Senate Bill sb0634
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Florida Senate - 2002 SB 634
By Senator Clary
7-159A-02
1 A bill to be entitled
2 An act relating to condominiums; amending s.
3 718.203, F.S.; relieving the developer of
4 liability for certain defects if the developer
5 has met prescribed conditions; creating s.
6 718.3027, F.S.; requiring prelitigation
7 disclosure to and approval by owners; requiring
8 a disclosure; providing that a prelitigation
9 disclosure is not admissible in evidence;
10 amending s. 718.301, F.S.; providing for the
11 effect of actions taken by members of the board
12 of administration of an association; amending
13 s. 718.503, F.S.; providing requirements for
14 developer disclosure in certain contracts for
15 the sale or lease of a residential unit;
16 amending s. 718.506, F.S.; abrogating the right
17 to a cause of action against a developer for an
18 oral representation or information that is not
19 in the developer's promotional materials;
20 providing an effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Subsections (8) and (9) are added to
25 section 718.203, Florida Statutes, to read:
26 718.203 Warranties.--
27 (8) If the developer has obtained from the contractor
28 a construction payment and performance bond in the amount of
29 the contract with the contractor which was issued by a surety
30 licensed to do business in this state and has assigned or
31 otherwise made available the bond or the proceeds thereof to
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Florida Senate - 2002 SB 634
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1 the association for a period equal to or greater than the
2 warranty periods in s. 718.203, the developer has no
3 liability, under the Condominium Act or otherwise at law or in
4 equity, to the association or to the purchaser of each unit
5 for any construction defects or deficiencies that are within
6 the scope of the developer's contract with the contractor and
7 all subcontractors and suppliers.
8 (9) If the developer has required the engineer to
9 maintain a professional malpractice policy that has minimum
10 aggregate policy limits no less than 60 percent of the value
11 of the developer's contract with the general contractor and
12 that was issued by an insurer licensed to do business in this
13 state and has assigned or otherwise made available the policy
14 or the proceeds thereof to the association for a period equal
15 to or greater than the warranty periods in s. 718.213, the
16 developer has no liability to the association or to the
17 purchaser of each unit, under the Condominium Act or otherwise
18 at law or in equity, for any defects in engineering design or
19 engineering services that are within the scope of the
20 developer's contract with the engineer.
21 Section 2. Section 718.3027, Florida Statutes, is
22 created to read:
23 718.3027 Prelitigation disclosure to and approval by
24 owners.--
25 (1) Before commencing any litigation against the
26 developer in the name of the association involving amounts in
27 controversy in excess of $100,000, the association must
28 furnish to each owner other than the developer a separate
29 document entitled "Litigation Disclosure Notice". The
30 division shall, by rule, establish a standard format for a
31 Litigation Disclosure Notice.
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Florida Senate - 2002 SB 634
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1 (2) A Litigation Disclosure Notice must inform each
2 owner other than the developer of the basis for the
3 association's contemplated litigation or adversarial
4 proceeding; the professional qualifications of the person
5 making the allegations supporting the association's claim; the
6 response of the developer to the allegations and whether the
7 developer has refused or offered to perform remedial work; the
8 efforts made to mediate or resolve the claim; the projected
9 attorney's fees, expert fees, and other costs to the
10 association of the proposed litigation; the association's
11 probability of success in the litigation; the association's
12 probability of collecting a judgment resulting from the
13 litigation; and the probability of association liability for
14 attorney's fees and costs associated with the litigation.
15 (3) Litigation based upon the matter described in the
16 Litigation Disclosure Notice may not be commenced unless
17 approved in advance by a majority of the owners other than the
18 developer, or by such greater number of the owners other than
19 the developer as is required by the declaration of the
20 condominium operated by the association. At any meeting of
21 unit owners regarding the proposed litigation, the developer
22 may be excluded from the meeting, and the developer-owned
23 units do not count against the quorum requirement. At any
24 meeting of the board of administration, a director nominated
25 or appointed by the developer may be excluded from the
26 meeting, and the seat does not count against the quorum
27 requirement.
28 (4) The Litigation Disclosure Notice must carry the
29 following legend, in conspicuous type on the top of the first
30 page: THIS DOCUMENT HAS BEEN PREPARED BY THE ASSOCIATION AND
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Florida Senate - 2002 SB 634
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1 ITS ATTORNEYS IN ANTICIPATION OF LITIGATION, AND IS A
2 PROTECTED LAWYER-CLIENT COMMUNICATION.
3 (5) A Litigation Disclosure Notice is confidential,
4 exempt from discovery by a developer, and inadmissible in any
5 trial or hearing. A unit owner may not waive the
6 confidentiality of a Litigation Disclosure Notice; only the
7 board of administration of the association may authorize a
8 waiver of confidentiality of a Litigation Disclosure Notice.
9 Section 3. Present subsection (6) of section 718.301,
10 Florida Statutes, is redesignated as subsection (7) of that
11 section, and a new subsection (6) is added to that section, to
12 read:
13 718.301 Transfer of association control.--
14 (6) Actions taken by members of the board of
15 administration designated by the developer are considered
16 actions taken by the developer, and the developer is
17 responsible to the association and its members for all such
18 actions.
19 Section 4. Paragraph (a) of subsection (1) of section
20 718.503, Florida Statutes, is amended to read:
21 718.503 Developer disclosure prior to sale;
22 nondeveloper unit owner disclosure prior to sale;
23 voidability.--
24 (1) DEVELOPER DISCLOSURE.--
25 (a) Contents of contracts.--Any contract for the sale
26 of a residential unit or a lease thereof for an unexpired term
27 of more than 5 years shall:
28 1. Contain the following legend in conspicuous type:
29 THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN
30 NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER
31 THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND
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1 RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED
2 TO HIM OR HER BY THE DEVELOPER UNDER SECTION 718.503, FLORIDA
3 STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY
4 DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL
5 WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF
6 ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING
7 IN A MANNER THAT IS ADVERSE TO THE BUYER. ANY PURPORTED
8 WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT.
9 BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE
10 THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS
11 REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL
12 TERMINATE AT CLOSING.
13 2. Contain the following caveat in conspicuous type on
14 the first page of the contract: ORAL REPRESENTATIONS CANNOT
15 BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE
16 DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE
17 MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION
18 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A
19 BUYER OR LESSEE. A PURCHASER HAS NO CLAIM OR CAUSE OF ACTION
20 AGAINST THE DEVELOPER FOR THE PURCHASER'S RELIANCE ON ORAL
21 REPRESENTATIONS OR INFORMATION NOT CONTAINED IN THIS CONTRACT
22 OR IN THE PROSPECTUS. A PURCHASER MAY MAKE A CLAIM OR
23 INSTITUTE A CAUSE OF ACTION AGAINST THE DEVELOPER ONLY FOR THE
24 PURCHASER'S RELIANCE ON THE TERMS OF THIS CONTRACT OR ON
25 MATTERS SET FORTH IN THE PROSPECTUS.
26 3. If the unit has been occupied by someone other than
27 the buyer, contain a statement that the unit has been
28 occupied.
29 4. If the contract is for the sale or transfer of a
30 unit subject to a lease, include as an exhibit a copy of the
31 executed lease and shall contain within the text in
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1 conspicuous type: THE UNIT IS SUBJECT TO A LEASE (OR
2 SUBLEASE).
3 5. If the contract is for the lease of a unit for a
4 term of 5 years or more, include as an exhibit a copy of the
5 proposed lease.
6 6. If the contract is for the sale or lease of a unit
7 that is subject to a lien for rent payable under a lease of a
8 recreational facility or other commonly used facility, contain
9 within the text the following statement in conspicuous type:
10 THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT IS SUBJECT TO
11 A LIEN FOR RENT PAYABLE UNDER A LEASE OF COMMONLY USED
12 FACILITIES. FAILURE TO PAY RENT MAY RESULT IN FORECLOSURE OF
13 THE LIEN.
14 7. State the name and address of the escrow agent
15 required by s. 718.202 and state that the purchaser may obtain
16 a receipt for his or her deposit from the escrow agent upon
17 request.
18 8. If the contract is for the sale or transfer of a
19 unit in a condominium in which timeshare estates have been or
20 may be created, contain within the text in conspicuous type:
21 UNITS IN THIS CONDOMINIUM ARE SUBJECT TO TIMESHARE ESTATES.
22 The contract for the sale of a fee interest in a timeshare
23 estate shall also contain, in conspicuous type, the following:
24 FOR THE PURPOSE OF AD VALOREM TAXES OR SPECIAL ASSESSMENTS
25 LEVIED BY TAXING AUTHORITIES AGAINST A FEE INTEREST IN A
26 TIMESHARE ESTATE, THE MANAGING ENTITY IS GENERALLY CONSIDERED
27 THE TAXPAYER UNDER FLORIDA LAW. YOU HAVE THE RIGHT TO
28 CHALLENGE AN ASSESSMENT BY A TAXING AUTHORITY RELATING TO YOUR
29 TIMESHARE ESTATE PURSUANT TO THE PROVISIONS OF CHAPTER 194,
30 FLORIDA STATUTES.
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1 Section 5. Subsection (3) is added to section 718.506,
2 Florida Statutes, to read:
3 718.506 Publication of false and misleading
4 information.--
5 (3) A person has no cause of action against a
6 developer for any oral representation or information that is
7 not contained in the developer's advertising and promotional
8 materials, including, but not limited to, a prospectus, the
9 items required as exhibits to a prospectus, brochures, and
10 newspaper advertising.
11 Section 6. This act shall take effect July 1, 2002.
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14 SENATE SUMMARY
15 Relieves a condominium developer of liability for certain
defects if the developer has met prescribed conditions.
16 Requires prelitigation disclosure to and approval by
condominium owners. Requires a disclosure. Provides that
17 a prelitigation disclosure is not admissible in evidence.
Provides for the effect of actions taken by members of
18 the board of administration of an association. Provides
requirements for developer disclosure in certain
19 contracts for the sale or lease of a residential unit.
Abrogates the right to a cause of action against a
20 developer for an oral representation or information that
is not in the developer's promotional materials.
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