| 1 |
A bill to be entitled |
| 2 |
An act relating to real property;
amending s. 215.555, |
| 3 |
F.S.; redefining the term
"covered policy" for purposes of |
| 4 |
the Florida Hurricane Catastrophe Fund
to include |
| 5 |
commercial self-insurance funds;
amending s. 624.462, |
| 6 |
F.S.; providing that any applicant or
fund participant may |
| 7 |
select an agent of choice without
restriction by the fund; |
| 8 |
providing that a commercial
self-insurance fund shall be |
| 9 |
an insurer for the purpose of
assessments levied by the |
| 10 |
Florida Hurricane Catastrophe Fund or
Citizens Property |
| 11 |
Insurance Group; requiring the office
to establish the |
| 12 |
method for determining the inputted
premium that is |
| 13 |
subject to assessment; amending s.
718.103, F.S.; |
| 14 |
redefining the term "land";
amending s. 718.111, F.S.; |
| 15 |
specifying that requirements relating
to the acquisition |
| 16 |
and maintenance of adequate insurance
apply to all |
| 17 |
residential condominiums; amending s.
718.115, F.S.; |
| 18 |
providing that common expenses include
the costs of |
| 19 |
certain insurance or self-insurance;
amending s. 718.116, |
| 20 |
F.S.; requiring notice of special
assessments for certain |
| 21 |
insurance; amending s. 718.503, F.S.;
requiring additional |
| 22 |
disclosures in contracts for sale or
lease of residential |
| 23 |
units; requiring copies of budgets to
be furnished to |
| 24 |
buyers when a closing occurs more than
12 months after an |
| 25 |
offering circular is filed with the
state; amending s. |
| 26 |
718.504, F.S.; requiring certain
information relating to |
| 27 |
the budget to be included in the
offering circular; |
| 28 |
requiring that an association budget
be prepared in good |
| 29 |
faith; amending s. 718.616, F.S.;
requiring that certain |
| 30 |
disclosures be compiled in a report;
revising the items |
| 31 |
required to be disclosed; requiring
supplemental reports |
| 32 |
in certain situations; amending s.
718.618, F.S.; revising |
| 33 |
certain requirements for reserve
accounts; revising the |
| 34 |
method of computing the amounts
required to fund |
| 35 |
additional converter reserve accounts;
deleting references |
| 36 |
to specific items that are covered by
an implied warranty |
| 37 |
of fitness in the absence of reserve
accounts; requiring |
| 38 |
that a developer disclose in a
contract of sale compliance |
| 39 |
with certain obligations regarding the
maintenance of |
| 40 |
improvements; amending s. 719.104, F.S.;
providing for |
| 41 |
cooperative associations and similar
organizations to |
| 42 |
acquire and maintain windstorm
insurance; amending s. |
| 43 |
719.107, F.S.; providing that common
expenses include |
| 44 |
costs of certain insurance; amending
s. 719.108, F.S.; |
| 45 |
providing for notice of special
assessments levied in |
| 46 |
conjunction with certain insurance;
amending s. 719.503, |
| 47 |
F.S.; requiring additional disclosures
in contracts for |
| 48 |
sale or lease of residential units;
requiring copies of |
| 49 |
budgets to be furnished to buyers when
a closing occurs |
| 50 |
more than 12 months after an offering
circular is filed |
| 51 |
with the state; amending s. 719.504,
F.S.; requiring |
| 52 |
certain information relating to the
budget to be included |
| 53 |
in the offering circular; requiring
that an association |
| 54 |
budget be prepared in good faith;
amending s. 720.303, |
| 55 |
F.S.; providing for homeowners'
associations to acquire |
| 56 |
and maintain windstorm insurance;
amending s. 720.308, |
| 57 |
F.S.; providing for homeowners'
associations to levy |
| 58 |
assessments for insurance; providing
an effective date. |
| 59 |
|
| 60 |
Be It Enacted by the Legislature of
the State of Florida: |
| 61 |
|
| 62 |
Section
1. Paragraph (c) of subsection (2) of section |
| 63 |
215.555, Florida Statutes, as amended
by section 2 of chapter |
| 64 |
2007-1, Laws of Florida, is amended to
read: |
| 65 |
215.555 Florida
Hurricane Catastrophe Fund.-- |
| 66 |
(2) DEFINITIONS.--As
used in this section: |
| 67 |
(c) "Covered
policy" means any insurance policy covering |
| 68 |
residential property in this state,
including, but not limited |
| 69 |
to, any homeowner's, mobile home
owner's, farm owner's, |
| 70 |
condominium association, condominium
unit owner's, tenant's, or |
| 71 |
apartment building policy, or any
other policy covering a |
| 72 |
residential structure or its contents
issued by any authorized |
| 73 |
insurer, including a
commercial self-insurance fund holding a |
| 74 |
certificate of
authority issued by the Office of Insurance |
| 75 |
Regulation
under s. 624.462, the Citizens Property Insurance |
| 76 |
Corporation, and any joint
underwriting association or similar |
| 77 |
entity created under
pursuant to law. The term
"covered policy" |
| 78 |
includes any collateral protection
insurance policy covering |
| 79 |
personal residences which protects
both the borrower's and the |
| 80 |
lender's financial interests, in an
amount at least equal to the |
| 81 |
coverage for the dwelling in place
under the lapsed homeowner's |
| 82 |
policy, if such policy can be
accurately reported as required in |
| 83 |
subsection (5). Additionally, covered
policies include policies |
| 84 |
covering the peril of wind removed
from the Florida Residential |
| 85 |
Property and Casualty Joint
Underwriting Association or from the |
| 86 |
Citizens Property Insurance
Corporation, created under pursuant |
| 87 |
to s. 627.351(6), or from the
Florida Windstorm Underwriting |
| 88 |
Association, created under
pursuant to s. 627.351(2), by an |
| 89 |
authorized insurer under the terms and
conditions of an executed |
| 90 |
assumption agreement between the
authorized insurer and such |
| 91 |
association or Citizens Property
Insurance Corporation. Each |
| 92 |
assumption agreement between the
association and such authorized |
| 93 |
insurer or Citizens Property Insurance
Corporation must be |
| 94 |
approved by the Office of Insurance
Regulation before prior
to |
| 95 |
the effective date of the assumption,
and the Office of |
| 96 |
Insurance Regulation must provide
written notification to the |
| 97 |
board within 15 working days after
such approval. "Covered |
| 98 |
policy" does not include any
policy that excludes wind coverage |
| 99 |
or hurricane coverage or any
reinsurance agreement and does not |
| 100 |
include any policy otherwise meeting
this definition which is |
| 101 |
issued by a surplus lines insurer or a
reinsurer. All commercial |
| 102 |
residential excess policies and all
deductible buy-back policies |
| 103 |
that, based on sound actuarial
principles, require individual |
| 104 |
ratemaking shall be excluded by rule
if the actuarial soundness |
| 105 |
of the fund is not jeopardized. For
this purpose, the term |
| 106 |
"excess policy" means a
policy that provides insurance |
| 107 |
protection for large commercial
property risks and that provides |
| 108 |
a layer of coverage above a primary
layer insured by another |
| 109 |
insurer. |
| 110 |
Section
2. Subsections (2) and (5) of section 624.462, |
| 111 |
Florida Statutes, as amended, by
section 12 of chapter 2007-1, |
| 112 |
Laws of Florida, are amended to read: |
| 113 |
624.462 Commercial
self-insurance funds.-- |
| 114 |
(2) As
used in ss. 624.460-624.488, "commercial self- |
| 115 |
insurance fund" or
"fund" means a group of members, operating |
| 116 |
individually and collectively through
a trust or corporation, |
| 117 |
that must be: |
| 118 |
(a) Established
by: |
| 119 |
1. A
not-for-profit trade association, industry |
| 120 |
association, or professional
association of employers or |
| 121 |
professionals which has a constitution
or bylaws, which is |
| 122 |
incorporated under the laws of this
state, and which has been |
| 123 |
organized for purposes other than that
of obtaining or providing |
| 124 |
insurance and operated in good faith
for a continuous period of |
| 125 |
1 year; |
| 126 |
2. A
self-insurance trust fund organized pursuant to s. |
| 127 |
627.357 and maintained in good faith
for a continuous period of |
| 128 |
1 year for purposes other than that of
obtaining or providing |
| 129 |
insurance pursuant to this section.
Each member of a commercial |
| 130 |
self-insurance trust fund established
pursuant to this |
| 131 |
subsection must maintain membership in
the self-insurance trust |
| 132 |
fund organized pursuant to s. 627.357; |
| 133 |
3. A
group of 10 or more health care providers, as defined |
| 134 |
in s. 627.351(4)(h), for purposes of
providing medical |
| 135 |
malpractice coverage; or |
| 136 |
4. A
not-for-profit group comprised of one or more |
| 137 |
community associations responsible for
operating at least 50 |
| 138 |
residential parcels or units created
and operating under chapter |
| 139 |
718, chapter 719, chapter 720, chapter
721, or chapter 723 which |
| 140 |
restricts its membership to community
associations only and |
| 141 |
which has been organized and
maintained in good faith for the |
| 142 |
purpose of pooling and spreading the
liabilities of its group |
| 143 |
members relating to property or
casualty risk or surety |
| 144 |
insurance which,
in accordance with applicable provisions of |
| 145 |
part I of chapter
626, appoints resident general lines agents |
| 146 |
only, and which
does not prevent, impede, or restrict any |
| 147 |
applicant or fund
participant from maintaining or selecting an |
| 148 |
agent of choice.
The fund may not refuse to appoint the agent of |
| 149 |
record for any fund
applicant or fund member and may not favor |
| 150 |
one or more such
appointed agents over other appointed agents. |
| 151 |
(b)1. In
the case of funds established pursuant to |
| 152 |
subparagraph (a)2. or subparagraph
(a)4., operated pursuant to a |
| 153 |
trust agreement by a board of trustees
which shall have complete |
| 154 |
fiscal control over the fund and which
shall be responsible for |
| 155 |
all operations of the fund. The
majority of the trustees shall |
| 156 |
be owners, partners, officers,
directors, or employees of one or |
| 157 |
more members of the fund. The
trustees shall have the authority |
| 158 |
to approve applications of members for
participation in the fund |
| 159 |
and to contract with an authorized
administrator or servicing |
| 160 |
company to administer the day-to-day
affairs of the fund. |
| 161 |
2. In
the case of funds established pursuant to |
| 162 |
subparagraph (a)1. or subparagraph
(a)3., operated pursuant to a |
| 163 |
trust agreement by a board of trustees
or as a corporation by a |
| 164 |
board of directors which board shall: |
| 165 |
a. Be
responsible to members of the fund or beneficiaries |
| 166 |
of the trust or policyholders of the
corporation; |
| 167 |
b. Appoint
independent certified public accountants, legal |
| 168 |
counsel, actuaries, and investment
advisers as needed; |
| 169 |
c. Approve
payment of dividends to members; |
| 170 |
d. Approve
changes in corporate structure; and |
| 171 |
e. Have
the authority to contract with an administrator |
| 172 |
authorized under s. 626.88 to
administer the day-to-day affairs |
| 173 |
of the fund including, but not limited
to, marketing, |
| 174 |
underwriting, billing, collection,
claims administration, safety |
| 175 |
and loss prevention, reinsurance,
policy issuance, accounting, |
| 176 |
regulatory reporting, and general
administration. The fees or |
| 177 |
compensation for services under such
contract shall be |
| 178 |
comparable to the costs for similar
services incurred by |
| 179 |
insurers writing the same lines of
insurance, or where available |
| 180 |
such expenses as filed by boards,
bureaus, and associations |
| 181 |
designated by insurers to file such
data. A majority of the |
| 182 |
trustees or directors shall be owners,
partners, officers, |
| 183 |
directors, or employees of one or more
members of the fund. |
| 184 |
(5) A
commercial self-insurance fund created
under |
| 185 |
subparagraph
(2)(a)4. shall be an insurer for the purpose of any |
| 186 |
assessments levied
by the Florida Hurricane Catastrophe Fund as |
| 187 |
provided under s.
215.555 or by the Citizens Property Insurance |
| 188 |
Corporation as
provided under s. 627.351(6)(b)3. The office |
| 189 |
shall establish the
method for determining the imputed premium |
| 190 |
that is
subject to any such assessment. must
participate in the |
| 191 |
Florida
Self-Insurance Fund Guaranty Association. |
| 192 |
Section
3. Subsection (18) of section 718.103, Florida |
| 193 |
Statutes, is amended to read: |
| 194 |
718.103 Definitions.--As
used in this chapter, the term: |
| 195 |
(18) "Land"
means the surface of a legally described |
| 196 |
parcel of real property and includes,
unless otherwise specified |
| 197 |
in the declaration and whether
separate from or including such |
| 198 |
surface, airspace lying above and
subterranean space lying below |
| 199 |
such surface. However, if so defined
in the declaration, the |
| 200 |
term "land" may mean all or
any portion of the airspace or |
| 201 |
subterranean space between two legally
identifiable elevations |
| 202 |
and may exclude the surface of a
parcel of real property and may |
| 203 |
mean any combination of the foregoing,
whether or not |
| 204 |
contiguous,
or may mean a condominium unit. |
| 205 |
Section
4. Subsection (11) of section 718.111, Florida |
| 206 |
Statutes, as amended by section 37 of
chapter 2007-1, Laws of |
| 207 |
Florida, is amended to read: |
| 208 |
718.111 The
association.-- |
| 209 |
(11) INSURANCE.--In
order to protect the safety, health, |
| 210 |
and welfare of the people of the State
of Florida and to ensure |
| 211 |
consistency in the provision of
insurance coverage to |
| 212 |
condominiums and their unit owners,
paragraphs (a), (b), and (c) |
| 213 |
are deemed to apply to every
residential condominium in the |
| 214 |
state, regardless of the date of its
declaration of condominium. |
| 215 |
It is the intent of the Legislature to
encourage lower or stable |
| 216 |
insurance premiums for associations
described in this section. |
| 217 |
Therefore, the Legislature requires a
report to be prepared by |
| 218 |
the Office of Insurance Regulation of
the Department of |
| 219 |
Financial Services for publication 18
months from the effective |
| 220 |
date of this act, evaluating premium
increases or decreases for |
| 221 |
associations, unit owner premium
increases or decreases, |
| 222 |
recommended changes to better define
common areas, or any other |
| 223 |
information the Office of Insurance
Regulation deems |
| 224 |
appropriate. |
| 225 |
(a) A
unit-owner controlled association operating a |
| 226 |
residential condominium shall use its
best efforts to obtain and |
| 227 |
maintain adequate insurance to protect
the association, the |
| 228 |
association property, the common
elements, and the condominium |
| 229 |
property required to be insured by the
association pursuant to |
| 230 |
paragraph (b). If the association is
developer controlled, the |
| 231 |
association shall exercise due
diligence to obtain and maintain |
| 232 |
such insurance. Failure to obtain and
maintain adequate |
| 233 |
insurance during any period of
developer control shall |
| 234 |
constitute a breach of fiduciary
responsibility by the |
| 235 |
developer-appointed members of the
board of directors of the |
| 236 |
association, unless said members can
show that despite such |
| 237 |
failure, they have exercised due
diligence. The declaration of |
| 238 |
condominium as originally recorded, or
amended pursuant to |
| 239 |
procedures provided therein, may
require that condominium |
| 240 |
property consisting of freestanding
buildings where there is no |
| 241 |
more than one building in or on such
unit need not be insured by |
| 242 |
the association if the declaration
requires the unit owner to |
| 243 |
obtain adequate insurance for the
condominium property. An |
| 244 |
association may also obtain and
maintain liability insurance for |
| 245 |
directors and officers, insurance for
the benefit of association |
| 246 |
employees, and flood insurance for
common elements, association |
| 247 |
property, and units. Adequate
insurance, regardless of any |
| 248 |
requirement in the declaration of
condominium for coverage by |
| 249 |
the association for "full
insurable value," "replacement cost," |
| 250 |
or the like, may include reasonable
deductibles as determined by |
| 251 |
the board based upon available funds
or predetermined assessment |
| 252 |
authority at the time that the
insurance is obtained. |
| 253 |
1. Windstorm
insurance coverage for a group of no fewer |
| 254 |
than three communities created and
operating under this chapter, |
| 255 |
chapter 719, chapter 720, or chapter
721 may be obtained and |
| 256 |
maintained for the communities if the
insurance coverage is |
| 257 |
sufficient to cover an amount equal to
the probable maximum loss |
| 258 |
for the communities for a 250-year
windstorm event. Such |
| 259 |
probable maximum loss must be
determined through the use of a |
| 260 |
competent model that has been accepted
by the Florida Commission |
| 261 |
on Hurricane Loss Projection
Methodology. Such insurance |
| 262 |
coverage is deemed adequate windstorm
insurance for the purposes |
| 263 |
of this section. |
| 264 |
2. An
association or group of associations may self-insure |
| 265 |
against claims against the
association, the association |
| 266 |
property, and the condominium property
required to be insured by |
| 267 |
an association, upon compliance with
the applicable provisions |
| 268 |
of ss. 624.460-624.488, which shall be
considered adequate |
| 269 |
insurance for the purposes of this
section. A copy of each |
| 270 |
policy of insurance in effect shall be
made available for |
| 271 |
inspection by unit owners at
reasonable times. |
| 272 |
(b) Every
hazard insurance policy issued or renewed on or |
| 273 |
after January 1, 2004, to protect the
condominium shall provide |
| 274 |
primary coverage for: |
| 275 |
1. All
portions of the condominium property located |
| 276 |
outside the units; |
| 277 |
2. The
condominium property located inside the units as |
| 278 |
such property was initially installed,
or replacements thereof |
| 279 |
of like kind and quality and in
accordance with the original |
| 280 |
plans and specifications or, if the
original plans and |
| 281 |
specifications are not available, as
they existed at the time |
| 282 |
the unit was initially conveyed; and |
| 283 |
3. All
portions of the condominium property for which the |
| 284 |
declaration of condominium requires
coverage by the association. |
| 285 |
|
| 286 |
Anything to the contrary
notwithstanding, the terms "condominium |
| 287 |
property," "building,"
"improvements," "insurable improvements," |
| 288 |
"common elements,"
"association property," or any other term |
| 289 |
found in the declaration of
condominium which defines the scope |
| 290 |
of property or casualty insurance that
a condominium association |
| 291 |
must obtain shall exclude all floor,
wall, and ceiling |
| 292 |
coverings, electrical fixtures,
appliances, air conditioner or |
| 293 |
heating equipment, water heaters,
water filters, built-in |
| 294 |
cabinets and countertops, and window
treatments, including |
| 295 |
curtains, drapes, blinds, hardware,
and similar window treatment |
| 296 |
components, or replacements of any of
the foregoing which are |
| 297 |
located within the boundaries of a
unit and serve only one unit |
| 298 |
and all air conditioning compressors
that service only an |
| 299 |
individual unit, whether or not
located within the unit |
| 300 |
boundaries. The foregoing is intended
to establish the property |
| 301 |
or casualty insuring responsibilities
of the association and |
| 302 |
those of the individual unit owner and
do not serve to broaden |
| 303 |
or extend the perils of coverage
afforded by any insurance |
| 304 |
contract provided to the individual
unit owner. Beginning |
| 305 |
January 1, 2004, the association shall
have the authority to |
| 306 |
amend the declaration of condominium,
without regard to any |
| 307 |
requirement for mortgagee approval of
amendments affecting |
| 308 |
insurance requirements, to conform the
declaration of |
| 309 |
condominium to the coverage
requirements of this section. |
| 310 |
(c) Every
hazard insurance policy issued or renewed on or |
| 311 |
after January 1, 2004, to an
individual unit owner shall provide |
| 312 |
that the coverage afforded by such
policy is excess over the |
| 313 |
amount recoverable under any other
policy covering the same |
| 314 |
property. Each insurance policy issued
to an individual unit |
| 315 |
owner providing such coverage shall be
without rights of |
| 316 |
subrogation against the condominium
association that operates |
| 317 |
the condominium in which such unit
owner's unit is located. All |
| 318 |
real or personal property located
within the boundaries of the |
| 319 |
unit owner's unit which is excluded
from the coverage to be |
| 320 |
provided by the association as set
forth in paragraph (b) shall |
| 321 |
be insured by the individual unit
owner. |
| 322 |
(d) The
association shall obtain and maintain adequate |
| 323 |
insurance or fidelity bonding of all
persons who control or |
| 324 |
disburse funds of the association. The
insurance policy or |
| 325 |
fidelity bond must cover the maximum
funds that will be in the |
| 326 |
custody of the association or its
management agent at any one |
| 327 |
time. As used in this paragraph, the
term "persons who control |
| 328 |
or disburse funds of the
association" includes, but is not |
| 329 |
limited to, those individuals
authorized to sign checks and the |
| 330 |
president, secretary, and treasurer of
the association. The |
| 331 |
association shall bear the cost of
bonding. |
| 332 |
Section
5. Present paragraph (f) of subsection (1) of |
| 333 |
section 718.115, Florida Statutes, is
redesignated as paragraph |
| 334 |
(g), and a new paragraph (f) is added
to that subsection, to |
| 335 |
read: |
| 336 |
718.115 Common
expenses and common surplus.-- |
| 337 |
(1) |
| 338 |
(f) Common
expenses include the costs of insurance |
| 339 |
acquired by the
association under the authority of s. |
| 340 |
718.111(11),
including costs and contingent expenses required to |
| 341 |
participate in a
self-insurance fund authorized and approved |
| 342 |
pursuant to s.
624.462. |
| 343 |
Section
6. Subsection (10) of section 718.116, Florida |
| 344 |
Statutes, is amended to read: |
| 345 |
718.116 Assessments;
liability; lien and priority; |
| 346 |
interest; collection.-- |
| 347 |
(10) The
specific purpose or purposes of any special |
| 348 |
assessment,
including any contingent special assessment levied |
| 349 |
in conjunction with
the purchase of an insurance policy |
| 350 |
authorized by
s. 718.111(11), approved in accordance with the |
| 351 |
condominium documents shall be set
forth in a written notice of |
| 352 |
such assessment sent or delivered to
each unit owner. The funds |
| 353 |
collected pursuant to a special
assessment shall be used only |
| 354 |
for the specific purpose or purposes
set forth in such notice. |
| 355 |
However, upon completion of such
specific purpose or purposes, |
| 356 |
any excess funds will be considered
common surplus, and may, at |
| 357 |
the discretion of the board, either be
returned to the unit |
| 358 |
owners or applied as a credit toward
future assessments. |
| 359 |
Section
7. Paragraph (a) of subsection (1) of section |
| 360 |
718.503, Florida Statutes, is amended,
and paragraph (c) is |
| 361 |
added to that subsection, to read: |
| 362 |
718.503 Developer
disclosure prior to sale; nondeveloper |
| 363 |
unit owner disclosure prior to sale;
voidability.-- |
| 364 |
(1) DEVELOPER
DISCLOSURE.-- |
| 365 |
(a) Contents
of contracts.--Any contract for the sale of a |
| 366 |
residential unit or a lease thereof
for an unexpired term of |
| 367 |
more than 5 years shall: |
| 368 |
1. Contain
the following legend in conspicuous type: THIS |
| 369 |
AGREEMENT IS VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE OF |
| 370 |
THE BUYER'S INTENTION TO CANCEL WITHIN
15 DAYS AFTER THE DATE OF |
| 371 |
EXECUTION OF THIS AGREEMENT BY THE
BUYER, AND RECEIPT BY BUYER |
| 372 |
OF ALL OF THE ITEMS REQUIRED TO BE
DELIVERED TO HIM OR HER BY |
| 373 |
THE DEVELOPER UNDER SECTION 718.503,
FLORIDA STATUTES. THIS |
| 374 |
AGREEMENT IS ALSO VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE |
| 375 |
OF THE BUYER'S INTENTION TO CANCEL
WITHIN 15 DAYS AFTER THE DATE |
| 376 |
OF RECEIPT FROM THE DEVELOPER OF ANY
AMENDMENT WHICH MATERIALLY |
| 377 |
ALTERS OR MODIFIES THE OFFERING IN A
MANNER THAT IS ADVERSE TO |
| 378 |
THE BUYER. ANY PURPORTED WAIVER OF
THESE VOIDABILITY RIGHTS |
| 379 |
SHALL BE OF NO EFFECT. BUYER MAY
EXTEND THE TIME FOR CLOSING FOR |
| 380 |
A PERIOD OF NOT MORE THAN 15 DAYS
AFTER THE BUYER HAS RECEIVED |
| 381 |
ALL OF THE ITEMS REQUIRED. BUYER'S
RIGHT TO VOID THIS AGREEMENT |
| 382 |
SHALL TERMINATE AT CLOSING. FIGURES
CONTAINED IN ANY BUDGET |
| 383 |
DELIVERED TO THE BUYER PREPARED IN
ACCORDANCE WITH THE |
| 384 |
CONDOMINIUM ACT ARE ESTIMATES ONLY
AND REPRESENT AN |
| 385 |
APPROXIMATION OF FUTURE EXPENSES
BASED ON FACTS AND |
| 386 |
CIRCUMSTANCES EXISTING AT THE TIME
OF THE PREPARATION OF THE |
| 387 |
BUDGET BY THE DEVELOPER. ACTUAL
COSTS OF SUCH ITEMS MAY EXCEED |
| 388 |
THE ESTIMATED COSTS. SUCH CHANGES
IN COST DO NOT CONSTITUTE |
| 389 |
MATERIAL ADVERSE CHANGES IN THE
OFFERING. |
| 390 |
2. Contain
the following caveat in conspicuous type on the |
| 391 |
first page of the contract: ORAL
REPRESENTATIONS CANNOT BE |
| 392 |
RELIED UPON AS CORRECTLY STATING THE
REPRESENTATIONS OF THE |
| 393 |
DEVELOPER. FOR CORRECT
REPRESENTATIONS, REFERENCE SHOULD BE MADE |
| 394 |
TO THIS CONTRACT AND THE DOCUMENTS
REQUIRED BY SECTION 718.503, |
| 395 |
FLORIDA STATUTES, TO BE FURNISHED BY A
DEVELOPER TO A BUYER OR |
| 396 |
LESSEE. |
| 397 |
3. If
the unit has been occupied by someone other than the |
| 398 |
buyer, contain a statement that the
unit has been occupied. |
| 399 |
4. If
the contract is for the sale or transfer of a unit |
| 400 |
subject to a lease, include as an
exhibit a copy of the executed |
| 401 |
lease and shall contain within the
text in conspicuous type: THE |
| 402 |
UNIT IS SUBJECT TO A LEASE (OR
SUBLEASE). |
| 403 |
5. If
the contract is for the lease of a unit for a term |
| 404 |
of 5 years or more, include as an
exhibit a copy of the proposed |
| 405 |
lease. |
| 406 |
6. If
the contract is for the sale or lease of a unit that |
| 407 |
is subject to a lien for rent payable
under a lease of a |
| 408 |
recreational facility or other
commonly used facility, contain |
| 409 |
within the text the following
statement in conspicuous type: |
| 410 |
THIS CONTRACT IS FOR THE TRANSFER OF A
UNIT THAT IS SUBJECT TO A |
| 411 |
LIEN FOR RENT PAYABLE UNDER A LEASE OF
COMMONLY USED FACILITIES. |
| 412 |
FAILURE TO PAY RENT MAY RESULT IN
FORECLOSURE OF THE LIEN. |
| 413 |
7. State
the name and address of the escrow agent required |
| 414 |
by s. 718.202 and state that the
purchaser may obtain a receipt |
| 415 |
for his or her deposit from the escrow
agent upon request. |
| 416 |
8. If
the contract is for the sale or transfer of a unit |
| 417 |
in a condominium in which timeshare
estates have been or may be |
| 418 |
created, contain within the text in
conspicuous type: UNITS IN |
| 419 |
THIS CONDOMINIUM ARE SUBJECT TO
TIMESHARE ESTATES. The contract |
| 420 |
for the sale of a fee interest in a
timeshare estate shall also |
| 421 |
contain, in conspicuous type, the
following: FOR THE PURPOSE OF |
| 422 |
AD VALOREM TAXES OR SPECIAL
ASSESSMENTS LEVIED BY TAXING |
| 423 |
AUTHORITIES AGAINST A FEE INTEREST IN
A TIMESHARE ESTATE, THE |
| 424 |
MANAGING ENTITY IS GENERALLY
CONSIDERED THE TAXPAYER UNDER |
| 425 |
FLORIDA LAW. YOU HAVE THE RIGHT TO
CHALLENGE AN ASSESSMENT BY A |
| 426 |
TAXING AUTHORITY RELATING TO YOUR
TIMESHARE ESTATE PURSUANT TO |
| 427 |
THE PROVISIONS OF CHAPTER 194, FLORIDA
STATUTES. |
| 428 |
(c) Subsequent
estimates; when provided.--If the closing |
| 429 |
on a contract
occurs more than 12 months after the filing of the |
| 430 |
offering circular
with the division, the developer shall provide |
| 431 |
a copy of the
current estimated operating budget of the |
| 432 |
association to the
buyer at closing, which shall not be |
| 433 |
considered an
amendment that modifies the offering provided any |
| 434 |
changes to the
association's budget from the budget given to the |
| 435 |
buyer at the time
of contract signing were the result of matters |
| 436 |
beyond the
developer's control. Changes in budgets of any master |
| 437 |
association,
recreation association, or club and similar budgets |
| 438 |
for entities other
than the association shall likewise not be |
| 439 |
considered
amendments that modify the offering. It is the intent |
| 440 |
of this paragraph
to clarify existing law. |
| 441 |
Section
8. Present paragraph (d) of subsection (21) of |
| 442 |
section 718.504, Florida Statutes, is
redesignated as paragraph |
| 443 |
(f), and new paragraphs (d) and (e)
are added to that |
| 444 |
subsection, to read: |
| 445 |
718.504 Prospectus
or offering circular.--Every developer |
| 446 |
of a residential condominium which
contains more than 20 |
| 447 |
residential units, or which is part of
a group of residential |
| 448 |
condominiums which will be served by
property to be used in |
| 449 |
common by unit owners of more than 20
residential units, shall |
| 450 |
prepare a prospectus or offering
circular and file it with the |
| 451 |
Division of Florida Land Sales,
Condominiums, and Mobile Homes |
| 452 |
prior to entering into an enforceable
contract of purchase and |
| 453 |
sale of any unit or lease of a unit
for more than 5 years and |
| 454 |
shall furnish a copy of the prospectus
or offering circular to |
| 455 |
each buyer. In addition to the
prospectus or offering circular, |
| 456 |
each buyer shall be furnished a
separate page entitled |
| 457 |
"Frequently Asked Questions and
Answers," which shall be in |
| 458 |
accordance with a format approved by
the division and a copy of |
| 459 |
the financial information required by
s. 718.111. This page |
| 460 |
shall, in readable language, inform
prospective purchasers |
| 461 |
regarding their voting rights and unit
use restrictions, |
| 462 |
including restrictions on the leasing
of a unit; shall indicate |
| 463 |
whether and in what amount the unit
owners or the association is |
| 464 |
obligated to pay rent or land use fees
for recreational or other |
| 465 |
commonly used facilities; shall
contain a statement identifying |
| 466 |
that amount of assessment which,
pursuant to the budget, would |
| 467 |
be levied upon each unit type,
exclusive of any special |
| 468 |
assessments, and which shall further
identify the basis upon |
| 469 |
which assessments are levied, whether
monthly, quarterly, or |
| 470 |
otherwise; shall state and identify
any court cases in which the |
| 471 |
association is currently a party of
record in which the |
| 472 |
association may face liability in
excess of $100,000; and which |
| 473 |
shall further state whether membership
in a recreational |
| 474 |
facilities association is mandatory,
and if so, shall identify |
| 475 |
the fees currently charged per unit
type. The division shall by |
| 476 |
rule require such other disclosure as
in its judgment will |
| 477 |
assist prospective purchasers. The
prospectus or offering |
| 478 |
circular may include more than one
condominium, although not all |
| 479 |
such units are being offered for sale
as of the date of the |
| 480 |
prospectus or offering circular. The
prospectus or offering |
| 481 |
circular must contain the following
information: |
| 482 |
(21) An
estimated operating budget for the condominium and |
| 483 |
the association, and a schedule of the
unit owner's expenses |
| 484 |
shall be attached as an exhibit and
shall contain the following |
| 485 |
information: |
| 486 |
(d) The
following statement in conspicuous type: THE |
| 487 |
BUDGET CONTAINED IN
THIS OFFERING CIRCULAR HAS BEEN PREPARED IN |
| 488 |
ACCORDANCE WITH THE
CONDOMINIUM ACT AND IS A GOOD FAITH ESTIMATE |
| 489 |
ONLY AND REPRESENTS
AN APPROXIMATION OF FUTURE EXPENSES BASED ON |
| 490 |
FACTS AND
CIRCUMSTANCES EXISTING AT THE TIME OF ITS PREPARATION. |
| 491 |
ACTUAL COSTS OF
SUCH ITEMS MAY EXCEED THE ESTIMATED COSTS. SUCH |
| 492 |
CHANGES IN COST DO
NOT CONSTITUTE MATERIAL ADVERSE CHANGES IN |
| 493 |
THE OFFERING. |
| 494 |
(e) Each
budget for an association prepared by a developer |
| 495 |
consistent with
this subsection shall be prepared in good faith |
| 496 |
and shall reflect
accurate estimated amounts for the required |
| 497 |
items in paragraph
(c) at the time of the filing of the offering |
| 498 |
circular with the
division, and subsequent increased amounts of |
| 499 |
any item included
in the association's estimated budget that are |
| 500 |
beyond the control
of the developer shall not be considered an |
| 501 |
amendment that
would give rise to rescission rights set forth in |
| 502 |
s. 718.503(1)(a) or
(b), nor shall such increases modify, void, |
| 503 |
or otherwise affect
any guarantee of the developer contained in |
| 504 |
the offering
circular or any purchase contract. It is the intent |
| 505 |
of this paragraph
to clarify existing law. |
| 506 |
Section
9. Section 718.616, Florida Statutes, is amended |
| 507 |
to read: |
| 508 |
718.616 Disclosure
of condition of building and estimated |
| 509 |
replacement costs and notification of
municipalities.-- |
| 510 |
(1) Each
developer of a residential condominium created by |
| 511 |
converting existing, previously
occupied improvements to such |
| 512 |
form of ownership shall prepare
a report that discloses disclose |
| 513 |
the condition of the improvements and
the condition of certain |
| 514 |
components and their current estimated
replacement costs as of |
| 515 |
the date of the
report. |
| 516 |
(2) The
following information shall be stated concerning |
| 517 |
the improvements: |
| 518 |
(a) The
date and type of construction. |
| 519 |
(b) The
prior use. |
| 520 |
(c) Whether
there is termite damage or infestation and |
| 521 |
whether the termite damage or
infestation, if any, has been |
| 522 |
properly treated. The statement shall
be substantiated by |
| 523 |
including, as an exhibit, an
inspection report by a certified |
| 524 |
pest control operator. |
| 525 |
(3)(a) Disclosure
of condition shall be made for each of |
| 526 |
the following components that the
existing improvements may |
| 527 |
include: |
| 528 |
1. Roof. |
| 529 |
2. Structure. |
| 530 |
3. Fireproofing
and Fire protection systems. |
| 531 |
4. Elevators. |
| 532 |
5. Heating
and cooling systems. |
| 533 |
6. Plumbing. |
| 534 |
7. Electrical
systems. |
| 535 |
8. Swimming
pool. |
| 536 |
9. Seawalls,
pilings, and docks. |
| 537 |
10. Pavement
and concrete, including roadways, walkways, |
| 538 |
and parking
areas. |
| 539 |
11. Drainage
systems. |
| 540 |
12. Irrigation
systems. |
| 541 |
(b) For
each component, the following information shall be |
| 542 |
disclosed and substantiated by
attaching a copy of a certificate |
| 543 |
under seal of an architect or engineer
authorized to practice in |
| 544 |
this state: |
| 545 |
1. The
age of the component as of the date of the
report. |
| 546 |
2. The
estimated remaining useful life of the component as |
| 547 |
of the date of the
report. |
| 548 |
3. The
estimated current replacement cost of the component |
| 549 |
as of the
date of the report, expressed: |
| 550 |
a. As
a total amount; and |
| 551 |
b. As
a per-unit amount, based upon each unit's |
| 552 |
proportional share of the common
expenses. |
| 553 |
4. The
structural and functional soundness of the |
| 554 |
component. |
| 555 |
(c) Each
unit owner and the association are third-party |
| 556 |
beneficiaries of
the report. |
| 557 |
(d) A
supplemental report shall be prepared for any |
| 558 |
structure or
component that is renovated or repaired after |
| 559 |
completion of the
original report and prior to the recording of |
| 560 |
the declaration of
condominium. If the declaration is not |
| 561 |
recorded within 1
year after the date of the original report, |
| 562 |
the developer shall
update the report annually prior to |
| 563 |
recording the
declaration of condominium. |
| 564 |
(e) The
report may not contain representations on behalf |
| 565 |
of the development
concerning future improvements or repairs and |
| 566 |
must be limited to
the current condition of the improvements. |
| 567 |
(4) If
the proposed condominium is situated within a |
| 568 |
municipality, the disclosure shall
include a letter from the |
| 569 |
municipality acknowledging that the
municipality has been |
| 570 |
notified of the proposed creation of a
residential condominium |
| 571 |
by conversion of existing, previously
occupied improvements and, |
| 572 |
in any county, as defined in s.
125.011(1), acknowledging |
| 573 |
compliance with applicable zoning
requirements as determined by |
| 574 |
the municipality. |
| 575 |
Section
10. Section 718.618, Florida Statutes, is amended |
| 576 |
to read: |
| 577 |
718.618 Converter
reserve accounts; warranties.-- |
| 578 |
(1) When
existing improvements are converted to ownership |
| 579 |
as a residential condominium, the
developer shall establish |
| 580 |
converter reserve accounts for
capital expenditures and deferred |
| 581 |
maintenance, or give warranties as
provided by subsection (6), |
| 582 |
or post a surety bond as provided by
subsection (7). The |
| 583 |
developer shall fund the converter
reserve accounts in amounts |
| 584 |
calculated as follows: |
| 585 |
(a)1. When
the existing improvements include an air- |
| 586 |
conditioning system serving more than
one unit or property which |
| 587 |
the association is responsible to
repair, maintain, or replace, |
| 588 |
the developer shall fund an
air-conditioning reserve account. |
| 589 |
The amount of the reserve account
shall be the product of the |
| 590 |
estimated current replacement cost of
the system, as disclosed |
| 591 |
and substantiated pursuant to s.
718.616(3)(b), multiplied by a |
| 592 |
fraction, the numerator of which shall
be the lesser of the age |
| 593 |
of the system in years or 9, and the
denominator of which shall |
| 594 |
be 10. When such air-conditioning
system is within 1,000 yards |
| 595 |
of the seacoast, the numerator shall
be the lesser of the age of |
| 596 |
the system in years or 3, and the
denominator shall be 4. |
| 597 |
2. The
developer shall fund a plumbing reserve account. |
| 598 |
The amount of the funding shall be the
product of the estimated |
| 599 |
current replacement cost of the
plumbing component, as disclosed |
| 600 |
and substantiated pursuant to s.
718.616(3)(b), multiplied by a |
| 601 |
fraction, the numerator of which shall
be the lesser of the age |
| 602 |
of the plumbing in years or 36, and
the denominator of which |
| 603 |
shall be 40. |
| 604 |
3. The
developer shall fund a roof reserve account. The |
| 605 |
amount of the funding shall be the
product of the estimated |
| 606 |
current replacement cost of the
roofing component, as disclosed |
| 607 |
and substantiated pursuant to s.
718.616(3)(b), multiplied by a |
| 608 |
fraction, the numerator of which shall
be the lesser of the age |
| 609 |
of the roof in years or the numerator
listed in the following |
| 610 |
table. The denominator of the fraction
shall be determined based |
| 611 |
on the roof type, as follows: |
| 612 |
|
| |
|
Roof Type |
Numerator |
Denominator |
|
| 613 |
|
| |
| a. |
Built-up roof
without insulation |
4 |
5 |
|
| 614 |
|
| |
| b. |
Built-up roof with
insulation |
4 |
5 |
|
| 615 |
|
| |
| c. |
Cement tile roof |
45 |
50 |
|
| 616 |
|
| |
| d. |
Asphalt shingle
roof |
14 |
15 |
|
| 617 |
|
| |
|
| 618 |
|
| |
| f. |
Wood shingle roof |
9 |
10 |
|
| 619 |
|
| |
|
| 620 |
|
| 621 |
(b) The
age of any component or structure for which the |
| 622 |
developer is required to fund a
reserve account shall be |
| 623 |
measured in years,
rounded to the nearest whole year. The amount |
| 624 |
of converter
reserves to be funded by the developer for each |
| 625 |
structure or
component shall be based on the age of the |
| 626 |
structure or
component as disclosed in the inspection report. |
| 627 |
The architect or
engineer shall determine the age of the |
| 628 |
component
from the later of: |
| 629 |
1. The
date when the component or structure was replaced |
| 630 |
or substantially renewed, if the
replacement or renewal of the |
| 631 |
component at least met the
requirements of the then-applicable |
| 632 |
building code; or |
| 633 |
2. The
date when the installation or construction of the |
| 634 |
existing component or structure was
completed. |
| 635 |
(c) When
the age of a component or structure is to be |
| 636 |
measured from the date of replacement
or renewal, the developer |
| 637 |
shall provide the division with a
certificate, under the seal of |
| 638 |
an architect or engineer authorized to
practice in this state, |
| 639 |
verifying: |
| 640 |
1. The
date of the replacement or renewal; and |
| 641 |
2. That
the replacement or renewal at least met the |
| 642 |
requirements of the then-applicable
building code. |
| 643 |
(d) In
addition to establishing the reserve accounts |
| 644 |
specified above, the developer shall
establish those other |
| 645 |
reserve accounts required by s.
718.112(2)(f), and shall fund |
| 646 |
those accounts in accordance with the
formula provided therein. |
| 647 |
The vote to waive
or reduce the funding or reserves required by |
| 648 |
s. 718.112(2)(f)
does not affect or negate the obligations |
| 649 |
arising under this
section. |
| 650 |
(2)(a) The
developer shall fund the reserve account |
| 651 |
required by subsection (1), on a pro
rata basis upon the sale of |
| 652 |
each unit. The developer shall deposit
in the reserve account |
| 653 |
not less than a percentage of the
total amount to be deposited |
| 654 |
in the reserve account equal to the
percentage of ownership of |
| 655 |
the common elements allocable to the
unit sold. When a developer |
| 656 |
deposits amounts in excess of the
minimum reserve account |
| 657 |
funding, later deposits may be reduced
to the extent of the |
| 658 |
excess funding. For the purposes of
this subsection, a unit is |
| 659 |
considered sold when a fee interest in
the unit is transferred |
| 660 |
to a third party or the unit is leased
for a period in excess of |
| 661 |
5 years. |
| 662 |
(b) When
an association makes an expenditure of converter |
| 663 |
reserve account funds before the
developer has sold all units, |
| 664 |
the developer shall make a deposit in
the reserve account. Such |
| 665 |
deposit shall be at least equal to
that portion of the |
| 666 |
expenditure which would be charged
against the reserve account |
| 667 |
deposit that would have been made for
any such unit had the unit |
| 668 |
been sold. Such deposit may be reduced
to the extent the |
| 669 |
developer has funded the reserve
account in excess of the |
| 670 |
minimum reserve account funding
required by this subsection. |
| 671 |
This paragraph applies only when the
developer has funded |
| 672 |
reserve accounts as provided by
paragraph (a). |
| 673 |
(3) The
use of reserve account funds, as provided
in this |
| 674 |
section,
is limited as follows: |
| 675 |
(a) Reserve
account funds may be spent prior to the |
| 676 |
assumption of control of the
association by unit owners other |
| 677 |
than the developer; and |
| 678 |
(b) Reserve
account funds may be expended only for repair |
| 679 |
or replacement of the specific
components for which the funds |
| 680 |
were deposited, unless, after
assumption of control of the |
| 681 |
association by unit owners other than
the developer, it is |
| 682 |
determined by three-fourths of the
voting interests in the |
| 683 |
condominium to expend the funds for
other purposes. |
| 684 |
(4) The
developer shall establish the reserve account, as |
| 685 |
provided in this section, in
the name of the association at a |
| 686 |
bank, savings and loan association, or
trust company located in |
| 687 |
this state. |
| 688 |
(5) A
developer may establish and fund additional |
| 689 |
converter
reserve accounts. The amount of funding
shall be the |
| 690 |
product of the
estimated current replacement cost of a |
| 691 |
component, as
disclosed and substantiated pursuant to s. |
| 692 |
718.616(3)(b),
multiplied by a fraction, the numerator of which |
| 693 |
is the age of the
component in years and the denominator of |
| 694 |
which is the total
estimated life of the component in years. |
| 695 |
(6) A
developer makes no implied warranties when existing |
| 696 |
improvements are converted to
ownership as a residential |
| 697 |
condominium and reserve accounts are
funded in accordance with |
| 698 |
this section. As an alternative to
establishing such reserve |
| 699 |
accounts, or when a developer fails to
establish the reserve |
| 700 |
accounts in accordance with this
section, the developer shall be |
| 701 |
deemed to have granted to the
purchaser of each unit an implied |
| 702 |
warranty of fitness and
merchantability for the purposes or uses |
| 703 |
intended, as
to the roof and structural components of the |
| 704 |
improvements; as to
fireproofing and fire protection systems; |
| 705 |
and as to
mechanical, electrical, and plumbing elements serving |
| 706 |
the improvements,
except mechanical elements serving only one |
| 707 |
unit.
The warranty shall be for a period beginning with the |
| 708 |
notice of intended conversion and
continuing for 3 years |
| 709 |
thereafter, or the recording of the
declaration to condominium |
| 710 |
and continuing for 3 years thereafter,
or 1 year after owners |
| 711 |
other than the developer obtain
control of the association, |
| 712 |
whichever occurs last, but in no event
more than 5 years. |
| 713 |
(a) The
warranty provided for in this section is |
| 714 |
conditioned upon routine maintenance
being performed, unless the |
| 715 |
maintenance is an obligation of the
developer or a developer- |
| 716 |
controlled association. |
| 717 |
(b) The
warranty shall inure to the benefit of each owner |
| 718 |
and successor owner. |
| 719 |
(c) Existing
improvements converted to residential |
| 720 |
condominium may be covered by an
insured warranty program |
| 721 |
underwritten by an insurance company
authorized to do business |
| 722 |
in this state, if such warranty
program meets the minimum |
| 723 |
requirements of this chapter. To the
degree that the warranty |
| 724 |
program does not meet the minimum
requirements of this chapter, |
| 725 |
such requirements shall apply. |
| 726 |
(7) When
a developer desires to post a surety bond, the |
| 727 |
developer shall, after notification to
the buyer, acquire a |
| 728 |
surety bond issued by a company
licensed to do business in this |
| 729 |
state, if such a bond is readily
available in the open market, |
| 730 |
in an amount which would be equal to
the total amount of all |
| 731 |
reserve accounts required under
subsection (1), payable to the |
| 732 |
association. |
| 733 |
(8) The
amended provisions of this section do not affect a |
| 734 |
conversion of existing improvements
when a developer has filed a |
| 735 |
notice of intended conversion and the
documents required by s. |
| 736 |
718.503 or s. 718.504, as applicable,
with the division prior to |
| 737 |
the effective date of this law,
provided: |
| 738 |
(a) The
documents are proper for filing purposes. |
| 739 |
(b) The
developer, not later than 6 months after such |
| 740 |
filing: |
| 741 |
1. Records
a declaration for such filing in accordance |
| 742 |
with part I. |
| 743 |
2. Gives
a notice of intended conversion. |
| 744 |
(9) This
section applies only to the conversion of |
| 745 |
existing improvements where
construction of the improvement was |
| 746 |
commenced prior to its designation by
the developer as a |
| 747 |
condominium. In such circumstances, s.
718.203 does not apply. |
| 748 |
(10) A
developer who sells a condominium parcel that is |
| 749 |
subject to this
part shall disclose in conspicuous type in the |
| 750 |
contract of sale
whether the developer has established converter |
| 751 |
reserve accounts,
provided a warranty of fitness and |
| 752 |
merchantability, or
posted a surety bond for purposes of |
| 753 |
complying with this
section. |
| 754 |
Section
11. Subsection (3) of section 719.104, Florida |
| 755 |
Statutes, is amended to read: |
| 756 |
719.104 Cooperatives;
access to units; records; financial |
| 757 |
reports; assessments; purchase of
leases.-- |
| 758 |
(3) INSURANCE.--The
association shall use its best efforts |
| 759 |
to obtain and maintain adequate
insurance to protect the |
| 760 |
association property. The association
may also obtain and |
| 761 |
maintain liability insurance for
directors and officers, |
| 762 |
insurance for the benefit of
association employees, and flood |
| 763 |
insurance. A copy of each policy of
insurance in effect shall be |
| 764 |
made available for inspection by unit
owners at reasonable |
| 765 |
times. |
| 766 |
(a) Windstorm
insurance coverage for a group of no fewer |
| 767 |
than three
communities created and operating under chapter 718, |
| 768 |
this chapter,
chapter 720, or chapter 721 may be obtained and |
| 769 |
maintained for the
communities if the insurance coverage is |
| 770 |
sufficient to cover
an amount equal to the probable maximum loss |
| 771 |
for the communities
for a 250-year windstorm event. Such |
| 772 |
probable maximum
loss must be determined through the use of a |
| 773 |
competent model
that has been accepted by the Florida Commission |
| 774 |
on Hurricane Loss
Projection Methodology. Such insurance |
| 775 |
coverage is deemed
adequate windstorm insurance for the purposes |
| 776 |
of this section. |
| 777 |
(b) An
association or group of associations may self- |
| 778 |
insure against
claims against the association, the association |
| 779 |
property, and the
cooperative property required to be insured by |
| 780 |
an association,
upon compliance with the applicable provisions |
| 781 |
of ss.
624.460-624.488, which shall be considered adequate |
| 782 |
insurance for
purposes of this section. |
| 783 |
Section
12. Paragraph (e) is added to subsection (1) of |
| 784 |
section 719.107, Florida Statutes, to
read: |
| 785 |
719.107 Common
expenses; assessment.-- |
| 786 |
(1) |
| 787 |
(e) Common
expenses include the costs of insurance |
| 788 |
acquired by the
association under the authority of s. |
| 789 |
719.104(3),
including costs and contingent expenses required to |
| 790 |
participate in a
self-insurance fund authorized and approved |
| 791 |
pursuant to s.
624.462. |
| 792 |
Section
13. Subsection (9) of section 719.108, Florida |
| 793 |
Statutes, is amended to read: |
| 794 |
719.108 Rents
and assessments; liability; lien and |
| 795 |
priority; interest; collection;
cooperative ownership.-- |
| 796 |
(9) The
specific purposes of any special assessment, |
| 797 |
including any
contingent special assessment levied in |
| 798 |
conjunction with
the purchase of an insurance policy authorized |
| 799 |
by s.
719.104(3), approved in accordance with the cooperative |
| 800 |
documents shall be set forth in a
written notice of such |
| 801 |
assessment sent or delivered to each
unit owner. The funds |
| 802 |
collected pursuant to a special
assessment shall be used only |
| 803 |
for the specific purpose or purposes
set forth in such notice or |
| 804 |
returned to the unit owners. However,
upon completion of such |
| 805 |
specific purposes, any excess funds
shall be considered common |
| 806 |
surplus and
may, at the discretion of the board, either be |
| 807 |
returned to the
unit owners or applied as a credit toward future |
| 808 |
assessments. |
| 809 |
Section
14. Paragraph (a) of subsection (1) of section |
| 810 |
719.503, Florida Statutes, is amended,
and paragraph (c) is |
| 811 |
added to that subsection, to read: |
| 812 |
719.503 Disclosure
prior to sale.-- |
| 813 |
(1) DEVELOPER
DISCLOSURE.-- |
| 814 |
(a) Contents
of contracts.--Any contracts for the sale of |
| 815 |
a unit or a lease thereof for an
unexpired term of more than 5 |
| 816 |
years shall contain: |
| 817 |
1. The
following legend in conspicuous type: THIS |
| 818 |
AGREEMENT IS VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE OF |
| 819 |
THE BUYER'S INTENTION TO CANCEL WITHIN
15 DAYS AFTER THE DATE OF |
| 820 |
EXECUTION OF THIS AGREEMENT BY THE
BUYER, AND RECEIPT BY BUYER |
| 821 |
OF ALL OF THE ITEMS REQUIRED TO BE
DELIVERED TO HIM OR HER BY |
| 822 |
THE DEVELOPER UNDER SECTION 719.503,
FLORIDA STATUTES. THIS |
| 823 |
AGREEMENT IS ALSO VOIDABLE BY BUYER BY
DELIVERING WRITTEN NOTICE |
| 824 |
OF THE BUYER'S INTENTION TO CANCEL
WITHIN 15 DAYS AFTER THE DATE |
| 825 |
OF RECEIPT FROM THE DEVELOPER OF ANY
AMENDMENT WHICH MATERIALLY |
| 826 |
ALTERS OR MODIFIES THE OFFERING IN A
MANNER THAT IS ADVERSE TO |
| 827 |
THE BUYER. ANY PURPORTED WAIVER OF
THESE VOIDABILITY RIGHTS |
| 828 |
SHALL BE OF NO EFFECT. BUYER MAY
EXTEND THE TIME FOR CLOSING FOR |
| 829 |
A PERIOD OF NOT MORE THAN 15 DAYS
AFTER THE BUYER HAS RECEIVED |
| 830 |
ALL OF THE ITEMS REQUIRED. BUYER'S
RIGHT TO VOID THIS AGREEMENT |
| 831 |
SHALL TERMINATE AT CLOSING. FIGURES
CONTAINED IN ANY BUDGET |
| 832 |
DELIVERED TO THE
BUYER PREPARED IN ACCORDANCE WITH THE |
| 833 |
COOPERATIVE ACT ARE
ESTIMATES ONLY AND REPRESENT AN |
| 834 |
APPROXIMATION OF
FUTURE EXPENSES BASED ON FACTS AND |
| 835 |
CIRCUMSTANCES
EXISTING AT THE TIME OF THE PREPARATION OF THE |
| 836 |
BUDGET BY THE
DEVELOPER. ACTUAL COSTS OF SUCH ITEMS MAY EXCEED |
| 837 |
THE ESTIMATED
COSTS. SUCH CHANGES IN COST DO NOT CONSTITUTE |
| 838 |
MATERIAL ADVERSE
CHANGES IN THE OFFERING. |
| 839 |
2. The
following caveat in conspicuous type shall be |
| 840 |
placed upon the first page of the
contract: ORAL REPRESENTATIONS |
| 841 |
CANNOT BE RELIED UPON AS CORRECTLY
STATING THE REPRESENTATIONS |
| 842 |
OF THE DEVELOPER. FOR CORRECT
REPRESENTATIONS, REFERENCE SHOULD |
| 843 |
BE MADE TO THIS CONTRACT AND THE
DOCUMENTS REQUIRED BY SECTION |
| 844 |
719.503, FLORIDA STATUTES, TO BE
FURNISHED BY A DEVELOPER TO A |
| 845 |
BUYER OR LESSEE. |
| 846 |
3. If
the unit has been occupied by someone other than the |
| 847 |
buyer, a statement that the unit has
been occupied. |
| 848 |
4. If
the contract is for the sale or transfer of a unit |
| 849 |
subject to a lease, the contract shall
include as an exhibit a |
| 850 |
copy of the executed lease and shall
contain within the text in |
| 851 |
conspicuous type: THE UNIT IS SUBJECT
TO A LEASE (OR SUBLEASE). |
| 852 |
5. If
the contract is for the lease of a unit for a term |
| 853 |
of 5 years or more, the contract shall
include as an exhibit a |
| 854 |
copy of the proposed lease. |
| 855 |
6. If
the contract is for the sale or lease of a unit that |
| 856 |
is subject to a lien for rent payable
under a lease of a |
| 857 |
recreational facility or other common
areas, the contract shall |
| 858 |
contain within the text the following
statement in conspicuous |
| 859 |
type: THIS CONTRACT IS FOR THE
TRANSFER OF A UNIT THAT IS |
| 860 |
SUBJECT TO A LIEN FOR RENT PAYABLE
UNDER A LEASE OF COMMON |
| 861 |
AREAS. FAILURE TO PAY RENT MAY RESULT
IN FORECLOSURE OF THE |
| 862 |
LIEN. |
| 863 |
7. The
contract shall state the name and address of the |
| 864 |
escrow agent required by s. 719.202
and shall state that the |
| 865 |
purchaser may obtain a receipt for his
or her deposit from the |
| 866 |
escrow agent, upon request. |
| 867 |
8. If
the contract is for the sale or transfer of a unit |
| 868 |
in a cooperative in which timeshare
estates have been or may be |
| 869 |
created, the following text in
conspicuous type: UNITS IN THIS |
| 870 |
COOPERATIVE ARE SUBJECT TO TIMESHARE
ESTATES. The contract for |
| 871 |
the sale of a timeshare estate must
also contain, in conspicuous |
| 872 |
type, the following: FOR THE PURPOSE
OF AD VALOREM TAXES OR |
| 873 |
SPECIAL ASSESSMENTS LEVIED BY TAXING
AUTHORITIES AGAINST A |
| 874 |
TIMESHARE ESTATE, THE MANAGING ENTITY
IS GENERALLY CONSIDERED |
| 875 |
THE TAXPAYER UNDER FLORIDA LAW. YOU
HAVE THE RIGHT TO CHALLENGE |
| 876 |
AN ASSESSMENT BY A TAXING AUTHORITY
RELATING TO YOUR TIMESHARE |
| 877 |
ESTATE PURSUANT TO THE PROVISIONS OF
CHAPTER 194, FLORIDA |
| 878 |
STATUTES. |
| 879 |
(c) Subsequent
estimates; when provided.--If the closing |
| 880 |
on a contract
occurs more than 12 months after the filing of the |
| 881 |
offering circular
with the division, the developer shall provide |
| 882 |
a copy of the
current estimated operating budget of the |
| 883 |
association to the
buyer at closing, which shall not be |
| 884 |
considered an
amendment that modifies the offering provided any |
| 885 |
changes to the
association's budget from the budget given to the |
| 886 |
buyer at the time
of contract signing were the result of matters |
| 887 |
beyond the
developer's control. Changes in budgets of any master |
| 888 |
association,
recreation association, or club and similar budgets |
| 889 |
for entities other
than the association shall likewise not be |
| 890 |
considered
amendments that modify the offering. It is the intent |
| 891 |
of this paragraph
to clarify existing law. |
| 892 |
Section
15. Present paragraph (d) of subsection (20) of |
| 893 |
section 719.504, Florida Statutes, is
redesignated as paragraph |
| 894 |
(f), and new paragraphs (d) and (e)
are added to that |
| 895 |
subsection, to read: |
| 896 |
719.504 Prospectus
or offering circular.--Every developer |
| 897 |
of a residential cooperative which
contains more than 20 |
| 898 |
residential units, or which is part of
a group of residential |
| 899 |
cooperatives which will be served by
property to be used in |
| 900 |
common by unit owners of more than 20
residential units, shall |
| 901 |
prepare a prospectus or offering
circular and file it with the |
| 902 |
Division of Florida Land Sales,
Condominiums, and Mobile Homes |
| 903 |
prior to entering into an enforceable
contract of purchase and |
| 904 |
sale of any unit or lease of a unit
for more than 5 years and |
| 905 |
shall furnish a copy of the prospectus
or offering circular to |
| 906 |
each buyer. In addition to the
prospectus or offering circular, |
| 907 |
each buyer shall be furnished a
separate page entitled |
| 908 |
"Frequently Asked Questions and
Answers," which must be in |
| 909 |
accordance with a format approved by
the division. This page |
| 910 |
must, in readable language: inform
prospective purchasers |
| 911 |
regarding their voting rights and unit
use restrictions, |
| 912 |
including restrictions on the leasing
of a unit; indicate |
| 913 |
whether and in what amount the unit
owners or the association is |
| 914 |
obligated to pay rent or land use fees
for recreational or other |
| 915 |
commonly used facilities; contain a
statement identifying that |
| 916 |
amount of assessment which, pursuant
to the budget, would be |
| 917 |
levied upon each unit type, exclusive
of any special |
| 918 |
assessments, and which identifies the
basis upon which |
| 919 |
assessments are levied, whether
monthly, quarterly, or |
| 920 |
otherwise; state and identify any
court cases in which the |
| 921 |
association is currently a party of
record in which the |
| 922 |
association may face liability in
excess of $100,000; and state |
| 923 |
whether membership in a recreational
facilities association is |
| 924 |
mandatory and, if so, identify the
fees currently charged per |
| 925 |
unit type. The division shall by rule
require such other |
| 926 |
disclosure as in its judgment will
assist prospective |
| 927 |
purchasers. The prospectus or offering
circular may include more |
| 928 |
than one cooperative, although not all
such units are being |
| 929 |
offered for sale as of the date of the
prospectus or offering |
| 930 |
circular. The prospectus or offering
circular must contain the |
| 931 |
following information: |
| 932 |
(20) An
estimated operating budget for the cooperative and |
| 933 |
the association, and a schedule of the
unit owner's expenses |
| 934 |
shall be attached as an exhibit and
shall contain the following |
| 935 |
information: |
| 936 |
(d) The
following statement in conspicuous type: THE |
| 937 |
BUDGET CONTAINED IN
THIS OFFERING CIRCULAR HAS BEEN PREPARED IN |
| 938 |
ACCORDANCE WITH THE
COOPERATIVE ACT AND IS A GOOD FAITH ESTIMATE |
| 939 |
ONLY AND REPRESENTS
AN APPROXIMATION OF FUTURE EXPENSES BASED ON |
| 940 |
FACTS AND
CIRCUMSTANCES EXISTING AT THE TIME OF ITS PREPARATION. |
| 941 |
ACTUAL COSTS OF
SUCH ITEMS MAY EXCEED THE ESTIMATED COSTS. SUCH |
| 942 |
CHANGES IN COST DO
NOT CONSTITUTE MATERIAL ADVERSE CHANGES IN |
| 943 |
THE OFFERING. |
| 944 |
(e) Each
budget for an association prepared by a developer |
| 945 |
consistent with
this subsection shall be prepared in good faith |
| 946 |
and shall reflect
accurate estimated amounts for the required |
| 947 |
items in paragraph
(c) at the time of the filing of the offering |
| 948 |
circular with the
division, and subsequent increased amounts of |
| 949 |
any item included
in the association's estimated budget that are |
| 950 |
beyond the control
of the developer shall not be considered an |
| 951 |
amendment that
would give rise to rescission rights set forth in |
| 952 |
s. 719.503(1)(a) or
(b), nor shall such increases modify, void, |
| 953 |
or otherwise affect
any guarantee of the developer contained in |
| 954 |
the offering
circular or any purchase contract. It is the intent |
| 955 |
of this paragraph
to clarify existing law. |
| 956 |
Section
16. Subsection (11) is added to section 720.303, |
| 957 |
Florida Statutes, to read: |
| 958 |
720.303 Association
powers and duties; meetings of board; |
| 959 |
official records; budgets; financial
reporting; association |
| 960 |
funds; recalls.-- |
| 961 |
(11) WINDSTORM
INSURANCE.--Windstorm insurance coverage |
| 962 |
for a group of no
fewer than three communities created and |
| 963 |
operating under
chapter 718, chapter 719, this chapter, or |
| 964 |
chapter 721 may be
obtained and maintained for the communities |
| 965 |
if the insurance
coverage is sufficient to cover an amount equal |
| 966 |
to the probable
maximum loss for the communities for a 250-year |
| 967 |
windstorm event.
Such probable maximum loss must be determined |
| 968 |
through the use of
a competent model that has been accepted by |
| 969 |
the Florida
Commission on Hurricane Loss Projection Methodology. |
| 970 |
Such insurance
coverage is deemed adequate windstorm coverage |
| 971 |
for purposes of
this chapter. |
| 972 |
Section
17. Section 720.308, Florida Statutes, is amended |
| 973 |
to read: |
| 974 |
720.308 Assessments
and charges.--For any community |
| 975 |
created after October 1, 1995, the
governing documents must |
| 976 |
describe the manner in which expenses
are shared and specify the |
| 977 |
member's proportional share thereof. |
| 978 |
(1) Assessments
levied pursuant to the annual budget or |
| 979 |
special assessment must be in the
member's proportional share of |
| 980 |
expenses as described in the governing
document, which share may |
| 981 |
be different among classes of parcels
based upon the state of |
| 982 |
development thereof, levels of
services received by the |
| 983 |
applicable members, or other relevant
factors. |
| 984 |
(2) While
the developer is in control of the homeowners' |
| 985 |
association, it may be excused from
payment of its share of the |
| 986 |
operating expenses and assessments
related to its parcels for |
| 987 |
any period of time for which the
developer has, in the |
| 988 |
declaration, obligated itself to pay
any operating expenses |
| 989 |
incurred that exceed the assessments
receivable from other |
| 990 |
members and other income of the
association. |
| 991 |
(3) Assessments
or contingent assessments may be levied by |
| 992 |
the board of
directors of the association to secure the |
| 993 |
obligation of the
homeowners' association for insurance acquired |
| 994 |
from a
self-insurance fund authorized and operating pursuant to |
| 995 |
s. 624.462. |
| 996 |
(4) This
section does not apply to an association, no |
| 997 |
matter when created, if the
association is created in a |
| 998 |
community that is included in an
effective development-of- |
| 999 |
regional-impact development order as
of October 1, 1995 the |
| 1000 |
effective
date of this act, together with any approved |
| 1001 |
modifications thereto. |
| 1002 |
Section
18. This act shall take effect upon becoming a |
| 1003 |
law. |