Senate Bill 1054c1

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    Florida Senate - 1998                           CS for SB 1054

    By the Committee on Regulated Industries and Senator Dudley





    315-1663B-98

  1                      A bill to be entitled

  2         An act relating to rulemaking authority of the

  3         Department of Business and Professional

  4         Regulation (RAB); amending s. 718.104, F.S.;

  5         requiring notification; amending s. 718.112,

  6         F.S.; providing requirements relating to

  7         association meetings; amending s. 718.117,

  8         F.S.; requiring notification; amending s.

  9         718.301, F.S.; providing rulemaking authority

10         for requirements relating to the transition of

11         a condominium; amending s. 718.403, F.S.;

12         requiring filing of recording information;

13         amending s. 718.502, F.S.; providing certain

14         requirements prior to the closure on any

15         contract for sale or lease of over 5 years;

16         providing rulemaking authority for requirements

17         relating to filing and review programs and

18         timetables; amending s. 718.503, F.S.;

19         providing requirements relating to the closure

20         of a transaction for the purchase of a

21         condominium unit; creating s. 718.621, F.S.;

22         providing rulemaking authority for requirements

23         relating to condominium conversion; providing

24         an effective date.

25

26  Be It Enacted by the Legislature of the State of Florida:

27

28         Section 1.  Subsection (2) of section 718.104, Florida

29  Statutes, is amended to read:

30

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    Florida Senate - 1998                           CS for SB 1054
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  1         718.104  Creation of condominiums; contents of

  2  declaration.--Every condominium created in this state shall be

  3  created pursuant to this chapter.

  4         (2)  A condominium is created by recording a

  5  declaration in the public records of the county where the land

  6  is located, executed and acknowledged with the requirements

  7  for a deed.  All persons who have record title to the interest

  8  in the land being submitted to condominium ownership, or their

  9  lawfully authorized agents, must join in the execution of the

10  declaration. Upon the recording of the declaration, or an

11  amendment adding a phase to the condominium under s.

12  718.403(6), all units described in the declaration or phase

13  amendment as being located in or on the land then being

14  submitted to condominium ownership shall come into existence,

15  regardless of the state of completion of planned improvements

16  in which the units may be located. Upon recording the

17  declaration of condominium pursuant to this section, the

18  developer shall file the recording information with the

19  division within 30 business days on a form prescribed by the

20  division.

21         Section 2.  Paragraphs (b) and (c) of subsection (2) of

22  section 718.112, Florida Statutes, are amended to read:

23         718.112  Bylaws.--

24         (2)  REQUIRED PROVISIONS.--The bylaws shall provide for

25  the following and, if they do not do so, shall be deemed to

26  include the following:

27         (b)  Quorum; voting requirements; proxies.--

28         1.  Unless a lower number is provided in the bylaws,

29  the percentage of voting interests required to constitute a

30  quorum at a meeting of the members shall be a majority of the

31  voting interests.  Unless otherwise provided in this chapter

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  1  or in the declaration, articles of incorporation, or bylaws,

  2  and except as provided in subparagraph (d)3., decisions shall

  3  be made by owners of a majority of the voting interests

  4  represented at a meeting at which a quorum is present.

  5         2.  Except as specifically otherwise provided herein,

  6  after January 1, 1992, unit owners may not vote by general

  7  proxy, but may vote by limited proxies substantially

  8  conforming to a limited proxy form adopted by the division.

  9  Limited proxies and general proxies may be used to establish a

10  quorum.  Limited proxies shall be used for votes taken to

11  waive or reduce reserves in accordance with subparagraph

12  (f)2.; for votes taken to waive financial statement

13  requirements as provided by s. 718.111(14); for votes taken to

14  amend the declaration pursuant to s. 718.110; for votes taken

15  to amend the articles of incorporation or bylaws pursuant to

16  this section; and for any other matter for which this chapter

17  requires or permits a vote of the unit owners.  Except as

18  provided in paragraph (d), after January 1, 1992, no proxy,

19  limited or general, shall be used in the election of board

20  members. General proxies may be used for other matters for

21  which limited proxies are not required, and may also be used

22  in voting for nonsubstantive changes to items for which a

23  limited proxy is required and given. Notwithstanding the

24  provisions of this subparagraph, unit owners may vote in

25  person at unit owner meetings.  Nothing contained herein shall

26  limit the use of general proxies or require the use of limited

27  proxies for any agenda item or election at any meeting of a

28  timeshare condominium association.

29         3.  Any proxy given shall be effective only for the

30  specific meeting for which originally given and any lawfully

31  adjourned meetings thereof.  In no event shall any proxy be

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  1  valid for a period longer than 90 days after the date of the

  2  first meeting for which it was given.  Every proxy is

  3  revocable at any time at the pleasure of the unit owner

  4  executing it.

  5         4.  A member of the board of administration or a

  6  committee may join by written concurrence in any action taken

  7  at a meeting of the board or committee, but such concurrence

  8  may not be used for the purposes of creating a quorum.

  9         5.  When any of the board or committee members meet by

10  telephone conference, those board or committee members

11  attending by telephone conference may be counted toward

12  obtaining a quorum and may vote by telephone. A telephone

13  speaker must be used so that the conversation of those board

14  or committee members attending by telephone may be heard by

15  the board or committee members attending in person as well as

16  by any unit owners present at a meeting.

17         (c)  Board of administration meetings.--Meetings of the

18  board of administration at which a quorum of the members is

19  present shall be open to all unit owners.  Any unit owner may

20  tape record or videotape meetings of the board of

21  administration.  The right to attend such meetings includes

22  the right to speak at such meetings with reference to all

23  designated agenda items.  The division shall adopt reasonable

24  rules governing the tape recording and videotaping of the

25  meeting.  The association may adopt written reasonable rules

26  governing the frequency, duration, and manner of unit owner

27  statements. Adequate notice of all meetings, which notice

28  shall specifically incorporate an identification of agenda

29  items, shall be posted conspicuously on the condominium

30  property at least 48 continuous hours preceding the meeting

31  except in an emergency.  Any item not included on the notice

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    Florida Senate - 1998                           CS for SB 1054
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  1  may be taken up on an emergency basis by at least a majority

  2  plus one of the members of the board. Such emergency action

  3  shall be noticed and ratified at the next regular meeting of

  4  the board. However, written notice of any meeting at which

  5  nonemergency special assessments, or at which amendment to

  6  rules regarding unit use, will be considered shall be mailed

  7  or delivered to the unit owners and posted conspicuously on

  8  the condominium property not less than 14 days prior to the

  9  meeting. Evidence of compliance with this 14-day notice shall

10  be made by an affidavit executed by the person providing the

11  notice and filed among the official records of the

12  association.  Upon notice to the unit owners, the board shall

13  by duly adopted rule designate a specific location on the

14  condominium property or association property upon which all

15  notices of board meetings shall be posted. If there is no

16  condominium property or association property upon which

17  notices can be posted, notices of board meetings shall be

18  mailed or delivered at least 14 days before the meeting to the

19  owner of each unit.  Notice of any meeting in which regular

20  assessments against unit owners are to be considered for any

21  reason shall specifically contain a statement that assessments

22  will be considered and the nature of any such assessments.

23  Meetings of a committee to take final action on behalf of the

24  board or make recommendations to the board regarding the

25  association budget are subject to the provisions of this

26  paragraph. Meetings of a committee that does not take final

27  action on behalf of the board or make recommendations to the

28  board regarding the association budget are subject to the

29  provisions of this section, unless those meetings are exempted

30  from this section by the bylaws of the association.

31  Notwithstanding any other law, the requirement that board

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    Florida Senate - 1998                           CS for SB 1054
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  1  meetings and committee meetings be open to the unit owners is

  2  inapplicable to meetings between the board or a committee and

  3  the association's attorney, with respect to proposed or

  4  pending litigation, when the meeting is held for the purpose

  5  of seeking or rendering legal advice.

  6         Section 3.  Subsection (1) of section 718.117, Florida

  7  Statutes, is amended to read:

  8         718.117  Termination.--

  9         (1)  Unless otherwise provided in the declaration, the

10  condominium property may be removed from the provisions of

11  this chapter only by consent of all of the unit owners,

12  evidenced by a recorded instrument to that effect, and upon

13  the written consent by all of the holders of recorded liens

14  affecting any of the condominium parcels.  When the board of

15  directors intends to terminate or merge the condominium, or

16  dissolve or merge the association, the boards shall so notify

17  the division before taking any action to terminate or merge

18  the condominium or the association. Upon recordation of the

19  instrument evidencing consent of all of the unit owners to

20  terminate the condominium, the association within 30 business

21  days shall notify the division within 30 working days of the

22  termination and the date the document was recorded, the county

23  where the document was recorded, and the book and page number

24  of the public records where the document was recorded, and

25  shall provide the division a copy of the recorded termination

26  notice certified by the clerk.

27         Section 4.  Subsection (6) is added to section 718.301,

28  Florida Statutes, to read:

29         718.301  Transfer of association control.--

30         (6)  The division may adopt rules administering the

31  provisions of this section.

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    Florida Senate - 1998                           CS for SB 1054
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  1         Section 5.  Subsection (8) is added to section 718.403,

  2  Florida Statutes, to read:

  3         718.403  Phase condominiums.--

  4         (8)  Upon recording the declaration of condominium or

  5  amendments adding phases pursuant to this section, the

  6  developer shall file the recording information with the

  7  division within 30 working days on a form prescribed by the

  8  division.

  9         Section 6.  Subsection (1) of section 718.502, Florida

10  Statutes, is amended to read:

11         718.502  Filing prior to sale or lease.--

12         (1)(a)  A developer of a residential condominium or

13  mixed-use condominium shall file with the division one copy of

14  each of the documents and items required to be furnished to a

15  buyer or lessee by ss. 718.503 and 718.504, if applicable.

16  Until the developer has so filed, a contract for sale of a

17  unit or lease of a unit for more than 5 years shall be

18  voidable by the purchaser or lessee prior to the closing of

19  his or her purchase or lease of a unit.

20         (b)  A developer may not close on any contract for sale

21  or contract for a lease period of more than 5 years until the

22  developer prepares and files with the division documents

23  complying with the requirements of this chapter and the rules

24  adopted by the division and until the division notifies the

25  developer that the filing is proper and the developer prepares

26  and delivers all documents required by section 718.503(1)(b)

27  to the prospective buyer.

28         (c)  The division by rule may develop filing, review,

29  and examination requirements and relevant timetables to ensure

30  compliance with the notice and disclosure provisions of this

31  section.

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    Florida Senate - 1998                           CS for SB 1054
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  1         Section 7.  Subsection (1) of section 718.503, Florida

  2  Statutes, is amended to read:

  3         718.503  Developer disclosure prior to sale;

  4  nondeveloper unit owner disclosure prior to sale;

  5  voidability.--

  6         (1)  DEVELOPER DISCLOSURE.--

  7         (a)  Contents of contracts.--Any contract for the sale

  8  of a residential unit or a lease thereof for an unexpired term

  9  of more than 5 years shall:

10         1.  Contain the following legend in conspicuous type:

11  THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN

12  NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER

13  THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND

14  RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED

15  TO HIM OR HER BY THE DEVELOPER UNDER SECTION 718.503, FLORIDA

16  STATUTES.  THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY

17  DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL

18  WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF

19  ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING

20  IN A MANNER THAT IS ADVERSE TO THE BUYER.  ANY PURPORTED

21  WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT.

22  BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE

23  THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS

24  REQUIRED.  BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL

25  TERMINATE AT CLOSING.

26         2.  Contain the following caveat in conspicuous type on

27  the first page of the contract:  ORAL REPRESENTATIONS CANNOT

28  BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE

29  DEVELOPER.  FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE

30  MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION

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    Florida Senate - 1998                           CS for SB 1054
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  1  718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A

  2  BUYER OR LESSEE.

  3         3.  If the unit has been occupied by someone other than

  4  the buyer, contain a statement that the unit has been

  5  occupied.

  6         4.  If the contract is for the sale or transfer of a

  7  unit subject to a lease, include as an exhibit a copy of the

  8  executed lease and shall contain within the text in

  9  conspicuous type:  THE UNIT IS SUBJECT TO A LEASE (OR

10  SUBLEASE).

11         5.  If the contract is for the lease of a unit for a

12  term of 5 years or more, include as an exhibit a copy of the

13  proposed lease.

14         6.  If the contract is for the sale or lease of a unit

15  that is subject to a lien for rent payable under a lease of a

16  recreational facility or other commonly used facility, contain

17  within the text the following statement in conspicuous type:

18  THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT IS SUBJECT TO

19  A LIEN FOR RENT PAYABLE UNDER A LEASE OF COMMONLY USED

20  FACILITIES. FAILURE TO PAY RENT MAY RESULT IN FORECLOSURE OF

21  THE LIEN.

22         7.  State the name and address of the escrow agent

23  required by s. 718.202 and state that the purchaser may obtain

24  a receipt for his or her deposit from the escrow agent upon

25  request.

26         8.  If the contract is for the sale or transfer of a

27  unit in a condominium in which timeshare estates have been or

28  may be created, contain within the text in conspicuous type:

29  UNITS IN THIS CONDOMINIUM ARE SUBJECT TO TIMESHARE ESTATES.

30  The contract for the sale of a fee interest in a timeshare

31  estate shall also contain, in conspicuous type, the following:

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  1  FOR THE PURPOSE OF AD VALOREM TAXES OR SPECIAL ASSESSMENTS

  2  LEVIED BY TAXING AUTHORITIES AGAINST A FEE INTEREST IN A

  3  TIMESHARE ESTATE, THE MANAGING ENTITY IS GENERALLY CONSIDERED

  4  THE TAXPAYER UNDER FLORIDA LAW.  YOU HAVE THE RIGHT TO

  5  CHALLENGE AN ASSESSMENT BY A TAXING AUTHORITY RELATING TO YOUR

  6  TIMESHARE ESTATE PURSUANT TO THE PROVISIONS OF CHAPTER 194,

  7  FLORIDA STATUTES.

  8         (b)  Copies of documents to be furnished to prospective

  9  buyer or lessee.--Until such time as the developer has

10  furnished the documents listed below to a person who has

11  entered into a contract to purchase a residential unit or

12  lease it for more than 5 years, the contract may be voided by

13  that person, entitling the person to a refund of any deposit

14  together with interest thereon as provided in s. 718.202.  The

15  contract may be terminated by written notice from the proposed

16  buyer or lessee delivered to the developer within 15 days

17  after the buyer or lessee receives all of the documents

18  required by this section. The developer may not close for 15

19  days following the execution of the agreement and delivery of

20  the documents to the buyer as evidenced by a signed Receipt

21  for Documents, unless the buyer is informed of the 15-day

22  voidability period and agrees to close before the expiration

23  of the 15 days. The developer shall retain in its records, for

24  5 years after the closing date, proof of buyer's agreement to

25  close before the expiration of the voidability period. The

26  documents to be delivered to the prospective buyer are the

27  prospectus or disclosure statement with all exhibits, if the

28  development is subject to the provisions of s. 718.504, or, if

29  not, then copies of the following which are applicable:

30         1.  The question and answer sheet described in s.

31  718.504, and declaration of condominium, or the proposed

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  1  declaration if the declaration has not been recorded, which

  2  shall include the certificate of a surveyor approximately

  3  representing the locations required by s. 718.104.

  4         2.  The documents creating the association.

  5         3.  The bylaws.

  6         4.  The ground lease or other underlying lease of the

  7  condominium.

  8         5.  The management contract, maintenance contract, and

  9  other contracts for management of the association and

10  operation of the condominium and facilities used by the unit

11  owners having a service term in excess of 1 year, and any

12  management contracts that are renewable.

13         6.  The estimated operating budget for the condominium

14  and a schedule of expenses for each type of unit, including

15  fees assessed pursuant to s. 718.113(1) for the maintenance of

16  limited common elements where such costs are shared only by

17  those entitled to use the limited common elements.

18         7.  The lease of recreational and other facilities that

19  will be used only by unit owners of the subject condominium.

20         8.  The lease of recreational and other common

21  facilities that will be used by unit owners in common with

22  unit owners of other condominiums.

23         9.  The form of unit lease if the offer is of a

24  leasehold.

25         10.  Any declaration of servitude of properties serving

26  the condominium but not owned by unit owners or leased to them

27  or the association.

28         11.  If the development is to be built in phases or if

29  the association is to manage more than one condominium, a

30  description of the plan of phase development or the

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    Florida Senate - 1998                           CS for SB 1054
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  1  arrangements for the association to manage two or more

  2  condominiums.

  3         12.  If the condominium is a conversion of existing

  4  improvements, the statements and disclosure required by s.

  5  718.616.

  6         13.  The form of agreement for sale or lease of units.

  7         14.  A copy of the floor plan of the unit and the plot

  8  plan showing the location of the residential buildings and the

  9  recreation and other common areas.

10         15.  A copy of all covenants and restrictions which

11  will affect the use of the property and which are not

12  contained in the foregoing.

13         16.  If the developer is required by state or local

14  authorities to obtain acceptance or approval of any dock or

15  marina facilities intended to serve the condominium, a copy of

16  any such acceptance or approval acquired by the time of filing

17  with the division under s. 718.502(1), or a statement that

18  such acceptance or approval has not been acquired or received.

19         17.  Evidence demonstrating that the developer has an

20  ownership, leasehold, or contractual interest in the land upon

21  which the condominium is to be developed.

22         Section 8.  Section 718.621, Florida Statutes, is

23  created to read:

24         718.621  Rulemaking authority.--The division is

25  authorized to adopt rules as necessary to administer and

26  ensure compliance with developers' obligations with respect to

27  condominium conversions concerning the filing and noticing of

28  intended conversion, rental agreement extensions, rights of

29  first refusal, and disclosure and post-purchase protections.

30         Section 9.  This act shall take effect upon becoming a

31  law.

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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                             SB 1054

  3

  4  Provides that the board of directors of condominium
    associations must notify the Division of Florida Land Sales,
  5  Condominiums, and Mobile Homes prior to taking any action to
    terminate or merge the condominium or the association.
  6  Provides that after recording a termination notice, the
    association shall provide the division with a copy of the
  7  recorded notice within 30 days.

  8  Authorizes the division to adopt rules tailored to administer
    the provisions of s. 718.301, F.S.
  9
    Provides that the developer, upon recording the declaration of
10  condominium or amendments adding phases to a condominium,
    shall file with the division such recording information on a
11  specific form, within 30 days.

12  Provides specific authority for the division to adopt rules
    regarding filing, review, and examination requirements and
13  relevant timetables to ensure compliance with notice and
    disclosure requirements in s. 718.502, F.S.
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