Bill Text: FL S1172 | 2015 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Termination of a Condominium Association
Spectrum: Slight Partisan Bill (? 3-1)
Status: (Introduced - Dead) 2015-04-27 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 643 (Ch. 2015-175) [S1172 Detail]
Download: Florida-2015-S1172-Comm_Sub.html
Bill Title: Termination of a Condominium Association
Spectrum: Slight Partisan Bill (? 3-1)
Status: (Introduced - Dead) 2015-04-27 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 643 (Ch. 2015-175) [S1172 Detail]
Download: Florida-2015-S1172-Comm_Sub.html
Florida Senate - 2015 CS for CS for SB 1172 By the Committees on Judiciary; and Regulated Industries; and Senator Latvala 590-03659-15 20151172c2 1 A bill to be entitled 2 An act relating to termination of a condominium 3 association; amending s. 718.117, F.S.; providing and 4 revising procedures and requirements for termination 5 of a condominium property; providing requirements for 6 the rejection of a plan of termination; defining 7 terms; providing applicability; providing and revising 8 requirements relating to partial termination of a 9 condominium property; authorizing a plan of 10 termination to be withdrawn, modified, or amended 11 under certain conditions; revising and providing 12 requirements relating to the allocation of proceeds of 13 the sale of condominium property; revising 14 requirements relating to the right to contest a plan 15 of termination; amending s. 718.1255, F.S.; revising 16 the term “dispute”; providing an effective date. 17 18 Be It Enacted by the Legislature of the State of Florida: 19 20 Section 1. Subsections (3), (4), (9), (11), (12), and (16) 21 of section 718.117, Florida Statutes, are amended to read: 22 718.117 Termination of condominium.— 23 (3) OPTIONAL TERMINATION.—Except as provided in subsection (2) 24 or unless the declaration provides for a lower percentage, the 25 condominium form of ownership may be terminated for all or a 26 portion of the condominium property pursuant to a plan of 27 termination approved by at least 80 percent of the total voting 28 interests of the condominium ifno more than10 percent or more 29 of the total voting interests of the condominium have rejected 30 the plan of termination by negative vote or by providing written 31 objections. 32 (a) The termination of the condominium form of ownership is 33 subject to the following conditions: 34 1. The total voting interests of the condominium must 35 include all voting interests for the purpose of considering a 36 plan of termination. A voting interest of the condominium may 37 not be suspended for any reason when voting on termination 38 pursuant to this subsection. 39 2. If 10 percent or more of the total voting interests of 40 the condominium reject a plan of termination, a subsequent plan 41 of termination pursuant to this subsection may not be considered 42 for 18 months after the date of the rejection. 43 (b) This subsection also does not apply to any condominium 44 created pursuant to part VI of this chapter until 5 years after 45 the recording of the declaration of condominium for the 46 condominium unless there are no objections to the plan of 47 terminationThis subsection does not apply to condominiums in48which 75 percent or more of the units are timeshare units. 49 (c) For purposes of this subsection, the term “bulk owner” 50 means the single holder of such voting interests or an owner 51 together with a related entity or entities that would be 52 considered insiders, as defined in s. 726.102, holding such 53 voting interests. If the condominium association is a 54 residential association proposed for termination pursuant to 55 this section and, at the time of recording the plan of 56 termination, at least 80 percent of the total voting interests 57 are owned by a bulk owner, the plan of termination is subject to 58 the following conditions and limitations: 59 1. If the former condominium units are offered for lease to 60 the public after the termination, each unit owner in occupancy 61 immediately before the date of recording of the plan of 62 termination may lease his or her former unit and remain in 63 possession of the unit for 12 months after the effective date of 64 the termination on the same terms as similar unit types within 65 the property are being offered to the public. In order to obtain 66 a lease and exercise the right to retain exclusive possession of 67 the unit owner’s former unit, the unit owner must make a written 68 request to the termination trustee to rent the former unit 69 within 90 days after the date the plan of termination is 70 recorded. Any unit owner who fails to timely make such written 71 request and sign a lease within 15 days after being presented 72 with a lease is deemed to have waived his or her right to retain 73 possession of his or her former unit and is required to vacate 74 the former unit upon the effective date of the termination, 75 unless otherwise provided in the plan of termination. 76 2. Any former unit owner whose unit was granted homestead 77 exemption status by the applicable county property appraiser as 78 of the date of the recording of the plan of termination shall be 79 paid a relocation payment in an amount equal to 1 percent of the 80 termination proceeds allocated to the owner’s former unit. Any 81 relocation payment payable under this subparagraph shall be paid 82 by the single entity or related entities owning at least 80 83 percent of the total voting interests. Such relocation payment 84 is in addition to the termination proceeds for such owner’s 85 former unit and shall be paid no later than 10 days after the 86 former unit owner vacates his or her former unit. 87 3. All unit owners other than the bulk owner shall be 88 compensated at least 100 percent of the fair market value of 89 their respective units. The fair market value shall be 90 determined by an independent appraiser, selected by the 91 termination trustee, as of a date that is no earlier than 90 92 days before the date that the plan of termination is recorded. 93 For original purchasers from the developer who dissent or object 94 to the plan of termination, the fair market value for the unit 95 owner dissenting or objecting may not be less than the original 96 purchase price paid for the unit. For purposes of this 97 subparagraph, the term “fair market value” means the price of a 98 unit that a seller is willing to accept and a buyer is willing 99 to pay on the open market in an arms-length transaction based on 100 similar units sold in other condominiums, including units sold 101 in bulk purchases but excluding units sold at wholesale or 102 distressed prices. The purchase price of units acquired in bulk 103 following a bankruptcy or foreclosure may not be considered for 104 purposes of determining fair market value. 105 4. The plan of termination must provide the manner by which 106 each first mortgage on a unit will be satisfied so that each 107 unit owner’s obligation under a first mortgage is satisfied in 108 full at the time the plan of termination is implemented. 109 5. Before presenting a plan of termination to the unit 110 owners for consideration pursuant to this paragraph, the plan 111 must include the following written disclosures in a sworn 112 statement: 113 a. The identity of any person or entity that owns or 114 controls 50 percent or more of the units in the condominium and, 115 if the units are owned by an artificial entity or entities, a 116 disclosure of the natural person or persons who, directly or 117 indirectly, manage or control the entity or entities and the 118 natural person or persons who, directly or indirectly, own or 119 control 20 percent or more of the artificial entity or entities 120 that constitute the bulk owner. 121 b. The units acquired by any bulk owner, the date each unit 122 was acquired, and the total amount of compensation paid to each 123 prior unit owner by the bulk owner, regardless of whether 124 attributed to the purchase price of the unit. 125 c. The relationship of any board member to the bulk owner 126 or any person or entity affiliated with the bulk owner subject 127 to disclosure pursuant to this subparagraph. 128 (d) If the members of the board of administration are 129 elected by the bulk owner, unit owners other than the bulk owner 130 may elect at least one-third of the members of the board of 131 administration before the approval of any plan of termination. 132 (4) EXEMPTION.—A plan of termination is not an amendment 133 subject to s. 718.110(4). In a partial termination, a plan of 134 termination is not an amendment subject to s. 718.110(4) if the 135 ownership share of the common elements of a surviving unit in 136 the condominium remains in the same proportion to the surviving 137 units as it was before the partial termination. An amendment to 138 a declaration to conform the declaration to this section is not 139 an amendment subject to s. 718.110(4) and may be approved by the 140 lesser of 80 percent of the voting interests or the percentage 141 of the voting interests required to amend the declaration. 142 (9) PLAN OF TERMINATION.—The plan of termination must be a 143 written document executed in the same manner as a deed by unit 144 owners having the requisite percentage of voting interests to 145 approve the plan and by the termination trustee. A copy of the 146 proposed plan of termination shall be given to all unit owners, 147 in the same manner as for notice of an annual meeting, at least 148 14 days prior to the meeting at which the plan of termination is 149 to be voted upon or prior to or simultaneously with the 150 distribution of the solicitation seeking execution of the plan 151 of termination or written consent to or joinder in the plan. A 152 unit owner may document assent to the plan by executing the plan 153 or by consent to or joinder in the plan in the manner of a deed. 154 A plan of termination and the consents or joinders of unit 155 owners and, if required, consents or joinders of mortgagees must 156 be recorded in the public records of each county in which any 157 portion of the condominium is located. The plan is effective 158 only upon recordation or at a later date specified in the plan. 159 If the plan of termination fails to receive the required 160 approval, the plan shall not be recorded and a new attempt to 161 terminate the condominium may not be proposed at a meeting or by 162 solicitation for joinder and consent for 180 days after the date 163 that such failed plan of termination was first given to all unit 164 owners in the manner as provided in this subsection. 165 (a) If the plan of termination is voted on at a meeting of 166 the unit owners called in accordance with this subsection, any 167 unit owner desiring to reject the plan must do so by either 168 voting to reject the plan in person or by proxy, or by 169 delivering a written rejection to the association before or at 170 the meeting. 171 (b) If the plan of termination is approved by written 172 consent or joinder without a meeting of the unit owners, any 173 unit owner desiring to object to the plan must deliver a written 174 objection to the association within 20 days after the date that 175 the association notifies the nonconsenting owners, in the manner 176 provided in paragraph (15)(a), that the plan of termination has 177 been approved by written action in lieu of a unit owner meeting. 178 (11) PLAN OF TERMINATION; OPTIONAL PROVISIONS; CONDITIONAL 179 TERMINATION; WITHDRAWAL; ERRORS.— 180 (a) Unless the plan of termination expressly authorizes a 181may provide that eachunit owner or other person to retain 182retainsthe exclusive right to possess thatof possession to the183 portion of the real estate which formerly constituted the unit 184 after termination or to use the common elements of the 185 condominium after termination, all such rights in the unit and 186 common elements automatically terminate on the effective date of 187 termination. Unless the plan expressly provides otherwise, all 188 leases, occupancy agreements, subleases, licenses, or other 189 agreements for the use or occupancy of any unit or common 190 elements of the condominium automatically terminate on the 191 effective date of termination. If the plan expressly authorizes 192 a unit owner or other person to retain exclusive right of 193 possession for that portion of the real estate which formerly 194 constituted the unit or to use the common elements of the 195 condominium after termination, the plan must specify the terms 196 andif the plan specifies theconditions of possession.In a197partialtermination, the plan of termination as specified in198subsection (10) must also identify the units that survive the199partial termination and provide that such units remain in the200condominium form of ownership pursuant to an amendment to the201declaration of condominium or an amended and restated202declaration.In a partial termination, title to the surviving 203 units and common elements that remain part of the condominium 204 property specified in the plan of termination remain vested in 205 the ownership shown in the public records and do not vest in the 206 termination trustee. 207 (b) In a conditional termination, the plan must specify the 208 conditions for termination. A conditional plan does not vest 209 title in the termination trustee until the plan and a 210 certificate executed by the association with the formalities of 211 a deed, confirming that the conditions in the conditional plan 212 have been satisfied or waived by the requisite percentage of the 213 voting interests, have been recorded. In a partial termination, 214 the plan does not vest title to the surviving units or common 215 elements that remain part of the condominium property in the 216 termination trustee. 217 (c) Unless otherwise provided in the plan of termination, 218 at any time before the sale of the condominium property, a plan 219 may be withdrawn or modified by the affirmative vote or written 220 agreement of at least the same percentage of voting interests in 221 the condominium as that which was required for the initial 222 approval of the plan. 223 (d) Upon the discovery of a scrivener’s error in the plan 224 of termination, the termination trustee may record an amended 225 plan or an amendment to the plan for the purpose of correcting 226 the error, and the amended plan or amendment to the plan must be 227 executed by the termination trustee in the same manner as 228 required for the execution of a deed. 229 (12) ALLOCATION OF PROCEEDS OF SALE OF CONDOMINIUM 230 PROPERTY.— 231 (a) Unless the declaration expressly provides for the 232 allocation of the proceeds of sale of condominium property, the 233 plan of termination may require separate valuations formust234first apportion the proceeds between the aggregate value of all235units and the value ofthe common elements. However, in the 236 absence of such provision, it is presumed that the common 237 elements have no independent value but rather that their value 238 is incorporated into the valuation of the unitsbased on their239respective fair market values immediately before the240termination, as determined by one or more independent appraisers241selected by the association or termination trustee. In a partial 242 termination, the aggregate values of the units and common 243 elements that are being terminated must be separately 244 determined, and the plan of termination must specify the 245 allocation of the proceeds of sale for the units and common 246 elements being terminated. 247 (b) The portion of proceeds allocated to the units shall be 248furtherapportioned among the individual units. The 249 apportionment is deemed fair and reasonable if it isso250 determinedby the unit owners, who may approve the plan of251terminationby any of the following methods: 252 1. The respective values of the units based on the fair 253 market values of the units immediately before the termination, 254 as determined by one or more independent appraisers selected by 255 the association or termination trustee; 256 2. The respective values of the units based on the most 257 recent market value of the units before the termination, as 258 provided in the county property appraiser’s records; or 259 3. The respective interests of the units in the common 260 elements specified in the declaration immediately before the 261 termination. 262 (c) The methods of apportionment in paragraph (b) do not 263 prohibit any other method of apportioning the proceeds of sale 264 allocated to the units or any other method of valuing the units 265 agreed upon in the plan of termination. AnyTheportion of the 266 proceeds separately allocated to the common elements shall be 267 apportioned among the units based upon their respective 268 interests in the common elements as provided in the declaration. 269 (d) Liens that encumber a unit shall, unless otherwise 270 provided in the plan of termination, be transferred to the 271 proceeds of sale of the condominium property and the proceeds of 272 sale or other distribution of association property, common 273 surplus, or other association assets attributable to such unit 274 in their same priority. In a partial termination, liens that 275 encumber a unit being terminated must be transferred to the 276 proceeds of sale of that portion of the condominium property 277 being terminated which are attributable to such unit. The 278 proceeds of any sale of condominium property pursuant to a plan 279 of termination may not be deemed to be common surplus or 280 association property. The holder of a lien that encumbers a unit 281 at the time of recording a plan must, within 30 days after the 282 written request from the termination trustee, deliver a 283 statement to the termination trustee confirming the outstanding 284 amount of any obligations of the unit owner secured by the lien. 285 (e) The termination trustee may setoff against, and reduce 286 the share of, the termination proceeds allocated to a unit by 287 the following amounts, which may include attorney fees and 288 costs: 289 1. All unpaid assessments, taxes, late fees, interest, 290 fines, charges, and other amounts due and owing to the 291 association associated with the unit, its owner, or the owner’s 292 family members, guests, tenants, occupants, licensees, invitees, 293 or other persons. 294 2. All costs of clearing title to the owner’s unit, 295 including, but not limited to, locating lienors, obtaining 296 statements from such lienors confirming the outstanding amount 297 of any obligations of the unit owner, and paying all mortgages 298 and other liens, judgments, and encumbrances and filing suit to 299 quiet title or remove title defects. 300 3. All costs of removing the owner or the owner’s family 301 members, guests, tenants, occupants, licensees, invitees, or 302 other persons from the unit in the event such persons fail to 303 vacate a unit as required by the plan. 304 4. All costs arising from, or related to, any breach of the 305 plan by the owner or the owner’s family members, guests, 306 tenants, occupants, licensees, invitees, or other persons. 307 5. All costs arising out of, or related to, the removal and 308 storage of all personal property remaining in a unit, other than 309 personal property owned by the association, so that the unit may 310 be delivered vacant and clear of the owner or the owner’s family 311 members, guests, tenants, occupants, licensees, invitees, or 312 other persons as required by the plan. 313 6. All costs arising out of, or related to, the appointment 314 and activities of a receiver or attorney ad litem acting for the 315 owner in the event that the owner is unable to be located. 316 (16) RIGHT TO CONTEST.—A unit owner or lienor may contest a 317 plan of termination by initiating a petition for mandatory 318 nonbinding arbitrationsummary procedurepursuant to s. 718.1255 319s. 51.011within 90 days after the date the plan is recorded. A 320 unit owner or lienor may only contest the fairness and 321 reasonableness of the apportionment of the proceeds from the 322 sale among the unit owners, that the first mortgages of all unit 323 owners other than the bulk owner have not or will not be fully 324 satisfied at the time of termination as required by subsection 325 (3), or that the required vote to approve the plan was not 326 obtained. A unit owner or lienor who does not contest the plan 327 within the 90-day period is barred from asserting or prosecuting 328 a claim against the association, the termination trustee, any 329 unit owner, or any successor in interest to the condominium 330 property. In an action contesting a plan of termination, the 331 person contesting the plan has the burden of pleading and 332 proving that the apportionment of the proceeds from the sale 333 among the unit owners was not fair and reasonable or that the 334 required vote was not obtained. The apportionment of sale 335 proceeds is presumed fair and reasonable if it was determined 336 pursuant to the methods prescribed in subsection (12). The 337 arbitratorcourtshall determine the rights and interests of the 338 parties in the apportionment of the sale proceedsand order the339plan of termination to be implemented if it is fair and340reasonable. If the arbitratorcourtdetermines that the 341 apportionment of sale proceedsplan of terminationis not fair 342 and reasonable, the arbitratorcourtmay void the plan or may 343 modify the plan to apportion the proceeds in a fair and 344 reasonable manner pursuant to this section based upon the 345 proceedings and order the modified plan of termination to be 346 implemented. If the arbitrator determines that the plan was not 347 properly approved, or that the procedures to adopt the plan were 348 not properly followed, it may void the plan or grant other 349 relief it deems just and proper. The arbitrator shall 350 automatically void the plan upon a finding that any of the 351 disclosures required in subparagraph (3)(d)4. are omitted, 352 misleading, incomplete, or inaccurate. Any challenge to a plan, 353 other than a challenge that the required vote was not obtained, 354 does not affect title to the condominium property or the vesting 355 of the condominium property in the trustee, but shall only be a 356 claim against the proceeds of the plan. In any such action, the 357 prevailing party shall recover reasonable attorneyattorney’s358 fees and costs. 359 Section 2. Subsection (1) of section 718.1255, Florida 360 Statutes, is amended to read: 361 718.1255 Alternative dispute resolution; voluntary 362 mediation; mandatory nonbinding arbitration; legislative 363 findings.— 364 (1) DEFINITIONS.—As used in this section, the term 365 “dispute” means any disagreement between two or more parties 366 that involves: 367 (a) The authority of the board of directors, under this 368 chapter or association document to: 369 1. Require any owner to take any action, or not to take any 370 action, involving that owner’s unit or the appurtenances 371 thereto. 372 2. Alter or add to a common area or element. 373 (b) The failure of a governing body, when required by this 374 chapter or an association document, to: 375 1. Properly conduct elections. 376 2. Give adequate notice of meetings or other actions. 377 3. Properly conduct meetings. 378 4. Allow inspection of books and records. 379 (c) A plan of termination pursuant to s. 718.117. 380 381 “Dispute” does not include any disagreement that primarily 382 involves: title to any unit or common element; the 383 interpretation or enforcement of any warranty; the levy of a fee 384 or assessment, or the collection of an assessment levied against 385 a party; the eviction or other removal of a tenant from a unit; 386 alleged breaches of fiduciary duty by one or more directors; or 387 claims for damages to a unit based upon the alleged failure of 388 the association to maintain the common elements or condominium 389 property. 390 Section 3. This act shall take effect July 1, 2015.