Bill Text: FL S1122 | 2016 | Regular Session | Introduced
Bill Title: Homeowners' Associations
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-02-03 - Unfavorable by Regulated Industries, laid on Table; YEAS 4 NAYS 6 [S1122 Detail]
Download: Florida-2016-S1122-Introduced.html
Florida Senate - 2016 SB 1122 By Senator Hays 11-00923C-16 20161122__ 1 A bill to be entitled 2 An act relating to homeowners’ associations; amending 3 s. 718.509, F.S.; revising the uses of the Florida 4 Condominiums, Timeshares, and Mobile Homes Trust Fund 5 to include reimbursement of costs to the Division of 6 Florida Condominiums, Timeshares, and Mobile Homes for 7 the administration and operation of the Homeowners’ 8 Association Act; amending s. 720.303, F.S.; increasing 9 certain fines; providing a cause of action for a 10 member against a community association manager or 11 management firm under certain circumstances; 12 authorizing related fines; prohibiting reimbursement 13 to a community association manager or management firm 14 for certain fines; requiring the community association 15 manager, the management firm, or the association to 16 annually provide a specified report beginning on a 17 specified date, and to resubmit the report under 18 certain circumstances to the Division of Florida 19 Condominiums, Timeshares, and Mobile Homes; revising 20 the dates by which the Department of Business and 21 Professional Regulation must meet certain reporting 22 requirements; extending the scheduled expiration of 23 specified statutory text; amending s. 720.305, F.S.; 24 providing that a fine may not become a lien against a 25 parcel; amending s. 720.307, F.S.; revising the 26 circumstances under which members other than the 27 developer are entitled to elect at least a majority of 28 the board of directors of the association; amending s. 29 720.311, F.S.; providing presuit mediation for 30 election and recall disputes; providing for binding 31 arbitration by the department for certain disputes 32 between a parcel owner and a homeowners’ association; 33 authorizing mediation or arbitration by a mediator or 34 arbitrator, respectively, who has been certified by a 35 county court; creating s. 720.318, F.S.; requiring the 36 department to provide training and educational 37 programs for homeowners’ association members, 38 directors, and officers; providing that the training 39 may include certain methods; authorizing the 40 department to review and approve training and 41 educational programs for members, directors, and 42 officers; requiring the department to maintain a 43 current list of approved programs and providers and to 44 make the list available to homeowners’ associations in 45 a reasonable and cost-effective manner; creating s. 46 720.319, F.S.; authorizing the department to enforce 47 and ensure compliance with the Homeowners’ Association 48 Act and specified rules; providing the department 49 jurisdiction to investigate complaints relating to 50 homeowners’ associations; requiring homeowners’ 51 associations to pay a specified fee to cover the 52 administrative and operational costs of the 53 department; prohibiting the department from imposing 54 the fee under certain circumstances; amending s. 55 720.401, F.S.; requiring a seller of a parcel to 56 provide a prospective buyer with specified association 57 documents under certain circumstances; authorizing a 58 prospective buyer to terminate a contract for purchase 59 within a specified timeframe under certain 60 circumstances; amending s. 720.402, F.S.; providing a 61 cause of action against developers by nondeveloper 62 members of a homeowners’ association or the 63 homeowners’ association; providing an effective date. 64 65 Be It Enacted by the Legislature of the State of Florida: 66 67 Section 1. Subsection (1) of section 718.509, Florida 68 Statutes, is amended to read: 69 718.509 Division of Florida Condominiums, Timeshares, and 70 Mobile Homes Trust Fund.— 71 (1) There is created within the State Treasury the Division 72 of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund 73 to be used for the administration and operation of this chapter 74 and chapters 718, 719, 720, 721, and 723 by the division. 75 Section 2. Paragraph (b) of subsection (5) and subsection 76 (13) of section 720.303, Florida Statutes, are amended to read: 77 720.303 Association powers and duties; meetings of board; 78 official records; budgets; financial reporting; association 79 funds; recalls.— 80 (5) INSPECTION AND COPYING OF RECORDS.—The official records 81 shall be maintained within the state for at least 7 years and 82 shall be made available to a parcel owner for inspection or 83 photocopying within 45 miles of the community or within the 84 county in which the association is located within 10 business 85 days after receipt by the board or its designee of a written 86 request. This subsection may be complied with by having a copy 87 of the official records available for inspection or copying in 88 the community or, at the option of the association, by making 89 the records available to a parcel owner electronically via the 90 Internet or by allowing the records to be viewed in electronic 91 format on a computer screen and printed upon request. If the 92 association has a photocopy machine available where the records 93 are maintained, it must provide parcel owners with copies on 94 request during the inspection if the entire request is limited 95 to no more than 25 pages. An association shall allow a member or 96 his or her authorized representative to use a portable device, 97 including a smartphone, tablet, portable scanner, or any other 98 technology capable of scanning or taking photographs, to make an 99 electronic copy of the official records in lieu of the 100 association’s providing the member or his or her authorized 101 representative with a copy of such records. The association may 102 not charge a fee to a member or his or her authorized 103 representative for the use of a portable device. 104 (b) A member who is denied access to official records is 105 entitled to the actual damages or minimum damages for the 106 association’s willful failure to comply with this subsection. 107 The minimum damages are $500to be$50per calendar day up to 30 10810days, the calculation to begin on the 11th business day after 109 receipt of the written request. If the association delegates to 110 a community association manager or management firm the 111 responsibility to provide members with access to official 112 records, as provided in this section, a member who is denied 113 access to official records by the community association manager 114 or management firm has a cause of action against the community 115 association manager or management firm for the actual or minimum 116 damages provided in this paragraph. A community association 117 manager or management firm may not be reimbursed or otherwise 118 indemnified by the association for payment of any actual or 119 minimum damages provided in this paragraph. 120 (13) REPORTING REQUIREMENT.—The community association 121 manager or management firm, or the association when there is no 122 community association manager or management firm, must submit a 123shallreport to the division by November 22, 20162013, and each 124 year thereafter, in a manner and form prescribed by the 125 division. 126 (a) The report mustshallinclude the association’s: 127 1. Legal name. 128 2. Federal employer identification number. 129 3. Mailing and physical addresses. 130 4. Total number of parcels. 131 5. Total amount of revenues and expenses from the 132 association’s annual budget. 133 (b) For associations in which control of the association 134 has not been transitioned to nondeveloper members, as set forth 135 in s. 720.307, the report shall also include the developer’s: 136 1. Legal name. 137 2. Mailing address. 138 3. Total number of parcels owned on the date of reporting. 139 (c) The reporting requirement provided in this subsection 140 shall be a continuing obligation on each association until the 141 required information is reported to the division. The community 142 association manager or management firm, or the association if 143 there is no community association manager or management firm, 144 must resubmit the report required under this subsection upon the 145 occurrence of a material change in the information required to 146 be reported pursuant to paragraphs (a) and (b). 147 (d) By October 1, 20162013, the department shall establish 148 and implement a registration system through an Internet website 149 that provides for the reporting requirements of paragraphs (a) 150 and (b). 151 (e) The department shall prepare an annual report of the 152 data reported pursuant to this subsection and present it to the 153 Governor, the President of the Senate, and the Speaker of the 154 House of Representatives by December 1, 20162013, and each year 155 thereafter. 156 (f) The division shall adopt rules pursuant to ss. 157 120.536(1) and 120.54 to implement the provisions of this 158 subsection. 159 (g) This subsection shall expire on July 1, 20262016, 160 unless reenacted by the Legislature. 161 Section 3. Subsection (2) of section 720.305, Florida 162 Statutes, is amended to read: 163 720.305 Obligations of members; remedies at law or in 164 equity; levy of fines and suspension of use rights.— 165 (2) The association may levy reasonable fines. A fine may 166 not exceed $100 per violation against any member or any member’s 167 tenant, guest, or invitee for the failure of the owner of the 168 parcel or its occupant, licensee, or invitee to comply with any 169 provision of the declaration, the association bylaws, or 170 reasonable rules of the association unless otherwise provided in 171 the governing documents. A fine may be levied by the board for 172 each day of a continuing violation, with a single notice and 173 opportunity for hearing, except that the fine may not exceed 174 $1,000 in the aggregate unless otherwise provided in the 175 governing documents. A fineof less than $1,000may not become a 176 lien against a parcel. In any action to recover a fine, the 177 prevailing party is entitled to reasonable attorney fees and 178 costs from the nonprevailing party as determined by the court. 179 (a) An association may suspend, for a reasonable period of 180 time, the right of a member, or a member’s tenant, guest, or 181 invitee, to use common areas and facilities for the failure of 182 the owner of the parcel or its occupant, licensee, or invitee to 183 comply with any provision of the declaration, the association 184 bylaws, or reasonable rules of the association. This paragraph 185 does not apply to that portion of common areas used to provide 186 access or utility services to the parcel. A suspension may not 187 prohibit an owner or tenant of a parcel from having vehicular 188 and pedestrian ingress to and egress from the parcel, including, 189 but not limited to, the right to park. 190 (b) A fine or suspension may not be imposed by the board of 191 administration without at least 14 days’ notice to the person 192 sought to be fined or suspended and an opportunity for a hearing 193 before a committee of at least three members appointed by the 194 board who are not officers, directors, or employees of the 195 association, or the spouse, parent, child, brother, or sister of 196 an officer, director, or employee. If the committee, by majority 197 vote, does not approve a proposed fine or suspension, it may not 198 be imposed. The role of the committee is limited to determining 199 whether to confirm or reject the fine or suspension levied by 200 the board. If the board of administration imposes a fine or 201 suspension, the association must provide written notice of such 202 fine or suspension by mail or hand delivery to the parcel owner 203 and, if applicable, to any tenant, licensee, or invitee of the 204 parcel owner. 205 Section 4. Subsection (1) of section 720.307, Florida 206 Statutes, is amended to read: 207 720.307 Transition of association control in a community. 208 With respect to homeowners’ associations: 209 (1) Members other than the developer are entitled to elect 210 at least a majority of the members of the board of directors of 211 the homeowners’ association upon the occurrence of any of the 212 followingwhen the earlier of the following events occurs: 213 (a) For a homeowners’ association consisting of fewer than 214 100 lots, the passage of 3 months after 75 percent of the 215 parcels in all phases of the community which will ultimately be 216 operated by the homeowners’ association have been conveyed to 217 members. 218 (b) For a homeowners’ association consisting of fewer than 219 200 lots, the passage of 10 years after the governing documents 220 of the homeowners’ association are filed with the local 221 government. 222 (c) For a homeowners’ association consisting of 200 or more 223 lots, the earlier of the passage of 20 years after the governing 224 documents of the homeowners’ association are filed with the 225 local government or 3 months after 90 percent of the parcels in 226 all phases of the community which will ultimately be operated by 227 the homeowners’ association have been conveyed to members.Three228months after 90 percent of the parcels in all phases of the229community that will ultimately be operated by the homeowners’230association have been conveyed to members;231 (h)(b)Conveyance of anotherSuch otherpercentage of the 232 parcelshas been conveyedto members, or the occurrence of such 233 other date or eventhas occurred, as is set forth in the 234 governing documents in order to comply with the requirements of 235 any governmentally chartered entity with regard to the mortgage 236 financing of parcels.;237 (d)(c)Abandonment by the developer, or the developer’s 238 failure ofUpon the developer abandoning or desertingits 239 responsibility to maintain and complete the amenities or 240 infrastructure as disclosed in the governing documents. There is 241 a rebuttable presumption that the developer has abandoned and 242 deserted the property if the developer has unpaid assessments or 243 guaranteed amounts under s. 720.308 for a period of more than 2 244 years.;245 (e)(d)Upon the developerFiling by the developer of a 246 petition seeking protection under chapter 7 of the federal 247 Bankruptcy Code.;248 (f)(e)Loss ofUpon the developer losingtitle to the 249 property by the developer through a foreclosure action or the 250 transfer of a deed in lieu of foreclosure, unless the successor 251 owner has accepted an assignment of developer rights and 252 responsibilities first arising after the date of such 253 assignment.;or254 (g)(f)Appointment ofUpona receiver for the developer 255being appointedby a circuit court, if the receiver isandnot 256beingdischarged within 30 days after such appointment, unless 257 the court determines within 30 days after such appointment that 258 transfer of control would be detrimental to the association or 259 its members. 260 261 For purposes of this section, the term “members other than the 262 developer” doesshallnot include builders, contractors, or 263 others who purchase a parcel for the purpose of constructing 264 improvementsthereonfor resale. 265 Section 5. Subsection (1) and paragraph (d) of subsection 266 (2) of section 720.311, Florida Statutes, are amended to read: 267 720.311 Dispute resolution.— 268 (1) The Legislature finds that alternative dispute 269 resolution has made progress in reducing court dockets and 270 trials and in offering a more efficient, cost-effective option 271 to litigation. The filing of any petition for arbitration or the 272 serving of a demand for presuit mediation as provided for in 273 this section shall toll the applicable statute of limitations. 274 Any recall dispute filed with the department pursuant to s. 275 720.303(10) shall be conducted by the department in accordance 276 with the provisions of ss. 718.112(2)(j) and 718.1255 and the 277 rules adopted by the division. In addition, the department shall 278 conduct mandatory binding arbitration of election disputes 279 between a member and an association pursuant to s. 718.1255 and 280 rules adopted by the division.NeitherElection disputes andnor281 recall disputes are eligible for presuit mediation; these282disputes shall be arbitrated by the department. At the request 283 of the parcel owner or homeowners’ association, the department 284 shall provide binding arbitration in disputes involving 285 covenants, restrictions, rule enforcement, and duties to 286 maintain and make safe pursuant to the declaration of covenants, 287 rules and regulations, and other governing documents; disputes 288 involving assessments; and disputes involving the official 289 records of the homeowners’ association. At the conclusion of the 290 proceeding, the department shall charge the parties a fee in an 291 amount adequate to cover all costs and expenses incurred by the 292 department in conducting the proceeding. Initially, the 293 petitioner shall remit a filing fee of at least $200 to the 294 department. The fees paid to the department shall become a 295 recoverable cost in the arbitration proceeding, and the 296 prevailing party in an arbitration proceeding shall recover its 297 reasonable costs and attorneyattorney’sfees in an amount found 298 reasonable by the arbitrator. The department shall adopt rules 299 to effectuate the purposes of this section. 300 (2) 301 (d) A mediator or arbitrator shall be authorized to conduct 302 mediation or arbitration under this section only if he or she 303 has been certified as a county court or circuit court civil 304 mediator or arbitrator, respectively, pursuant to the 305 requirements established by the Florida Supreme Court. 306 Settlement agreements resulting from mediation doshallnot have 307 precedential value in proceedings involving parties other than 308 those participating in the mediation to support either a claim 309 or defense in other disputes. 310 Section 6. Section 720.318, Florida Statutes, is created to 311 read: 312 720.318 Training and educational programs.—The department 313 shall provide training and educational programs for homeowners’ 314 association members, directors, and officers. At the 315 department’s discretion, the training and educational programs 316 may include web-based electronic media, live training, and 317 seminars in various locations throughout the state. The 318 department may review and approve training and educational 319 programs for members, directors, and officers of homeowners’ 320 associations which are offered by providers. The department 321 shall maintain a current list of approved programs and providers 322 and shall make such list available to homeowners’ associations 323 in a reasonable and cost-effective manner. 324 Section 7. Section 720.319, Florida Statutes, is created to 325 read: 326 720.319 Authority of the department.— 327 (1) The department may enforce and ensure compliance with 328 this chapter and rules relating to records access, financial 329 management, and elections of homeowners’ associations and may 330 investigate any complaint made to the department against a 331 homeowners’ association. 332 (2) Homeowners’ associations must pay to the department an 333 annual fee of $2 per lot to cover the department’s 334 administrative and operational costs in complying with this 335 chapter. The fee must be submitted to the department with the 336 annual report required under s. 720.303(13) and deposited into 337 the Division of Florida Condominiums, Timeshares, and Mobile 338 Homes Trust Fund. However, the department may not impose this 339 fee when it has determined, based on the long-range estimates of 340 such revenue, that the funds collected exceed those required to 341 cover such costs. 342 Section 8. Present subsection (2) of section 720.401, 343 Florida Statutes, is redesignated as subsection (3), and a new 344 subsection (2) is added to that section, to read: 345 720.401 Prospective purchasers subject to association 346 membership requirement; disclosure required; covenants; 347 assessments; contract cancellation.— 348 (2) A seller of a parcel for which membership in a 349 homeowners’ association is a condition of ownership must provide 350 a prospective buyer with the association’s governing documents, 351 including the declaration of covenants, articles and bylaws, 352 rules and regulations, and operating budget for the current 353 year, and any amendment to such documents. The seller must 354 provide the prospective buyer with such documents at least 7 355 days before closing. The prospective buyer may terminate the 356 contract for purchase within 3 days after receipt of such 357 documents. 358 Section 9. Section 720.402, Florida Statutes, is amended to 359 read: 360 720.402 Publication of false and misleading information; 361 developer’s use of homeowners’ association fund prohibited.— 362 (1) Any person who, in reasonable reliance upon any 363 material statement or information that is false or misleading 364 and published by or under authority from the developer in 365 advertising and promotional materials, including, but not 366 limited to, a contract of purchase, the declaration of 367 covenants, exhibits to a declaration of covenants, brochures, 368 and newspaper advertising, pays anything of value toward the 369 purchase of a parcel in a community located in this state has a 370 cause of action to rescind the contract or collect damages from 371 the developer for his or her loss before the closing of the 372 transaction. After the closing of the transaction, the purchaser 373 has a cause of action against the developer for damages under 374 this section from the time of closing until 1 year after the 375 date upon which the last of the events described in paragraphs 376 (a) through (d) occurs: 377 (a) The closing of the transaction; 378 (b) The issuance by the applicable governmental authority 379 of a certificate of occupancy or other evidence of sufficient 380 completion of construction of the purchaser’s residence to allow 381 lawful occupancy of the residence by the purchaser. In counties 382 or municipalities in which certificates of occupancy or other 383 evidences of completion sufficient to allow lawful occupancy are 384 not customarily issued, for the purpose of this section, 385 evidence of lawful occupancy shall be deemed to be given or 386 issued upon the date that such lawful occupancy of the residence 387 may be allowed under prevailing applicable laws, ordinances, or 388 statutes; 389 (c) The completion by the developer of the common areas and 390 such recreational facilities, whether or not the same are common 391 areas, which the developer is obligated to complete or provide 392 under the terms of the written contract, governing documents, or 393 written agreement for purchase or lease of the parcel; or 394 (d) In the event there is not a written contract or 395 agreement for sale or lease of the parcel, then the completion 396 by the developer of the common areas and such recreational 397 facilities, whether or not they are common areas, which the 398 developer would be obligated to complete under any rule of law 399 applicable to the developer’s obligation. 400 (2)(a) A nondeveloper parcel owner has a cause of action 401 against the developer for damages resulting from the developer’s 402 abandonment or failure of his or her responsibility to maintain 403 and complete amenities or infrastructure disclosed in the 404 governing documents, written contract, or written agreement for 405 purchase of the parcel. 406 (b) A nondeveloper parcel owner has a cause of action 407 against the developer for the developer’s failure to perform or 408 comply with any duty or obligation required under the governing 409 documents, written contract, or written agreement for purchase 410 of the parcel. 411 (3) A developer may not use association funds for any 412 purpose not specifically authorized in a homeowners’ association 413 budget adopted in accordance with the governing documents and s. 414 720.303. Any use of association funds by a developer in 415 violation of this section is actionable by a nondeveloper parcel 416 owner or the homeowners’ association. This subsection is 417 intended to clarify existing law and applies to all homeowners’ 418 associations existing on July 1, 2016 and created thereafter. 419 (4) Under no circumstances may a cause of action created or 420 recognized under this section survive for a period of more than 421 5 years after the closing of the transaction. 422 (5)(2)In any action for relief under this section, the 423 prevailing party may recover reasonable attorneyattorney’s424 fees. A developer may not expend association funds in the 425 defense of any suit under this section. 426 Section 10. This act shall take effect July 1, 2016.