HB 1987

1	A bill to be entitled
2	An act relating to homeowners' associations; amending s.
3	34.01, F.S.; expanding county court jurisdiction for
4	certain disputes; amending s. 720.301, F.S.; providing and
5	revising definitions; conforming cross references;
6	amending s. 720.302, F.S.; authorizing alternative methods
7	for resolution of certain disputes; conforming cross
8	references; amending s. 720.303, F.S.; providing criminal
9	penalties for certain acts by board members of homeowners'
10	associations; authorizing certain associations to enforce
11	certain deed restrictions; providing members with certain
12	rights at all meetings; providing guidelines for notice,
13	and delivery of notice, for certain meetings; providing
14	criteria for petitioning the board; providing certain
15	documents to be included in financial and accounting
16	records; providing certain members with access to copies
17	of certain documents; authorizing members access to
18	certain records for a fee; excluding certain records from
19	member access; providing criteria for the preparation of
20	annual financial reports; prohibiting use of association
21	funds to defend certain actions or proceedings; providing
22	requirements, criteria, procedures, and limitations for
23	recall of board directors and their removal from office;
24	amending s. 720.304, F.S.; authorizing homeowners to
25	display certain flags on certain occasions; providing
26	legislative intent; prohibiting certain lawsuits arising
27	from parcel owners' appearances and presentations before a
28	governmental entity; providing a definition; authorizing
29	the construction of ramps for entrance and egress under
30	certain conditions; authorizing owners to display signs
31	provided by a contractor for security services under
32	certain conditions; amending s. 720.305, F.S.; prohibiting
33	fines from becoming liens against parcels; providing for
34	attorney's fees and costs in actions to recover a fine;
35	creating s. 720.3055, F.S.; providing requirements for
36	association contracts for certain products and services;
37	authorizing certain associations to opt out of such
38	requirements under certain circumstances; providing
39	exceptions; amending s. 720.306, F.S.; providing meeting
40	notice requirements; providing members with the right to
41	speak at meetings; requiring arbitration of certain
42	election disputes; amending s. 720.311, F.S.; revising
43	certain dispute resolution provisions; providing
44	guidelines for the filing of alternative dispute
45	resolutions; providing for mandatory mediation or
46	arbitration under certain circumstances; providing
47	requirements, procedures, and limitations; providing for
48	fees; providing for award of attorney's fees and costs;
49	requiring the Division of Florida Land Sales,
50	Condominiums, and Mobile Homes of the Department of
51	Business and Professional Regulation to develop a
52	certification and training program for mediators and
53	arbitrators; providing program requirements; requiring the
54	division to develop an education program for certain
55	purposes; transferring, renumbering, and amending s.
56	689.26, F.S.; revising the disclosure summary to be
57	presented to a prospective parcel owner; providing
58	circumstances under which a contract may be voided;
59	specifying nonapplication of certain provisions of law;
60	transferring and renumbering s. 689.265, F.S., relating to
61	financial reports required of certain residential
62	subdivision developers; creating s. 720.402, F.S.;
63	providing a cause of action for damages for reliance on
64	certain false or misleading information; authorizing
65	recovery of attorney's fees under certain circumstances;
66	creating s. 720.501, F.S.; providing for certain
67	warranties to associations from developers; providing a
68	definition; preserving certain rights; providing
69	requirements; amending ss. 316.00825, 498.025, and
70	558.002, F.S.; conforming cross references; providing for
71	internal organization of ch. 720, F.S.; providing an
72	effective date.
73
74	Be It Enacted by the Legislature of the State of Florida:
75
76	Section 1.  Subsection (1) of section 34.01, Florida
77	Statutes, is amended to read:
78	34.01  Jurisdiction of county court.--
79	(1)  County courts shall have original jurisdiction:
80	(a)  In all misdemeanor cases not cognizable by the circuit
81	courts;
82	(b)  Of all violations of municipal and county ordinances;
83	and
84	(c)  Of all actions at law in which the matter in
85	controversy does not exceed the sum of $15,000, exclusive of
86	interest, costs, and attorney's fees, except those within the
87	exclusive jurisdiction of the circuit courts. The party
88	instituting any civil action, suit, or proceeding pursuant to
89	this paragraph where the amount in controversy is in excess of
90	$5,000 shall pay to the clerk of the county court the filing
91	fees and service charges in the same amounts and in the same
92	manner as provided in s. 28.241; and
93	(d)  Of disputes occurring in homeowners' associations as
94	described in s. 720.311(2)(a), which shall be concurrent with
95	jurisdiction of the circuit courts.
96	Section 2.  Section 720.301, Florida Statutes, is amended
97	to read:
98	720.301  Definitions.--As used in ss. 720.301-720.501
99	720.301-720.312, the term:
100	(1)  "Assessment" or "amenity fee" means a sum or sums of
101	money payable to the association, to the developer or other
102	owner of common areas, or to recreational facilities and other
103	properties serving the parcels by the owners of one or more
104	parcels as authorized in the governing documents, which if not
105	paid by the owner of a parcel, can result in a lien against the
106	parcel.
107	(2)  "Common area" means all real property within a
108	community which is owned or leased by an association or
109	dedicated for use or maintenance by the association or its
110	members, including, regardless of whether title has been
111	conveyed to the association:
112	(a)  Real property the use of which is dedicated to the
113	association or its members by a recorded plat; or
114	(b)  Real property committed by a declaration of covenants
115	to be leased or conveyed to the association.
116	(3)  "Community" means the real property that is or will be
117	subject to a declaration of covenants which is recorded in the
118	county where the property is located. The term "community"
119	includes all real property, including undeveloped phases, that
120	is or was the subject of a development-of-regional-impact
121	development order, together with any approved modification
122	thereto.
123	(4)  "Declaration of covenants," or "declaration," means a
124	recorded written instrument in the nature of covenants running
125	with the land which subjects the land comprising the community
126	to the jurisdiction and control of an association or
127	associations in which the owners of the parcels, or their
128	association representatives, must be members.
129	(5)  "Developer" means a person or entity that:
130	(a)  Creates the community served by the association; or
131	(b)  Succeeds to the rights and liabilities of the person
132	or entity that created the community served by the association,
133	provided that such is evidenced in writing.
134	(6)  "Division" means the Division of Florida Land Sales,
135	Condominiums, and Mobile Homes of the Department of Business and
136	Professional Regulation.
137	(7)(6)  "Governing documents" means:
138	(a)  The recorded declaration of covenants for a community,
139	and all duly adopted and recorded amendments, supplements, and
140	recorded exhibits thereto; and
141	(b)  The articles of incorporation and bylaws of the
142	homeowners' association, and any duly adopted amendments
143	thereto.
144	(8)(7)  "Homeowners' association" or "association" means a
145	Florida corporation responsible for the operation of a community
146	or a mobile home subdivision in which the voting membership is
147	made up of parcel owners or their agents, or a combination
148	thereof, and in which membership is a mandatory condition of
149	parcel ownership, and which is authorized to impose assessments
150	that, if unpaid, may become a lien on the parcel. The term
151	"homeowners' association" does not include a community
152	development district or other similar special taxing district
153	created pursuant to statute.
154	(9)(8)  "Member" means a member of an association, and may
155	include, but is not limited to, a parcel owner or an association
156	representing parcel owners or a combination thereof, and shall
157	include any person or entity obligated by the governing
158	documents to pay an assessment or amenity fee.
159	(10)(9)  "Parcel" means a platted or unplatted lot, tract,
160	unit, or other subdivision of real property within a community,
161	as described in the declaration:
162	(a)  Which is capable of separate conveyance; and
163	(b)  Of which the parcel owner, or an association in which
164	the parcel owner must be a member, is obligated:
165	1.  By the governing documents to be a member of an
166	association that serves the community; and
167	2.  To pay to the homeowners' association assessments that,
168	if not paid, may result in a lien.
169	(11)(10)  "Parcel owner" means the record owner of legal
170	title to a parcel.
171	(12)(11)  "Voting interest" means the voting rights
172	distributed to the members of the homeowners' association,
173	pursuant to the governing documents.
174	Section 3.  Subsection (2) of section 720.302, Florida
175	Statutes, is amended to read:
176	720.302  Purposes, scope, and application.--
177	(2)  The Legislature recognizes that it is not in the best
178	interest of homeowners' associations or the individual
179	association members thereof to create or impose a bureau or
180	other agency of state government to regulate the affairs of
181	homeowners' associations. However, in accordance with s.
182	720.311, the Legislature finds that homeowners' associations and
183	their individual members will benefit from an expedited
184	alternative process for resolution of election and recall
185	disputes and presuit mediation of other disputes involving
186	covenant enforcement and authorizes the division to hear,
187	administer, and determine these disputes as set forth in this
188	chapter. Further, the Legislature recognizes that certain
189	contract rights have been created for the benefit of homeowners'
190	associations and members thereof before the effective date of
191	this act and that ss. 720.301-720.501 720.301-720.312 are not
192	intended to impair such contract rights, including, but not
193	limited to, the rights of the developer to complete the
194	community as initially contemplated.
195	Section 4.  Section 720.303, Florida Statutes, is amended
196	to read:
197	720.303  Association powers and duties; meetings of board;
198	official records; budgets; financial reporting; association
199	funds; recalls.--
200	(1)  POWERS AND DUTIES.-An association which operates a
201	community as defined in s. 720.301, must be operated by an
202	association that is a Florida corporation. After October 1,
203	1995, the association must be incorporated and the initial
204	governing documents must be recorded in the official records of
205	the county in which the community is located. An association may
206	operate more than one community. The officers and directors of
207	an association have a fiduciary relationship to the members who
208	are served by the association. It is the intent of the
209	Legislature that nothing in this subsection be construed as
210	providing for or removing a requirement of a fiduciary
211	relationship between any manager employed by the association and
212	the parcel owners. An officer, director, or manager who,
213	otherwise than as provided by law for the proper discharge of
214	his or her duties, directly or indirectly demands, seeks,
215	receives, accepts, or agrees to receive or accept anything of
216	value personally for or because of any act performed or to be
217	performed by such official or person on behalf of the
218	association commits a misdemeanor of the first degree,
219	punishable as provided in s. 775.082 or s. 775.083. Any person
220	who directly or indirectly gives, offers, or promises anything
221	of value to any officer, director, or manager for or because of
222	any official act performed or to be performed by such person on
223	behalf of the association commits a misdemeanor of the first
224	degree, punishable as provided in s. 775.082 or s. 775.083. The
225	powers and duties of an association include those set forth in
226	this chapter and, except as expressly limited or restricted in
227	this chapter, those set forth in the governing documents. After
228	control of the association is obtained by members unit owners
229	other than the developer, the association may institute,
230	maintain, settle, or appeal actions or hearings in its name on
231	behalf of all members concerning matters of common interest to
232	the members, including, but not limited to, the common areas;
233	roof or structural components of a building, or other
234	improvements for which the association is responsible;
235	mechanical, electrical, or plumbing elements serving an
236	improvement or building for which the association is
237	responsible; representations of the developer pertaining to any
238	existing or proposed commonly used facility; and protesting ad
239	valorem taxes on commonly used facilities. The association may
240	defend actions in eminent domain or bring inverse condemnation
241	actions. Before commencing litigation against any party in the
242	name of the association involving amounts in controversy in
243	excess of $100,000, the association must obtain the affirmative
244	approval of a majority of the voting interests at a meeting of
245	the membership at which a quorum has been attained. This
246	subsection does not limit any statutory or common-law right of
247	any individual member or class of members to bring any action
248	without participation by the association. A member does not have
249	authority to act for the association by virtue of being a
250	member. An association may have more than one class of members
251	and may issue membership certificates. An association of 15 or
252	fewer parcel owners may enforce only the requirements of those
253	deed restrictions established prior to the purchase of each
254	parcel upon an affected parcel owner or owners.
255	(2)  BOARD MEETINGS.--
256	(a)  A meeting of the board of directors of an association
257	occurs whenever a quorum of the board gathers to conduct
258	association business. All meetings of the board must be open to
259	all members except for meetings between the board and its
260	attorney with respect to proposed or pending litigation where
261	the contents of the discussion would otherwise be governed by
262	the attorney-client privilege.
263	(b)  Each member has the right to attend all meetings of
264	the board and to speak on any matter placed on the agenda by
265	petition of the voting interests for at least 3 minutes each.
266	The association may adopt reasonable written rules, consistent
267	with this paragraph, expanding the right of members to speak and
268	governing the frequency, duration, and other manner of member
269	statements, which rules may include the requirement of a sign-up
270	sheet for members wishing to speak. Notwithstanding any other
271	law, the requirement that board meetings and committee meetings
272	be open to the members is not applicable to meetings between the
273	board or a committee and the association's attorney, with
274	respect to meetings of the board held for the purpose of
275	discussing personnel matters.
276	(c)  The bylaws shall provide for giving notice to parcel
277	owners and members of all board meetings. If the bylaws do not
278	specify the manner for giving notice, the following shall apply:
279	1.  Notices of all board meetings must be posted in a
280	conspicuous place in the community at least 48 hours in advance
281	of a meeting, except in an emergency. In the alternative, if
282	notice is not posted in a conspicuous place in the community,
283	notice of each board meeting must be mailed or delivered to each
284	member at least 7 days before the meeting, except in an
285	emergency. Notwithstanding this general notice requirement, for
286	communities with more than 100 members, the bylaws may provide
287	for a reasonable alternative to posting or mailing of notice for
288	each board meeting, including publication of notice, provision
289	of a schedule of board meetings, or the conspicuous posting and
290	repeated broadcasting of the notice on a closed-circuit cable
291	television system serving the homeowners' association. However,
292	if broadcast notice is used in lieu of a notice posted
293	physically in the community, the notice must be broadcast at
294	least four times every broadcast hour of each day that a posted
295	notice is otherwise required. When broadcast notice is provided,
296	the notice and agenda must be broadcast in a manner and for a
297	sufficient continuous length of time so as to allow an average
298	reader to observe the notice and read and comprehend the entire
299	content of the notice and the agenda. The bylaws or amended
300	bylaws may provide for giving notice by electronic transmission
301	in a manner authorized by law for meetings of the board of
302	directors, committee meetings requiring notice under this
303	section, and annual and special meetings of the members;
304	however, a member must consent in writing to receiving notice by
305	electronic transmission.
306	2.  An assessment may not be levied at a board meeting
307	unless the notice of the meeting includes a statement that
308	assessments will be considered and the nature of the
309	assessments. Written notice of any meeting at which special
310	assessments will be considered, or at which amendments to rules
311	regarding parcel use will be considered, must be mailed,
312	delivered, or electronically transmitted to the parcel owners
313	and members and posted conspicuously on the property or
314	broadcast on closed-circuit cable television not fewer than 14
315	days prior to the meeting.
316	3.  Directors may not vote by proxy or by secret ballot at
317	board meetings, except that secret ballots may be used in the
318	election of officers. This subsection also applies to the
319	meetings of any committee or other similar body, when a final
320	decision will be made regarding the expenditure of association
321	funds, and to any body vested with the power to approve or
322	disapprove architectural decisions with respect to a specific
323	parcel of residential property owned by a member of the
324	community.
325	(d)  If 20 percent of the total voting interests petition
326	the board to address an item of business, the board shall, at
327	its next board meeting or special meeting, but not later than 60
328	days after the receipt of the petition, take the petitioned item
329	up on its agenda. The board shall give all members notice of the
330	meeting at which the petitioned item shall be addressed in
331	accordance with the 14-day notice requirement pursuant to
332	subparagraph (c)2. Each member shall have the right to speak for
333	at least 3 minutes on each item placed on the agenda by
334	petition, provided that the member signs the sign-up sheet, if
335	one is required, or submits a written request to speak prior to
336	the meeting. Other than addressing the item at the meeting, the
337	board is not obligated to take any other action requested by the
338	petition.
339	(3)  MINUTES.--Minutes of all meetings of the members of an
340	association and of the board of directors of an association must
341	be maintained in written form or in another form that can be
342	converted into written form within a reasonable time. A vote or
343	abstention from voting on each matter voted upon for each
344	director present at a board meeting must be recorded in the
345	minutes.
346	(4)  OFFICIAL RECORDS.--The association shall maintain each
347	of the following items, when applicable, which constitute the
348	official records of the association:
349	(a)  Copies of any plans, specifications, permits, and
350	warranties related to improvements constructed on the common
351	areas or other property that the association is obligated to
352	maintain, repair, or replace.
353	(b)  A copy of the bylaws of the association and of each
354	amendment to the bylaws.
355	(c)  A copy of the articles of incorporation of the
356	association and of each amendment thereto.
357	(d)  A copy of the declaration of covenants and a copy of
358	each amendment thereto.
359	(e)  A copy of the current rules of the homeowners'
360	association.
361	(f)  The minutes of all meetings of the board of directors
362	and of the members, which minutes must be retained for at least
363	7 years.
364	(g)  A current roster of all members and their mailing
365	addresses and parcel identifications. The association shall also
366	maintain the electronic mailing addresses and the numbers
367	designated by members for receiving notice sent by electronic
368	transmission of those members consenting to receive notice by
369	electronic transmission. The electronic mailing addresses and
370	numbers provided by unit owners to receive notice by electronic
371	transmission shall be removed from association records when
372	consent to receive notice by electronic transmission is revoked.
373	However, the association is not liable for an erroneous
374	disclosure of the electronic mail address or the number for
375	receiving electronic transmission of notices.
376	(h)  All of the association's insurance policies or a copy
377	thereof, which policies must be retained for at least 7 years.
378	(i)  A current copy of all contracts to which the
379	association is a party, including, without limitation, any
380	management agreement, lease, or other contract under which the
381	association has any obligation or responsibility. Bids received
382	by the association for work to be performed must also be
383	considered official records and must be kept for a period of 1
384	year.
385	(j)  The financial and accounting records of the
386	association, kept according to good accounting practices. All
387	financial and accounting records must be maintained for a period
388	of at least 7 years. The financial and accounting records must
389	include:
390	1.  Accurate, itemized, and detailed records of all
391	receipts and expenditures.
392	2.  A current account and a periodic statement of the
393	account for each member, designating the name and current
394	address of each member who is obligated to pay assessments, the
395	due date and amount of each assessment or other charge against
396	the member, the date and amount of each payment on the account,
397	and the balance due.
398	3.  All tax returns, financial statements, and financial
399	reports of the association.
400	4.  Any other records that identify, measure, record, or
401	communicate financial information.
402	(k)  A copy of the disclosure summary described in s.
403	720.401(2).
404	(l)  All other written records of the association not
405	specifically included in the foregoing that are related to the
406	operation of the association.
407	(5)  INSPECTION AND COPYING OF RECORDS.--The official
408	records shall be maintained within the state and must be open to
409	inspection and available for photocopying by members or their
410	authorized agents at reasonable times and places within 10
411	business days after receipt of a written request for access.
412	This subsection may be complied with by having a copy of the
413	official records available for inspection or copying in the
414	community. If the association has a photocopy machine available
415	where the records are maintained, the association must provide
416	parcel owners with copies on request during the inspection if
417	the entire request is limited to 25 pages.
418	(a)  The failure of an association to provide access to the
419	records within 10 business days after receipt of a written
420	request creates a rebuttable presumption that the association
421	willfully failed to comply with this subsection.
422	(b)  A member who is denied access to official records is
423	entitled to the actual damages or minimum damages for the
424	association's willful failure to comply with this subsection.
425	The minimum damages are to be $50 per calendar day up to 10
426	days, the calculation to begin on the 11th business day after
427	receipt of the written request.
428	(c)  The association may adopt reasonable written rules
429	governing the frequency, time, location, notice, and manner of
430	inspections and records to be inspected but may not impose a
431	requirement that a parcel owner demonstrate any proper purpose
432	for the inspection or state any reason for the inspection or
433	limit a parcel owner's right to inspect records to less than one
434	8-hour business day per month. The association, and may impose
435	fees to cover the costs of providing copies of the official
436	records, including, without limitation, the costs of copying.
437	The association may charge up to 50 cents per page for copies
438	made on the association's photocopy machine. If the association
439	does not have a photocopy machine available where the records
440	are kept, or if the records requested to be copied exceed 25
441	pages in length, the association may have copies made by an
442	outside vendor and may charge the actual cost of copying. The
443	association shall maintain an adequate number of copies of the
444	recorded governing documents, to ensure their availability to
445	members and prospective members, and may charge only its actual
446	costs for reproducing and furnishing these documents to those
447	persons who are entitled to receive them. Notwithstanding the
448	provisions of this paragraph, the following records shall not be
449	accessible to members or parcel owners:
450	1.  Any record protected by the lawyer-client privilege as
451	described in s. 90.502 and any record protected by the work-
452	product privilege, including, but not limited to, any record
453	prepared by an association attorney or prepared at the
454	attorney's express direction, which reflects a mental
455	impression, conclusion, litigation strategy, or legal theory of
456	the attorney or the association, and which was prepared
457	exclusively for civil or criminal litigation or for adversarial
458	administrative proceedings, or which was prepared in
459	anticipation of imminent civil or criminal litigation or
460	imminent adversarial administrative proceedings until the
461	conclusion of the litigation or adversarial administrative
462	proceedings.
463	2.  Information obtained by an association in connection
464	with the approval of the lease, sale, or other transfer of a
465	parcel.
466	3.  Disciplinary, health, insurance, and personnel records
467	of the association's employees.
468	4.  Medical records of parcel owners or community
469	residents.
470	(6)  BUDGETS.--The association shall prepare an annual
471	budget. The budget must reflect the estimated revenues and
472	expenses for that year and the estimated surplus or deficit as
473	of the end of the current year. The budget must set out
474	separately all fees or charges for recreational amenities,
475	whether owned by the association, the developer, or another
476	person. The association shall provide each member with a copy of
477	the annual budget or a written notice that a copy of the budget
478	is available upon request at no charge to the member. The copy
479	must be provided to the member within the time limits set forth
480	in subsection (5).
481	(7)  FINANCIAL REPORTING.--The association shall prepare an
482	annual financial report within 60 days after the close of the
483	fiscal year. The association shall, within the time limits set
484	forth in subsection (5), provide each member with a copy of the
485	annual financial report or a written notice that a copy of the
486	financial report is available upon request at no charge to the
487	member. Financial reports shall be prepared as follows:
488	(a)  An association that meets the criteria of this
489	paragraph shall prepare or cause to be prepared a complete set
490	of financial statements in accordance with generally accepted
491	accounting principles. The financial statements shall be based
492	on the association's total annual revenues, as follows:
493	1.  An association with total annual revenues of $100,000
494	or more, but less than $200,000, shall prepare compiled
495	financial statements.
496	2.  An association with total annual revenues of at least
497	$200,000, but less than $400,000, shall prepare reviewed
498	financial statements.
499	3.  An association with total annual revenues of $400,000
500	or more shall prepare audited financial statements.
501	(b)  An association with total annual revenues of less than
502	$100,000 shall prepare a report of cash receipts and
503	expenditures.
504	(c)  An association in a community of fewer than 50
505	parcels, regardless of the association's annual revenues, may
506	prepare a report of cash receipts and expenditures in lieu of
507	financial statements required by paragraph (a) unless the
508	governing documents provide otherwise.
509	(d)  A report of cash receipts and disbursements must
510	disclose the amount of receipts by accounts and receipt
511	classifications and the amount of expenses by accounts and
512	expense classifications, including, but not limited to, the
513	following, as applicable: costs for security, professional, and
514	management fees and expenses; taxes; costs for recreation
515	facilities; expenses for refuse collection and utility services;
516	expenses for lawn care; costs for building maintenance and
517	repair; insurance costs; administration and salary expenses; and
518	reserves if maintained by the association.
519	(e)  If 20 percent of the parcel owners petition the board
520	for a level of financial reporting higher than that required by
521	this section, the association shall duly notice and hold a
522	meeting of members within 30 days after receipt of the petition
523	for the purpose of voting on raising the level of reporting for
524	that fiscal year. Upon approval of a majority of the total
525	voting interests of the parcel owners, the association shall
526	amend the budget or adopt a special assessment to pay for the
527	financial report regardless of any provision to the contrary in
528	the governing documents, and shall prepare or cause to be
529	prepared the following statements, which shall be provided
530	within 90 days after the meeting or the end of the fiscal year,
531	whichever occurs later:
532	1.  Compiled, reviewed, or audited financial statements, if
533	the association is otherwise required to prepare a report of
534	cash receipts and expenditures;
535	2.  Reviewed or audited financial statements, if the
536	association is otherwise required to prepare compiled financial
537	statements; or
538	3.  Audited financial statements, if the association is
539	otherwise required to prepare reviewed financial statements.
540	(f)  If approved by a majority of the voting interests
541	present at a properly called meeting of the association, an
542	association may prepare or cause to be prepared:
543	1.  A report of cash receipts and expenditures in lieu of a
544	compiled, reviewed, or audited financial statement;
545	2.  A report of cash receipts and expenditures or a
546	compiled financial statement in lieu of a reviewed or audited
547	financial statement; or
548	3.  A report of cash receipts and expenditures, a compiled
549	financial statement, or a reviewed financial statement in lieu
550	of an audited financial statement. The financial report must
551	consist of either:
552	(a)  Financial statements presented in conformity with
553	generally accepted accounting principles; or
554	(b)  A financial report of actual receipts and
555	expenditures, cash basis, which report must show:
556	1.  The amount of receipts and expenditures by
557	classification; and
558	2.  The beginning and ending cash balances of the
559	association.
560	(8)  ASSOCIATION FUNDS; COMMINGLING.--
561	(a)  All association funds held by a developer shall be
562	maintained separately in the association's name. Reserve and
563	operating funds of the association shall not be commingled prior
564	to turnover except the association may jointly invest reserve
565	funds; however, such jointly invested funds must be accounted
566	for separately.
567	(b)  No developer in control of a homeowners' association
568	shall commingle any association funds with his or her funds or
569	with the funds of any other homeowners' association or community
570	association.
571	(c)  Association funds may not be utilized by a developer
572	to defend a civil or criminal action, administrative proceeding,
573	or arbitration proceeding that has been filed against the
574	developer or directors appointed to the association board by the
575	developer, even when the subject of the action or proceeding
576	concerns the operation of the developer-controlled association.
577	(9)  APPLICABILITY.--Sections 617.1601-617.1604 do not
578	apply to a homeowners' association in which the members have the
579	inspection and copying rights set forth in this section.
580	(10)  RECALL OF BOARD DIRECTORS.--
581	(a)1.  Notwithstanding any provision contained in the
582	governing documents, subject to the provisions of s. 720.307
583	regarding transition of association control, any member of the
584	board of directors may be recalled and removed from office with
585	or without cause by a majority of the total voting interests.
586	2.  When the governing documents, including the
587	declaration, articles of incorporation, or bylaws, provide that
588	only a specific class of members is entitled to elect a board
589	director or directors, only that class of members may vote to
590	recall those board directors so elected.
591	(b)1.  Board directors may be recalled by an agreement in
592	writing or by written ballot without a membership meeting. The
593	agreement in writing or the written ballots, or a copy thereof,
594	shall be served on the association by certified mail or by
595	personal service in the manner authorized by chapter 48 and the
596	Florida Rules of Civil Procedure.
597	2.  The board shall duly notice and hold a meeting of the
598	board within 5 full business days after receipt of the agreement
599	in writing or written ballots. At the meeting, the board shall
600	either certify the written ballots or written agreement to
601	recall a director or directors of the board, in which case such
602	director or directors shall be recalled effective immediately
603	and shall turn over to the board within 5 full business days any
604	and all records and property of the association in their
605	possession, or proceed as described in paragraph (d).
606	3.  When it is determined by the division pursuant to
607	binding arbitration proceedings that an initial recall effort
608	was defective, written agreements or written ballots used in the
609	first recall effort and not found to be defective may be reused
610	in one subsequent recall effort. However, in no event shall a
611	written agreement or written ballot be valid for more than 120
612	days after it has been signed by the member.
613	4.  Any rescission or revocation of a member's written
614	ballot or written agreement must be in writing and, in order to
615	be effective, must be delivered to the association prior to the
616	association being served with the written agreements or written
617	ballots.
618	5.  The agreement in writing or by ballot shall list at
619	least as many possible replacement directors as there are
620	directors subject to the recall, when at least a majority of the
621	board is sought to be recalled; the person executing the recall
622	instrument may vote for as many replacement candidates as there
623	are directors subject to the recall.
624	(c)1.  If the declaration, articles of incorporation, or
625	bylaws specifically provide, the members may also recall and
626	remove a director or directors by a vote taken at a meeting. If
627	so provided in the governing documents, a special meeting of the
628	members to recall a director or directors of the board of
629	administration may be called by 10 percent of the voting
630	interests giving notice of the meeting as required for a meeting
631	of members, and the notice shall state the purpose of the
632	meeting. Electronic transmission may not be used as a method of
633	giving notice of a meeting called in whole or in part for this
634	purpose.
635	2.  The board shall duly notice and hold a board meeting
636	within 5 full business days of the adjournment of the member
637	meeting to recall one or more directors. At the meeting, the
638	board shall either certify the recall, in which case such
639	director or directors shall be recalled effective immediately
640	and shall turn over to the board within 5 full business days any
641	and all records and property of the association in their
642	possession, or shall proceed as set forth in paragraph (d).
643	(d)  If the board determines not to certify the written
644	agreement or written ballots to recall a director or directors
645	of the board or does not certify the recall by a vote at a
646	meeting, the board shall, within 5 full business days after the
647	meeting, file with the division a petition for binding
648	arbitration pursuant to the applicable procedures in ss.
649	718.1255 and 718.112(2)(j) and the rules adopted thereunder. For
650	the purposes of this section, the members who voted at the
651	meeting or who executed the agreement in writing shall
652	constitute one party under the petition for arbitration. If the
653	arbitrator certifies the recall as to any director or directors
654	of the board, the recall will be effective upon mailing of the
655	final order of arbitration to the association. The director or
656	directors so recalled shall deliver to the board any and all
657	records of the association in their possession within 5 full
658	business days after the effective date of the recall.
659	(e)  If a vacancy occurs on the board as a result of a
660	recall and less than a majority of the board directors are
661	removed, the vacancy may be filled by the affirmative vote of a
662	majority of the remaining directors, notwithstanding any
663	provision to the contrary contained in this subsection or in the
664	governing documents. If vacancies occur on the board as a result
665	of a recall and a majority or more of the board of directors are
666	removed, the vacancies shall be filled by members voting in
667	favor of the recall. If the removal is at a meeting, any
668	vacancies shall be filled by the members at the meeting. If the
669	recall occurred by agreement in writing or by written ballot,
670	members may vote for replacement directors in the same
671	instrument in accordance with procedural rules adopted by the
672	division, which rules need not be consistent with this
673	subsection.
674	(f)  If the board fails to duly notice and hold a board
675	meeting within 5 full business days after service of an
676	agreement in writing or within 5 full business days after the
677	adjournment of the director recall meeting, the recall shall be
678	deemed effective and the board of directors so recalled shall
679	immediately turn over to the board any and all records and
680	property of the association.
681	(g)  If a director who is removed fails to relinquish his
682	or her office or turn over records as required under this
683	section, the circuit court in the county where the association
684	maintains its principal office may, upon the petition of the
685	association, summarily order the director to relinquish his or
686	her office and turn over all association records upon
687	application of the association.
688	(h)  The minutes of the board meeting at which the board
689	decides whether to certify the recall are an official
690	association record. The minutes shall record the date and time
691	of the meeting, the decision of the board, and the vote count
692	taken on each board member subject to the recall. In addition,
693	when the board decides not to certify the recall, as to each
694	vote rejected, the minutes shall identify the parcel number and
695	the specific reason for each such rejection.
696	(i)  When the recall of more than one board director is
697	sought, the written agreement, ballot, or vote at a meeting
698	shall provide for a separate vote for each board director sought
699	to be recalled.
700	Section 5.  Section 720.304, Florida Statutes, is amended
701	to read:
702	720.304  Right of owners to peaceably assemble; display of
703	flag; SLAPP suits prohibited; construction of access ramps;
704	display of security signs.--
705	(1)  All common areas and recreational facilities serving
706	any homeowners' association shall be available to parcel owners
707	in the homeowners' association served thereby and their invited
708	guests for the use intended for such common areas and
709	recreational facilities. The entity or entities responsible for
710	the operation of the common areas and recreational facilities
711	may adopt reasonable rules and regulations pertaining to the use
712	of such common areas and recreational facilities. No entity or
713	entities shall unreasonably restrict any parcel owner's right to
714	peaceably assemble or right to invite public officers or
715	candidates for public office to appear and speak in common areas
716	and recreational facilities.
717	(2)  Any homeowner may display one portable, removable
718	United States flag or official flag of the State of Florida in a
719	respectful manner, and, on Armed Forces Day, Memorial Day, Flag
720	Day, Independence Day, and Veterans Day, may display in a
721	respectful manner portable, removable official flags, not larger
722	than 4 1/2 feet by 6 feet, that represent the United States
723	Army, Navy, Air Force, Marine Corps, or Coast Guard, regardless
724	of any declaration rules or requirements dealing with flags or
725	decorations.
726	(3)  Any owner prevented from exercising rights guaranteed
727	by subsection (1) or subsection (2) may bring an action in the
728	appropriate court of the county in which the alleged
729	infringement occurred, and, upon favorable adjudication, the
730	court shall enjoin the enforcement of any provision contained in
731	any homeowners' association document or rule that operates to
732	deprive the owner of such rights.
733	(4)  It is the intent of the Legislature to protect the
734	right of parcel owners to exercise their rights to instruct
735	their representatives and petition for redress of grievances
736	before the various governmental entities of this state as
737	protected by the First Amendment to the United States
738	Constitution and s. 5, Art. I of the State Constitution. The
739	Legislature recognizes that strategic lawsuits against public
740	participation, or "SLAPP" suits, as they are typically called,
741	have occurred when members of the homeowners' association are
742	sued by individuals, business entities, or governmental entities
743	arising out of a parcel owner's appearance and presentation
744	before a governmental entity on matters related to the
745	homeowners' association. However, it is the public policy of
746	this state that governmental entities, business organizations,
747	and individuals not engage in SLAPP suits because such actions
748	are inconsistent with the right of parcel owners to participate
749	in the state's institutions of government. Therefore, the
750	Legislature finds and declares that prohibiting such lawsuits by
751	governmental entities, business entities, and individuals
752	against parcel owners who address matters concerning their
753	homeowners' association will preserve this fundamental state
754	policy, preserve the constitutional rights of parcel owners, and
755	ensure the continuation of representative government in this
756	state. It is the intent of the Legislature that such lawsuits be
757	expeditiously disposed of by the courts.
758	(a)  As used in this subsection, "governmental entity"
759	means the state, including the executive, legislative, and
760	judicial branches of government and the independent
761	establishments of the state, counties, or municipalities,
762	districts, authorities, boards, commissions, or any agencies of
763	these branches, which are subject to chapter 286.
764	(b)  No governmental entity, business organization, or
765	individual in this state shall file or cause to be filed,
766	through its employees or agents, any lawsuit, cause of action,
767	claim, cross-claim, or counterclaim against a parcel owner
768	without merit and solely because such parcel owner has exercised
769	the right to instruct his or her representatives or the right to
770	petition for redress of grievances before the various
771	governmental entities of this state, as protected by the First
772	Amendment to the United States Constitution and s. 5, Art. I of
773	the State Constitution.
774	(c)  A parcel owner sued by a governmental entity, business
775	organization, or individual in violation of this section has a
776	right to an expeditious resolution of a claim that the suit is
777	in violation of this section. A parcel owner may petition the
778	court for an order dismissing the action or granting final
779	judgment in favor of that parcel owner. The petitioner may file
780	a motion for summary judgment, together with supplemental
781	affidavits, seeking a determination that the governmental
782	entity's, business organization's, or individual's lawsuit has
783	been brought in violation of this section. The governmental
784	entity, business organization, or individual shall thereafter
785	file its response and any supplemental affidavits. As soon as
786	practicable, the court shall set a hearing on the petitioner's
787	motion, which shall be held at the earliest possible time after
788	the filing of the governmental entity's, business
789	organization's, or individual's response. The court may award
790	the parcel owner sued by the governmental entity, business
791	organization, or individual actual damages arising from the
792	governmental entity's, individual's, or business organization's
793	violation of this act. A court may treble the damages awarded to
794	a prevailing parcel owner and shall state the basis for the
795	treble damages award in its judgment. The court shall award the
796	prevailing party reasonable attorney's fees and costs incurred
797	in connection with a claim that an action was filed in violation
798	of this section.
799	(d)  Homeowners' associations shall not expend association
800	funds in prosecuting a SLAPP suit against a parcel owner.
801	(5)(a) Any homeowner may construct an access ramp when a
802	resident or occupant has a medical necessity or disability that
803	requires a ramp for egress and ingress under the following
804	conditions:
805	1.  The ramp must be as unobtrusive as possible, designed
806	to blend in as aesthetically as practicable, and be reasonably
807	sized to fit the intended use.
808	2.  Plans for the ramp must be submitted in advance to the
809	homeowners' association. The association may make reasonable
810	requests to modify the design to achieve architectural
811	consistency with surrounding structures and surfaces.
812	(b)  The homeowner must submit to the association an
813	affidavit from a physician attesting to the medical necessity or
814	disability of the resident or occupant of the home requiring the
815	access ramp. Certification used for the purposes of s. 320.0848
816	shall be sufficient to meet the affidavit requirement.
817	(6)  Any homeowner may display a sign of a reasonable size
818	provided by a contractor for security services within 10 feet of
819	any entrance to the home.
820	Section 6.  Subsection (2) of section 720.305, Florida
821	Statutes, is amended to read:
822	720.305  Obligations of members; remedies at law or in
823	equity; levy of fines and suspension of use rights; collection
824	of attorney's fees; failure to fill sufficient number of
825	vacancies on board of directors to constitute a quorum;
826	appointment of receiver upon petition of any member.--
827	(2)  If the governing documents so provide, an association
828	may suspend, for a reasonable period of time, the rights of a
829	member or a member's tenants, guests, or invitees, or both, to
830	use common areas and facilities and may levy reasonable fines,
831	not to exceed $100 per violation, against any member or any
832	tenant, guest, or invitee. A fine may be levied on the basis of
833	each day of a continuing violation, with a single notice and
834	opportunity for hearing, except that no such fine shall exceed
835	$1,000 in the aggregate unless otherwise provided in the
836	governing documents. No fine shall become a lien against a
837	parcel. In any action to recover a fine, the prevailing party
838	shall be entitled to collect reasonable attorney's fees and
839	costs from the nonprevailing party as determined by the court.
840	(a)  A fine or suspension may not be imposed without notice
841	of at least 14 days to the person sought to be fined or
842	suspended and an opportunity for a hearing before a committee of
843	at least three members appointed by the board who are not
844	officers, directors, or employees of the association, or the
845	spouse, parent, child, brother, or sister of an officer,
846	director, or employee. If the committee, by majority vote, does
847	not approve a proposed fine or suspension, it may not be
848	imposed.
849	(b)  The requirements of this subsection do not apply to
850	the imposition of suspensions or fines upon any member because
851	of the failure of the member to pay assessments or other charges
852	when due if such action is authorized by the governing
853	documents.
854	(c)  Suspension of common-area-use rights shall not impair
855	the right of an owner or tenant of a parcel to have vehicular
856	and pedestrian ingress to and egress from the parcel, including,
857	but not limited to, the right to park.
858	Section 7.  Section 720.3055, Florida Statutes, is created
859	to read:
860	720.3055  Contracts for products and services; in writing;
861	bids; exceptions.--
862	(1)  All contracts as further described in this section or
863	any contract that is not to be fully performed within 1 year
864	after the making thereof for the purchase, lease, or renting of
865	materials or equipment to be used by the association in
866	accomplishing its purposes under this chapter or the governing
867	documents, and all contracts for the provision of services,
868	shall be in writing. If a contract for the purchase, lease, or
869	renting of materials or equipment, or for the provision of
870	services, requires payment by the association that exceeds 10
871	percent of the total annual budget of the association, including
872	reserves, the association shall obtain competitive bids for the
873	materials, equipment, or services. Nothing contained in this
874	section shall be construed to require the association to accept
875	the lowest bid.
876	(2)(a)  Notwithstanding the foregoing, contracts with
877	employees of the association and contracts for attorney,
878	accountant, architect, community association manager, engineer,
879	and landscape architect services are not subject to the
880	provisions of this section.
881	(b)  A contract executed before October 1, 2004, and any
882	renewal thereof is not subject to the competitive bid
883	requirements of this section. If a contract was awarded under
884	the competitive bid procedures of this section, any renewal of
885	that contract is not subject to such competitive bid
886	requirements if the contract contains a provision that allows
887	the board to cancel the contract on 30 days' notice. Materials,
888	equipment, or services provided to an association under a local
889	government franchise agreement by a franchise holder are not
890	subject to the competitive bid requirements of this section. A
891	contract with a manager, if made by a competitive bid, may be
892	made for up to 3 years. An association whose declaration or
893	bylaws provide for competitive bidding for services may operate
894	under the provisions of such declaration or bylaws in lieu of
895	this section if those provisions are not less stringent than the
896	requirements of this section.
897	(3)  Nothing contained in this section is intended to limit
898	the ability of an association to obtain needed products and
899	services in an emergency.
900	(4)  This section shall not apply if the business entity
901	with which the association desires to enter into a contract is
902	the only source of supply within the county serving the
903	association.
904	(5)  Nothing contained in this section shall excuse a party
905	contracting to provide maintenance or management services from
906	compliance with s. 720.309.
907	Section 8.  Subsections (5) through (8) of section 720.306,
908	Florida Statutes, are renumbered as subsections (7) through
909	(10), respectively, present subsection (7) is amended, and new
910	subsections (5) and (6) are added to said section, to read:
911	720.306  Meetings of members; voting and election
912	procedures; amendments.--
913	(5)  NOTICE OF MEETINGS.--The bylaws shall provide for
914	giving notice to members of all member meetings. If the bylaws
915	do not provide such notice, they shall be deemed to provide the
916	following: the association shall give all parcel owners and
917	members actual notice of all membership meetings, which shall be
918	mailed, delivered, or electronically transmitted to the parcel
919	owners and members not fewer than 14 days prior to the meeting.
920	Evidence of compliance with this 14-day notice shall be made by
921	an affidavit executed by the person providing the notice and
922	filed upon execution among the official records of the
923	association. In addition to mailing, delivering, or
924	electronically transmitting the notice of any meeting, the
925	association may, by reasonable rule, adopt a procedure for
926	conspicuously posting and repeatedly broadcasting the notice and
927	the agenda on a closed-circuit cable television system serving
928	the association. When broadcast notice is provided, the notice
929	and agenda must be broadcast in a manner and for a sufficient
930	continuous length of time so as to allow an average reader to
931	observe the notice and read and comprehend the entire content of
932	the notice and the agenda.
933	(6)  RIGHT TO SPEAK.--Members and parcel owners have the
934	right to attend all membership meetings and to speak at any
935	meeting with reference to all items opened for discussion or
936	included on the agenda. Notwithstanding any provision to the
937	contrary in the governing documents or any rules adopted by the
938	board or by the membership, a member or parcel owner has the
939	right to speak for at least 3 minutes on any item, provided the
940	member or parcel owner submits a written request to speak prior
941	to the meeting. The association may adopt written reasonable
942	rules governing the frequency, duration, and other manner of
943	member and parcel owner statements, which rules shall be
944	consistent with this subsection.
945	(9)(7)  ELECTIONS.--Elections of directors must be
946	conducted in accordance with the procedures set forth in the
947	governing documents of the association. All members of the
948	association shall be eligible to serve on the board of
949	directors, and a member may nominate himself or herself as a
950	candidate for the board at a meeting where the election is to be
951	held. Except as otherwise provided in the governing documents,
952	boards of directors must be elected by a plurality of the votes
953	cast by eligible voters. Any election dispute between a member
954	and an association must be submitted to mandatory binding
955	arbitration with the division. Such proceedings shall be
956	conducted in the manner provided by s. 718.1255 and the
957	procedural rules adopted by the division.
958	Section 9.  Section 720.311, Florida Statutes, is amended
959	to read:
960	720.311  Dispute resolution.--
961	(1)  The Legislature finds that alternative dispute
962	resolution has made progress in reducing court dockets and
963	trials and in offering a more efficient, cost-effective option
964	to litigation. The filing of any petition for mediation or
965	arbitration provided for in this section shall toll the
966	applicable statute of limitations. Any recall dispute filed with
967	the division pursuant to s. 720.303(10) shall be conducted by
968	the division in accordance with the provisions of ss. 718.1255
969	and 718.112(2)(j) and the rules adopted by the division. In
970	addition, the division shall conduct mandatory binding
971	arbitration of election disputes between a member and an
972	association pursuant to s. 718.1255 and rules adopted by the
973	division. Neither election disputes nor recall disputes are
974	eligible for mediation; these disputes shall be arbitrated by
975	the division. At the conclusion of the proceeding, the division
976	shall charge the parties a fee in an amount adequate to cover
977	all costs and expenses incurred by the division in conducting
978	the proceeding. Initially, the petitioner shall remit a filing
979	fee of at least $200 to the division. The fees paid to the
980	division shall become a recoverable cost in the arbitration
981	proceeding. The prevailing party shall be paid its reasonable
982	costs and attorney's fees in an amount found reasonable by the
983	arbitrator. The division shall adopt rules to effectuate the
984	purposes of this section.
985	(2)(a)  Disputes between an association and a parcel owner
986	regarding use of or changes to the parcel or the common areas
987	and other covenant enforcement disputes, disputes regarding
988	amendments to the governing documents, disputes regarding
989	meetings of the board and committees appointed by the board,
990	membership meetings not including election meetings, and access
991	to the official records of the association shall be filed with
992	the division for mandatory mediation prior to the disputes being
993	filed in court. Mediation proceedings must be conducted in
994	accordance with the applicable Florida Rules of Civil Procedure,
995	and these proceedings are privileged and confidential to the
996	same extent as court-ordered mediation. No arbitrator or judge
997	shall consider any information or evidence arising from the
998	mediation proceeding except in a proceeding to impose sanctions
999	for failure to attend a mediation session. Persons who are not
1000	parties to the dispute may not attend the mediation conference
1001	without the consent of all parties, except for counsel for the
1002	parties and a corporate representative designated by the
1003	association. When mediation is attended by a quorum of the
1004	board, such mediation is not a board meeting for purposes of
1005	notice and participation set forth in s. 720.303. The division
1006	shall conduct the proceedings through the use of division
1007	mediators or refer the disputes to private mediators who have
1008	been duly certified by the division as provided in paragraph
1009	(c). The parties shall share the costs of mediation equally,
1010	including the fee charged by the mediator, if any, unless the
1011	parties agree otherwise. If a division mediator is used, the
1012	division may charge such fee as is necessary to pay expenses of
1013	the mediation, including, but not limited to, the salary and
1014	benefits of the mediator and any travel expenses incurred. The
1015	petitioner shall initially file with the division upon filing
1016	the dispute a filing fee of $200, which shall be used to defray
1017	the costs of the mediation. At the conclusion of the mediation,
1018	the division shall charge to the parties, to be shared equally
1019	unless otherwise agreed by the parties, such further fees as are
1020	necessary to fully reimburse the division for all expenses
1021	incurred in the mediation.
1022	(b)  If mediation as described in paragraph (a) is not
1023	successful in resolving all issues between the parties, the
1024	parties may file the unresolved dispute in a court of competent
1025	jurisdiction or elect to enter into binding or nonbinding
1026	arbitration pursuant to the procedures set forth in s. 718.1255
1027	and rules adopted by the division, with the arbitration
1028	proceeding to be conducted by a division arbitrator or by a
1029	private arbitrator certified by the division. If all parties do
1030	not agree to arbitration proceedings following an unsuccessful
1031	mediation, any party may file the dispute in court. A final
1032	order resulting from nonbinding arbitration is final and
1033	enforceable in the courts if a complaint for trial de novo is
1034	not filed in a court of competent jurisdiction within 30 days
1035	after entry of the order.
1036	(c)  The division shall develop a certification and
1037	training program for private mediators and private arbitrators
1038	that shall emphasize experience and expertise in the area of the
1039	operation of community associations. A mediator or arbitrator
1040	shall be certified by the division only if he or she has
1041	attended at least 20 hours of training in mediation or
1042	arbitration, as appropriate, and only if he or she has mediated
1043	or arbitrated at least 10 disputes involving community
1044	associations within the 5 years preceding the date of the
1045	application, or if he or she has mediated or arbitrated 10
1046	disputes in any area within the 5 years preceding the date of
1047	the application and has completed 20 hours of training in
1048	community association disputes. In order to be certified by the
1049	division, a mediator must also be certified by the Florida
1050	Supreme Court. The division may conduct the training and
1051	certification program within the division or may contract with
1052	an outside vendor to perform the training or certification. The
1053	expenses of operating the training and certification program
1054	shall be paid by the training fees, by the moneys and filing
1055	fees generated by the arbitration of recall and election
1056	disputes, and by the awarded fees in mediation of those disputes
1057	referenced in this section. Initially, the Department of
1058	Business and Professional Regulation should seek sufficient
1059	funding to cover the startup costs of establishing the
1060	certification and training program.
1061	(d)  The mediation procedures provided by this subsection
1062	may be used by a corporation in this state responsible for the
1063	operation of a community in which the voting members are parcel
1064	owners or their representatives, in which membership in the
1065	corporation is not a mandatory condition of parcel ownership, or
1066	which is not authorized to impose an assessment that may become
1067	a lien on the parcel.
1068	(3)  The division shall develop an education program to
1069	assist homeowners, associations, board members, and managers in
1070	understanding and increasing awareness of the operation of
1071	homeowners' associations pursuant to this chapter and in
1072	understanding the use of alternative dispute resolution
1073	techniques in resolving disputes between parcel owners and
1074	associations or between owners. Such education program may
1075	include the development of pamphlets and other written
1076	instructional guides, the holding of classes and meetings by
1077	division employees or outside vendors, as the division may
1078	determine, and the creation and maintenance of an Internet
1079	website containing instructional materials. The expenses of
1080	operating the education program shall initially be paid by the
1081	moneys and filing fees generated by the arbitration of recall
1082	and election disputes and by the fees awarded in mediation of
1083	those disputes referenced in this section. At any time after the
1084	filing in a court of competent jurisdiction of a complaint
1085	relating to a dispute under ss. 720.301-720.312, the court may
1086	order that the parties enter mediation or arbitration
1087	procedures.
1088	Section 10.  Section 689.26, Florida Statutes, is
1089	transferred, renumbered as section 720.401, Florida Statutes,
1090	and amended to read:
1091	720.401 689.26  Prospective purchasers subject to
1092	association membership requirement; disclosure required;
1093	covenants; assessments; contract cancellation voidability.--
1094	(1)(a)  A prospective parcel owner in a community must be
1095	presented a disclosure summary before executing the contract for
1096	sale. The disclosure summary must be in a form substantially
1097	similar to the following form:
1098
1099	DISCLOSURE SUMMARY
1100	FOR
1101	(NAME OF COMMUNITY)
1102
1103	1.  AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL
1104	(WILL) (WILL NOT) BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS'
1105	ASSOCIATION.
1106	2.  THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE
1107	COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS
1108	COMMUNITY.
1109	3.  YOU WILL (WILL) (WILL NOT) BE OBLIGATED TO PAY
1110	ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO
1111	PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $______
1112	PER ______. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL
1113	ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS
1114	MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS
1115	$______ PER ______.
1116	4.  YOU MAY (WILL) (WILL NOT) BE OBLIGATED TO PAY SPECIAL
1117	ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL
1118	DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE.
1119	5.4.  YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR
1120	ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION COULD
1121	RESULT IN A LIEN ON YOUR PROPERTY.
1122	6.5.  THERE MAY BE (IS) (IS NOT) AN OBLIGATION TO PAY RENT
1123	OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED
1124	FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS'
1125	ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $______ PER
1126	______. (If such obligation exists, then the amount of the
1127	current obligation shall be set forth.)
1128	7.6.  THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE
1129	RESTRICTIVE COVENANTS (CAN) (CANNOT) BE AMENDED WITHOUT THE
1130	APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE,
1131	IF NO MANDATORY ASSOCIATION EXISTS, PARCEL OWNERS.
1132	8.7.  THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE
1133	ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU
1134	SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING
1135	DOCUMENTS BEFORE PURCHASING PROPERTY.
1136	9.8.  THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD
1137	AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE
1138	THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED
1139	FROM THE DEVELOPER.
1140	DATE:PURCHASER:
1141	PURCHASER:
1142
1143	The disclosure must be supplied by the developer, or by the
1144	parcel owner if the sale is by an owner that is not the
1145	developer. Any contract or agreement for sale shall refer to and
1146	incorporate the disclosure summary and shall include, in
1147	prominent language, a statement that the potential buyer should
1148	not execute the contract or agreement until they have received
1149	and read the disclosure summary required by this section.
1150	(b)  Each contract entered into for the sale of property
1151	governed by covenants subject to disclosure required by this
1152	section must contain in conspicuous type a clause that states:
1153
1154	IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401
1155	689.26, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE
1156	PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE,
1157	THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR
1158	SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S
1159	INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE
1160	DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST.
1161	ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT.
1162	BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.
1163
1164	(c)  If the disclosure summary is not provided to a
1165	prospective purchaser before the purchaser executes a contract
1166	for the sale of property governed by covenants that are subject
1167	to disclosure pursuant to this section, the purchaser may void
1168	the contract by delivering to the seller or the seller's agent
1169	or representative written notice canceling the contract within 3
1170	days after receipt of the disclosure summary or prior to
1171	closing, whichever occurs first. This right may not be waived by
1172	the purchaser but terminates at closing. A contract that does
1173	not conform to the requirements of this subsection is voidable
1174	at the option of the purchaser prior to closing.
1175	(2)  This section does not apply to any association
1176	regulated under chapter 718, chapter 719, chapter 721, or
1177	chapter 723 or to a subdivider registered under chapter 498; and
1178	also does not apply if disclosure regarding the association is
1179	otherwise made in connection with the requirements of chapter
1180	718, chapter 719, chapter 721, or chapter 723.
1181	Section 11.  Section 689.265, Florida Statutes, is
1182	transferred and renumbered as section 720.3086, Florida
1183	Statutes, to read:
1184	720.3086 689.265  Financial report.--In a residential
1185	subdivision in which the owners of lots or parcels must pay
1186	mandatory maintenance or amenity fees to the subdivision
1187	developer or to the owners of the common areas, recreational
1188	facilities, and other properties serving the lots or parcels,
1189	the developer or owner of such areas, facilities, or properties
1190	shall make public, within 60 days following the end of each
1191	fiscal year, a complete financial report of the actual, total
1192	receipts of mandatory maintenance or amenity fees received by
1193	it, and an itemized listing of the expenditures made by it from
1194	such fees, for that year. Such report shall be made public by
1195	mailing it to each lot or parcel owner in the subdivision, by
1196	publishing it in a publication regularly distributed within the
1197	subdivision, or by posting it in prominent locations in the
1198	subdivision. This section does not apply to amounts paid to
1199	homeowner associations pursuant to chapter 617, chapter 718,
1200	chapter 719, chapter 721, or chapter 723, or to amounts paid to
1201	local governmental entities, including special districts.
1202	Section 12.  Section 720.402, Florida Statutes, is created
1203	to read:
1204	720.402  Publication of false or misleading information.--
1205	(1)  Any person who, in reasonable reliance upon any
1206	material statement or information that is false or misleading
1207	and published by or under authority from the developer in
1208	advertising and promotional materials, including, but not
1209	limited to, a contract of purchaser, the declaration of
1210	covenants, exhibits to a declaration of covenants, brochures,
1211	and newspaper advertising, pays anything of value toward the
1212	purchase of a parcel in a community located in this state shall
1213	have a cause of action to rescind the contract or collect
1214	damages from the developer for his or her loss prior to the
1215	closing of the transaction. After the closing of the
1216	transaction, the purchaser shall have a cause of action against
1217	the developer for damages under this section from the time of
1218	closing until 1 year after the date upon which the last of the
1219	events described in paragraphs (a)-(d) occur:
1220	(a)  The closing of the transaction;
1221	(b)  The issuance by the applicable governmental authority
1222	of a certificate of occupancy or other evidence of sufficient
1223	completion of construction of the purchaser's residence to allow
1224	lawful occupancy of the residence by the purchaser. In counties
1225	or municipalities in which certificates of occupancy or other
1226	evidences of completion sufficient to allow lawful occupancy are
1227	not customarily issued, for the purposes of this section,
1228	evidence of lawful occupancy shall be deemed to be given or
1229	issued upon the date that such lawful occupancy of the residence
1230	may be allowed under prevailing applicable laws, ordinances, or
1231	statutes;
1232	(c)  The completion by the developer of the common areas
1233	and such recreational facilities, whether or not the same are
1234	common areas, that the developer is obligated to complete or
1235	provide under the terms of the written contract, governing
1236	documents, or written agreement for purchase or lease of the
1237	parcel; or
1238	(d)  If there is not a written contract or agreement for
1239	sale or lease of the parcel, the completion by the developer of
1240	the common areas and such recreational facilities, whether or
1241	not the same are common areas, that the developer would be
1242	obligated to complete under any rule of law applicable to the
1243	developer's obligation.
1244
1245	Under no circumstances shall a cause of action created or
1246	recognized under this section survive for a period of more than
1247	5 years after the closing of the transaction.
1248	(2)  In any action for relief under this section, the
1249	prevailing party may recover reasonable attorney's fees. A
1250	developer shall not expend association funds in the defense of
1251	any suit under this section.
1252	Section 13.  Section 720.501, Florida Statutes, is created
1253	to read:
1254	720.501  Warranties.--
1255	(1)(a)  The developer shall be deemed to have granted to
1256	the homeowners' association an implied warranty of fitness and
1257	merchantability for the purposes or uses intended as follows:
1258	1.  As to the common areas and improvements thereon, a
1259	warranty for 3 years commencing with the completion of the
1260	building or improvement, or for 1 year after transfer of control
1261	of the association from the developer to the members other than
1262	the developer, but in no event for more than 5 years after
1263	completion of the building or improvement.
1264	2.  As to the personal property that is transferred with or
1265	appurtenant to the common areas, a warranty for the same period
1266	as that provided by the manufacturer of the personal property,
1267	commencing with the date of transfer of the common areas to the
1268	association.
1269	(b)  The statute of limitations for any action in law or
1270	equity that an association may have shall not begin to run until
1271	the members other than the developer have elected a majority of
1272	the members of the board.
1273	(2)  For purposes of this section, the term "completion of
1274	a building or improvement" means issuance of a certificate of
1275	occupancy for the entire building or improvement, or the
1276	equivalent authorization issued by the governmental body having
1277	jurisdiction. In jurisdictions where no certificate of occupancy
1278	or equivalent authorization is issued, "completion of a building
1279	or improvement" means substantial completion of construction,
1280	finishing, and equipping of the building or improvement
1281	according to the plans and specifications.
1282	(3)  The warranties provided by this section are
1283	conditioned upon routine maintenance being performed unless the
1284	maintenance is an obligation of the developer or a developer-
1285	controlled association.
1286	(4)  The warranties provided by this section shall inure to
1287	the benefit of each owner and his or her successor owners and to
1288	the benefit of the developer.
1289	(5)  Nothing in this section affects a homeowners'
1290	association as to which rights are established by transfer of
1291	control and ownership rights of the common areas from the
1292	developer to the homeowners' association prior to October 1,
1293	2004.
1294	(6)  The warranties provided by this section may be covered
1295	by an insured warranty program underwritten by a licensed
1296	insurance company registered in this state, provided such
1297	warranty program meets the minimum requirements of this chapter.
1298	Section 14.  Paragraph (a) of subsection (1) of section
1299	316.00825, Florida Statutes, is amended to read:
1300	316.00825  Closing and abandonment of roads; optional
1301	conveyance to homeowners' association; traffic control
1302	jurisdiction.--
1303	(1)(a)  In addition to the authority provided in s. 336.12,
1304	the governing body of the county may abandon the roads and
1305	rights-of-way dedicated in a recorded residential subdivision
1306	plat and simultaneously convey the county's interest in such
1307	roads, rights-of-way, and appurtenant drainage facilities to a
1308	homeowners' association for the subdivision, if the following
1309	conditions have been met:
1310	1.  The homeowners' association has requested the
1311	abandonment and conveyance in writing for the purpose of
1312	converting the subdivision to a gated neighborhood with
1313	restricted public access.
1314	2.  No fewer than four-fifths of the owners of record of
1315	property located in the subdivision have consented in writing to
1316	the abandonment and simultaneous conveyance to the homeowners'
1317	association.
1318	3.  The homeowners' association is both a corporation not
1319	for profit organized and in good standing under chapter 617, and
1320	a "homeowners' association" as defined in s. 720.301(8)(7) with
1321	the power to levy and collect assessments for routine and
1322	periodic major maintenance and operation of street lighting,
1323	drainage, sidewalks, and pavement in the subdivision.
1324	4.  The homeowners' association has entered into and
1325	executed such agreements, covenants, warranties, and other
1326	instruments; has provided, or has provided assurance of, such
1327	funds, reserve funds, and funding sources; and has satisfied
1328	such other requirements and conditions as may be established or
1329	imposed by the county with respect to the ongoing operation,
1330	maintenance, and repair and the periodic reconstruction or
1331	replacement of the roads, drainage, street lighting, and
1332	sidewalks in the subdivision after the abandonment by the
1333	county.
1334	Section 15.  Paragraphs (g) and (h) of subsection (2) of
1335	section 498.025, Florida Statutes, are amended to read:
1336	498.025  Exemptions.--
1337	(2)  Except as provided in s. 498.022, the provisions of
1338	this chapter do not apply to offers or dispositions of interests
1339	in lots, parcels, or units contained in a recorded subdivision
1340	plat, or resulting from the subdivision of land in accordance
1341	with applicable local land development laws and regulations
1342	pursuant to part II of chapter 163, including lots, parcels,
1343	units, or interest vested under such part, if all of the
1344	following conditions exist:
1345	(g)  The contract for purchase or lease contains, and the
1346	subdivider complies with, the following provisions:
1347	1.  The purchaser must inspect the subdivided land prior to
1348	the execution of the contract or lease.
1349	2.  The purchaser shall have an absolute right to cancel
1350	the contract or lease for any reason whatsoever for a period of
1351	7 business days following the date on which the contract or
1352	lease was executed by the purchaser.
1353	3.  In the event the purchaser elects to cancel within the
1354	period provided, all funds or other property paid by the
1355	purchaser shall be refunded without penalty or obligation within
1356	20 days of the receipt of the notice of cancellation by the
1357	developer.
1358	4.  All funds or property paid by the purchaser shall be
1359	put in escrow until closing has occurred and the lease or deed
1360	has been recorded.
1361	5.  Unless otherwise timely canceled, closing shall occur
1362	within 180 days of the date of execution of the contract by the
1363	purchaser.
1364	6.  When title is conveyed, said title shall be conveyed by
1365	statutory warranty deed unencumbered by any lien or mortgage
1366	except for any first purchase money mortgage given by the
1367	purchaser and restrictions, covenants, or easements of record.
1368	7.  The subdivider presents to the purchaser the disclosure
1369	required by s. 720.401 689.26 prior to the execution of the
1370	contract or lease.
1371	(h)  The agreement for deed contains, and the subdivider
1372	complies with, the following provisions:
1373	1.  The purchaser must inspect the subdivided land prior to
1374	the execution of the agreement for deed.
1375	2.  The purchaser shall have an absolute right to cancel
1376	the agreement for deed for any reason whatsoever for a period of
1377	7 business days following the date on which the agreement for
1378	deed was executed by the purchaser.
1379	3.  If the purchaser elects to cancel within the period
1380	provided, all funds or other property paid by the purchaser
1381	shall be refunded without penalty or obligation within 20 days
1382	after the receipt of the notice of cancellation by the
1383	developer.
1384	4.  All funds or for property paid by the purchaser shall
1385	be put in escrow until the agreement for deed has been recorded
1386	in the county in which the subdivision is located.
1387	5.  Unless otherwise timely canceled, the agreement for
1388	deed shall be recorded within 180 days after its execution by
1389	the purchaser.
1390	6.  Sale of lots in the subdivision shall be restricted
1391	solely to residents of the state.
1392	7.  The underlying mortgage or other ancillary documents
1393	shall contain release provisions for the individual lot
1394	purchased.
1395	8.  The subdivider presents to the purchaser the disclosure
1396	required by s. 720.401 689.26 prior to the execution of the
1397	agreement for deed.
1398	Section 16.  Subsection (2) of section 558.002, Florida
1399	Statutes, is amended to read:
1400	558.002  Definitions.--As used in this act, the term:
1401	(2)  "Association" has the same meaning as in s.
1402	718.103(2), s. 719.103(2), s. 720.301(8)(7), or s. 723.025.
1403	Section 17.  The Division of Statutory Revision is
1404	requested to designate ss. 720.301-720.312, Florida Statutes, as
1405	part I of chapter 720, Florida Statutes; to designate ss.
1406	720.401 and 720.402, Florida Statutes, as part II of chapter
1407	720, Florida Statutes, and entitle that part "DISCLOSURE PRIOR
1408	TO SALE OF RESIDENTIAL PARCELS"; and to designate s. 720.501,
1409	Florida Statutes, as part III of chapter 720, Florida Statutes,
1410	and entitle that part "RIGHTS AND OBLIGATIONS OF DEVELOPERS."
1411	Section 18.  This act shall take effect October 1, 2004.

CODING: Words stricken are deletions; words underlined are additions.