providing |
| 71 |
a formula to determine the guarantor's
total financial |
| 72 |
obligation to the association;
providing that certain |
| 73 |
expenses incurred in the production of
certain revenues |
| 74 |
shall not be included in the operating
expenses; amending |
| 75 |
s. 720.311, F.S.; revising provisions
relating to dispute |
| 76 |
resolution; providing that the filing
of any petition for |
| 77 |
arbitration or the serving of an offer
for presuit |
| 78 |
mediation shall toll the applicable
statute of |
| 79 |
limitations; providing that certain
disputes between an |
| 80 |
association and a parcel owner shall be
subject to presuit |
| 81 |
mediation; revising provisions to
conform; providing that |
| 82 |
temporary injunctive relief may be
sought in certain |
| 83 |
disputes subject to presuit mediation;
authorizing the |
| 84 |
court to refer the parties to mediation
under certain |
| 85 |
circumstances; requiring the aggrieved
party to serve on |
| 86 |
the responding party a written offer to
participate in |
| 87 |
presuit mediation; providing a form for
such offer; |
| 88 |
providing that service of the offer is
effected by the |
| 89 |
sending of such an offer in a certain
manner; providing |
| 90 |
that the prevailing party in any
subsequent arbitration or |
| 91 |
litigation proceedings is entitled to
seek recovery of all |
| 92 |
costs and attorney's fees incurred in
the presuit |
| 93 |
mediation process; requiring the
mediator or arbitrator to |
| 94 |
meet certain certification
requirements; removing a |
| 95 |
requirement relating to development of
an education |
| 96 |
program to increase awareness of the
operation of |
| 97 |
homeowners' associations and the use of
alternative |
| 98 |
dispute resolution techniques;
providing effective dates. |
| 99 |
|
| 100 |
Be It Enacted by the Legislature of the
State of Florida: |
| 101 |
|
| 102 |
Section
1. Section 712.11, Florida Statutes, is created to |
| 103 |
read: |
| 104 |
712.11 Covenant
revitalization.--A homeowners' association |
| 105 |
not otherwise
subject to chapter 720 may use the procedures set |
| 106 |
forth in ss.
720.403-720.407 to revive covenants that have |
| 107 |
lapsed under the
terms of this chapter. |
| 108 |
Section
2. Subsection (5) is added to section 718.106, |
| 109 |
Florida Statutes, to read: |
| 110 |
718.106 Condominium
parcels; appurtenances; possession and |
| 111 |
enjoyment.-- |
| 112 |
(5) A
local government may not prohibit condominium unit |
| 113 |
owners or an
association from permitting guests, licensees, or |
| 114 |
invitees access to a
public beach adjacent to or adjoining the |
| 115 |
condominium
property. |
| 116 |
Section
3. Effective October 1, 2006, subsection (11) of |
| 117 |
section 718.110, Florida Statutes, is
amended to read: |
| 118 |
718.110 Amendment
of declaration; correction of error or |
| 119 |
omission in declaration by circuit
court.-- |
| 120 |
(11) The
Legislature finds that the procurement of |
| 121 |
mortgagee consent to
amendments that do not affect the rights or |
| 122 |
interests of
mortgagees is an unreasonable and substantial |
| 123 |
logistical and
financial burden on the unit owners and that |
| 124 |
there is a
compelling state interest in enabling the members of |
| 125 |
a condominium
association to approve amendments to the |
| 126 |
condominium
documents through legal means. Accordingly, and |
| 127 |
notwithstanding any provision to the
contrary contained in this |
| 128 |
section: |
| 129 |
(a) As
to any mortgage recorded on or after October 1, |
| 130 |
2006,
any provision in the declaration,
articles of |
| 131 |
incorporation,
or bylaws that requires recorded
after April 1, |
| 132 |
1992, may not
require the consent or joinder of some or all |
| 133 |
mortgagees of units or
any other portion of the condominium |
| 134 |
property
to or in amendments to the declaration, articles
of |
| 135 |
incorporation, or
bylaws or for any other matter shall be |
| 136 |
enforceable
only as to the following matters: unless
the |
| 137 |
requirement is
limited to amendments materially affecting the |
| 138 |
rights or interests
of the mortgagees, or as otherwise required |
| 139 |
by the Federal
National Mortgage Association or the Federal Home |
| 140 |
Loan Mortgage
Corporation, and unless the requirement provides |
| 141 |
that such consent
may not be unreasonably withheld. It shall be |
| 142 |
presumed that,
except as to |
| 143 |
1. Those
matters described in subsections (4) and (8)., |
| 144 |
2. Amendments
to the declaration, articles of |
| 145 |
incorporation, or
bylaws that adversely affect the priority of |
| 146 |
the mortgagee's lien
or the mortgagee's rights to foreclose its |
| 147 |
lien or that
otherwise materially affect the rights and |
| 148 |
interests of the
mortgagees. |
| 149 |
(b) As
to mortgages recorded before October 1, 2006, any |
| 150 |
existing provisions
in the declaration, articles of |
| 151 |
incorporation, or
bylaws requiring mortgagee consent shall be |
| 152 |
enforceable. |
| 153 |
(c) In
securing consent or joinder, the association shall |
| 154 |
be entitled to rely
upon the public records to identify the |
| 155 |
holders of
outstanding mortgages. The association may use the |
| 156 |
address provided in
the original recorded mortgage document, |
| 157 |
unless there is a
different address for the holder of the |
| 158 |
mortgage in a
recorded assignment or modification of the |
| 159 |
mortgage, which
recorded assignment or modification must |
| 160 |
reference the
official records book and page on which the |
| 161 |
original mortgage
was recorded. Once the association has |
| 162 |
identified the
recorded mortgages of record, the association |
| 163 |
shall, in writing,
request of each unit owner whose unit is |
| 164 |
encumbered by a
mortgage of record any information the owner has |
| 165 |
in his or her
possession regarding the name and address of the |
| 166 |
person to whom
mortgage payments are currently being made. |
| 167 |
Notice shall be sent
to such person if the address provided in |
| 168 |
the original
recorded mortgage document is different from the |
| 169 |
name and address of
the mortgagee or assignee of the mortgage as |
| 170 |
shown by the public
record. The association shall be deemed to |
| 171 |
have complied with
this requirement by making the written |
| 172 |
request of the unit
owners required under this paragraph. Any |
| 173 |
notices required to
be sent to the mortgagees under this |
| 174 |
paragraph shall be
sent to all available addresses provided to |
| 175 |
the association. |
| 176 |
(d) Any
notice to the mortgagees required under paragraph |
| 177 |
(c) may be sent by a
method that establishes proof of delivery, |
| 178 |
and any mortgagee
who fails to respond within 60 days after the |
| 179 |
date of mailing
shall be deemed to have consented to the |
| 180 |
amendment. |
| 181 |
(e) For
those amendments requiring mortgagee consent on or |
| 182 |
after October
1, 2006, do not materially affect
the rights or |
| 183 |
interests of
mortgagees. in the event mortgagee consent is |
| 184 |
provided other than by properly
recorded joinder, such consent |
| 185 |
shall be evidenced by affidavit of the
association recorded in |
| 186 |
the public records of the county where
the declaration is |
| 187 |
recorded. Any
amendment adopted without the required consent of |
| 188 |
a mortgagee shall be
voidable only by a mortgagee who was |
| 189 |
entitled to notice
and an opportunity to consent. An action to |
| 190 |
void an amendment
shall be subject to the statute of limitations |
| 191 |
beginning 5 years
from the date of discovery as to the |
| 192 |
amendments described
in subparagraphs (a)1. and 2. and 5 years |
| 193 |
from the date of
recordation of the certificate of amendment for |
| 194 |
all other
amendments. This provision shall apply to all |
| 195 |
mortgages,
regardless of the date of recordation of the |
| 196 |
mortgage. |
| 197 |
Section
4. Paragraph (l) of subsection (2) of section |
| 198 |
718.112, Florida Statutes, is amended
to read: |
| 199 |
718.112 Bylaws.-- |
| 200 |
(2) REQUIRED
PROVISIONS.--The bylaws shall provide for the |
| 201 |
following and, if they do not do so,
shall be deemed to include |
| 202 |
the following: |
| 203 |
(l) Certificate
of compliance.--There shall be a provision |
| 204 |
that a certificate of compliance from a
licensed electrical |
| 205 |
contractor or electrician may be
accepted by the association's |
| 206 |
board as evidence of compliance of the
condominium units with |
| 207 |
the applicable fire and life safety
code. Notwithstanding the |
| 208 |
provisions of chapter 633 or of any
other code, statute, |
| 209 |
ordinance, administrative rule, or
regulation, or any |
| 210 |
interpretation of the foregoing, an
association, condominium, or |
| 211 |
unit owner is not obligated to retrofit
the common elements or |
| 212 |
units of a residential condominium with
a fire sprinkler system |
| 213 |
or other engineered lifesafety system
in a building that has |
| 214 |
been certified for occupancy by the
applicable governmental |
| 215 |
entity, if the unit owners have voted
to forego such |
| 216 |
retrofitting and engineered lifesafety
system by the affirmative |
| 217 |
vote of two-thirds of all voting
interests in the affected |
| 218 |
condominium. However, a condominium
association may not vote to |
| 219 |
forego the retrofitting with a fire
sprinkler system of common |
| 220 |
areas in a high-rise building. For
purposes of this subsection, |
| 221 |
the term "high-rise building"
means a building that is greater |
| 222 |
than 75 feet in height where the
building height is measured |
| 223 |
from the lowest level of fire
department access to the floor of |
| 224 |
the highest occupiable story. For
purposes of this subsection, |
| 225 |
the term "common areas" means
any enclosed hallway, corridor, |
| 226 |
lobby, stairwell, or entryway. In no
event shall the local |
| 227 |
authority having jurisdiction require
completion of retrofitting |
| 228 |
of common areas with a sprinkler system
before the end of 2025 |
| 229 |
2014. |
| 230 |
1. A
vote to forego retrofitting may be obtained by |
| 231 |
limited proxy or by a ballot personally
cast at a duly called |
| 232 |
membership meeting, or by execution of
a written consent by the |
| 233 |
member, and shall be effective upon the
recording of a |
| 234 |
certificate attesting to such vote in
the public records of the |
| 235 |
county where the condominium is
located. The association shall |
| 236 |
mail, hand deliver, or electronically
transmit to each unit |
| 237 |
owner written notice at least 14 days
prior to such membership |
| 238 |
meeting in which the vote to forego
retrofitting of the required |
| 239 |
fire sprinkler system is to take place.
Within 30 days after the |
| 240 |
association's opt-out vote, notice of
the results of the opt-out |
| 241 |
vote shall be mailed, hand delivered,
or electronically |
| 242 |
transmitted to all unit owners.
Evidence of compliance with this |
| 243 |
30-day notice shall be made by an
affidavit executed by the |
| 244 |
person providing the notice and filed
among the official records |
| 245 |
of the association. After such notice
is provided to each owner, |
| 246 |
a copy of such notice shall be provided
by the current owner to |
| 247 |
a new owner prior to closing and shall
be provided by a unit |
| 248 |
owner to a renter prior to signing a
lease. |
| 249 |
2. As
part of the information collected annually from |
| 250 |
condominiums, the division shall
require condominium |
| 251 |
associations to report the membership
vote and recording of a |
| 252 |
certificate under this subsection and,
if retrofitting has been |
| 253 |
undertaken, the per-unit cost of such
work. The division shall |
| 254 |
annually report to the Division of
State Fire Marshal of the |
| 255 |
Department of Financial Services the
number of condominiums that |
| 256 |
have elected to forego retrofitting. |
| 257 |
Section
5. Section 718.114, Florida Statutes, is amended |
| 258 |
to read: |
| 259 |
718.114 Association
powers.--An association has the power |
| 260 |
to enter into agreements, to acquire
leaseholds, memberships, |
| 261 |
and other possessory or use interests
in lands or facilities |
| 262 |
such as country clubs, golf courses,
marinas, and other |
| 263 |
recreational facilities. It has this
power whether or not the |
| 264 |
lands or facilities are contiguous to
the lands of the |
| 265 |
condominium, if they are intended to
provide enjoyment, |
| 266 |
recreation, or other use or benefit to
the unit owners. All of |
| 267 |
these leaseholds, memberships, and
other possessory or use |
| 268 |
interests existing or created at the
time of recording the |
| 269 |
declaration must be stated and fully
described in the |
| 270 |
declaration. Subsequent to the
recording of the declaration, |
| 271 |
agreements acquiring
these leaseholds, memberships, or other |
| 272 |
possessory or use
interests not entered into within 12 months |
| 273 |
following the
recording of the declaration shall be considered a |
| 274 |
material alteration
or substantial addition to the real property |
| 275 |
that is
association property, and the association may not |
| 276 |
acquire or enter into agreements
acquiring these leaseholds, |
| 277 |
memberships, or other possessory or use
interests except as |
| 278 |
authorized by the declaration as
provided in s. 718.113. The |
| 279 |
declaration may provide that the
rental, membership fees, |
| 280 |
operations, replacements, and other
expenses are common expenses |
| 281 |
and may impose covenants and
restrictions concerning their use |
| 282 |
and may contain other provisions not
inconsistent with this |
| 283 |
chapter. A condominium association may
conduct bingo games as |
| 284 |
provided in s. 849.0931. |
| 285 |
Section
6. Subsections (1) and (2) of section 718.404, |
| 286 |
Florida Statutes, are amended to read: |
| 287 |
718.404 Mixed-use
condominiums.--When a condominium |
| 288 |
consists of both residential and
commercial units, the following |
| 289 |
provisions shall apply: |
| 290 |
(1) The
condominium documents shall not provide that the |
| 291 |
owner of any commercial unit shall have
the authority to veto |
| 292 |
amendments to the declaration, articles
of incorporation, |
| 293 |
bylaws, or rules or regulations of the
association. This |
| 294 |
subsection shall
apply retroactively as a remedial measure. |
| 295 |
(2) Subject
to s. 718.301, where the number of residential |
| 296 |
units in the condominium equals or
exceeds 50 percent of the |
| 297 |
total units operated by the
association, owners of the |
| 298 |
residential units shall be entitled to
vote for a majority of |
| 299 |
the seats on the board of
administration. This subsection shall |
| 300 |
apply retroactively
as a remedial measure. |
| 301 |
Section
7. Subsections (18) through (27) of section |
| 302 |
719.103, Florida Statutes, are
renumbered as subsections (19) |
| 303 |
through (28), respectively, and a new
subsection (18) is added |
| 304 |
to that section to read: |
| 305 |
719.103 Definitions.--As
used in this chapter: |
| 306 |
(18) "Equity
facilities club" means a club comprised of |
| 307 |
recreational
facilities in which proprietary membership |
| 308 |
interests are sold
to individuals, which membership interests |
| 309 |
entitle the
individuals to use certain physical facilities owned |
| 310 |
by the equity club.
Such physical facilities do not include a |
| 311 |
residential unit or
accommodation. For purposes of this |
| 312 |
definition, the term
"accommodation" shall include, but is not |
| 313 |
limited to, any
apartment, residential cooperative unit, |
| 314 |
residential
condominium unit, cabin, lodge, hotel or motel room, |
| 315 |
or any other
accommodation designed for overnight occupancy for |
| 316 |
one or more
individuals. |
| 317 |
Section
8. Section 719.507, Florida Statutes, is amended |
| 318 |
to read: |
| 319 |
719.507 Zoning
and building laws, ordinances, and |
| 320 |
regulations.--All laws, ordinances, and
regulations concerning |
| 321 |
buildings or zoning shall be construed
and applied with |
| 322 |
reference to the nature and use of such
property, without regard |
| 323 |
to the form of ownership. No law,
ordinance, or regulation shall |
| 324 |
establish any requirement concerning
the use, location, |
| 325 |
placement, or construction of buildings
or other improvements |
| 326 |
which are, or may thereafter be,
subjected to the cooperative or |
| 327 |
equity
facilities club form of ownership, unless such |
| 328 |
requirement shall be equally applicable
to all buildings and |
| 329 |
improvements of the same kind not then,
or thereafter to be, |
| 330 |
subjected to the cooperative or
equity facilities club form of |
| 331 |
ownership. This section does not apply
if the owner in fee of |
| 332 |
any land enters into and records a
covenant that existing |
| 333 |
improvements or improvements to be
constructed shall not be |
| 334 |
converted to the cooperative form of
residential ownership prior |
| 335 |
to 5 years after the later of the date
of the covenant or |
| 336 |
completion date of the improvements.
Such covenant shall be |
| 337 |
entered into with the governing body of
the municipality in |
| 338 |
which the land is located or, if the
land is not located in a |
| 339 |
municipality, with the governing body
of the county in which the |
| 340 |
land is located. |
| 341 |
Section
9. Subsections (4) and (5) of section 720.302, |
| 342 |
Florida Statutes, are amended to read: |
| 343 |
720.302 Purposes,
scope, and application.-- |
| 344 |
(4) This
chapter does not apply to any association that is |
| 345 |
subject to regulation under chapter
718, chapter 719, or chapter |
| 346 |
721; or to any nonmandatory
association formed under chapter |
| 347 |
723, except to
the extent that a provision of chapter 718, |
| 348 |
chapter 719, or
chapter 721 is expressly incorporated into this |
| 349 |
chapter for the
purpose of regulating homeowners' associations. |
| 350 |
(5) Unless
expressly stated to the contrary, corporations |
| 351 |
not for profit
that operate residential homeowners' associations |
| 352 |
in this state shall be governed by and
subject to chapter 607, |
| 353 |
if the association
was incorporated under that chapter, or to |
| 354 |
chapter 617,
if the association was incorporated under that |
| 355 |
chapter, and
this chapter. This subsection is intended to |
| 356 |
clarify existing law. |
| 357 |
Section
10. Paragraph (a) of subsection (2), subsection |
| 358 |
(6), and subsection (7) of section
720.303, Florida Statutes, as |
| 359 |
amended by section 18 of chapter
2004-345 and section 135 of |
| 360 |
chapter 2005-2, Laws of Florida, are
amended, and paragraph (d) |
| 361 |
is added to subsection (5) of that
section, to read: |
| 362 |
720.303 Association
powers and duties; meetings of board; |
| 363 |
official records; budgets; financial
reporting; association |
| 364 |
funds; recalls.-- |
| 365 |
(2) BOARD
MEETINGS.-- |
| 366 |
(a) A
meeting of the board of directors of an association |
| 367 |
occurs whenever a quorum of the board
gathers to conduct |
| 368 |
association business. All meetings of
the board must be open to |
| 369 |
all members except for meetings between
the board and its |
| 370 |
attorney with respect to proposed or
pending litigation where |
| 371 |
the contents of the discussion would
otherwise be governed by |
| 372 |
the attorney-client privilege. The
provisions of this subsection |
| 373 |
shall also apply to
the meetings of any committee or other |
| 374 |
similar body when a
final decision will be made regarding the |
| 375 |
expenditure of
association funds and to meetings of any body |
| 376 |
vested with the
power to approve or disapprove architectural |
| 377 |
decisions with
respect to a specific parcel of residential |
| 378 |
property owned by a
member of the community. |
| 379 |
(5) INSPECTION
AND COPYING OF RECORDS.--The official |
| 380 |
records shall be maintained within the
state and must be open to |
| 381 |
inspection and available for
photocopying by members or their |
| 382 |
authorized agents at reasonable times
and places within 10 |
| 383 |
business days after receipt of a
written request for access. |
| 384 |
This subsection may be complied with by
having a copy of the |
| 385 |
official records available for
inspection or copying in the |
| 386 |
community. If the association has a
photocopy machine available |
| 387 |
where the records are maintained, it
must provide parcel owners |
| 388 |
with copies on request during the
inspection if the entire |
| 389 |
request is limited to no more than 25
pages. |
| 390 |
(d) The
association or its authorized agent is not |
| 391 |
required to provide
a prospective purchaser or lienholder with |
| 392 |
information about
the residential subdivision or the association |
| 393 |
other than
information or documents required by this chapter to |
| 394 |
be made available or
disclosed. The association or its |
| 395 |
authorized agent may
charge a reasonable fee to the prospective |
| 396 |
purchaser or
lienholder or the current parcel owner or member |
| 397 |
for providing good
faith responses to requests for information |
| 398 |
by or on behalf of a
prospective purchaser or lienholder, other |
| 399 |
than that required
by law, if the fee does not exceed $150 plus |
| 400 |
the reasonable cost
of photocopying and any attorney's fees |
| 401 |
incurred by the
association in connection with the response. |
| 402 |
(6) BUDGETS.-- |
| 403 |
(a) The
association shall prepare an annual budget that |
| 404 |
sets out the
annual operating expenses. The budget must reflect |
| 405 |
the estimated revenues and expenses for
that year and the |
| 406 |
estimated surplus or deficit as of the
end of the current year. |
| 407 |
The budget must set out separately all
fees or charges paid for |
| 408 |
by the
association for recreational amenities, whether owned by |
| 409 |
the association, the developer, or
another person. The |
| 410 |
association shall provide each member
with a copy of the annual |
| 411 |
budget or a written notice that a copy
of the budget is |
| 412 |
available upon request at no charge to
the member. The copy must |
| 413 |
be provided to the member within the
time limits set forth in |
| 414 |
subsection (5). |
| 415 |
(b) In
addition to annual operating expenses, the budget |
| 416 |
may include reserve
accounts for capital expenditures and |
| 417 |
deferred maintenance
for which the association is responsible to |
| 418 |
the extent that the
governing documents do not limit increases |
| 419 |
in assessments,
including reserves. If the budget of the |
| 420 |
association includes
reserve accounts, such reserves shall be |
| 421 |
determined,
maintained, and waived in the manner provided in |
| 422 |
this subsection.
Once an association provides for reserve |
| 423 |
accounts in the
budget, the association shall thereafter |
| 424 |
determine, maintain,
and waive reserves in compliance with the |
| 425 |
provisions of this
subsection. |
| 426 |
(c) If
the budget of the association does not provide for |
| 427 |
reserve accounts
governed by this subsection and the association |
| 428 |
is responsible for
the repair and maintenance of capital |
| 429 |
improvements that
may result in a special assessment if reserves |
| 430 |
are not provided,
each financial report for the preceding fiscal |
| 431 |
year required by
subsection (7) shall contain the following |
| 432 |
statement in
conspicuous type: THE BUDGET OF THE ASSOCIATION |
| 433 |
DOES NOT PROVIDE FOR
RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES |
| 434 |
AND DEFERRED
MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS. |
| 435 |
OWNERS MAY ELECT TO
PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO THE |
| 436 |
PROVISIONS OF
SECTION 720.303(6), FLORIDA STATUTES, UPON THE |
| 437 |
APPROVAL OF NOT LESS
THAN A MAJORITY OF THE TOTAL VOTING |
| 438 |
INTERESTS OF THE
ASSOCIATION. |
| 439 |
(d) An
association shall be deemed to have provided for |
| 440 |
reserve accounts
when reserve accounts have been initially |
| 441 |
established by the
developer or when the membership of the |
| 442 |
association
affirmatively elects to provide for reserves. If |
| 443 |
reserve accounts are
not initially provided for by the |
| 444 |
developer, the
membership of the association may elect to do so |
| 445 |
upon the affirmative
approval of not less than a majority of the |
| 446 |
total voting
interests of the association. Such approval may be |
| 447 |
attained by vote of
the members at a duly called meeting of the |
| 448 |
membership or upon a
written consent executed by not less than a |
| 449 |
majority of the
total voting interests in the community. The |
| 450 |
approval action of
the membership shall state that reserve |
| 451 |
accounts shall be
provided for in the budget and designate the |
| 452 |
components for which
the reserve accounts are to be established. |
| 453 |
Upon approval by the
membership, the board of directors shall |
| 454 |
provide for the
required reserve accounts for inclusion in the |
| 455 |
budget in the next
fiscal year following the approval and in |
| 456 |
each year
thereafter. Once established as provided in this |
| 457 |
subsection, the
reserve accounts shall be funded or maintained |
| 458 |
or shall have their
funding waived in the manner provided in |
| 459 |
paragraph (f). |
| 460 |
(e) The
amount to be reserved in any account established |
| 461 |
shall be computed by
means of a formula that is based upon |
| 462 |
estimated remaining
useful life and estimated replacement cost |
| 463 |
or deferred
maintenance expense of each reserve item. The |
| 464 |
association may
adjust replacement reserve assessments annually |
| 465 |
to take into account
any changes in estimates of cost or useful |
| 466 |
life of a reserve
item. |
| 467 |
(f) Once
a reserve account or reserve accounts are |
| 468 |
established, the
membership of the association, upon a majority |
| 469 |
vote at a meeting at
which a quorum is present, may provide for |
| 470 |
no reserves or less
reserves than required by this section. If a |
| 471 |
meeting of the unit
owners has been called to determine whether |
| 472 |
to waive or reduce
the funding of reserves and no such result is |
| 473 |
achieved or a quorum
is not present, the reserves as included in |
| 474 |
the budget shall go
into effect. After the turnover, the |
| 475 |
developer may vote
its voting interest to waive or reduce the |
| 476 |
funding of reserves.
Any vote taken pursuant to this subsection |
| 477 |
to waive or reduce
reserves shall be applicable only to one |
| 478 |
budget year. |
| 479 |
(g) Funding
formulas for reserves authorized by this |
| 480 |
section shall be
based on either a separate analysis of each of |
| 481 |
the required assets
or a pooled analysis of two or more of the |
| 482 |
required assets. |
| 483 |
1. If
the association maintains separate reserve accounts |
| 484 |
for each of the
required assets, the amount of the contribution |
| 485 |
to each reserve
account shall be the sum of the following two |
| 486 |
calculations: |
| 487 |
a. The
total amount necessary, if any, to bring a negative |
| 488 |
component balance to
zero. |
| 489 |
b. The
total estimated deferred maintenance expense or |
| 490 |
estimated
replacement cost of the reserve component less the |
| 491 |
estimated balance of
the reserve component as of the beginning |
| 492 |
of the period for
which the budget will be in effect. The |
| 493 |
remainder, if
greater than zero, shall be divided by the |
| 494 |
estimated remaining
useful life of the component. |
| 495 |
|
| 496 |
The formula may be
adjusted each year for changes in estimates |
| 497 |
and deferred
maintenance performed during the year and may |
| 498 |
include factors such
as inflation and earnings on invested |
| 499 |
funds. |
| 500 |
2. If
the association maintains a pooled account of two or |
| 501 |
more of the required
reserve assets, the amount of the |
| 502 |
contribution to the
pooled reserve account as disclosed on the |
| 503 |
proposed budget
shall not be less than that required to ensure |
| 504 |
that the balance on
hand at the beginning of the period for |
| 505 |
which the budget
will go into effect plus the projected annual |
| 506 |
cash inflows over
the remaining estimated useful life of all of |
| 507 |
the assets that make
up the reserve pool are equal to or greater |
| 508 |
than the projected
annual cash outflows over the remaining |
| 509 |
estimated useful
lives of all of the assets that make up the |
| 510 |
reserve pool, based
on the current reserve analysis. The |
| 511 |
projected annual
cash inflows may include estimated earnings |
| 512 |
from investment of
principal. The reserve funding formula shall |
| 513 |
not include any type
of balloon payments. |
| 514 |
(h) Reserve
funds and any interest accruing thereon shall |
| 515 |
remain in the
reserve account or accounts and shall be used only |
| 516 |
for authorized
reserve expenditures unless their use for other |
| 517 |
purposes is approved
in advance by a majority vote at a meeting |
| 518 |
at which a quorum is
present. Prior to turnover of control of an |
| 519 |
association by a
developer to parcel owners, the developer- |
| 520 |
controlled
association shall not vote to use reserves for |
| 521 |
purposes other than
those for which they were intended without |
| 522 |
the approval of a
majority of all nondeveloper voting interests |
| 523 |
voting in person or
by limited proxy at a duly called meeting of |
| 524 |
the association. |
| 525 |
(7) FINANCIAL
REPORTING.--Within 90 days after the end of |
| 526 |
the fiscal year, or
annually on the date provided in the bylaws, |
| 527 |
the association
shall prepare and complete, or contract with a |
| 528 |
third party for the
preparation and completion of, a financial |
| 529 |
report for the
preceding fiscal year. Within 21 days after the |
| 530 |
final financial
report is completed by the association or |
| 531 |
received from the
third party, but not later than 120 days after |
| 532 |
the end of the
fiscal year or other date as provided in the |
| 533 |
bylaws, the
association shall prepare an annual financial
report |
| 534 |
within 60 days after
the close of the fiscal year. The |
| 535 |
association
shall, within the time limits set forth in |
| 536 |
subsection (5), provide each member
with a copy of the annual |
| 537 |
financial report or a written notice
that a copy of the |
| 538 |
financial report is available upon
request at no charge to the |
| 539 |
member. Financial reports shall be
prepared as follows: |
| 540 |
(a) An
association that meets the criteria of this |
| 541 |
paragraph shall prepare or cause to be
prepared a complete set |
| 542 |
of financial statements in accordance
with generally accepted |
| 543 |
accounting principles as
adopted by the Board of Accountancy. |
| 544 |
The financial statements shall be based
upon the association's |
| 545 |
total annual revenues, as follows: |
| 546 |
1. An
association with total annual revenues of $100,000 |
| 547 |
or more, but less than $200,000, shall
prepare compiled |
| 548 |
financial statements. |
| 549 |
2. An
association with total annual revenues of at least |
| 550 |
$200,000, but less than $400,000, shall
prepare reviewed |
| 551 |
financial statements. |
| 552 |
3. An
association with total annual revenues of $400,000 |
| 553 |
or more shall prepare audited financial
statements. |
| 554 |
(b)1. An
association with total annual revenues of less |
| 555 |
than $100,000 shall prepare a report of
cash receipts and |
| 556 |
expenditures. |
| 557 |
2. An
association in a community of fewer than 50 parcels, |
| 558 |
regardless of the association's annual
revenues, may prepare a |
| 559 |
report of cash receipts and
expenditures in lieu of financial |
| 560 |
statements required by paragraph (a)
unless the governing |
| 561 |
documents provide otherwise. |
| 562 |
3. A
report of cash receipts and disbursement must |
| 563 |
disclose the amount of receipts by
accounts and receipt |
| 564 |
classifications and the amount of
expenses by accounts and |
| 565 |
expense classifications, including, but
not limited to, the |
| 566 |
following, as applicable: costs for
security, professional, and |
| 567 |
management fees and expenses; taxes;
costs for recreation |
| 568 |
facilities; expenses for refuse
collection and utility services; |
| 569 |
expenses for lawn care; costs for
building maintenance and |
| 570 |
repair; insurance costs; administration
and salary expenses; and |
| 571 |
reserves if maintained by the
association. |
| 572 |
(c) If
20 percent of the parcel owners petition the board |
| 573 |
for a level of financial reporting
higher than that required by |
| 574 |
this section, the association shall
duly notice and hold a |
| 575 |
meeting of members within 30 days of
receipt of the petition for |
| 576 |
the purpose of voting on raising the
level of reporting for that |
| 577 |
fiscal year. Upon approval of a
majority of the total voting |
| 578 |
interests of the parcel owners, the
association shall prepare or |
| 579 |
cause to be prepared, shall amend the
budget or adopt a special |
| 580 |
assessment to pay for the financial
report regardless of any |
| 581 |
provision to the contrary in the
governing documents, and shall |
| 582 |
provide within 90 days of the meeting
or the end of the fiscal |
| 583 |
year, whichever occurs later: |
| 584 |
1. Compiled,
reviewed, or audited financial statements, if |
| 585 |
the association is otherwise required
to prepare a report of |
| 586 |
cash receipts and expenditures; |
| 587 |
2. Reviewed
or audited financial statements, if the |
| 588 |
association is otherwise required to
prepare compiled financial |
| 589 |
statements; or |
| 590 |
3. Audited
financial statements if the association is |
| 591 |
otherwise required to prepare reviewed
financial statements. |
| 592 |
(d) If
approved by a majority of the voting interests |
| 593 |
present at a properly called meeting of
the association, an |
| 594 |
association may prepare or cause to be
prepared: |
| 595 |
1. A
report of cash receipts and expenditures in lieu of a |
| 596 |
compiled, reviewed, or audited
financial statement; |
| 597 |
2. A
report of cash receipts and expenditures or a |
| 598 |
compiled financial statement in lieu of
a reviewed or audited |
| 599 |
financial statement; or |
| 600 |
3. A
report of cash receipts and expenditures, a compiled |
| 601 |
financial statement, or a reviewed
financial statement in lieu |
| 602 |
of an audited financial statement. |
| 603 |
Section
11. Subsection (2) of section
720.303, Florida |
| 604 |
Statutes, as amended
by section 2 of chapter 2004-345 and |
| 605 |
section 15 of
chapter 2004-353, Laws of Florida, is repealed. |
| 606 |
Section
12. Section 720.3035, Florida Statutes, is created |
| 607 |
to read: |
| 608 |
720.3035 Architectural
control covenants; parcel owner |
| 609 |
improvements; rights
and privileges.-- |
| 610 |
(1) The
authority of an association or any architectural, |
| 611 |
construction
improvement, or other such similar committee of an |
| 612 |
association to
review and approve plans and specifications for |
| 613 |
the location, size,
type, or appearance of any structure or |
| 614 |
other improvement on
a parcel, or to enforce standards for the |
| 615 |
external appearance
of any structure or improvement located on a |
| 616 |
parcel, shall only
be permitted to the extent that the authority |
| 617 |
is specifically
stated or reasonably inferred as to such |
| 618 |
location, size,
type, or appearance in the declaration of |
| 619 |
covenants or other
published guidelines and standards authorized |
| 620 |
by the declaration
of covenants. |
| 621 |
(2) If
the declaration of covenants or other published |
| 622 |
guidelines and
standards authorized by the declaration of |
| 623 |
covenants provides
options for the use of material, the size of |
| 624 |
the structure or
improvement, the design of the structure or |
| 625 |
improvement, or the
location of the structure or improvement on |
| 626 |
the parcel, neither
the association nor any architectural, |
| 627 |
construction
improvement, or other such similar committee of the |
| 628 |
association shall
restrict the right of a parcel owner to select |
| 629 |
from the options
provided in the declaration of covenants or |
| 630 |
other published
guidelines and standards authorized by the |
| 631 |
declaration of
covenants. |
| 632 |
(3) Unless
otherwise specifically stated in the |
| 633 |
declaration of
covenants or other published guidelines and |
| 634 |
standards authorized
by the declaration of covenants, each |
| 635 |
parcel shall be
deemed to have only one front for purposes of |
| 636 |
determining the
required front setback even if the parcel is |
| 637 |
bounded by a roadway
or other easement on more than one side. |
| 638 |
When the declaration
of covenants or other published guidelines |
| 639 |
and standards
authorized by the declaration of covenants do not |
| 640 |
provide for specific
setback limitations, the applicable county |
| 641 |
or municipal setback
limitations shall apply, and neither the |
| 642 |
association nor any
architectural, construction improvement, or |
| 643 |
other such similar
committee of the association shall enforce or |
| 644 |
attempt to enforce
any setback limitation that is inconsistent |
| 645 |
with the applicable
county or municipal standard or standards. |
| 646 |
(4) Each
parcel owner shall be entitled to the rights and |
| 647 |
privileges set forth
in the declaration of covenants or other |
| 648 |
published guidelines
and standards authorized by the declaration |
| 649 |
of covenants
concerning the architectural use of the parcel, and |
| 650 |
the construction of
permitted structures and improvements on the |
| 651 |
parcel and such
rights and privileges shall not be unreasonably |
| 652 |
infringed upon or
impaired by the association or any |
| 653 |
architectural,
construction improvement, or other such similar |
| 654 |
committee of the
association. If the association or any |
| 655 |
architectural,
construction improvement, or other such similar |
| 656 |
committee of the
association should unreasonably, knowingly, and |
| 657 |
willfully infringe
upon or impair the rights and privileges set |
| 658 |
forth in the
declaration of covenants or other published |
| 659 |
guidelines and
standards authorized by the declaration of |
| 660 |
covenants, the
adversely affected parcel owner shall be entitled |
| 661 |
to recover damages
caused by such infringement or impairment, |
| 662 |
including any costs
and reasonable attorney's fees incurred in |
| 663 |
preserving or
restoring the rights and privileges of the parcel |
| 664 |
owner set forth in
the declaration of covenants or other |
| 665 |
published guidelines
and standards authorized by the declaration |
| 666 |
of covenants. |
| 667 |
(5) Neither
the association nor any architectural, |
| 668 |
construction
improvement, or other such similar committee of the |
| 669 |
association shall
enforce any policy or restriction that is |
| 670 |
inconsistent with
the rights and privileges of a parcel owner |
| 671 |
set forth in the
declaration of covenants or other published |
| 672 |
guidelines and
standards authorized by the declaration of |
| 673 |
covenants, whether
uniformly applied or not. Neither the |
| 674 |
association nor any
architectural, construction improvement, or |
| 675 |
other such similar
committee of the association may rely upon a |
| 676 |
policy or
restriction that is inconsistent with the declaration |
| 677 |
of covenants or
other published guidelines and standards |
| 678 |
authorized by the
declaration of covenants, whether uniformly |
| 679 |
applied or not, in
defense of any action taken in the name of or |
| 680 |
on behalf of the
association against a parcel owner. |
| 681 |
Section
13. Subsection (1) of section 720.305, Florida |
| 682 |
Statutes, is amended to read: |
| 683 |
720.305 Obligations
of members; remedies at law or in |
| 684 |
equity; levy of fines and suspension of
use rights; failure to |
| 685 |
fill sufficient number of vacancies on
board of directors to |
| 686 |
constitute a quorum; appointment of
receiver upon petition of |
| 687 |
any member.-- |
| 688 |
(1) Each
member and the member's tenants, guests, and |
| 689 |
invitees, and each association, are
governed by, and must comply |
| 690 |
with, this chapter, the governing
documents of the community, |
| 691 |
and the rules of the association.
Actions at law or in equity, |
| 692 |
or both, to redress alleged failure or
refusal to comply with |
| 693 |
these provisions may be brought by the
association or by any |
| 694 |
member against: |
| 695 |
(a) The
association; |
| 696 |
(b) A
member; |
| 697 |
(c) Any
director or officer of an association who |
| 698 |
willfully and knowingly fails to comply
with these provisions; |
| 699 |
and |
| 700 |
(d) Any
tenants, guests, or invitees occupying a parcel or |
| 701 |
using the common areas. |
| 702 |
|
| 703 |
The prevailing party in any such
litigation is entitled to |
| 704 |
recover reasonable attorney's fees and
costs. A member |
| 705 |
prevailing in an
action between the association and the member |
| 706 |
under this section,
in addition to recovering his or her |
| 707 |
reasonable
attorney's fees, may recover additional amounts as |
| 708 |
determined by the
court to be necessary to reimburse the member |
| 709 |
for his or her share
of assessments levied by the association to |
| 710 |
fund its expenses of
the litigation. This relief does not |
| 711 |
exclude other
remedies provided by law. This section does not |
| 712 |
deprive any person of any other
available right or remedy. |
| 713 |
Section
14. Paragraph (c) of subsection (1) of section |
| 714 |
720.306, Florida Statutes, is amended
to read: |
| 715 |
720.306 Meetings
of members; voting and election |
| 716 |
procedures; amendments.-- |
| 717 |
(1) QUORUM;
AMENDMENTS.-- |
| 718 |
(c) Unless
otherwise provided in the governing documents |
| 719 |
as originally recorded or permitted by
this chapter or chapter |
| 720 |
617, an amendment may not materially
and adversely alter the |
| 721 |
proportionate voting interest
appurtenant to a parcel or |
| 722 |
increase the proportion or percentage
by which a parcel shares |
| 723 |
in the common expenses of the
association unless the record |
| 724 |
parcel owner and all record owners of
liens on the parcels join |
| 725 |
in the execution of the amendment. For
purposes of this section, |
| 726 |
a change in quorum requirements is not
an alteration of voting |
| 727 |
interests. The
merger or consolidation of one or more |
| 728 |
associations under a
plan of merger or consolidation under |
| 729 |
chapter 607 or
chapter 617 shall not be considered a material or |
| 730 |
adverse alteration
of the proportionate voting interest |
| 731 |
appurtenant to a
parcel. |
| 732 |
Section
15. Paragraph (t) is added to subsection (3) of |
| 733 |
section 720.307, Florida Statutes, to
read: |
| 734 |
720.307 Transition
of association control in a |
| 735 |
community.--With respect to homeowners'
associations: |
| 736 |
(3) At
the time the members are entitled to elect at least |
| 737 |
a majority of the board of directors of
the homeowners' |
| 738 |
association, the developer shall, at
the developer's expense, |
| 739 |
within no more than 90 days deliver the
following documents to |
| 740 |
the board: |
| 741 |
(t) The
financial records, including financial statements |
| 742 |
of the association,
and source documents from the incorporation |
| 743 |
of the association
through the date of turnover. The records |
| 744 |
shall be audited by
an independent certified public accountant |
| 745 |
for the period from
the incorporation of the association or from |
| 746 |
the period covered
by the last audit, if an audit has been |
| 747 |
performed for each
fiscal year since incorporation. All |
| 748 |
financial statements
shall be prepared in accordance with |
| 749 |
generally accepted
accounting principles and shall be audited in |
| 750 |
accordance with
generally accepted auditing standards, as |
| 751 |
prescribed by the
Board of Accountancy, pursuant to chapter 473. |
| 752 |
The certified public
accountant performing the audit shall |
| 753 |
examine to the
extent necessary supporting documents and |
| 754 |
records, including
the cash disbursements and related paid |
| 755 |
invoices to
determine if expenditures were for association |
| 756 |
purposes and the
billings, cash receipts, and related records of |
| 757 |
the association to
determine that the developer was charged and |
| 758 |
paid the proper
amounts of assessments. This paragraph applies |
| 759 |
to associations with
a date of incorporation after December 31, |
| 760 |
2006. |
| 761 |
Section
16. Section 720.308, Florida Statutes, is amended |
| 762 |
to read: |
| 763 |
720.308 Assessments
and charges.-- |
| 764 |
(1) ASSESSMENTS.--For
any community created after October |
| 765 |
1, 1995, the governing documents must
describe the manner in |
| 766 |
which expenses are shared and specify
the member's proportional |
| 767 |
share thereof. Assessments levied
pursuant to the annual budget |
| 768 |
or special assessment must be in the
member's proportional share |
| 769 |
of expenses as described in the
governing document, which share |
| 770 |
may be different among classes of
parcels based upon the state |
| 771 |
of development thereof, levels of
services received by the |
| 772 |
applicable members, or other relevant
factors. While the |
| 773 |
developer is in control of the
homeowners' association, it may |
| 774 |
be excused from payment of its share of
the operating expenses |
| 775 |
and assessments related to its parcels
for any period of time |
| 776 |
for which the developer has, in the
declaration, obligated |
| 777 |
itself to pay any operating expenses
incurred that exceed the |
| 778 |
assessments receivable from other
members and other income of |
| 779 |
the association. This section does not
apply to an association, |
| 780 |
no matter when created, if the
association is created in a |
| 781 |
community that is included in an
effective development-of- |
| 782 |
regional-impact development order as of
the effective date of |
| 783 |
this act, together with any approved
modifications thereto. |
| 784 |
(2) GUARANTEES
OF COMMON EXPENSES.-- |
| 785 |
(a) Establishment
of a guarantee.--If a guarantee of the |
| 786 |
assessments of
parcel owners is not included in the purchase |
| 787 |
contracts or
declaration, any agreement establishing a guarantee |
| 788 |
shall only be
effective upon the approval of a majority of the |
| 789 |
voting interests of
the members other than the developer. |
| 790 |
Approval shall be
expressed at a meeting of the members voting |
| 791 |
in person or by
limited proxy or by agreement in writing without |
| 792 |
a meeting if
provided in the bylaws. Such guarantee shall meet |
| 793 |
the requirements of
this section. |
| 794 |
(b) Guarantee
period.--The period of time for the |
| 795 |
guarantee shall be
indicated by a specific beginning and ending |
| 796 |
date or event. |
| 797 |
1. The
ending date or event shall be the same for all of |
| 798 |
the members of an
association, including members in different |
| 799 |
phases of the
development. |
| 800 |
2. The
guarantee may provide for different intervals of |
| 801 |
time during a
guarantee period with different dollar amounts for |
| 802 |
each such interval. |
| 803 |
3. The
guarantee may provide that after the initial stated |
| 804 |
period, the
developer has an option to extend the guarantee for |
| 805 |
one or more
additional stated periods. The extension of a |
| 806 |
guarantee is limited
to extending the ending date or event; |
| 807 |
therefore, the
developer does not have the option of changing |
| 808 |
the level of
assessments guaranteed. |
| 809 |
(3) MAXIMUM
LEVEL OF ASSESSMENTS.--The stated dollar |
| 810 |
amount of the
guarantee shall be an exact dollar amount for each |
| 811 |
parcel identified in
the declaration. Regardless of the stated |
| 812 |
dollar amount of the
guarantee, assessments charged to a member |
| 813 |
shall not exceed the
maximum obligation of the member based on |
| 814 |
the total amount of
the adopted budget and the member's |
| 815 |
proportionate
ownership share of the common elements. |
| 816 |
(4) CASH
FUNDING REQUIREMENTS DURING GUARANTEE.--The cash |
| 817 |
payments required
from the guarantor during the guarantee period |
| 818 |
shall be determined
as follows: |
| 819 |
(a) If
at any time during the guarantee period the funds |
| 820 |
collected from
member assessments at the guaranteed level and |
| 821 |
other revenues
collected by the association are not sufficient |
| 822 |
to provide payment,
on a timely basis, of all assessments, |
| 823 |
including the full
funding of the reserves unless properly |
| 824 |
waived, the
guarantor shall advance sufficient cash to the |
| 825 |
association at the
time such payments are due. |
| 826 |
(b) Expenses
incurred in the production of nonassessment |
| 827 |
revenues, not in
excess of the nonassessment revenues, shall not |
| 828 |
be included in the
assessments. If the expenses attributable to |
| 829 |
nonassessment
revenues exceed nonassessment revenues, only the |
| 830 |
excess expenses must
be funded by the guarantor. Interest earned |
| 831 |
on the investment of
association funds may be used to pay the |
| 832 |
income tax expense
incurred as a result of the investment; such |
| 833 |
expense shall not be
charged to the guarantor; and the net |
| 834 |
investment income
shall be retained by the association. Each |
| 835 |
such nonassessment-revenue-generating
activity shall be |
| 836 |
considered
separately. Any portion of the parcel assessment that |
| 837 |
is budgeted for
designated capital contributions of the |
| 838 |
association shall
not be used to pay operating expenses. |
| 839 |
(5) CALCULATION
OF GUARANTOR'S FINAL OBLIGATION.--The |
| 840 |
guarantor's total
financial obligation to the association at the |
| 841 |
end of the guarantee
period shall be determined on the accrual |
| 842 |
basis using the
following formula: the guarantor shall pay any |
| 843 |
deficits that exceed
the guaranteed amount, less the total |
| 844 |
regular periodic
assessments earned by the association from the |
| 845 |
members other than
the guarantor during the guarantee period |
| 846 |
regardless of
whether the actual level charged was less than the |
| 847 |
maximum guaranteed
amount. |
| 848 |
(6) EXPENSES.--Expenses
incurred in the production of |
| 849 |
nonassessment
revenues, not in excess of the nonassessment |
| 850 |
revenues, shall not
be included in the operating expenses. If |
| 851 |
the expenses
attributable to nonassessment revenues exceed |
| 852 |
nonassessment
revenues, only the excess expenses must be funded |
| 853 |
by the guarantor.
Interest earned on the investment of |
| 854 |
association funds
may be used to pay the income tax expense |
| 855 |
incurred as a result
of the investment; such expense shall not |
| 856 |
be charged to the
guarantor; and the net investment income shall |
| 857 |
be retained by the
association. Each such nonassessment-revenue- |
| 858 |
generating activity
shall be considered separately. Any portion |
| 859 |
of the parcel
assessment that is budgeted for designated capital |
| 860 |
contributions of the
association shall not be used to pay |
| 861 |
operating expenses. |
| 862 |
Section
17. Section 720.311, Florida Statutes, is amended |
| 863 |
to read: |
| 864 |
720.311 Dispute
resolution.-- |
| 865 |
(1) The
Legislature finds that alternative dispute |
| 866 |
resolution has made progress in
reducing court dockets and |
| 867 |
trials and in offering a more
efficient, cost-effective option |
| 868 |
to litigation. The filing of any
petition for mediation or |
| 869 |
arbitration or
the serving of an offer for presuit mediation as |
| 870 |
provided for in this section shall toll
the applicable statute |
| 871 |
of limitations. Any recall dispute
filed with the department |
| 872 |
pursuant to s. 720.303(10) shall be
conducted by the department |
| 873 |
in accordance with the provisions of ss.
718.112(2)(j) and |
| 874 |
718.1255 and the rules adopted by the
division. In addition, the |
| 875 |
department shall conduct mandatory
binding arbitration of |
| 876 |
election disputes between a member and
an association pursuant |
| 877 |
to s. 718.1255 and rules adopted by the
division. Neither |
| 878 |
election disputes nor recall disputes
are eligible for presuit |
| 879 |
mediation; these disputes shall be
arbitrated by the department. |
| 880 |
At the conclusion of the proceeding,
the department shall charge |
| 881 |
the parties a fee in an amount adequate
to cover all costs and |
| 882 |
expenses incurred by the department in
conducting the |
| 883 |
proceeding. Initially, the petitioner
shall remit a filing fee |
| 884 |
of at least $200 to the department. The
fees paid to the |
| 885 |
department shall become a recoverable
cost in the arbitration |
| 886 |
proceeding, and the prevailing party in
an arbitration |
| 887 |
proceeding shall recover its reasonable
costs and attorney's |
| 888 |
fees in an amount found reasonable by
the arbitrator. The |
| 889 |
department shall adopt rules to
effectuate the purposes of this |
| 890 |
section. |
| 891 |
(2)(a) Disputes
between an association and a parcel owner |
| 892 |
regarding use of or changes to the
parcel or the common areas |
| 893 |
and other covenant enforcement
disputes, disputes regarding |
| 894 |
amendments to the association
documents, disputes regarding |
| 895 |
meetings of the board and committees
appointed by the board, |
| 896 |
membership meetings not including
election meetings, and access |
| 897 |
to the official records of the
association shall be the subject |
| 898 |
of an offer
filed with the department for presuit
mandatory |
| 899 |
mediation served
by an aggrieved party before the dispute is |
| 900 |
filed in court. Presuit
mediation proceedings must be conducted |
| 901 |
in accordance with the applicable
Florida Rules of Civil |
| 902 |
Procedure, and these proceedings are
privileged and confidential |
| 903 |
to the same extent as court-ordered
mediation. Disputes subject |
| 904 |
to presuit mediation
under this section shall not include the |
| 905 |
collection of any
assessment, fine, or other financial |
| 906 |
obligation,
including attorney's fees and costs, claimed to be |
| 907 |
due or any action to
enforce a prior mediation settlement |
| 908 |
agreement between
the parties. Also, in any dispute subject to |
| 909 |
presuit mediation
under this section where emergency relief is |
| 910 |
required, a motion
for temporary injunctive relief may be filed |
| 911 |
with the court
without first complying with the presuit |
| 912 |
mediation
requirements of this section. After any issues |
| 913 |
regarding emergency
or temporary relief are resolved, the court |
| 914 |
may either refer the
parties to a mediation program administered |
| 915 |
by the courts
or require mediation under this section. An |
| 916 |
arbitrator or judge may not consider
any information or evidence |
| 917 |
arising from the presuit
mediation proceeding except in a |
| 918 |
proceeding to impose sanctions for
failure to attend a presuit |
| 919 |
mediation session or
with the parties' agreement in a proceeding |
| 920 |
seeking to
enforce the agreement. Persons who are not parties to |
| 921 |
the dispute may not attend the presuit
mediation conference |
| 922 |
without the consent of all parties,
except for counsel for the |
| 923 |
parties and a corporate representative
designated by the |
| 924 |
association. When mediation is attended
by a quorum of the |
| 925 |
board, such mediation is not a board
meeting for purposes of |
| 926 |
notice and
participation set forth in s. 720.303. An aggrieved |
| 927 |
party shall serve on
the responding party a written offer to |
| 928 |
participate in
presuit mediation in substantially the following |
| 929 |
form: |
| 930 |
|
| 931 |
STATUTORY OFFER TO
PARTICIPATE IN PRESUIT MEDIATION |
| 932 |
|
| 933 |
The alleged
aggrieved party,__________________, hereby |
| 934 |
offers to
_________________, as the responding party, |
| 935 |
to enter into
presuit mediation in connection with the |
| 936 |
following dispute,
which by statute is of a type that |
| 937 |
is subject to
presuit mediation: |
| 938 |
|
| 939 |
(List specific
nature of the dispute or disputes to be |
| 940 |
mediated and the
authority supporting a finding of a |
| 941 |
violation as to each
dispute.) |
| 942 |
|
| 943 |
Pursuant to section
720.311, Florida Statutes, this |
| 944 |
offer to resolve the
dispute through presuit mediation |
| 945 |
is required before a
lawsuit can be filed concerning |
| 946 |
the dispute.
Pursuant to the statute, the aggrieved |
| 947 |
party is hereby
offering to engage in presuit |
| 948 |
mediation with a
neutral third-party mediator in order |
| 949 |
to attempt to
resolve this dispute without court |
| 950 |
action, and the
aggrieved party demands that you |
| 951 |
likewise agree to
this process. If you fail to agree |
| 952 |
to presuit
mediation, or if you agree and later fail |
| 953 |
to follow through
with your agreement to mediate, suit |
| 954 |
may be brought
against you without further warning. |
| 955 |
|
| 956 |
The process of
mediation involves a supervised |
| 957 |
negotiation process
in which a trained, neutral third- |
| 958 |
party mediator meets
with both parties and assists |
| 959 |
them in exploring
possible opportunities for resolving |
| 960 |
part or all of the
dispute. The mediation process is a |
| 961 |
voluntary one. By
agreeing to participate in presuit |
| 962 |
mediation, you are
not bound in any way to change your |
| 963 |
position or to enter
into any type of agreement. |
| 964 |
Furthermore, the
mediator has no authority to make any |
| 965 |
decisions in this
matter or to determine who is right |
| 966 |
or wrong and merely
acts as a facilitator to ensure |
| 967 |
that each party
understands the position of the other |
| 968 |
party and that all
reasonable settlement options are |
| 969 |
fully explored. All
mediation communications are |
| 970 |
confidential under
the Mediation Confidentiality and |
| 971 |
Privilege Act
pursuant to sections 44.401-44.406, |
| 972 |
Florida Statutes,
and a mediation participant may not |
| 973 |
disclose a mediation
communication to a person other |
| 974 |
than a mediation
participant or a participant's |
| 975 |
counsel. |
| 976 |
|
| 977 |
If an agreement is
reached, it shall be reduced to |
| 978 |
writing and becomes
a binding and enforceable |
| 979 |
commitment of the
parties. A resolution of one or more |
| 980 |
disputes in this
fashion avoids the need to litigate |
| 981 |
these issues in
court. The failure to reach an |
| 982 |
agreement, or the
failure of a party to participate in |
| 983 |
the process, results
in the mediator's declaring an |
| 984 |
impasse in the
mediation, after which the aggrieved |
| 985 |
party may proceed to
court on all outstanding, |
| 986 |
unsettled disputes. |
| 987 |
|
| 988 |
The aggrieved party
has selected and hereby lists |
| 989 |
three certified
mediators who we believe to be neutral |
| 990 |
and qualified to
mediate the dispute. You have the |
| 991 |
right to select any
one of these mediators. The fact |
| 992 |
that one party may
be familiar with one or more of the |
| 993 |
listed mediators
does not mean that the mediator |
| 994 |
cannot act as a
neutral and impartial facilitator. Any |
| 995 |
mediator who cannot
act in this capacity ethically |
| 996 |
must decline to
accept engagement. The mediators that |
| 997 |
we suggest, and
their current hourly rates, are as |
| 998 |
follows: |
| 999 |
|
| 1000 |
(List the names,
addresses, telephone numbers, and |
| 1001 |
hourly rates of the
mediators. Other pertinent |
| 1002 |
information about
the background of the mediators may |
| 1003 |
be included as an
attachment.) |
| 1004 |
|
| 1005 |
You may contact the
offices of these mediators to |
| 1006 |
confirm that the
listed mediators will be neutral and |
| 1007 |
will not show any
favoritism toward either party. The |
| 1008 |
names of certified
mediators may be found through the |
| 1009 |
office of the clerk
of the circuit court for this |
| 1010 |
circuit. |
| 1011 |
|
| 1012 |
If you agree to
participate in the presuit mediation |
| 1013 |
process, the statute
requires that each party is to |
| 1014 |
pay one-half of the
costs and fees involved in the |
| 1015 |
presuit mediation
process unless otherwise agreed by |
| 1016 |
all parties. An
average mediation may require 3 to 4 |
| 1017 |
hours of the
mediator's time, including some |
| 1018 |
preparation time,
and each party would need to pay |
| 1019 |
one-half of the
mediator's fees as well as his or her |
| 1020 |
own attorney's fees
if he or she chooses to employ an |
| 1021 |
attorney in
connection with the mediation. However, |
| 1022 |
use of an attorney
is not required and is at the |
| 1023 |
option of each
party. The mediator may require the |
| 1024 |
advance payment of
some or all of the anticipated |
| 1025 |
fees. The aggrieved
party hereby agrees to pay or |
| 1026 |
prepay one-half of
the mediator's estimated fees and |
| 1027 |
to forward this
amount or such other reasonable |
| 1028 |
advance deposits as
the mediator may require for this |
| 1029 |
purpose. Any funds
deposited will be returned to you |
| 1030 |
if these are in
excess of your share of the fees |
| 1031 |
incurred. |
| 1032 |
|
| 1033 |
If you agree to
participate in presuit mediation in |
| 1034 |
order to attempt to
resolve the dispute and thereby |
| 1035 |
avoid further legal
action, please sign below and |
| 1036 |
clearly indicate
which mediator is acceptable to you. |
| 1037 |
We will then ask the
mediator to schedule a mutually |
| 1038 |
convenient time and
place for the mediation conference |
| 1039 |
to be held. The
mediation conference must be held |
| 1040 |
within 90 days after
the date of this letter unless |
| 1041 |
extended by mutual
written agreement. In the event |
| 1042 |
that you fail to
respond within 20 days after the date |
| 1043 |
of this letter, or
if you fail to agree to at least |
| 1044 |
one of the mediators
that we have suggested and to pay |
| 1045 |
or prepay to the
mediator one-half of the costs |
| 1046 |
involved, the
aggrieved party will be authorized to |
| 1047 |
proceed with the
filing of a lawsuit against you |
| 1048 |
without further
notice and may seek an award of |
| 1049 |
attorney's fees or
costs incurred in attempting to |
| 1050 |
obtain mediation. |
| 1051 |
|
| 1052 |
Should you wish, you
may also elect to waive presuit |
| 1053 |
mediation so that
this matter may proceed directly to |
| 1054 |
court. |
| 1055 |
|
| 1056 |
Therefore, please
give this matter your immediate |
| 1057 |
attention. By law,
your response must be mailed by |
| 1058 |
certified mail,
return receipt requested, with an |
| 1059 |
additional copy
being sent by regular first-class mail |
| 1060 |
to the address shown
on this offer. |
| 1061 |
|
| 1062 |
_____________________ |
| 1063 |
_____________________ |
| 1064 |
|
| 1065 |
RESPONDING PARTY:
CHOOSE ONLY ONE OF THE TWO OPTIONS |
| 1066 |
BELOW. YOUR
SIGNATURE INDICATES YOUR AGREEMENT TO THAT |
| 1067 |
CHOICE. |
| 1068 |
|
| 1069 |
AGREEMENT TO MEDIATE |
| 1070 |
|
| 1071 |
The undersigned
hereby agrees to participate in |
| 1072 |
presuit mediation
and agrees to the following mediator |
| 1073 |
or mediators as
acceptable to mediate this dispute: |
| 1074 |
|
| 1075 |
(List acceptable
mediator or mediators.) |
| 1076 |
|
| 1077 |
I/we further agree
to pay or prepay one-half of the |
| 1078 |
mediator's fees and
to forward such advance deposits |
| 1079 |
as the mediator may
require for this purpose. |
| 1080 |
|
| 1081 |
_______________________ |
| 1082 |
Signature of
responding party #1 |
| 1083 |
|
| 1084 |
_______________________ |
| 1085 |
Signature of
responding party #2 (if applicable)(if |
| 1086 |
property is owned by
more than one person, all owners |
| 1087 |
must sign) |
| 1088 |
|
| 1089 |
WAIVER OF MEDIATION |
| 1090 |
|
| 1091 |
The undersigned
hereby waives the right to participate |
| 1092 |
in presuit mediation
of the dispute listed above and |
| 1093 |
agrees to allow the
aggrieved party to proceed in |
| 1094 |
court on such
matters. |
| 1095 |
|
| 1096 |
__________________________ |
| 1097 |
Signature of
responding party #1 |
| 1098 |
|
| 1099 |
___________________________ |
| 1100 |
Signature of
responding party #2 (if applicable)(if |
| 1101 |
property is owned by
more than one person, all owners |
| 1102 |
must sign) |
| 1103 |
|
| 1104 |
(b) Service
of the statutory offer to participate in |
| 1105 |
presuit mediation
shall be effected by sending a letter in |
| 1106 |
substantial
conformity with the above form by certified mail, |
| 1107 |
return receipt
requested, with an additional copy being sent by |
| 1108 |
regular first-class
mail, to the address of the responding party |
| 1109 |
as it last appears
on the books and records of the association. |
| 1110 |
The responding party
shall have 20 days from the date of the |
| 1111 |
mailing of the
statutory offer to serve a response to the |
| 1112 |
aggrieved party in
writing. The response shall be served by |
| 1113 |
certified mail,
return receipt requested, with an additional |
| 1114 |
copy being sent by
regular first-class mail, to the address |
| 1115 |
shown on the
statutory offer. In the alternative, the responding |
| 1116 |
party may waive
mediation in writing. Notwithstanding the |
| 1117 |
foregoing, once the
parties have agreed on a mediator, the |
| 1118 |
mediator may
reschedule the mediation for a date and time |
| 1119 |
mutually
convenient to the parties. The
department shall conduct |
| 1120 |
the proceedings
through the use of department mediators or refer |
| 1121 |
the disputes to
private mediators who have been duly certified |
| 1122 |
by the
department as provided in paragraph (c). The parties |
| 1123 |
shall share the costs of presuit
mediation equally, including |
| 1124 |
the fee charged by the mediator, if
any, unless the parties |
| 1125 |
agree otherwise,
and the mediator may require advance payment of |
| 1126 |
its reasonable fees
and costs. The failure of any party to |
| 1127 |
respond to a demand
or response, to agree upon a mediator, to |
| 1128 |
make payment of fees
and costs within the time established by |
| 1129 |
the mediator, or to
appear for a scheduled mediation session |
| 1130 |
shall operate as an
impasse in the presuit mediation by such |
| 1131 |
party, entitling the
other party to proceed in court and to seek |
| 1132 |
an award of the
costs and fees associated with the mediation. |
| 1133 |
Additionally, if any
presuit mediation session cannot be |
| 1134 |
scheduled and
conducted within 90 days after the offer to |
| 1135 |
participate in
mediation was filed, an impasse shall be deemed |
| 1136 |
to have occurred
unless both parties agree to extend this |
| 1137 |
deadline.
If a department mediator is used, the
department may |
| 1138 |
charge such fee as
is necessary to pay expenses of the |
| 1139 |
mediation,
including, but not limited to, the salary and |
| 1140 |
benefits of the
mediator and any travel expenses incurred. The |
| 1141 |
petitioner shall
initially file with the department upon filing |
| 1142 |
the disputes, a
filing fee of $200, which shall be used to |
| 1143 |
defray the costs of
the mediation. At the conclusion of the |
| 1144 |
mediation, the
department shall charge to the parties, to be |
| 1145 |
shared equally
unless otherwise agreed by the parties, such |
| 1146 |
further fees as are
necessary to fully reimburse the department |
| 1147 |
for all expenses
incurred in the mediation. |
| 1148 |
(c)(b) If
presuit mediation as described in paragraph (a) |
| 1149 |
is not successful in resolving all
issues between the parties, |
| 1150 |
the parties may file the unresolved
dispute in a court of |
| 1151 |
competent jurisdiction or elect to
enter into binding or |
| 1152 |
nonbinding arbitration pursuant to the
procedures set forth in |
| 1153 |
s. 718.1255 and rules adopted by the
division, with the |
| 1154 |
arbitration proceeding to be conducted
by a department |
| 1155 |
arbitrator or by a private arbitrator
certified by the |
| 1156 |
department. If all parties do not agree
to arbitration |
| 1157 |
proceedings following an unsuccessful presuit
mediation, any |
| 1158 |
party may file the dispute in court. A
final order resulting |
| 1159 |
from nonbinding arbitration is final
and enforceable in the |
| 1160 |
courts if a complaint for trial de novo
is not filed in a court |
| 1161 |
of competent jurisdiction within 30
days after entry of the |
| 1162 |
order. As to
any issue or dispute that is not resolved at |
| 1163 |
presuit mediation,
and as to any issue that is settled at |
| 1164 |
presuit mediation
but is thereafter subject to an action seeking |
| 1165 |
enforcement of the
mediation settlement, the prevailing party in |
| 1166 |
any subsequent
arbitration or litigation proceeding shall be |
| 1167 |
entitled to seek
recovery of all costs and attorney's fees |
| 1168 |
incurred in the
presuit mediation process. |
| 1169 |
(d)(c) The
department shall develop a certification and |
| 1170 |
training program for
private mediators and private arbitrators |
| 1171 |
which shall
emphasize experience and expertise in the area of |
| 1172 |
the operation
of community associations. A mediator or |
| 1173 |
arbitrator shall be certified to
conduct mediation or |
| 1174 |
arbitration
under this section by the department only if he or |
| 1175 |
she has been
certified as a circuit court civil mediator or |
| 1176 |
arbitrator,
respectively, pursuant to the requirements |
| 1177 |
established
attended at least 20 hours of training in
mediation |
| 1178 |
or arbitration, as
appropriate, and only if the applicant has |
| 1179 |
mediated or
arbitrated at least 10 disputes involving community |
| 1180 |
associations within
5 years prior to the date of the |
| 1181 |
application, or has
mediated or arbitrated 10 disputes in any |
| 1182 |
area within 5 years
prior to the date of application and has |
| 1183 |
completed 20 hours
of training in community association |
| 1184 |
disputes. In order
to be certified by the department, any |
| 1185 |
mediator must also
be certified by the Florida Supreme Court. |
| 1186 |
The department may
conduct the training and certification |
| 1187 |
program within the
department or may contract with an outside |
| 1188 |
vendor to perform
the training or certification. The expenses of |
| 1189 |
operating the
training and certification and training program |
| 1190 |
shall be paid by the
moneys and filing fees generated by the |
| 1191 |
arbitration of
recall and election disputes and by the mediation |
| 1192 |
of those disputes
referred to in this subsection and by the |
| 1193 |
training fees. |
| 1194 |
(e)(d) The
presuit mediation procedures provided by this |
| 1195 |
subsection may be used by a Florida
corporation responsible for |
| 1196 |
the operation of a community in which
the voting members are |
| 1197 |
parcel owners or their representatives,
in which membership in |
| 1198 |
the corporation is not a mandatory
condition of parcel |
| 1199 |
ownership, or which is not authorized
to impose an assessment |
| 1200 |
that may become a lien on the parcel. |
| 1201 |
(3) The
department shall develop an education program to |
| 1202 |
assist homeowners,
associations, board members, and managers in |
| 1203 |
understanding and
increasing awareness of the operation of |
| 1204 |
homeowners'
associations pursuant to this chapter and in |
| 1205 |
understanding the
use of alternative dispute resolution |
| 1206 |
techniques in
resolving disputes between parcel owners and |
| 1207 |
associations or
between owners. Such education program may |
| 1208 |
include the
development of pamphlets and other written |
| 1209 |
instructional
guides, the holding of classes and meetings by |
| 1210 |
department employees
or outside vendors, as the department |
| 1211 |
determines, and the
creation and maintenance of a website |
| 1212 |
containing
instructional materials. The expenses of operating |
| 1213 |
the education
program shall be initially paid by the moneys and |
| 1214 |
filing fees
generated by the arbitration of recall and election |
| 1215 |
disputes and by the
mediation of those disputes referred to in |
| 1216 |
this subsection. |
| 1217 |
Section
18. Except as otherwise expressly provided in this |
| 1218 |
act, this act shall take effect July 1,
2006. |