Bill Text: FL S0840 | 2010 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Community Associations [CPSC]
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Failed) 2010-04-30 - Died in Messages, companion bill(s) passed, see CS/CS/CS/SB 1196 (Ch. 2010-174) [S0840 Detail]
Download: Florida-2010-S0840-Comm_Sub.html
Bill Title: Community Associations [CPSC]
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Failed) 2010-04-30 - Died in Messages, companion bill(s) passed, see CS/CS/CS/SB 1196 (Ch. 2010-174) [S0840 Detail]
Download: Florida-2010-S0840-Comm_Sub.html
Florida Senate - 2010 CS for CS for SB 840 By the Committees on Community Affairs; and Regulated Industries; and Senators Sobel, Gelber, and Aronberg 578-03170-10 2010840c2 1 A bill to be entitled 2 An act relating to community associations; amending s. 3 718.103, F.S.; redefining the term “developer”; 4 amending s. 718.501, F.S.; specifying that the 5 Division of Florida Condominiums, Timeshares, and 6 Mobile Homes of the Department of Business and 7 Professional Regulation has jurisdiction with respect 8 to bulk assignees and bulk buyers; creating part VII 9 of ch. 718, F.S.; creating the “Distressed Condominium 10 Relief Act”; providing legislative findings and 11 intent; defining the terms “bulk assignee” and “bulk 12 buyer”; providing for the assignment of developer 13 rights by a bulk assignee; specifying liabilities of 14 bulk assignees and bulk buyers; providing exceptions; 15 providing additional responsibilities of bulk 16 assignees and bulk buyers; authorizing certain 17 entities to assign developer rights to a bulk 18 assignee; limiting the number of bulk assignees at any 19 given time; providing for the transfer of control of a 20 board of administration to unit owners; providing 21 effects of such transfer on parcels acquired by a bulk 22 assignee; providing obligations of a bulk assignee 23 upon the transfer of control of a board of 24 administration; requiring that a bulk assignee certify 25 certain information in writing; providing for the 26 resolution of a conflict between specified provisions 27 of state law; providing that the failure of a bulk 28 assignee or bulk buyer to comply with specified 29 provisions of state law results in the loss of certain 30 protections and exemptions; requiring that a bulk 31 assignee or bulk buyer file certain information with 32 the Division of Florida Condominiums, Timeshares, and 33 Mobile Homes before offering any units for sale or 34 lease in excess of a specified term; requiring that a 35 copy of such information be provided to a prospective 36 purchaser or tenant; requiring that certain contracts 37 and disclosure statements contain specified 38 statements; requiring that a bulk assignee or bulk 39 buyer comply with certain disclosure requirements; 40 prohibiting a bulk assignee from authorizing certain 41 actions on behalf of an association while the bulk 42 assignee is in control of the board of administration 43 of the association; requiring that a bulk assignee or 44 bulk buyer comply with certain laws with respect to 45 contracts entered into by the association while the 46 bulk assignee or bulk buyer was in control of the 47 board of administration; providing parcel owners with 48 specified protections regarding certain contracts; 49 requiring that a bulk buyer comply with certain 50 requirements regarding the transfer of a parcel; 51 prohibiting a person from being classified as a bulk 52 assignee or bulk buyer unless condominium parcels were 53 acquired before a specified date; providing that the 54 assignment of developer rights to a bulk assignee does 55 not release a developer from certain liabilities; 56 providing an effective date. 57 58 Be It Enacted by the Legislature of the State of Florida: 59 60 Section 1. Subsection (16) of section 718.103, Florida 61 Statutes, is amended to read: 62 718.103 Definitions.—As used in this chapter, the term: 63 (16) “Developer” means a person who creates a condominium 64 or offers condominium parcels for sale or lease in the ordinary 65 course of business, but does not include: 66 (a) An owner or lessee of a condominium or cooperative unit 67 who has acquired the unit for his or her own occupancy;,nor68does it include69 (b) A cooperative association thatwhichcreates a 70 condominium by conversion of an existing residential cooperative 71 after control of the association has been transferred to the 72 unit owners if, following the conversion, the unit owners will 73 be the same persons who were unit owners of the cooperative and 74 no units are offered for sale or lease to the public as part of 75 the plan of conversion;.76 (c) A bulk assignee or bulk buyer as defined in s. 718.703; 77 or 78 (d) A state, county, or municipal entityis not a developer79for any purposes under this act when it isacting as a lessor 80 and not otherwise named as a developer in the declaration of 81 condominiumassociation. 82 Section 2. Subsection (1) of section 718.501, Florida 83 Statutes, is amended to read: 84 718.501 Authority, responsibility, and duties of Division 85 of Florida Condominiums, Timeshares, and Mobile Homes.— 86 (1) The Division of Florida Condominiums, Timeshares, and 87 Mobile Homes of the Department of Business and Professional 88 Regulation, referred to as the “division” in this part, has the 89 power to enforce and ensure compliance with the provisions of 90 this chapter and rules relating to the development, 91 construction, sale, lease, ownership, operation, and management 92 of residential condominium units. In performing its duties, the 93 division has complete jurisdiction to investigate complaints and 94 enforce compliance with the provisions of this chapter with 95 respect to associations that are still under developer control 96 or the control of a bulk assignee or bulk buyer pursuant to part 97 VII of this chapter and complaints against developers, bulk 98 assignees, or bulk buyers involving improper turnover or failure 99 to turnover, pursuant to s. 718.301. However, after turnover has 100 occurred, the division hasshall only havejurisdiction to 101 investigate complaints related only to financial issues, 102 elections, and unit owner access to association records pursuant 103 to s. 718.111(12). 104 (a)1. The division may make necessary public or private 105 investigations within or outside this state to determine whether 106 any person has violated this chapter or any rule or order 107 hereunder, to aid in the enforcement of this chapter, or to aid 108 in the adoption of rules or forms hereunder. 109 2. The division may submit any official written report, 110 worksheet, or other related paper, or a duly certified copy 111 thereof, compiled, prepared, drafted, or otherwise made by and 112 duly authenticated by a financial examiner or analyst to be 113 admitted as competent evidence in any hearing in which the 114 financial examiner or analyst is available for cross-examination 115 and attests under oath that such documents were prepared as a 116 result of an examination or inspection conducted pursuant to 117 this chapter. 118 (b) The division may require or permit any person to file a 119 statement in writing, under oath or otherwise, as the division 120 determines, as to the facts and circumstances concerning a 121 matter to be investigated. 122 (c) For the purpose of any investigation under this 123 chapter, the division director or any officer or employee 124 designated by the division director may administer oaths or 125 affirmations, subpoena witnesses and compel their attendance, 126 take evidence, and require the production of any matter which is 127 relevant to the investigation, including the existence, 128 description, nature, custody, condition, and location of any 129 books, documents, or other tangible things and the identity and 130 location of persons having knowledge of relevant facts or any 131 other matter reasonably calculated to lead to the discovery of 132 material evidence. Upon the failure by a person to obey a 133 subpoena or to answer questions propounded by the investigating 134 officer and upon reasonable notice to all persons affected 135 thereby, the division may apply to the circuit court for an 136 order compelling compliance. 137 (d) Notwithstanding any remedies available to unit owners 138 and associations, if the division has reasonable cause to 139 believe that a violation of any provision of this chapter or 140 related rule has occurred, the division may institute 141 enforcement proceedings in its own name against any developer, 142 bulk assignee, bulk buyer, association, officer, or member of 143 the board of administration, or its assignees or agents, as 144 follows: 145 1. The division may permit a person whose conduct or 146 actions may be under investigation to waive formal proceedings 147 and enter into a consent proceeding whereby orders, rules, or 148 letters of censure or warning, whether formal or informal, may 149 be entered against the person. 150 2. The division may issue an order requiring the developer, 151 bulk assignee, bulk buyer, association, developer-designated 152 officer, or developer-designated member of the board of 153 administration, developer-designated assignees or agents, bulk 154 assignee-designated assignees or agents, bulk buyer-designated 155 assignees or agents, community association manager, or community 156 association management firm to cease and desist from the 157 unlawful practice and take such affirmative action as in the 158 judgment of the division will carry out the purposes of this 159 chapter. If the division finds that a developer, bulk assignee, 160 bulk buyer, association, officer, or member of the board of 161 administration, or its assignees or agents, is violating or is 162 about to violate any provision of this chapter, any rule adopted 163 or order issued by the division, or any written agreement 164 entered into with the division, and presents an immediate danger 165 to the public requiring an immediate final order, it may issue 166 an emergency cease and desist order reciting with particularity 167 the facts underlying such findings. The emergency cease and 168 desist order is effective for 90 days. If the division begins 169 nonemergency cease and desist proceedings, the emergency cease 170 and desist order remains effective until the conclusion of the 171 proceedings under ss. 120.569 and 120.57. 172 3. If a developer, bulk assignee, or bulk buyer, fails to 173 pay any restitution determined by the division to be owed, plus 174 any accrued interest at the highest rate permitted by law, 175 within 30 days after expiration of any appellate time period of 176 a final order requiring payment of restitution or the conclusion 177 of any appeal thereof, whichever is later, the division must 178shallbring an action in circuit or county court on behalf of 179 any association, class of unit owners, lessees, or purchasers 180 for restitution, declaratory relief, injunctive relief, or any 181 other available remedy. The division may also temporarily revoke 182 its acceptance of the filing for the developer to which the 183 restitution relates until payment of restitution is made. 184 4. The division may petition the court for the appointment 185 of a receiver or conservator. If appointed, the receiver or 186 conservator may take action to implement the court order to 187 ensure the performance of the order and to remedy any breach 188 thereof. In addition to all other means provided by law for the 189 enforcement of an injunction or temporary restraining order, the 190 circuit court may impound or sequester the property of a party 191 defendant, including books, papers, documents, and related 192 records, and allow the examination and use of the property by 193 the division and a court-appointed receiver or conservator. 194 5. The division may apply to the circuit court for an order 195 of restitution whereby the defendant in an action brought 196 pursuant to subparagraph 4. shall be ordered to make restitution 197 of those sums shown by the division to have been obtained by the 198 defendant in violation of this chapter. Such restitution shall, 199 at the option of the court, be payable to the conservator or 200 receiver appointed pursuant to subparagraph 4. or directly to 201 the persons whose funds or assets were obtained in violation of 202 this chapter. 203 6. The division may impose a civil penalty against a 204 developer, bulk assignee, or bulk buyer, or association, or its 205 assignee or agent, for any violation of this chapter or a rule 206 adopted under this chapter. The division may impose a civil 207 penalty individually against any officer or board member who 208 willfully and knowingly violates a provision of this chapter, 209 adopted rule, or a final order of the division; may order the 210 removal of such individual as an officer or from the board of 211 administration or as an officer of the association; and may 212 prohibit such individual from serving as an officer or on the 213 board of a community association for a period of time. The term 214 “willfully and knowingly” means that the division informed the 215 officer or board member that his or her action or intended 216 action violates this chapter, a rule adopted under this chapter, 217 or a final order of the division and that the officer or board 218 member refused to comply with the requirements of this chapter, 219 a rule adopted under this chapter, or a final order of the 220 division. The division, beforeprior toinitiating formal agency 221 action under chapter 120, mustshallafford the officer or board 222 member an opportunity to voluntarily comply with this chapter, a 223 rule adopted under this chapter, or a final order of the 224 division. An officer or board member who complies within 10 days 225 is not subject to a civil penalty. A penalty may be imposed on 226 the basis of each day of continuing violation, butin no event227shallthe penalty for any offense may not exceed $5,000. By 228 January 1, 1998, the division shall adopt, by rule, penalty 229 guidelines applicable to possible violations or to categories of 230 violations of this chapter or rules adopted by the division. The 231 guidelines must specify a meaningful range of civil penalties 232 for each such violation of the statute and rules and must be 233 based upon the harm caused by the violation, the repetition of 234 the violation, and upon such other factors deemed relevant by 235 the division. For example, the division may consider whether the 236 violations were committed by a developer, bulk assignee, or bulk 237 buyer, or owner-controlled association, the size of the 238 association, and other factors. The guidelines must designate 239 the possible mitigating or aggravating circumstances that 240 justify a departure from the range of penalties provided by the 241 rules. It is the legislative intent that minor violations be 242 distinguished from those which endanger the health, safety, or 243 welfare of the condominium residents or other persons and that 244 such guidelines provide reasonable and meaningful notice to the 245 public of likely penalties that may be imposed for proscribed 246 conduct. This subsection does not limit the ability of the 247 division to informally dispose of administrative actions or 248 complaints by stipulation, agreed settlement, or consent order. 249 All amounts collected shall be deposited with the Chief 250 Financial Officer to the credit of the Division of Florida 251 Condominiums, Timeshares, and Mobile Homes Trust Fund. If a 252 developer, bulk assignee, or bulk buyer fails to pay the civil 253 penalty and the amount deemed to be owed to the association, the 254 division shall issue an order directing that such developer, 255 bulk assignee, or bulk buyer cease and desist from further 256 operation until such time as the civil penalty is paid or may 257 pursue enforcement of the penalty in a court of competent 258 jurisdiction. If an association fails to pay the civil penalty, 259 the division shall pursue enforcement in a court of competent 260 jurisdiction, and the order imposing the civil penalty or the 261 cease and desist order will not become effective until 20 days 262 after the date of such order. Any action commenced by the 263 division shall be brought in the county in which the division 264 has its executive offices or in the county where the violation 265 occurred. 266 7. If a unit owner presents the division with proof that 267 the unit owner has requested access to official records in 268 writing by certified mail, and that after 10 days the unit owner 269 again made the same request for access to official records in 270 writing by certified mail, and that more than 10 days has 271 elapsed since the second request and the association has still 272 failed or refused to provide access to official records as 273 required by this chapter, the division shall issue a subpoena 274 requiring production of the requested records where the records 275 are kept pursuant to s. 718.112. 276 8. In addition to subparagraph 6., the division may seek 277 the imposition of a civil penalty through the circuit court for 278 any violation for which the division may issue a notice to show 279 cause under paragraph (r). The civil penalty shall be at least 280 $500 but no more than $5,000 for each violation. The court may 281 also award to the prevailing party court costs and reasonable 282 attorney’s fees and, if the division prevails, may also award 283 reasonable costs of investigation. 284 (e) The division may prepare and disseminate a prospectus 285 and other information to assist prospective owners, purchasers, 286 lessees, and developers of residential condominiums in assessing 287 the rights, privileges, and duties pertaining thereto. 288 (f) The division has authority to adopt rules pursuant to 289 ss. 120.536(1) and 120.54 to implement and enforce the 290 provisions of this chapter. 291 (g) The division shall establish procedures for providing 292 notice to an association and the developer, bulk assignee, or 293 bulk buyer during the period in whichwherethe developer, bulk 294 assignee, or bulk buyer controls the association ifwhenthe 295 division is considering the issuance of a declaratory statement 296 with respect to the declaration of condominium or any related 297 document governing in such condominium community. 298 (h) The division shall furnish each association which pays 299 the fees required by paragraph (2)(a) a copy of this act, 300 subsequent changes to this act on an annual basis, an amended 301 version of this act as it becomes available from the Secretary 302 of State’s office on a biennial basis, and the rules adopted 303 thereto on an annual basis. 304 (i) The division shall annually provide each association 305 with a summary of declaratory statements and formal legal 306 opinions relating to the operations of condominiums which were 307 rendered by the division during the previous year. 308 (j) The division shall provide training and educational 309 programs for condominium association board members and unit 310 owners. The training may, in the division’s discretion, include 311 web-based electronic media, and live training and seminars in 312 various locations throughout the state. The division mayshall313have the authority toreview and approve education and training 314 programs for board members and unit owners offered by providers 315 and shall maintain a current list of approved programs and 316 providers and shall make such list available to board members 317 and unit owners in a reasonable and cost-effective manner. 318 (k) The division shall maintain a toll-free telephone 319 number accessible to condominium unit owners. 320 (l) The division shall develop a program to certify both 321 volunteer and paid mediators to provide mediation of condominium 322 disputes. The division shall provide, upon request, a list of 323 such mediators to any association, unit owner, or other 324 participant in arbitration proceedings under s. 718.1255 325 requesting a copy of the list. The division shall include on the 326 list of volunteer mediators only the names of persons who have 327 received at least 20 hours of training in mediation techniques 328 or who have mediated at least 20 disputes. In order to become 329 initially certified by the division, paid mediators must be 330 certified by the Supreme Court to mediate court cases in county 331 or circuit courts. However, the division may adopt, by rule, 332 additional factors for the certification of paid mediators, 333 which factors must be related to experience, education, or 334 background. Any person initially certified as a paid mediator by 335 the division must, in order to continue to be certified, comply 336 with the factors or requirements imposed by rules adopted by the 337 division. 338 (m) When a complaint is made, the division mustshall339 conduct its inquiry with due regard to the interests of the 340 affected parties. Within 30 days after receipt of a complaint, 341 the division shall acknowledge the complaint in writing and 342 notify the complainant whether the complaint is within the 343 jurisdiction of the division and whether additional information 344 is needed by the division from the complainant. The division 345 shall conduct its investigation and shall, within 90 days after 346 receipt of the original complaint or of timely requested 347 additional information, take action upon the complaint. However, 348 the failure to complete the investigation within 90 days does 349 not prevent the division from continuing the investigation, 350 accepting or considering evidence obtained or received after 90 351 days, or taking administrative action if reasonable cause exists 352 to believe that a violation of this chapter or a rule of the 353 division has occurred. If an investigation is not completed 354 within the time limits established in this paragraph, the 355 division shall, on a monthly basis, notify the complainant in 356 writing of the status of the investigation. When reporting its 357 action to the complainant, the division shall inform the 358 complainant of any right to a hearing pursuant to ss. 120.569 359 and 120.57. 360 (n) Condominium association directors, officers, and 361 employees; condominium developers; condominium bulk assignees 362 and bulk buyers, community association managers; and community 363 association management firms have an ongoing duty to reasonably 364 cooperate with the division in any investigation pursuant to 365 this section. The division shall refer to local law enforcement 366 authorities any person whom the division believes has altered, 367 destroyed, concealed, or removed any record, document, or thing 368 required to be kept or maintained by this chapter with the 369 purpose to impair its verity or availability in the department’s 370 investigation. 371 (o) The division may: 372 1. Contract with agencies in this state or other 373 jurisdictions to perform investigative functions; or 374 2. Accept grants-in-aid from any source. 375 (p) The division shall cooperate with similar agencies in 376 other jurisdictions to establish uniform filing procedures and 377 forms, public offering statements, advertising standards, and 378 rules and common administrative practices. 379 (q) The division shall consider notice to a developer, bulk 380 assignee, or bulk buyer to be complete when it is delivered to 381 thedeveloper’saddress of the developer, bulk assignee, or bulk 382 buyer currently on file with the division. 383 (r) In addition to its enforcement authority, the division 384 may issue a notice to show cause, which shall provide for a 385 hearing, upon written request, in accordance with chapter 120. 386 (s) The division shall submit to the Governor, the 387 President of the Senate, the Speaker of the House of 388 Representatives, and the chairs of the legislative 389 appropriations committees an annual report that includes, but 390 need not be limited to, the number of training programs provided 391 for condominium association board members and unit owners, the 392 number of complaints received by type, the number and percent of 393 complaints acknowledged in writing within 30 days and the number 394 and percent of investigations acted upon within 90 days in 395 accordance with paragraph (m), and the number of investigations 396 exceeding the 90-day requirement. The annual report shall also 397 include an evaluation of the division’s core business processes 398 and make recommendations for improvements, including statutory 399 changes. The report shall be submitted by September 30 following 400 the end of the fiscal year. 401 Section 3. Part VII of chapter 718, Florida Statutes, 402 consisting of sections 718.701, 718.702, 718.703, 718.704, 403 718.705, 718.706, 718.707, and 718.708, is created to read: 404 718.701 Short title.—This part may be cited as the 405 “Distressed Condominium Relief Act.” 406 718.702 Legislative intent.— 407 (1) The Legislature acknowledges the massive downturn in 408 the condominium market which has transpired throughout the state 409 and the impact of such downturn on developers, lenders, unit 410 owners, and condominium associations. Numerous condominium 411 projects have either failed or are in the process of failing, 412 whereby the condominium has a small percentage of third-party 413 unit owners as compared to the unsold inventory of units. As a 414 result of the inability to find purchasers for this inventory of 415 units, which results in part from the devaluing of real estate 416 in this state, developers are unable to satisfy the requirements 417 of their lenders, leading to defaults on mortgages. 418 Consequently, lenders are faced with the task of finding a 419 solution to the problem in order to be paid for their 420 investments. 421 (2) The Legislature recognizes that all of the factors 422 listed in this section lead to condominiums becoming distressed, 423 resulting in detriment to the unit owners and the condominium 424 association on account of the resulting shortage of assessment 425 moneys available to support the financial requirements for 426 proper maintenance of the condominium. Such shortage and the 427 resulting lack of proper maintenance further erodes property 428 values. The Legislature finds that individuals and entities 429 within this state and in other states have expressed interest in 430 purchasing unsold inventory in one or more condominium projects, 431 but are reticent to do so because of accompanying liabilities 432 inherited from the original developer, which are by definition 433 imputed to the successor purchaser, including a foreclosing 434 mortgagee. This results in the potential purchaser having 435 unknown and unquantifiable risks, and potential successor 436 purchasers are unwilling to accept such risks. The result is 437 that condominium projects stagnate, leaving all parties involved 438 at an impasse without the ability to find a solution. 439 (3) The Legislature finds and declares that it is the 440 public policy of this state to protect the interests of 441 developers, lenders, unit owners, and condominium associations 442 with regard to distressed condominiums, and that there is a need 443 for relief from certain provisions of the Florida Condominium 444 Act geared toward enabling economic opportunities within these 445 condominiums for successor purchasers, including foreclosing 446 mortgagees. Such relief would benefit existing unit owners and 447 condominium associations. The Legislature further finds and 448 declares that this situation cannot be open-ended without 449 potentially prejudicing the rights of unit owners and 450 condominium associations, and thereby declares that the 451 provisions of this part shall be used by purchasers of 452 condominium inventory for a specific and defined period. 453 718.703 Definitions.—As used in this part, the term: 454 (1) “Bulk assignee” means a person who: 455 (a) Acquires more than seven condominium parcels as set 456 forth in s. 718.707; and 457 (b) Receives an assignment of some or all of the rights of 458 the developer as are set forth in the declaration of condominium 459 or in this chapter by a written instrument recorded as an 460 exhibit to the deed or as a separate instrument in the public 461 records of the county in which the condominium is located. 462 (2) “Bulk buyer” means a person who acquires more than 463 seven condominium parcels as set forth in s. 718.707 but who 464 does not receive an assignment of any developer rights other 465 than the right to conduct sales, leasing, and marketing 466 activities within the condominium; the right to be exempt from 467 the payment of working capital contributions to the condominium 468 association arising out of, or in connection with, the bulk 469 buyer’s acquisition of a bulk number of units; and the right to 470 be exempt from any rights of first refusal which may be held by 471 the condominium association and would otherwise be applicable to 472 subsequent transfers of title from the bulk buyer to any third 473 party purchaser concerning one or more units. 474 718.704 Assignment and assumption of developer rights by 475 bulk assignee; bulk buyer.— 476 (1) A bulk assignee is deemed to have assumed and is liable 477 for all duties and responsibilities of the developer under the 478 declaration and this chapter, except: 479 (a) Warranties of the developer under s. 718.203(1) or s. 480 718.618, except for design, construction, development, or repair 481 work performed by or on behalf of such bulk assignee; 482 (b) The obligation to: 483 1. Fund converter reserves under s. 718.618 for a unit that 484 was not acquired by the bulk assignee; or 485 2. Provide converter warranties on any portion of the 486 condominium property except as may be expressly provided by the 487 bulk assignee in the contract for purchase and sale executed 488 with a purchaser and pertaining to any design, construction, 489 development, or repair work performed by or on behalf of the 490 bulk assignee; 491 (c) The requirement to provide the association with a 492 cumulative audit of the association’s finances from the date of 493 formation of the condominium association as required by s. 494 718.301(4)(c). However, the bulk assignee shall provide an audit 495 for the period for which the bulk assignee elects a majority of 496 the members of the board of administration; 497 (d) Any liability arising out of or in connection with 498 actions taken by the board of administration or the developer 499 appointed directors before the bulk assignee elects a majority 500 of the members of the board of administration; and 501 (e) Any liability for or arising out of the developer’s 502 failure to fund previous assessments or to resolve budgetary 503 deficits in relation to a developer’s right to guarantee 504 assessments, except as otherwise provided in subsection (2). 505 506 Further, the bulk assignee is responsible for delivering 507 documents and materials in accordance with s. 718.705(3). A bulk 508 assignee may expressly assume some or all of the obligations of 509 the developer described in paragraphs (a)-(e). 510 (2) A bulk assignee receiving the assignment of the rights 511 of the developer to guarantee the level of assessments and fund 512 budgetary deficits pursuant to s. 718.116 is deemed to have 513 assumed and is liable for all obligations of the developer with 514 respect to such guarantee, including any applicable funding of 515 reserves to the extent required by law, for as long as the 516 guarantee remains in effect. A bulk assignee not receiving an 517 assignment of the right of the developer to guarantee the level 518 of assessments and fund budgetary deficits pursuant to s. 519 718.116 or a bulk buyer is not deemed to have assumed and is not 520 liable for the obligations of the developer with respect to such 521 guarantee, but is responsible for payment of assessments in the 522 same manner as all other owners of condominium parcels. 523 (3) A bulk buyer is liable for the duties and 524 responsibilities of the developer under the declaration and this 525 chapter only to the extent provided in this part, together with 526 any other duties or responsibilities of the developer expressly 527 assumed in writing by the bulk buyer. 528 (4) An acquirer of condominium parcels is not considered a 529 bulk assignee or a bulk buyer if the transfer to such acquirer 530 was made before the effective date of this part with the intent 531 to hinder, delay, or defraud any purchaser, unit owner, or the 532 association, or if the acquirer is a person who would constitute 533 an insider under s. 726.102(7). 534 (5) An assignment of developer rights to a bulk assignee 535 may be made by the developer, a previous bulk assignee, or a 536 court of competent jurisdiction acting on behalf of the 537 developer or the previous bulk assignee. At any particular time, 538 there may be no more than one bulk assignee within a 539 condominium, but there may be more than one bulk buyer. If more 540 than one acquirer of condominium parcels in the same condominium 541 receives an assignment of developer rights from the same person, 542 the bulk assignee is the acquirer whose instrument of assignment 543 is recorded first in applicable public records. 544 718.705 Board of administration; transfer of control.— 545 (1) For purposes of determining the timing for transfer of 546 control of the board of administration of the association to 547 unit owners other than the developer under s. 718.301(1)(a) and 548 (b), if a bulk assignee is entitled to elect a majority of the 549 members of the board, a condominium parcel acquired by the bulk 550 assignee is not deemed to be conveyed to a purchaser, or to be 551 owned by an owner other than the developer, until such 552 condominium parcel is conveyed to an owner who is not a bulk 553 assignee. 554 (2) Unless control of the board of administration of the 555 association has already been relinquished pursuant to s. 556 718.301(1), the bulk assignee must relinquish control of the 557 association pursuant to s. 718.301 and this part, as if the bulk 558 assignee were the developer. 559 (3) When a bulk assignee relinquishes control of the board 560 of administration as set forth in s. 718.301, the bulk assignee 561 must deliver all of those items required by s. 718.301(4). 562 However, the bulk assignee is not required to deliver items and 563 documents not in the possession of the bulk assignee during the 564 period during which the bulk assignee was entitled to elect at 565 least a majority of the members of the board of administration. 566 In conjunction with acquisition of condominium parcels, a bulk 567 assignee shall undertake a good faith effort to obtain the 568 documents and materials required to be provided to the 569 association pursuant to s. 718.301(4). To the extent the bulk 570 assignee is not able to obtain all of such documents and 571 materials, the bulk assignee shall certify in writing to the 572 association the names or descriptions of the documents and 573 materials that were not obtainable by the bulk assignee. 574 Delivery of the certificate relieves the bulk assignee of 575 responsibility for the delivery of the documents and materials 576 referenced in the certificate as otherwise required under ss. 577 718.112 and 718.301 and this part. The responsibility of the 578 bulk assignee for the audit required by s. 718.301(4) commences 579 as of the date on which the bulk assignee elected a majority of 580 the members of the board of administration. 581 (4) If a conflict arises between the provisions or 582 application of this section and s. 718.301, this section 583 prevails. 584 (5) Failure of a bulk assignee or bulk buyer to 585 substantially comply with all the requirements contained in this 586 part shall result in the loss of any and all protections or 587 exemptions provided under this part. 588 718.706 Specific provisions pertaining to offering of units 589 by a bulk assignee or bulk buyer.— 590 (1) Before offering any units for sale or for lease for a 591 term exceeding 5 years, a bulk assignee or a bulk buyer shall 592 file the following documents with the division and provide such 593 documents to a prospective purchaser or tenant: 594 (a) An updated prospectus or offering circular, or a 595 supplement to the prospectus or offering circular, filed by the 596 creating developer prepared in accordance with s. 718.504, which 597 must include the form of contract for sale and for lease in 598 compliance with s. 718.503(2); 599 (b) An updated Frequently Asked Questions and Answers 600 sheet; 601 (c) The executed escrow agreement if required under s. 602 718.202; and 603 (d) The financial information required by s. 718.111(13). 604 However, if a financial information report does not exist for 605 the fiscal year before acquisition of title by the bulk assignee 606 or bulk buyer, or accounting records cannot be obtained in good 607 faith by the bulk assignee or the bulk buyer which would permit 608 preparation of the required financial information report, the 609 bulk assignee or bulk buyer is excused from the requirement of 610 this paragraph. However, the bulk assignee or bulk buyer must 611 include in the purchase contract the following statement in 612 conspicuous type: 613 614 THE FINANCIAL INFORMATION REPORT REQUIRED UNDER S. 615 718.111(13) FOR THE IMMEDIATELY PRECEDING FISCAL YEAR 616 OF THE ASSOCIATION IS NOT AVAILABLE OR CANNOT BE 617 CREATED BY THE SELLER AS A RESULT OF INSUFFICIENT 618 ACCOUNTING RECORDS OF THE ASSOCIATION. 619 (2) Before offering any units for sale or for lease for a 620 term exceeding 5 years, a bulk assignee must file with the 621 division and provide to a prospective purchaser a disclosure 622 statement that must include, but is not limited to: 623 (a) A description of any rights of the developer which have 624 been assigned to the bulk assignee; 625 (b) The following statement in conspicuous type: 626 627 THE SELLER IS NOT OBLIGATED FOR ANY WARRANTIES OF THE 628 DEVELOPER UNDER S. 718.203(1) OR S. 718.618, AS 629 APPLICABLE, EXCEPT FOR DESIGN, CONSTRUCTION, 630 DEVELOPMENT, OR REPAIR WORK PERFORMED BY OR ON BEHALF 631 OF SELLER; and 632 (c) If the condominium is a conversion subject to part VI, 633 the following statement in conspicuous type: 634 635 THE SELLER HAS NO OBLIGATION TO FUND CONVERTER 636 RESERVES OR TO PROVIDE CONVERTER WARRANTIES UNDER S. 637 718.618 ON ANY PORTION OF THE CONDOMINIUM PROPERTY 638 EXCEPT AS MAY BE EXPRESSLY REQUIRED OF THE SELLER IN 639 THE CONTRACT FOR PURCHASE AND SALE EXECUTED BY THE 640 SELLER AND THE PREVIOUS DEVELOPER AND PERTAINING TO 641 ANY DESIGN, CONSTRUCTION, DEVELOPMENT, OR REPAIR WORK 642 PERFORMED BY OR ON BEHALF OF THE SELLER. 643 (3) A bulk assignee, while it is in control of the board of 644 administration of the association, may not authorize, on behalf 645 of the association: 646 (a) The waiver of reserves or the reduction of funding of 647 the reserves pursuant to s. 718.112(2)(f)2., unless approved by 648 a majority of the voting interests not controlled by the 649 developer, bulk assignee, and bulk buyer; or 650 (b) The use of reserve expenditures for other purposes 651 pursuant to s. 718.112(2)(f)3., unless approved by a majority of 652 the voting interests not controlled by the developer, bulk 653 assignee, and bulk buyer. 654 (4) A bulk assignee or a bulk buyer shall comply with all 655 the requirements of s. 718.302 regarding any contracts entered 656 into by the association during the period the bulk assignee or 657 bulk buyer maintains control of the board of administration. 658 Unit owners shall be afforded all the protections contained in 659 s. 718.302 regarding agreements entered into by the association 660 before unit owners other than the developer, bulk assignee, or 661 bulk buyer elected a majority of the board of administration. 662 (5) A bulk buyer shall comply with the requirements 663 contained in the declaration regarding any transfer of a unit, 664 including sales, leases, and subleases. A bulk buyer is not 665 entitled to any exemptions afforded a developer or successor 666 developer under this chapter regarding any transfer of a unit, 667 including sales, leases, or subleases. 668 718.707 Time limitation for classification as bulk assignee 669 or bulk buyer.—A person acquiring condominium parcels may not be 670 classified as a bulk assignee or bulk buyer unless the 671 condominium parcels were acquired before July 1, 2012. The date 672 of such acquisition shall be determined by the date of recording 673 of a deed or other instrument of conveyance for such parcels in 674 the public records of the county in which the condominium is 675 located, or by the date of issuance of a certificate of title in 676 a foreclosure proceeding with respect to such condominium 677 parcels. 678 718.708 Liability of developers and others.—An assignment 679 of developer rights to a bulk assignee or bulk buyer does not 680 release the creating developer from any liabilities under the 681 declaration or this chapter. This part does not limit the 682 liability of the creating developer for claims brought by unit 683 owners, bulk assignees, or bulk buyers for violations of this 684 chapter by the creating developer, unless specifically excluded 685 in this part. Nothing contained within this part waives, 686 releases, compromises, or limits the liability of contractors, 687 subcontractors, materialmen, manufacturers, architects, 688 engineers, or any participant in the design or construction of a 689 condominium for any claim brought by an association, unit 690 owners, bulk assignees, or bulk buyers arising from the design 691 of the condominium, construction defects, misrepresentations 692 associated with condominium property, or violations of this 693 chapter, unless specifically excluded in this part. 694 Section 4. This act shall take effect upon becoming a law.