Bill Text: FL S0840 | 2010 | Regular Session | Engrossed

---

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-Engrossed.html

---

 
CS for CS for CS for SB 840                First Engrossed (ntc) 
2010840e1 
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;, nor 
68  does it include 
69         (b) A cooperative association that which creates 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 entity is not a developer 
79  for any purposes under this act when it is acting as a lessor 
80  and not otherwise named as a developer in the declaration of 
81  condominium association. 
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 has shall only have jurisdiction 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 
178  shall bring 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, before prior to initiating formal agency 
221  action under chapter 120, must shall afford 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, but in no event 
227  shall the 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 which where the developer, bulk 
294  assignee, or bulk buyer controls the association if when the 
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 may shall 
313  have the authority to review 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 must shall 
339  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  the developer’s address 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. This part does not waive, release, compromise, or 
686  limit liability established under chapter 718 except as 
687  specifically waived, released, compromised, or limited in this 
688  part. 
689         Section 4. This act shall take effect upon becoming a law.