2017 Florida Condominium and Homeowner Association Legislative Update

2017 was a big legislative year for community associations, especially condominium associations.  Following is an overview of the 2017 legislation directly impacting Florida’s condominium and homeowner associations.

Click here for the .pdf version.

Condominium & Homeowner Associations

Financial Reporting Requirements

HB 6027, full text of the law can be found here.  Law goes into effect July 1, 2017.

The exemption for condominium associations with less than 50 units and homeowners associations containing less than 50 parcels from providing yearend financial statements prepared by an independent accountant has been eliminated.

Condominium associations with fewer than 50 units and homeowner associations of less than 50 parcels can no longer opt to prepare a report of cash receipts and expenditures in lieu of financial statements.  These associations must comply with financial reporting requirements based upon the association’s revenues.

The prohibition on condominium associations waiving financial reporting requirements for more than three (3) years was eliminated.

 Estoppel Certificates

SB398, full text of the law can be found here.  Law goes into effect July 1, 2017.

Associations have 10 business days to issue an estoppel certificate after receiving a written or electronic request from an owner, mortgagee or their designee. A fee cannot be charged if the estoppel certificate is not delivered within ten business days.

Estoppel certificates must be returned to the requestor (mailed, email or fax) on the day they are issued.

If an estoppel certificate is hand delivered or sent by electronic mail it has to be valid for 30 days; estoppel certificates sent by regular mail have to be valid for 35 days.

-Only board members, authorized agents or representatives (attorneys, accountants, etc.) of the association or the association’s management company can issue an estoppel letter.

The association’s website must list the designated person or entity, with a street or e-mail address, for the receipt of estoppel requests.

Association’s are permitted to amend their estoppel certificates but they cannot charge for the amended estoppel certificate.

Associations cannot collect any money owed in excess of the amount specified in the estoppel certificate.

The Association’s ability to demand the payment of the estoppel certificate fee prior to the anticipated closing of a real estate transaction remains in effect.

Associations can charge up to $400 for the preparation and delivery of an estoppel certificate if, on the date of issuance, delinquent amounts are owed to the association. Otherwise, the Association cannot charge more than $150.00.  Upon request for an expedited estoppel certificate, an additional $100.00 can be charged if the expedited estoppel certificate is produced within three business days.

The statute lists a sliding scale of estoppel certificates charges for owners with multiple units.

The following information is required to be in an estoppel certificate:

  • date of issuance;
  • name(s) of unit/parcel owner(s);
  • unit/parcel designation and address;
  • parking or garage space number;
  • attorney’s name and contact information if the account is delinquent and has been turned over to an attorney for collection;
  • the fee for preparation and delivery of the estoppel certificate;
  • name of the requestor; and
  • assessment information and other information, including:
      • regular periodic assessment amount and frequency;
      • date for which the regular periodic assessment is paid through;
      • next installment due date and amount;
      • itemized list of all assessments, special assessments, and other money currently owed or to become due after issuance of the estoppel certificate;
      • other fees, such as capital contribution fees, resale fees, transfer fees, etc.;
      • whether there are any open violations of rules or regulations;
      • whether association approval of transfer of the unit/parcel is required and, if so, whether the board has approved the transfer;
      • whether there is a right of first refusal and, if so, has the right been exercised;
      • list and contact information for any other associations of which the unit/parcel is a member;
  • contact information for all insurance maintained by the association; and signature of an officer or authorized agent of the association.

Condominiums Only

HB 1237, full text of the law can be found here.  Law goes into effect July 1, 2017.

Directors.

Unless approved by an affirmative vote of two-thirds of the total voting interests of the association or there are not enough eligible candidates to fill the vacancies on the board, a board member may not serve more than four consecutive 2-year terms.

Recalls.

Boards are no longer required to certify a recall or initiate arbitration proceedings for not doing so.  Boards are required to a meeting within 5 business days after receipt of a written recall agreement.

Recalled board members must turn over to the association all records and property of the association within 10 business days after the recall vote.

Voting Rights.

Only monetary obligations more than 90 days delinquent totaling more than $1,000 can an association suspend a member’s voting rights. The delinquent member must be provided 30 days notice accompanied by proof of the delinquency before such suspension takes effect.

Receiver cannot vote on behalf of a unit owner if the owner’s unit was placed in receivership to protect/benefit the association.

Conflicts of Interest.

An association cannot hire an attorney who also represents the association’s management company.

Board members, the property manager and the property management company are prohibited from purchasing a unit at an association foreclosure sale or accepting a deed in lieu of foreclosure.

Associations are prohibited from hiring service providers owned (at least 1% of equity shares) or operated by a board member, any person who has a financial relationship with a board member, or a close relative of a board member.

Officers and directors must disclose to the board any activity that may be construed as a conflict of interest. A rebuttable presumption of a conflict of interest exists if a director, officer, or relative of a director or officer enters into a contract for goods or services with the association or holds an interest in a business entity that conducts business with the association or proposes to enter into a contract with the association.

Any proposed activity that may be a conflict of interest must be subject to a board vote. The meeting notice agenda for such vote must list the proposed activity and all transactional documents (contracts) related to the proposed activity must be attached to the meeting agenda.

If the board votes against the proposed activity, the director or officer must notify the board in writing of his or her intention not to pursue the proposed activity or to resign from the board. If the board finds that an officer or a director has violated this provision, the officer or director is automatically deemed as being removed from office.

Official Records.

Bids for materials, equipment or services are considered part of an association’s official records.

In addition to unit owners, designated representatives of unit owners may inspect and copy condominium documents and records. Tenants may inspect and copy only the association’s rules and by-laws.

Associations with 150 or more units must post copies of certain specifically designated official records on its website, be inaccessible to the general public.  Does not go into effect until July 1, 2018.

Websites.

Condominium association with 150 or more units must maintain a secure website containing the following items:

  • Owner password and login.
  • The secure portion of the website must contain all condominium documents, rules and regulations, management and other agreements to which the association is a party, annual budget and proposed annual budget, financial reports and board certifications.
  • The ability to post on the front page of the website, or a separate subpage labeled “Notices”, which is linked to and visible from the front page. Documents to be considered or voted upon by the board or the owners must also be posted.

Financial Reports.

Condominium associations with less than 50 units are no longer exempt from the financial reporting requirements applicable only to larger condominiums.

Unit owners are entitled to the most recent financial report within 5 business days after the receipt of a written request.

Annually, associations are required to report to the DBPR all of the financial institutions at which it maintains accounts.  A copy of the submission is obtainable upon receipt of a written request by a member.

Criminal Penalties added to F.S. §718

Association officers, directors or manager may not solicit or accept kickbacks from vendors.

Voting certificate or ballot envelope forgery is now considered a crime.

Destroying official records or hindering their access in furtherance of a crime is punishable as a crime in F.S. § 918.13 or as obstruction of justice pursuant to Florida Statutes, Chapter 843.

An office or director charged with one of the above crimes must be removed from office and cannot be appointed, elected or have access to the association’s official records without a court order.  If the charges are resolved without a finding of guilt, the officer or director must be reinstated for the remainder of his or her term of office, if any.

Debit Cards.

Associations and their officers, directors and employees are prohibited from using a debit card issued in the name of the association, or which is billed directly to the association, for the payment of any association expense. Using a debit card in violation of this law, for a non-association expense, can be prosecuted as credit card fraud (confusing, poorly drafted statute)

Ombudsman.

If necessary to assist with an investigation of election misconduct, the Ombudsman can open and review ballots that are otherwise supposed to be cast in secret.

Condominium Terminations

SB 1520, full text of the law can be found here.  Law goes into effect July 1, 2017.

Provides for termination of a condominium when the community is no longer economically viable;

Requires affirmative vote of 80% or more of the owners and negative vote of no more than 5% of the voters;

Requires approval of the termination by the Division;

Requires a waiting period of 24 months to propose a subsequent plan of termination after rejection of a previous plan;

Requires the identity of the person or entity that owns or controls 25% or more of the units;

Requires the identity of the natural persons who own 10% or more of the entity which owns or controls 25% or more of the units;

Carries an effective date of July 1, 2007 – 10 years before the legislation was passed and signed into law.

Noteworthy Veto
Condominium Fire Sprinklers

Under current law, local governments are barred from requiring sprinkler retrofitting of condominium buildings (three stories or more) before the end of 2019.  Owners can also vote to opt-out of retrofitting sprinklers, but are not able to opt out of  the installation of alternative fire safety systems known as “engineered life safety systems”.  The legislation vetoed by Governor Scott would have postponed the retrofitting requirement until 2022 and would have allowed owners to opt-out of both retrofitting sprinklers and the installation of “engineered life safety systems”.

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Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com.

 

 

Vaccine Discovered to Prevent Zombie Homes from Plaguing Florida’s Community Associations!

Two recent Florida Appellate Court decisions offer hope for community associations plagued with zombie homes.

-By Joshua Gerstin, Esq.

Within the last decade, almost every community association has encountered the same problem, a lender forecloses on an owner and nothing happens for years.  Either the owner vigorously contests the lender’s foreclosure, the lender simply does not move forward or both.  While the lender’s case meanders through the courts, the association is left with a “zombie house”, an abandoned home lowering property values and/or an owner no longer paying his/her maintenance assessments.  Until now, once a lender filed a foreclosure lawsuit a community association could do nothing other than sit and wait, sometimes for years.

In two recent Florida appellate court cases a vaccine for this zombie house problem was discovered, the community association’s “relation back” provisions in its Declaration.  In Fountainspring II Homeowners Association, Inc. v. Veliz, Case No. 4D-3408 (Fla. 4th DCA March 15, 2017), and Jallali v. Knightsbridge Village Homeowners Association, Inc., Case No. 4D15-2036 (Fla. 4th DCA Jan. 4, 2017), the Courts ruled the association was permitted to begin its own foreclosure action after the lender’s foreclosure had already begun (and stalled). In addition to the Florida laws governing both condominium and homeowner associations, the Courts found the governing documents of each association to be a major factor in their decisions.

According to both the Fountainspring and Jallali cases, well-drafted “relation back” provisions in a community association’s governing documents allow community associations to foreclose on an owner after the lender foreclosure lawsuit has already begun.  Although the association’s lien and foreclosure remains subordinate to the lender’s foreclosure, the association can drastically cut the effect and expense of a zombie home.  Properly worded “relation back provisions” in a community association’s governing documents is another tool available to community associations struggling to keep costs down and property values up.

Please contact our office for an evaluation to determine whether your association’s governing documents have the necessary “relation back” provisions to benefit from these recent Florida court decisions.

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

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 Name: _________________________________________________

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Community name: ________________________________________

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Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com

2017 Pending Florida Community Association Legislation

Click here for PDF version of this article

The weather outside is cool in Florida, but the heat is surely on community associations, their directors, officers and property managers in Florida’s 2017 legislative session.

 

SB 294 (Condos, Cooperatives, HOAs)

The bill requires associations with less than 50 units to prepare a financial report based on the association’s annual revenues. In addition, if an association fails to provide the financial report to the owners if requested, the owners are prohibited from waiving the financial report for three (3) consecutive years and must file a copy with the State for those three (3) years.

  • This bill eliminates the option for associations with fewer than 50 units and more than $150,000 in annual revenue to submit less comprehensive annual financial statements.
  • Penalizes association with enhanced financial reporting requirements if they fail to provide owners with annual financial reports upon request.

HB 295 (HOAs)

  • Increases penalties for not providing access to official records to $500 per day for up to 30 days.
  • Imposes financial liability on property managers for failing to provide proper access to association official records.
  • Revises the timeframe for members to take control of the board of directors from the developer.
  • Provides for binding arbitration of disputes involving assessments, official records, and enforcement of covenants, rules, and restrictions.
  • Requires home sellers to provide prospective buyers with the association’s governing documents and operating budget at least 7 days before closing, and allows buyers to terminate the contract within 3 days after receipt of the documents.

SB 318 (HOAs)

  • This bill provides for a new, alternative procedure for homeowners associations to preserve their governing documents under Florida’s Marketable Record Title Act.
  • At the first board meeting following each annual meeting of the members, the board of directors must consider whether to preserve the association’s governing documents under Florida’s Marketable Record Title Act.
  • At least every 5 years, homeowners association must record a notice in the public records containing specific information including, the name and address of the association, a list of its recorded governing documents, contact information for the current property manager, and a legal description of the community.

SB 398 (Condos, Cooperatives, HOAs)

  • Requires estoppel letters to be issued within 10 days of a request, and caps fees at $200 An additional $100 may be charged if the estoppel letter is requested on expedited basis (3 business days). An additional $200 may be charged if the owner is delinquent.
  • Creates a maximum fee schedule for multiple estoppel letter requests.
  • Requires estoppel letters to include a long list of various information beyond standard financial information.
  • Association must publish on their website the name and address/email address of person responsible for receiving estoppels requests.

 SB 744 (Condos, Cooperatives, HOAs)

Condos

  • Requires bids for work to be performed be maintained in the official records for 1 year.
  • Eliminates the July 1, 2018 deadline to be classified as a bulk buyer or bulk assignee.

Cooperatives

  • Prohibits co-owners from serving on the board simultaneously in communities with more than 10 units, unless there not enough eligible candidates to fill all board vacancies.
  • Allows board members to communicate via email, but prohibits voting via email.
  • Directors and officers who are over 90 days delinquent in any monetary obligation to the association are deemed to have abandoned their position.

Condos & Cooperatives

  • Includes electronic records relating to unit owner voting in the list of official records of the association.
  • Eliminates the option for associations with less than 50 units to prepare a report of cash receipts and expenditures in lieu of complete financial statements.
  • Removes a restriction prohibiting associations from waiving certain financial reporting requirements for more than 3 consecutive years.
  • Authorizes the board to adopt a procedure for posting meeting notices and agendas on the association website.
  • Clarifying that associations under 75 feet high are not required to undergo fire sprinkler/life safety retrofitting and do not need to conduct an opt-out vote.
  • Extends the deadline to opt-out or apply for a permit for fire sprinkler/life safety retrofitting to December 31, 2018, and extends the deadline to complete fire sprinkler/life safety retrofitting to December 21, 2021.
  • Clarifies certain rules and procedures for fire sprinkler/life safety retrofitting.

HOAs

  • Allows board members to communicate via email, but prohibits voting via email.
  • Requires the annual budget to include reserve accounts for capital expenditures and deferred maintenance which the governing documents require the association to undertake and which exceed $10,000.
  • Allows a developer to waive reserves until the end of the second fiscal year after the declaration is recorded, after which, only a majority of non-developer owners can waive reserves.
  • Revises certain voting procedures and calculations for reserve accounts.
  • Imposes certain limitations on adopting budgets that exceed the prior year budget by more than 15%.
  • Prohibits write-in nominations at an annual meeting when no election is required because the number of candidates does not exceed the number of vacancies, unless nominations from the floor are required by the bylaws.

SB 950 ( HOAs)

  • Prohibiting fines from being imposed on a home for 6 months after the death of the owner.
  • Prohibiting late fees and interest on delinquent assessments for the first year after the death of the parcel owner.
  • If a fine is imposed against a home after the owner dies, the association must provide written notice to the executor of the owner’s estate at least 5 times by certified mail.

 SB 1186 ( HOAs)

  • Specifies procedures for amending the declaration.
  • States that declaration amendments restricting rentals only apply to owners who consent to the amendment, or who purchase their home after July 1, 2017.

SB 1258 (Condos)

  • Imposes fines on board members and officers who knowingly violate any association bylaw or the Condominium Act: $250 for the first violation, $500 for the second violation, and $1,000 for third and subsequent violations. After 3 or more violations, the Department of Business and Professional Regulation may issue an order recalling the director or officer.

SB 1520 (Condos)

  • This bill makes it more difficult to terminate a condominium association.
  • Increases the minimum threshold for approving termination a condominium from 80 percent to 90 percent of the total voting interests.
  • Lowers the threshold for rejecting condominium termination from 10 percent to 5 percent of the total voting interests.
  • Expands the definition of owners who are entitled to receive fair market value for their condominium unit.

SB 1650 (HOAs)

  • Allows disputes relating to amendments of the governing documents to be resolved by mandatory arbitration in lieu of presuit mediation.

 SB 1652 (HOAs)

  • Creates specific election procedures for communities with 7500 or more homes.

SB 1682 (Condos)

  • Prohibits attorneys from representing both an association and its management company.
  • Prohibits board members and management companies from acquiring units at a foreclosure sale arising from the association’s foreclosure of the unit, or via deed in lieu of foreclosure.
  • Adds bids for materials, equipment, or services to the list of association official records.
  • Allows tenants and authorized representatives of members to inspect association official records.
  • Any board member who knowingly, willfully, and repeatedly refuses to comply with a valid request to inspect the official records is guilty of a second degree misdemeanor
  • Any person who knowingly or intentionally defaces or destroys accounting records, or who fails to create or maintain required accounting records in order to harm the association or any member, is guilty of a first degree misdemeanor.
  • Any person who knowingly and willfully refuses to release or produce association official records to facilitate a crime or to prevent a crime from being discovered, is guilty of a third degree felony.
  • Requiring associations with over 500 units to post many types of official records on its website, including the governing documents, financial statements, contracts with third parties, documents to be considered at membership meetings and notices of such meetings.
  • Allows board members to serve 2-year terms only if permitted in the bylaws or articles of incorporation. Prohibiting board members from serving more than 4 consecutive 2-year terms unless approved by an affirmative vote of 2/3 of the entire membership
  • Modifies director recall procedures.
  • Restricts association from contracting or employing service providers in which a board member has a financial stake.
  • Makes it a felony to engage in fraudulent voting activities, aid another person in committing fraudulent voting activities, or help someone avoid being caught for committing fraudulent voting activities.
  • Prohibits any party who provides maintenance or management services to the association from owning more than 50% of the units and purchasing any property subject to a lien of the association.
  • Sets forth detailed disclosure requirements for directors with possible conflicts of interest
  • A unit owner who is 90 days delinquent can be suspended from voting only if the delinquency exceeds $1,000 and requires 30-day notice.

 

Stay Informed, Subscribe to the Gerstin & Associates Newsletter

Subscribe to the Gerstin & Associates Newsletter

 Name: _________________________________________________

Mailing address: ________________________________________

E-mail address: _________________________________________

Community name: ________________________________________

Position on board, if any: __________________________________

Fax this completed page to (561) 750-8185 or email the above  information to: joshua@gerstin.com.

Attorney advises communities on support animals

SunSentinel, January 17, 2017.  Attorney Joshua Gerstin recently provided Alliance of Delray Residential Associations members with advice on medically necessary pets, making decisions through emails and governing documents, topics that community board of directors will face this year.  Read full article here.

 

To watch the video presentation or to download the presentation by Joshua Gerstin, Esq. click here.

Video! 2017 Legal Update: Medically Necessary Pets, Directors’ Emails & Enforcement of Governing Documents.

Please click here for a copy of the January 4, 2017 presentation of:

Medically Necessary Pets
Board of Directors Insider’s Guide to Email &
Achieving Utopia Through the Enforcement of Community Association Documents.

 

Presented by Joshua Gerstin, Esq. for the Delray Alliance of Residential Associations.

Please click here for a copy of the January 4, 2017 presentation.

2014 Florida Community Association and Real Estate Legislative Update

 2014 Florida Community Association and Real Estate Legislative Update
By: Joshua Gerstin, Esq.

Click here to download .pdf version

Approximately 200 bills were introduced in the Florida legislature in 2014, 264 bills were passed by the legislature and Governor Rick Scott signed 158 into law. Many of these new laws will directly impact the operations of Florida’s community associations and the ownership of real estate for years to come.

 

HB 7307

Condominiums and Homeowner Associations.

Contains significant changes to the services a CAM (Community Association Property Manager) can perform.  The newly expanded CAM duties include:

  • Collecting delinquent assessments prior to the filing of a civil action.
  • Completing forms related created by statute or by a state agency.
  • Drafting letters of intended action, calculating and preparing certificates of assessments.
  • Estoppel letters.

Conspicuously absent from the new law are provisions lessening or mitigating the association’s liability if a CAM violates the Fair Debt Collection Practices Act. Instead, associations remain ultimately responsible. HB 7307 also provides:

  • New professional liability standards for CAMS
  • CAM contracts can only require Association’s provide limited indemnification to a CAM.
  • Lists conduct a CAM cannot be indemnified for such as grossly negligent, reckless or the derivation of an improper personal benefit.
  • Creates new forms in Chapters 718, 719 and 720 for notifying delinquent unit owners of their past due assessment balances.

 

SB 1524 Condominiums and Homeowner Associations.

  • Information Protection Act. Imposes new requirements on businesses, including community associations, to protect customer/members records containing the following information:
    • names;
    • social security numbers;
    • medical histories ( ex. medically necessary pets) and;
    • other identification numbers
      • Security breach reporting to the Department of Legal Affairs is required
      • Limits required disclosure by businesses of a breach if proper reporting, and other procedures to rectify the situation, are followed

 

HB 807, Condominium and Homeowner Associations.

  • Outgoing Board Members Relinquishment. Outgoing Board or committee members are required to relinquish all of the Association’s Official Records in their possession within five days after an election.
    • No “lame duck” provision for prior director whose term expires more than five days after an election.
    • Allows for civil penalties to be imposed by the Division for willful violation.
  • Member Directories. Owners can consent to information other than contact information being printed in an ownership directory. Associations can print a directory containing the name, parcel address and telephone numbers for each parcel owner without obtaining the owners’ consent. Individual owners may exclude his or her telephone numbers from the directory.
  • Board or Committee Meetings. Board or committee members appearing by telephone, videoconferencing or other real time video counts towards a quorum. The absent board or committee member appearing by telephone or video can also vote as if actually present.

 

HB 807, Condominium Associations Only

  • Abandoned Units: in addition to the reasons set forth in F.S. §718.111(5)(a), in which a condominium association has the irrevocable right of access to each unit. This legislation created a new statute F.S. §718. 111(5)(b)(1).
    • At the sole discretion of a condominium association’s board of directors a board may, after tendering the required notice, enter an abandoned unit to:
      • inspect the unit and adjoining common elements;
      • make repairs to the unit or to the common elements serving the unit;
      • repair or remediate the due to the presence of mold or similar deterioration;
      • turn on the power for the unit;
      • to otherwise maintain, preserve or protect the unit and its adjoining common elements.
  • Condominium Insurance Clarification: if an item is not damaged by an insurable or casualty event, the items repair or replacement costs are governed by the association’s Governing Documents.
  • Email. Condominium Board or committee members may communicate, but are prohibited from voting, via email.
  • Delinquencies. Condominium association’s that obtain title to a foreclosed property, or via a deed in lieu of foreclosure, from a delinquent owner are not considered a “previous owner” liable for past due assessments. Allows condominium associations that own foreclosed properties to seek the past due assessments of the prior owner from a new owner (subject to the limits of bank foreclosure, Safe Harbor statutes).
  • Condominium Optional Termination. A failed condominium termination plan cannot be sought again by joinder and consent or proposed at a meeting for 180 days after the date the termination plan failed.

 

HB 807, Homeowner Associations Only

  • Emergency Powers for Homeowners’ Associations: The bill incorporates the current emergency powers provisions in the Condominium Act into the Homeowners’ Association Act.
  • Allows homeowner associations to provide notice of adopted amendments via email.
  • In lieu of providing an actual copy of an amendment that passed, homeowner association owners can be notified the amendment passed along with the Official Records Book and Page and a notice a copy of the amendment is available at no charge to the owners. Allowable only if an exact copy of the amendment was sent to the owners prior to its passage. Amends F.S. §720.306(1)(b).
  • Requires HOA board and owner meetings to be held at handicap accessible locations only if requested by a physically handicapped person entitled to attend the meeting. This law does not apply to condominium associations. Amends F.S. §720.303(2)(a) & 720.306(1)(a).
  • Marketable Records Title Act (“MRTA”). Clarifies existing law. Newspapers do not have to publish a MRTA notice.

 

SB 440, Non-Residential Condominiums

  • Proxies can be used in voting for Board members of non-residential condominiums.
  • General proxies from owners in non-residential condominiums can now be used to vote on waiving or reducing the reserves, waiving financial reporting requirements or amending the Governing Documents.
  • Directors may now serve for an unlimited number of terms or years in a non-residential condominium.
  • If a unit is owned by more than one owner in a non-residential condominium, all owners can serve simultaneously on the board of directors.
  • Non residential condominiums directors do not have to take the “loyalty oath” certifying they are familiar with the Governing Documents and will discharge his/her duties in a fiduciary capacity.
  • Non-residential condominiums are excluded from the mandatory arbitration and mediation provision of Florida law.
  • Non-residential condominiums are excluded from the hurricane shutter provisions in the F.S. § 718.
  • Limitations on development phases meant to protect early purchasers of condominiums no longer apply to non-residential condominiums.

 

SB 356, Vacation Rentals.

  • The State of Florida reserved the exclusive right to regulate vacation rentals. Local municipalities can no longer pass ordinances that prohibit vacation rentals or that regulate the duration or frequency of vacation rentals. Applies only to ordinances adopted after June 1, 2011.

 

Real Estate.

  • Subsurface Mineral Rights. New disclosures are required when subsurface mineral rights are reserved by the Seller. Unwary buyers can now cancel contracts and statutory penalties exist for intentional violators.
  • Florida “GI Bill”. Tuition waivers veterans, military base upgrades and a multimillion-dollar marketing campaign, the Florida “GI Bill” intends to make Florida the most military-friendly state in the nation.

 

Insurance.

  • SB542 Flood Insurance.

o   Insurers may offer personal lines of residential flood insurance to residential customers (commercial condos or commercial residential excluded).

  • HB 1089 Citizen’s Insurance, Windstorm Coverage.

o   For wind only coverage for commercial lines residential condominiums, associations cannot have 50% of the units rented more than 8 times a year for less than 30 days.

  • SB 1672 Citizens Insurance.

o   Citizens Insurance may offer wind only policies and will discontinue certain multi-peril policies.

o   Insurance agents and public adjusters cannot obtain referral fees from an inspection company performing an insurance inspection for coverage.

o   Public adjusters cannot accept power of attorney that allows them to select the vendors and contractors to perform property repairs.

  • SB 708 Homeowner Insurance.

o   Insurers can no longer deny a claim for a misrepresentation in an insurance claim if the insurance policy has been in effect for 90 or more days.

o   A “Homeowners’ Claim Bill of Rights” was added enhancing protections afforded to personal line residential policyholders.

 

Service of Process HB 627.

  • Employer must permit service of process on employees.
  • $1000.00 fine on employer for not permitting service of process one employee.
  • Sheriff can rely on a levying creditor’s affidavit for the disbursement poof proceeds from the sale of levied property.

 

For information purposes only. For legal advice, please consult an attorney.

Florida Supreme Court Alters Community Association Declarations, In a Big Way

Did Florida’s Supreme Court render laws governing condominium and homeowner association declarations useless and unenforceable?

Florida’s community associations across the state are becoming increasingly concerned the legislature can no longer pass laws that affect Florida’s condominium and homeowner associations after the Supreme Court’s recent decision in Cohn v. Grand.  Florida’s community associations should be concerned and need to take action, but as explained below all hope is far from lost.

The Facts:

1.      The Grand was a condo hotel.

2.      When owner Cohn purchased a unit the Grand the Declaration stated “unit owners would governed by the “the Condominium Act of the State of Florida in effect as of the date of recording this Declaration.”

3.      The Declaration did not include the phrase, “as amended from time to time.”

4.      The dispute specifically arose as to whether the unit owners are afforded voting rights in accordance with the Condominium Act in effect at the time the Declaration was recorded or were said voting rights altered over time by each amendment made to legislation relating to condominium associations and in particular voting.

The Legal Argument:

Unit owners’ contractual rights, defined by the terms of the Florida Condominium Act (“Act”) at a fixed point in time, do not vary when changes to the Act are made because the term “as amended from time to time” was not included in the Declaration.

Florida Law Applied to the Facts and the Legal Argument:

An overriding principle embedded in the Florida Constitution is that “state action” (legislation) that impairs a contract is unconstitutional. In determining whether legislation impairs a contract a three part test is used and the results are weighed and balanced:

1)      To what extent are the contractual rights impaired;

2)      Does the state have a good reason for enacting policy that changes contractual rights; and

3)      Are the means the state will use to achieve this policy reasonable?

The issue in Grand related to owner voting which has long been considered a substantive right. As such, the Court gave greater weight to item # 1 above and less to item # 2.

The Court’s Decision:

The Florida Supreme Court held “The Constitution prohibits the impairment of contracts; and the statute regulating mixed-use condominiums (F.S. 718.404(2)) impaired the Grand’s unit owner’s contractual rights, which are established in the Grand’s declaration.” In other words, the law at the time the Declaration was recorded, not at the present time, was the law that applies to owners’ voting rights in the Grand.

Click here to read the Court’s full opinion

What This Means to Your Association:

The Grand decision should not be read as the end of legislative control over Florida community associations.. Surely, rules relating to enforcement of covenants would not be considered a substantive right that any  legislative changes would be outweighed and nullified. Instead, each such case will be reviewed by the courts on a “case-by-case” basis, if the magic words “as amended from time to time” is not in the Declaration.

What to Do:

Check your community association’s Declaration and determine whether the drafter included the words “as amended from time to time” in relation to statutes that will be used to enforce and interpret the Declaration (Condo. Act or HOA Act.). If not, speak with your community association’s attorney and begin the process of amending your community association’s Declaration.