SB 546 Relating to Homeowner's Associations |
S546 GENERAL BILL by Senator Fasano
(Compare H 0391)
11-156-06 1 A bill to be entitled 2 An act relating to homeowners' associations; 3 creating s. 712.11, F.S.; authorizing certain 4 associations to revive lapsed covenants; 5 amending s. 720.302, F.S.; revising certain 6 purposes for regulation; amending s. 720.303, 7 F.S.; revising notice requirements relating to 8 the levy of special assessments; authorizing 9 associations to charge specified fees for 10 providing certain information to prospective 11 purchasers or lienholders; limiting liability 12 for providing such information; revising 13 certain time requirements relating to annual 14 reports of associations; amending s. 720.305, 15 F.S.; prohibiting a fine levied by an 16 association from becoming a lien unless the 17 governing documents claimed to have been 18 violated are recorded in the public records; 19 amending s. 720.306, F.S.; providing that 20 certain mergers or consolidations do not alter 21 specified voting interests; limiting the right 22 of members to speak at membership meetings; 23 amending s. 720.402, F.S., relating to 24 publication of false or misleading information; 25 clarifying that the section does not limit 26 common-law rights; amending s. 720.405, F.S.; 27 deleting a requirement that a proposed revived 28 governing document not contain certain 29 restrictive covenants; repealing s. 720.311, 30 F.S., relating to an alternative dispute 31 resolution process; amending s. 34.01, F.S.;
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1 conforming a cross-reference; providing an 2 effective date. 3 4 Be It Enacted by the Legislature of the State of Florida: 5 6 Section 1. Section 712.11, Florida Statutes, is 7 created to read: 8 712.11 Covenant revitalization.--A homeowners' 9 association that is not subject to chapter 720 may use the 10 procedures in ss. 720.403-720.407 to revive covenants that 11 have lapsed pursuant to this chapter. 12 Section 2. Section 720.302, Florida Statutes, is 13 amended to read: 14 720.302 Purposes, scope, and application.-- 15 (1) The purposes of this chapter are to give statutory 16 recognition to corporations not for profit that operate 17 residential communities in this state, to provide procedures 18 for operating homeowners' associations, and to protect the 19 rights of association members without unduly impairing the 20 ability of such associations to perform their functions. 21 (2) The Legislature recognizes that it is not in the 22 best interest of homeowners' associations or the individual 23 association members thereof to create or impose a bureau or 24 other agency of state government to regulate the affairs of
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1 2 that certain contract rights have been created for the benefit 3 of homeowners' associations and members thereof before the 4 effective date of this act and that ss. 720.301-720.407 are 5 not intended to impair such contract rights, including, but 6 not limited to, the rights of the developer to complete the 7 community as initially contemplated. 8 (3) Except as specifically provided in this chapter, 9 this chapter does not apply to: 10 (a) A community that is composed of property primarily 11 intended for commercial, industrial, or other nonresidential 12 use; or 13 (b) The commercial or industrial parcels in a 14 community that contains both residential parcels and parcels 15 intended for commercial or industrial use. 16 (4) This chapter does not apply to any association 17 that is subject to regulation under chapter 718, chapter 719, 18 or chapter 721; or to any nonmandatory association formed 19 under chapter 723. 20 (5) Unless expressly stated to the contrary, 21 corporations not for profit that operate residential 22 homeowners' associations in this state shall be governed by 23 and subject to chapter 617 and this chapter or chapter 607 if 24 incorporated under that chapter. This subsection is intended 25 to clarify existing law. 26 Section 3. Subsections (2), (5), and (7) of section 27 720.303, Florida Statutes, are amended to read: 28 720.303 Association powers and duties; meetings of 29 board; official records; budgets; financial reporting; 30 association funds; recalls.-- 31 (2) BOARD MEETINGS.--
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1 (a) A meeting of the board of directors of an 2 association occurs whenever a quorum of the board gathers to 3 conduct association business. All meetings of the board must 4 be open to all members except for meetings between the board 5 and its attorney with respect to proposed or pending 6 litigation where the contents of the discussion would 7 otherwise be governed by the attorney-client privilege. 8 (b) Members have the right to attend all meetings of 9 the board and to speak on any matter placed on the agenda by 10 petition of the voting interests for at least 3 minutes. The 11 association may adopt written reasonable rules expanding the 12 right of members to speak and governing the frequency, 13 duration, and other manner of member statements, which rules 14 must be consistent with this paragraph and may include a 15 sign-up sheet for members wishing to speak. Notwithstanding 16 any other law, the requirement that board meetings and 17 committee meetings be open to the members is inapplicable to 18 meetings between the board or a committee and the 19 association's attorney, with respect to meetings of the board 20 held for the purpose of discussing personnel matters. 21 (c) The bylaws shall provide for giving notice to 22 parcel owners and members of all board meetings and, if they 23 do not do so, shall be deemed to provide the following: 24 1. Notices of all board meetings must be posted in a 25 conspicuous place in the community at least 48 hours in 26 advance of a meeting, except in an emergency. In the 27 alternative, if notice is not posted in a conspicuous place in 28 the community, notice of each board meeting must be mailed or 29 delivered to each member at least 7 days before the meeting, 30 except in an emergency. Notwithstanding this general notice 31 requirement, for communities with more than 100 members, the
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1 bylaws may provide for a reasonable alternative to posting or 2 mailing of notice for each board meeting, including 3 publication of notice, provision of a schedule of board 4 meetings, or the conspicuous posting and repeated broadcasting 5 of the notice on a closed-circuit cable television system 6 serving the homeowners' association. However, if broadcast 7 notice is used in lieu of a notice posted physically in the 8 community, the notice must be broadcast at least four times 9 every broadcast hour of each day that a posted notice is 10 otherwise required. When broadcast notice is provided, the 11 notice and agenda must be broadcast in a manner and for a 12 sufficient continuous length of time so as to allow an average 13 reader to observe the notice and read and comprehend the 14 entire content of the notice and the agenda. The bylaws or 15 amended bylaws may provide for giving notice by electronic 16 transmission in a manner authorized by law for meetings of the 17 board of directors, committee meetings requiring notice under 18 this section, and annual and special meetings of the members; 19 however, a member must consent in writing to receiving notice 20 by electronic transmission.
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22 board meeting unless the notice of the meeting includes a 23 statement that special assessments will be considered and the
24 nature of such
25 at which special assessments will be considered or at which 26 amendments to rules regarding parcel use will be considered 27 must be mailed, delivered, or electronically transmitted to 28 the members and parcel owners and posted conspicuously on the 29 property or broadcast on closed-circuit cable television not 30 less than 14 days before the meeting. 31
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1 3. Directors may not vote by proxy or by secret ballot 2 at board meetings, except that secret ballots may be used in 3 the election of officers. This subsection also applies to the 4 meetings of any committee or other similar body, when a final 5 decision will be made regarding the expenditure of association 6 funds, and to meetings of any body vested with the power to 7 approve or disapprove architectural decisions with respect to 8 a specific parcel of residential property owned by a member of 9 the community. 10 (d) If 20 percent of the total voting interests 11 petition the board to address an item of business, the board 12 shall at its next regular board meeting or at a special 13 meeting of the board, but not later than 60 days after the 14 receipt of the petition, take the petitioned item up on an 15 agenda. The board shall give all members notice of the meeting 16 at which the petitioned item shall be addressed in accordance 17 with the 14-day notice requirement pursuant to subparagraph 18 (c)2. Each member shall have the right to speak for at least 3 19 minutes on each matter placed on the agenda by petition, 20 provided that the member signs the sign-up sheet, if one is 21 provided, or submits a written request to speak prior to the 22 meeting. Other than addressing the petitioned item at the 23 meeting, the board is not obligated to take any other action 24 requested by the petition. 5 (5) INSPECTION AND COPYING OF RECORDS.--The official 26 records shall be maintained within the state and must be open 27 to inspection and available for photocopying by members or 28 their authorized agents at reasonable times and places within 29 10 business days after receipt of a written request for 30 access. This subsection may be complied with by having a copy 31 of the official records available for inspection or copying in
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1 the community. If the association has a photocopy machine 2 available where the records are maintained, it must provide 3 parcel owners with copies on request during the inspection if 4 the entire request is limited to no more than 25 pages. 5 (a) The failure of an association to provide access to 6 the records within 10 business days after receipt of a written 7 request creates a rebuttable presumption that the association 8 willfully failed to comply with this subsection. 9 (b) A member who is denied access to official records 10 is entitled to the actual damages or minimum damages for the 11 association's willful failure to comply with this subsection. 12 The minimum damages are to be $50 per calendar day up to 10 13 days, the calculation to begin on the 11th business day after 14 receipt of the written request. 15 (c) The association may adopt reasonable written rules 16 governing the frequency, time, location, notice, records to be 17 inspected, and manner of inspections, but may not impose a 18 requirement that a parcel owner demonstrate any proper purpose 19 for the inspection, state any reason for the inspection, or 20 limit a parcel owner's right to inspect records to less than 21 one 8-hour business day per month. The association may impose 22 fees to cover the costs of providing copies of the official 23 records, including, without limitation, the costs of copying. 4 The association may charge up to 50 cents per page for copies 25 made on the association's photocopier. If the association does 26 not have a photocopy machine available where the records are 27 kept, or if the records requested to be copied exceed 25 pages 28 in length, the association may have copies made by an outside 29 vendor and may charge the actual cost of copying. The 30 association shall maintain an adequate number of copies of the 31 recorded governing documents, to ensure their availability to
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1 members and prospective members. Notwithstanding the 2 provisions of this paragraph, the following records shall not 3 be accessible to members or parcel owners: 4 1. Any record protected by the lawyer-client privilege 5 as described in s. 90.502 and any record protected by the 6 work-product privilege, including, but not limited to, any 7 record prepared by an association attorney or prepared at the 8 attorney's express direction which reflects a mental 9 impression, conclusion, litigation strategy, or legal theory 10 of the attorney or the association and was prepared 11 exclusively for civil or criminal litigation or for 12 adversarial administrative proceedings or which was prepared 13 in anticipation of imminent civil or criminal litigation or 14 imminent adversarial administrative proceedings until the 15 conclusion of the litigation or adversarial administrative 16 proceedings. 17 2. Information obtained by an association in 18 connection with the approval of the lease, sale, or other 19 transfer of a parcel. 20 3. Disciplinary, health, insurance, and personnel 21 records of the association's employees. 22 4. Medical records of parcel owners or community 23 residents. 24 5. The association is not required to give a 25 prospective purchaser or lienholder information about the 26 subdivision or the association other than that required to be 27 disclosed under this chapter. It may charge the prospective 28 purchaser, lienholder, or current parcel owner or member a 29 reasonable fee not to exceed $150 to provide such information, 30 other than information required by law, plus the reasonable 31
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1 cost of photocopying and attorney's fees incurred by the 2 association in connection with the response. 3 6. An association is not liable for providing such 4 information in good faith pursuant to a written request if the 5 person providing the information includes a written statement 6 in substantially the following form: "The responses herein are 7 made in good faith and to the best of my ability as to their 8 accuracy." 9 (7) FINANCIAL REPORTING.--The association shall 10 prepare an annual financial report by a date specified in the
11 bylaws or
within 90 12 year. The association shall, within 21 days after the report 13 is prepared but not later than 120 days after the end of the
14 fiscal year
15 provide each member with a copy of the annual financial report 16 or a written notice that a copy of the financial report is 17 available upon request at no charge to the member. Financial 18 reports shall be prepared as follows: 19 (a) An association that meets the criteria of this 20 paragraph shall prepare or cause to be prepared a complete set 21 of financial statements in accordance with generally accepted 22 accounting principles. The financial statements shall be based 23 upon the association's total annual revenues, as follows: 24 1. An association with total annual revenues of 25 $100,000 or more, but less than $200,000, shall prepare 26 compiled financial statements. 27 2. An association with total annual revenues of at 28 least $200,000, but less than $400,000, shall prepare reviewed 29 financial statements. 30 3. An association with total annual revenues of 31 $400,000 or more shall prepare audited financial statements.
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1 (b)1. An association with total annual revenues of 2 less than $100,000 shall prepare a report of cash receipts and 3 expenditures. 4 2. An association in a community of fewer than 50 5 parcels, regardless of the association's annual revenues, may 6 prepare a report of cash receipts and expenditures in lieu of 7 financial statements required by paragraph (a) unless the 8 governing documents provide otherwise. 9 3. A report of cash receipts and disbursement must 10 disclose the amount of receipts by accounts and receipt 11 classifications and the amount of expenses by accounts and 12 expense classifications, including, but not limited to, the 13 following, as applicable: costs for security, professional, 14 and management fees and expenses; taxes; costs for recreation 15 facilities; expenses for refuse collection and utility 16 services; expenses for lawn care; costs for building 17 maintenance and repair; insurance costs; administration and 18 salary expenses; and reserves if maintained by the 19 association. 20 (c) If 20 percent of the parcel owners petition the 21 board for a level of financial reporting higher than that 22 required by this section, the association shall duly notice 23 and hold a meeting of members within 30 days of receipt of the 24 petition for the purpose of voting on raising the level of 25 reporting for that fiscal year. Upon approval of a majority of 26 the total voting interests of the parcel owners, the 27 association shall prepare or cause to be prepared, shall amend 28 the budget or adopt a special assessment to pay for the 29 financial report regardless of any provision to the contrary 30 in the governing documents, and shall provide within 90 days 31
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1 of the meeting or the end of the fiscal year, whichever occurs 2 later: 3 1. Compiled, reviewed, or audited financial 4 statements, if the association is otherwise required to 5 prepare a report of cash receipts and expenditures; 6 2. Reviewed or audited financial statements, if the 7 association is otherwise required to prepare compiled 8 financial statements; or 9 3. Audited financial statements if the association is 10 otherwise required to prepare reviewed financial statements. 11 (d) If approved by a majority of the voting interests 12 present at a properly called meeting of the association, an 13 association may prepare or cause to be prepared: 14 1. A report of cash receipts and expenditures in lieu 15 of a compiled, reviewed, or audited financial statement; 16 2. A report of cash receipts and expenditures or a 17 compiled financial statement in lieu of a reviewed or audited 18 financial statement; or 19 3. A report of cash receipts and expenditures, a 20 compiled financial statement, or a reviewed financial 21 statement in lieu of an audited financial statement. 22 Section 4. Subsection (2) of section 720.305, Florida 23 Statutes, is amended to read: 24 720.305 Obligations of members; remedies at law or in 25 equity; levy of fines and suspension of use rights; failure to 26 fill sufficient number of vacancies on board of directors to 27 constitute a quorum; appointment of receiver upon petition of 28 any member.-- 29 (2) If the governing documents so provide, an 30 association may suspend, for a reasonable period of time, the 31 rights of a member or a member's tenants, guests, or invitees,
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1 or both, to use common areas and facilities and may levy 2 reasonable fines, not to exceed $100 per violation, against 3 any member or any tenant, guest, or invitee. A fine may be 4 levied on the basis of each day of a continuing violation, 5 with a single notice and opportunity for hearing, except that 6 no such fine shall exceed $1,000 in the aggregate unless 7 otherwise provided in the governing documents. A fine shall 8 not become a lien against a parcel unless it is levied for a 9 violation of governing documents that have been recorded in 10 the public records of the county where the property is 11 located. In any action to recover a fine, the prevailing party 12 is entitled to collect its reasonable attorney's fees and 13 costs from the nonprevailing party as determined by the court. 14 (a) A fine or suspension may not be imposed without 15 notice of at least 14 days to the person sought to be fined or 16 suspended and an opportunity for a hearing before a committee 17 of at least three members appointed by the board who are not 18 officers, directors, or employees of the association, or the 19 spouse, parent, child, brother, or sister of an officer, 20 director, or employee. If the committee, by majority vote, 21 does not approve a proposed fine or suspension, it may not be 22 imposed. 23 (b) The requirements of this subsection do not apply 24 to the imposition of suspensions or fines upon any member 25 because of the failure of the member to pay assessments or 26 other charges when due if such action is authorized by the 27 governing documents. 28 (c) Suspension of common-area-use rights shall not 29 impair the right of an owner or tenant of a parcel to have 30 vehicular and pedestrian ingress to and egress from the 31 parcel, including, but not limited to, the right to park.
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1 Section 5. Subsections (1) and (6) of section 720.306, 2 Florida Statutes, are amended to read: 3 720.306 Meetings of members; voting and election 4 procedures; amendments.-- 5 (1) QUORUM; AMENDMENTS.-- 6 (a) Unless a lower number is provided in the bylaws, 7 the percentage of voting interests required to constitute a 8 quorum at a meeting of the members shall be 30 percent of the 9 total voting interests. Unless otherwise provided in this 10 chapter or in the articles of incorporation or bylaws, 11 decisions that require a vote of the members must be made by 12 the concurrence of at least a majority of the voting interests 13 present, in person or by proxy, at a meeting at which a quorum 14 has been attained. 15 (b) Unless otherwise provided in the governing 16 documents or required by law, and other than those matters set 17 forth in paragraph (c), any governing document of an 18 association may be amended by the affirmative vote of 19 two-thirds of the voting interests of the association. 20 (c) Unless otherwise provided in the governing 21 documents as originally recorded or permitted by this chapter 22 or chapter 617, an amendment may not materially and adversely 23 alter the proportionate voting interest appurtenant to a 24 parcel or increase the proportion or percentage by which a 25 parcel shares in the common expenses of the association unless 26 the record parcel owner and all record owners of liens on the 27 parcels join in the execution of the amendment. For purposes 28 of this section, a change in quorum requirements is not an 29 alteration of voting interests. The merger or consolidation of 30 associations under a plan of merger or consolidation pursuant 31 to chapter 607 or chapter 617 is not a material or adverse
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1 alteration of the proportionate voting interest appurtenant to 2 a parcel. 3 (6) RIGHT TO SPEAK.--Members and parcel owners have 4 the right to attend all membership meetings and to speak at
5 any meeting with reference
to all items
6 7 the contrary in the governing documents or any rules adopted 8 by the board or by the membership, a member and a parcel owner 9 have the right to speak for at least 3 minutes on any agenda
10 item, if 11 written request to speak prior to the meeting. The association 12 may adopt written reasonable rules governing the frequency, 13 duration, and other manner of member and parcel owner 14 statements, which rules must be consistent with this 15 subsection. 16 Section 6. Subsection (3) is added to section 720.402, 17 Florida Statutes, to read: 18 720.402 Publication of false and misleading 19 information.-- 20 (3) This section does not limit any rights provided by 21 common law. 22 Section 7. Subsection (4) of section 720.405, Florida 23 Statutes, is amended to read: 24 720.405 Organizing committee; parcel owner approval.-- 25 (4) The proposed revived declaration and other 26 governing documents for the community shall: 27 (a) Provide that the voting interest of each parcel 28 owner shall be the same as the voting interest of the parcel 29 owner under the previous governing documents; 30 (b) Provide that the proportional-assessment 31 obligations of each parcel owner shall be the same as
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1 proportional-assessment obligations of the parcel owner under 2 the previous governing documents; 3 (c) Contain the same respective amendment provisions 4 as the previous governing documents or, if there were no 5 amendment provisions in the previous governing document, 6 amendment provisions that require approval of not less than 7 two-thirds of the affected parcel owners; and
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12 (d) 13 declaration of covenants and other governing documents as 14 specified in this chapter. 15 Section 8. Section 720.311 is repealed. 16 Section 9. Subsection (1) of section 34.01, Florida 17 Statutes, is amended to read: 18 34.01 Jurisdiction of county court.-- 19 (1) County courts shall have original jurisdiction: 20 (a) In all misdemeanor cases not cognizable by the 21 circuit courts; 22 (b) Of all violations of municipal and county 23 ordinances; 24 (c) Of all actions at law in which the matter in 25 controversy does not exceed the sum of $15,000, exclusive of 26 interest, costs, and attorney's fees, except those within the 27 exclusive jurisdiction of the circuit courts; and 28 (d) Of disputes occurring in the homeowners' 29 associations as described in s. 720.311(2)(a) (2005), which 30 shall be concurrent with jurisdiction of the circuit courts. 31 Section 10. This act shall take effect July 1, 2006.
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1 ***************************************** 2 SENATE SUMMARY 3 Revises provisions related to homeowners' associations. Provides for reviving lapsed covenants. Revises noticed 4 requirements related to special assessments. Authorizes fees for providing information to purchasers or 5 lienholders. Limits liability for disclosing such information. Revises time limits related to annual report 6 requirements. Prohibits certain fines from becoming liens unless certain governing documents are recorded. 7 Clarifies the effect of certain mergers or consolidations. Limits the right of members to speak at 8 meetings. Clarifies certain common-law rights. Deletes a requirement relating to the revival of governing 9 documents containing restrictive covenants. Repeals a provision providing an alternative dispute resolution 10 process. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
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