Senate Bill sb2498c1

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    Florida Senate - 2004                           CS for SB 2498

    By the Committee on Regulated Industries; and Senator Garcia





    315-2492-04

  1                      A bill to be entitled

  2         An act relating to condominium associations;

  3         amending s. 718.110, F.S.; providing for

  4         grandfathering and modification of certain

  5         rights of a unit owner; requiring certain

  6         voting and approval criteria for amendments

  7         depriving owners of certain rights; creating s.

  8         718.5011, F.S.; creating the Office of the

  9         Condominium Ombudsman within the Division of

10         Florida Land Sales, Condominiums, and Mobile

11         Homes; authorizing appointment of ombudsman by

12         the Joint Legislative Auditing Committee;

13         prohibiting ombudsman or staff from engaging in

14         certain acts; creating s. 718.5012, F.S.;

15         granting certain powers and duties to the

16         ombudsman and the division; creating s.

17         718.5013, F.S.; authorizing disbursement from

18         the Division of Florida Land Sales,

19         Condominiums, and Mobile Homes Trust Fund with

20         approval of the committee for ombudsman costs

21         and expenses; authorizing the committee to

22         permit the ombudsman to retain certain

23         personnel; creating s. 718.5014, F.S.;

24         providing for location of the office of the

25         ombudsman; authorizing branch offices as

26         approved by the committee; creating s.

27         718.5015, F.S.; creating the Advisory Council

28         on Condominiums; providing for appointments by

29         the President of the Senate, the Speaker of the

30         House, and the Governor; providing limited

31         compensation and other terms of service;

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 1         specifying functions; amending s. 718.504,

 2         F.S.; providing certain prospective unit buyers

 3         with a separate document, rather than a

 4         separate page, of frequently asked questions

 5         and answers; requiring additional disclosure to

 6         prospective buyers concerning court cases that

 7         involve potential liabilities of the

 8         association; providing an effective date.

 9  

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

11  

12         Section 1.  Section 718.110, Florida Statutes, is

13  amended to read:

14         718.110  Amendment of declaration; correction of error

15  or omission in declaration by circuit court; grandfathering

16  and modification of certain rights.--

17         (1)(a)  If the declaration fails to provide a method of

18  amendment, the declaration may be amended as to all matters

19  except those described in subsection (4) or subsection (8) if

20  the amendment is approved by the owners of not less than

21  two-thirds of the units.  Except as to those matters described

22  in subsection (4) or subsection (8), no declaration recorded

23  after April 1, 1992, shall require that amendments be approved

24  by more than four-fifths of the voting interests.

25         (b)  No provision of the declaration shall be revised

26  or amended by reference to its title or number only.

27  Proposals to amend existing provisions of the declaration

28  shall contain the full text of the provision to be amended;

29  new words shall be inserted in the text and underlined; and

30  words to be deleted shall be lined through with hyphens.

31  However, if the proposed change is so extensive that this

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 1  procedure would hinder, rather than assist, the understanding

 2  of the proposed amendment, it is not necessary to use

 3  underlining and hyphens as indicators of words added or

 4  deleted, but, instead, a notation must be inserted immediately

 5  preceding the proposed amendment in substantially the

 6  following language: "Substantial rewording of declaration.

 7  See provision .... for present text."

 8         (c)  Nonmaterial errors or omissions in the amendment

 9  process will not invalidate an otherwise properly promulgated

10  amendment.

11         (2)  An amendment, other than amendments made by the

12  developer pursuant to ss. 718.104, 718.403, and 718.504(6),

13  (7), and (9) without a vote of the unit owners and any rights

14  the developer may have in the declaration to amend without

15  consent of the unit owners which shall be limited to matters

16  other than those under subsections (4) and (8), shall be

17  evidenced by a certificate of the association which shall

18  include the recording data identifying the declaration and

19  shall be executed in the form required for the execution of a

20  deed.  An amendment by the developer must be evidenced in

21  writing, but a certificate of the association is not required.

22  The developer of a timeshare condominium may reserve specific

23  rights in the declaration to amend the declaration without the

24  consent of the unit owners.

25         (3)  An amendment of a declaration is effective when

26  properly recorded in the public records of the county where

27  the declaration is recorded.

28         (4)  Unless otherwise provided in the declaration as

29  originally recorded, no amendment may change the configuration

30  or size of any unit in any material fashion, materially alter

31  or modify the appurtenances to the unit, or change the

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 1  proportion or percentage by which the unit owner shares the

 2  common expenses of the condominium and owns the common surplus

 3  of the condominium unless the record owner of the unit and all

 4  record owners of liens on the unit join in the execution of

 5  the amendment and unless all the record owners of all other

 6  units in the same condominium approve the amendment.  The

 7  acquisition of property by the association and material

 8  alterations or substantial additions to such property or the

 9  common elements by the association in accordance with s.

10  718.111(7) or s. 718.113, and amendments providing for the

11  transfer of use rights in limited common elements pursuant to

12  s. 718.106(2)(b) shall not be deemed to constitute a material

13  alteration or modification of the appurtenances to the units.

14  A declaration recorded after April 1, 1992, may not require

15  the approval of less than a majority of total voting interests

16  of the condominium for amendments under this subsection,

17  unless otherwise required by a governmental entity.

18         (5)  If it appears that through a scrivener's error a

19  unit has not been designated as owning an appropriate

20  undivided share of the common elements or does not bear an

21  appropriate share of the common expenses or that all the

22  common expenses or interest in the common surplus or all of

23  the common elements in the condominium have not been

24  distributed in the declaration, so that the sum total of the

25  shares of common elements which have been distributed or the

26  sum total of the shares of the common expenses or ownership of

27  common surplus fails to equal 100 percent, or if it appears

28  that more than 100 percent of common elements or common

29  expenses or ownership of the common surplus have been

30  distributed, the error may be corrected by filing an amendment

31  

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 1  to the declaration approved by the board of administration or

 2  a majority of the unit owners.

 3         (6)  The common elements designated by the declaration

 4  may be enlarged by an amendment to the declaration.  The

 5  amendment must describe the interest in the property and must

 6  submit the property to the terms of the declaration.  The

 7  amendment must be approved and executed as provided in this

 8  section.  The amendment divests the association of title to

 9  the land and vests title in the unit owners as part of the

10  common elements, without naming them and without further

11  conveyance, in the same proportion as the undivided shares in

12  the common elements that are appurtenant to the unit owned by

13  them.

14         (7)  The declarations, bylaws, and common elements of

15  two or more independent condominiums of a single complex may

16  be merged to form a single condominium, upon the approval of

17  such voting interest of each condominium as is required by the

18  declaration for modifying the appurtenances to the units or

19  changing the proportion or percentages by which the owners of

20  the parcel share the common expenses and own the common

21  surplus; upon the approval of all record owners of liens; and

22  upon the recording of new or amended articles of

23  incorporation, declarations, and bylaws.

24         (8)  Unless otherwise provided in the declaration as

25  originally recorded, no amendment to the declaration may

26  permit timeshare estates to be created in any unit of the

27  condominium, unless the record owner of each unit of the

28  condominium and the record owners of liens on each unit of the

29  condominium join in the execution of the amendment.

30         (9)  If there is an omission or error in a declaration,

31  or in any other document required by law to establish the

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 1  condominium, the association may correct the error or omission

 2  by an amendment to the declaration or to the other document

 3  required to create a condominium in the manner provided in the

 4  declaration to amend the declaration or, if none is provided,

 5  by vote of a majority of the voting interests of the

 6  condominium.  The amendment is effective when passed and

 7  approved and a certificate of amendment is executed and

 8  recorded as provided in subsections (2) and (3).  This

 9  procedure for amendment cannot be used if such an amendment

10  would materially or adversely affect property rights of unit

11  owners, unless the affected unit owners consent in writing.

12  This subsection does not restrict the powers of the

13  association to otherwise amend the declaration, or other

14  documentation, but authorizes a simple process of amendment

15  requiring a lesser vote for the purpose of curing defects,

16  errors, or omissions when the property rights of unit owners

17  are not materially or adversely affected.

18         (10)  If there is an omission or error in a declaration

19  of condominium, or any other document required to establish

20  the condominium, which omission or error would affect the

21  valid existence of the condominium, the circuit court has

22  jurisdiction to entertain a petition of one or more of the

23  unit owners in the condominium, or of the association, to

24  correct the error or omission, and the action may be a class

25  action.  The court may require that one or more methods of

26  correcting the error or omission be submitted to the unit

27  owners to determine the most acceptable correction.  All unit

28  owners, the association, and the mortgagees of a first

29  mortgage of record must be joined as parties to the action.

30  Service of process on unit owners may be by publication, but

31  the plaintiff must furnish every unit owner not personally

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 1  served with process with a copy of the petition and final

 2  decree of the court by certified mail, return receipt

 3  requested, at the unit owner's last known residence address.

 4  If an action to determine whether the declaration or another

 5  condominium document complies with the mandatory requirements

 6  for the formation of a condominium is not brought within 3

 7  years of the recording of the declaration, the declaration and

 8  other documents shall be effective under this chapter to

 9  create a condominium, as of the date the declaration was

10  recorded, whether or not the documents substantially comply

11  with the mandatory requirements of law.  However, both before

12  and after the expiration of this 3-year period, the circuit

13  court has jurisdiction to entertain a petition permitted under

14  this subsection for the correction of the documentation, and

15  other methods of amendment may be utilized to correct the

16  errors or omissions at any time.

17         (11)  Notwithstanding any provision to the contrary

18  contained in this section, any declaration recorded after

19  April 1, 1992, may not require the consent or joinder of some

20  or all mortgagees of units to or in amendments to the

21  declaration, unless the requirement is limited to amendments

22  materially affecting the rights or interests of the

23  mortgagees, or as otherwise required by the Federal National

24  Mortgage Association or the Federal Home Loan Mortgage

25  Corporation, and unless the requirement provides that such

26  consent may not be unreasonably withheld.  It shall be

27  presumed that, except as to those matters described in

28  subsections (4) and (8), amendments to the declaration do not

29  materially affect the rights or interests of mortgagees.  In

30  the event mortgagee consent is provided other than by properly

31  recorded joinder, such consent shall be evidenced by affidavit

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    Florida Senate - 2004                           CS for SB 2498
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 1  of the association recorded in the public records of the

 2  county where the declaration is recorded.

 3         (12)(a)  With respect to an existing multicondominium

 4  association, any amendment to change the fractional or

 5  percentage share of liability for the common expenses of the

 6  association and ownership of the common surplus of the

 7  association must be approved by at least a majority of the

 8  total voting interests of each condominium operated by the

 9  association unless the declarations of all condominiums

10  operated by the association uniformly require approval by a

11  greater percentage of the voting interests of each

12  condominium.

13         (b)  Unless approval by a greater percentage of the

14  voting interests of an existing multicondominium association

15  is expressly required in the declaration of an existing

16  condominium, the declaration may be amended upon approval of

17  at least a majority of the total voting interests of each

18  condominium operated by the multicondominium association for

19  the purpose of:

20         1.  Setting forth in the declaration the formula

21  currently utilized, but not previously stated in the

22  declaration, for determining the percentage or fractional

23  shares of liability for the common expenses of the

24  multicondominium association and ownership of the common

25  surplus of the multicondominium association.

26         2.  Providing for the creation or enlargement of a

27  multicondominium association by the merger or consolidation of

28  two or more associations and changing the name of the

29  association, as appropriate.

30         (13)(a)  Unless expressly stated in the amendment, any

31  amendment restricting unit owners' rights relating to the

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 1  rental of units, keeping of pets, or allocation of parking

 2  spaces shall apply only to unit owners who purchase their unit

 3  after the effective date of that amendment.

 4         (b)  Notwithstanding any other provision of law, or of

 5  the declaration or bylaws, an amendment that expressly

 6  deprives current unit owners of any part of their rights

 7  specified in paragraph (a) must be approved by at least a

 8  majority of the voting interests. A declaration or an

 9  amendment to a declaration may require approval by a greater

10  than super majority vote.

11         Section 2.  Section 718.5011, Florida Statutes, is

12  created to read:

13         718.5011  Ombudsman; appointment; oath; restrictions on

14  ombudsman and his or her employees.--

15         (1)  There is created an Office of the Condominium

16  Ombudsman. The office is, for administrative purposes, within

17  the Division of Florida Land Sales, Condominiums, and Mobile

18  Homes but shall remain independent of the division. The office

19  shall be a separate budget entity, funded by the Division of

20  Florida Land Sales, Condominiums, and Mobile Homes Trust Fund,

21  and the ombudsman shall be the agency head for all purposes.

22  The Department of Business and Professional Regulation shall

23  provide administrative support and service to the ombudsman,

24  but the ombudsman shall not be subject to the control,

25  supervision, or direction of the department. The ombudsman

26  shall develop a budget pursuant to chapter 216 which the

27  department shall submit, without change, to the Governor along

28  with the budget of the department.

29         (2)  The Governor shall appoint the ombudsman. The

30  ombudsman must be an attorney admitted to practice before the

31  Florida Supreme Court and shall serve at the pleasure of the

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 1  Governor. Vacancies in the office shall be filled in the same

 2  manner as the original appointment. The ombudsman and

 3  attorneys serving as staff shall take and subscribe to the

 4  oath of office required of state officers by the State

 5  Constitution. An officer or full-time employee of the

 6  ombudsman's office may not actively engage in any other

 7  business or profession; serve as the representative of any

 8  political party or on the executive committee or other

 9  governing body of any political party; serve as an executive,

10  officer, or employee of any political party, committee,

11  organization, or association; receive remuneration for

12  activities on behalf of any candidate for public office; or

13  engage in the solicitation of votes or other activities on

14  behalf of any candidate for public office. The ombudsman or

15  any employee of his or her office may not become a candidate

16  for election to public office unless he or she first resigns

17  from his or her office or employment.

18         Section 3.  Section 718.5012, Florida Statutes, is

19  created to read:

20         718.5012  Ombudsman; powers and duties.--The ombudsman

21  shall have such powers as are necessary to carry out the

22  duties of his or her office, including, but not limited to,

23  the following specific powers:

24         (1)  To have access to and use of all files and records

25  of the division and of all condominium associations, by

26  subpoena if necessary.

27         (2)  To employ professional and clerical staff as

28  necessary for the efficient operation of the Office of the

29  Condominium Ombudsman, including experts and other technical

30  personnel for participation in contested proceedings before

31  the division when the best interests of the public will be

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 1  served, and with the approval of the Office of the Governor,

 2  to adopt and administer a uniform personnel job classification

 3  and pay plan for such employees, and to enter into contracts.

 4         (3)  To prepare and issue reports, recommendations, and

 5  proposed orders to the division, the Governor, the Advisory

 6  Council on Condominiums, the President of the Senate, the

 7  Speaker of the House of Representatives, and the minority

 8  leaders of the Senate and the House of Representatives on any

 9  matter or subject within the jurisdiction of the division, and

10  to make such recommendations as he or she deems appropriate

11  for legislation relative to division procedures, rules,

12  jurisdiction, personnel, and functions.

13         (4)  To act as liaison between the division and unit

14  owners, and to assist any unit owner in the preparation and

15  filing of a complaint to be investigated by the division. The

16  ombudsman shall establish procedures for the submittal and

17  processing of complaints, including target dates for

18  concluding any investigation by the ombudsman.  The ombudsman

19  shall identify complaints that properly fall within the

20  jurisdiction of the division and require remedial action and

21  shall assist residents with promptly filing complaints with

22  the division. The ombudsman may recommend that the division

23  initiate enforcement proceedings. The department and the

24  ombudsman may submit findings of a criminal nature to the

25  state attorney's office and work with that office to bring

26  charges against the parties allegedly involved.

27         (5)  To monitor, investigate, and review condominium

28  elections and meetings, which includes, but is not limited to:

29         (a)  Providing information and evidence to the division

30  if a member of a condominium board attempts, engages in,

31  conspires to engage in, or willfully and knowingly benefits

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 1  from electoral fraud. If the information and evidence provided

 2  is clear and convincing, the division shall order the member

 3  removed from the board. The order of removal shall also

 4  prohibit the person who is removed from running for election

 5  to any office of a condominium board in the state for 4 years.

 6  Any person who is so removed from office twice shall be barred

 7  from serving on a condominium board in the state. Factual

 8  findings forming the basis for an order of removal shall be

 9  subject to judicial review only for abuse of discretion.

10         (b)  Working with the division to adopt rules governing

11  proceedings to remove a board member for electoral fraud.  The

12  division shall adopt rules governing such removal which shall,

13  at minimum, provide the accused board member with adequate

14  notice, opportunity to be heard, the right to confront and

15  cross-examine witnesses, the right to submit rebuttal

16  evidence, and the right to counsel.  Before the division

17  develops a rule proposal on removal, the division and the

18  office shall meet and confer regarding issues to be addressed

19  in the rule.  After the division develops a rule proposal on

20  removal, and before the proposal is finalized for publication

21  or other presentation to the public, the division shall

22  provide the office with a reasonable opportunity to review and

23  provide written comments on the proposal and consider any

24  comments the ombudsman provides.

25  

26  Neither this subsection nor rules adopted to implement it

27  shall be construed to require the ombudsman to provide counsel

28  or witnesses, or other assistance, at public expense.

29         (6)  To make recommendations to the division for

30  changes in rules and procedures for the filing, investigation,

31  

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 1  and resolution of complaints filed by unit owners,

 2  associations and managers.

 3         Section 4.  Section 718.5014, Florida Statutes, is

 4  created to read:

 5         718.5014  Ombudsman; location.--The ombudsman shall

 6  maintain his or her principal office in Leon County on the

 7  premises of the division or, if suitable space cannot be

 8  provided there, at such other place convenient to the offices

 9  of the division as will enable the ombudsman to expeditiously

10  carry out the duties and functions of his or her office. The

11  ombudsman may establish branch offices upon the concurrence of

12  the Joint Legislative Auditing Committee.

13         Section 5.  Section 718.5015, Florida Statutes, is

14  created to read:

15         718.5015  Advisory council; membership functions.--

16         (1)  There is created the Advisory Council on

17  Condominiums. The council shall consist of seven appointed

18  members. Two members shall be appointed by the President of

19  the Senate, two members shall be appointed by the Speaker of

20  the House of Representatives, and three members shall be

21  appointed by the Governor. At least one member that is

22  appointed by the Governor shall represent timeshare

23  condominiums. Members shall be appointed to 2-year terms;

24  however, one of the persons initially appointed by the

25  Governor, by the President of the Senate, and by the Speaker

26  of the House of Representatives, shall be appointed to a

27  1-year term. The director of the division shall serve as an ex

28  officio nonvoting member. The Legislature intends that the

29  persons appointed represent a cross-section of persons

30  interested in condominium issues. The council shall be located

31  within the division for administrative purposes. Members of

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 1  the council shall serve without compensation, but are entitled

 2  to receive per diem and travel expenses pursuant to s. 112.061

 3  while on official business.

 4         (2)  The functions of the advisory council shall be to:

 5         (a)  Receive, from the public, input regarding issues

 6  of concern with respect to condominiums and recommendations

 7  for changes in the condominium law. The issues that the

 8  council shall consider include, but are not limited to, the

 9  rights and responsibilities of the unit owners in relation to

10  the rights and responsibilities of the association.

11         (b)  Review, evaluate, and advise the division

12  concerning revisions and adoption of rules affecting

13  condominiums.

14         (c)  Recommend improvements, if needed, in the

15  education programs offered by the division.

16         (3)  The council may elect a chair and vice chair and

17  such other officers as it may deem advisable. The council

18  shall meet at the call of its chair, at the request of a

19  majority of its membership, at the request of the division, or

20  at such times as it may prescribe. A majority of the members

21  of the council shall constitute a quorum. Council action may

22  be taken by vote of a majority of the voting members who are

23  present at a meeting where there is a quorum.

24         Section 6.  Section 718.504, Florida Statutes, is

25  amended to read:

26         718.504  Prospectus or offering circular; "Frequently

27  Asked Questions and Answers".--Every developer of a

28  residential condominium which contains more than 20

29  residential units, or which is part of a group of residential

30  condominiums which will be served by property to be used in

31  common by unit owners of more than 20 residential units, shall

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 1  prepare a prospectus or offering circular and file it with the

 2  Division of Florida Land Sales, Condominiums, and Mobile Homes

 3  prior to entering into an enforceable contract of purchase and

 4  sale of any unit or lease of a unit for more than 5 years and

 5  shall furnish a copy of the prospectus or offering circular to

 6  each buyer.  In addition to the prospectus or offering

 7  circular, any prospective each buyer from the developer or

 8  current owner shall be furnished a separate document page

 9  entitled "Frequently Asked Questions and Answers," which shall

10  be in accordance with a format approved by the division and a

11  copy of the financial information required by s. 718.111.

12  This document page shall, in readable language, inform

13  prospective purchasers regarding their voting rights and unit

14  use restrictions, including restrictions on the leasing of a

15  unit; shall indicate whether and in what amount the unit

16  owners or the association is obligated to pay rent or land use

17  fees for recreational or other commonly used facilities; shall

18  contain a statement identifying that amount of assessment

19  which, pursuant to the budget, would be levied upon each unit

20  type, exclusive of any special assessments, and which shall

21  further identify the basis upon which assessments are levied,

22  whether monthly, quarterly, or otherwise; shall state and

23  identify any court cases in which the association is currently

24  a party of record in which the association may face liability

25  of $25,000 or more in excess of $100,000; and which shall

26  further state whether membership in a recreational facilities

27  association is mandatory, and if so, shall identify the fees

28  currently charged per unit type.  The division shall by rule

29  require such other disclosure as in its judgment will assist

30  prospective purchasers. The prospectus or offering circular

31  may include more than one condominium, although not all such

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 1  units are being offered for sale as of the date of the

 2  prospectus or offering circular.  The prospectus or offering

 3  circular must contain the following information:

 4         (1)  The front cover or the first page must contain

 5  only:

 6         (a)  The name of the condominium.

 7         (b)  The following statements in conspicuous type:

 8         1.  THIS PROSPECTUS (OFFERING CIRCULAR) CONTAINS

 9  IMPORTANT MATTERS TO BE CONSIDERED IN ACQUIRING A CONDOMINIUM

10  UNIT.

11         2.  THE STATEMENTS CONTAINED HEREIN ARE ONLY SUMMARY IN

12  NATURE.  A PROSPECTIVE PURCHASER SHOULD REFER TO ALL

13  REFERENCES, ALL EXHIBITS HERETO, THE CONTRACT DOCUMENTS, AND

14  SALES MATERIALS.

15         3.  ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS

16  CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. REFER

17  TO THIS PROSPECTUS (OFFERING CIRCULAR) AND ITS EXHIBITS FOR

18  CORRECT REPRESENTATIONS.

19         (2)  Summary:  The next page must contain all

20  statements required to be in conspicuous type in the

21  prospectus or offering circular.

22         (3)  A separate index of the contents and exhibits of

23  the prospectus.

24         (4)  Beginning on the first page of the text (not

25  including the summary and index), a description of the

26  condominium, including, but not limited to, the following

27  information:

28         (a)  Its name and location.

29         (b)  A description of the condominium property,

30  including, without limitation:

31  

                                  16

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 1         1.  The number of buildings, the number of units in

 2  each building, the number of bathrooms and bedrooms in each

 3  unit, and the total number of units, if the condominium is not

 4  a phase condominium, or the maximum number of buildings that

 5  may be contained within the condominium, the minimum and

 6  maximum numbers of units in each building, the minimum and

 7  maximum numbers of bathrooms and bedrooms that may be

 8  contained in each unit, and the maximum number of units that

 9  may be contained within the condominium, if the condominium is

10  a phase condominium.

11         2.  The page in the condominium documents where a copy

12  of the plot plan and survey of the condominium is located.

13         3.  The estimated latest date of completion of

14  constructing, finishing, and equipping.  In lieu of a date,

15  the description shall include a statement that the estimated

16  date of completion of the condominium is in the purchase

17  agreement and a reference to the article or paragraph

18  containing that information.

19         (c)  The maximum number of units that will use

20  facilities in common with the condominium.  If the maximum

21  number of units will vary, a description of the basis for

22  variation and the minimum amount of dollars per unit to be

23  spent for additional recreational facilities or enlargement of

24  such facilities.  If the addition or enlargement of facilities

25  will result in a material increase of a unit owner's

26  maintenance expense or rental expense, if any, the maximum

27  increase and limitations thereon shall be stated.

28         (5)(a)  A statement in conspicuous type describing

29  whether the condominium is created and being sold as fee

30  simple interests or as leasehold interests. If the condominium

31  

                                  17

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 1  is created or being sold on a leasehold, the location of the

 2  lease in the disclosure materials shall be stated.

 3         (b)  If timeshare estates are or may be created with

 4  respect to any unit in the condominium, a statement in

 5  conspicuous type stating that timeshare estates are created

 6  and being sold in units in the condominium.

 7         (6)  A description of the recreational and other

 8  commonly used facilities that will be used only by unit owners

 9  of the condominium, including, but not limited to, the

10  following:

11         (a)  Each room and its intended purposes, location,

12  approximate floor area, and capacity in numbers of people.

13         (b)  Each swimming pool, as to its general location,

14  approximate size and depths, approximate deck size and

15  capacity, and whether heated.

16         (c)  Additional facilities, as to the number of each

17  facility, its approximate location, approximate size, and

18  approximate capacity.

19         (d)  A general description of the items of personal

20  property and the approximate number of each item of personal

21  property that the developer is committing to furnish for each

22  room or other facility or, in the alternative, a

23  representation as to the minimum amount of expenditure that

24  will be made to purchase the personal property for the

25  facility.

26         (e)  The estimated date when each room or other

27  facility will be available for use by the unit owners.

28         (f)1.  An identification of each room or other facility

29  to be used by unit owners that will not be owned by the unit

30  owners or the association;

31  

                                  18

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 1         2.  A reference to the location in the disclosure

 2  materials of the lease or other agreements providing for the

 3  use of those facilities; and

 4         3.  A description of the terms of the lease or other

 5  agreements, including the length of the term; the rent

 6  payable, directly or indirectly, by each unit owner, and the

 7  total rent payable to the lessor, stated in monthly and annual

 8  amounts for the entire term of the lease; and a description of

 9  any option to purchase the property leased under any such

10  lease, including the time the option may be exercised, the

11  purchase price or how it is to be determined, the manner of

12  payment, and whether the option may be exercised for a unit

13  owner's share or only as to the entire leased property.

14         (g)  A statement as to whether the developer may

15  provide additional facilities not described above; their

16  general locations and types; improvements or changes that may

17  be made; the approximate dollar amount to be expended; and the

18  maximum additional common expense or cost to the individual

19  unit owners that may be charged during the first annual period

20  of operation of the modified or added facilities.

21  

22  Descriptions as to locations, areas, capacities, numbers,

23  volumes, or sizes may be stated as approximations or minimums.

24         (7)  A description of the recreational and other

25  facilities that will be used in common with other

26  condominiums, community associations, or planned developments

27  which require the payment of the maintenance and expenses of

28  such facilities, either directly or indirectly, by the unit

29  owners.  The description shall include, but not be limited to,

30  the following:

31         (a)  Each building and facility committed to be built.

                                  19

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 1         (b)  Facilities not committed to be built except under

 2  certain conditions, and a statement of those conditions or

 3  contingencies.

 4         (c)  As to each facility committed to be built, or

 5  which will be committed to be built upon the happening of one

 6  of the conditions in paragraph (b), a statement of whether it

 7  will be owned by the unit owners having the use thereof or by

 8  an association or other entity which will be controlled by

 9  them, or others, and the location in the exhibits of the lease

10  or other document providing for use of those facilities.

11         (d)  The year in which each facility will be available

12  for use by the unit owners or, in the alternative, the maximum

13  number of unit owners in the project at the time each of all

14  of the facilities is committed to be completed.

15         (e)  A general description of the items of personal

16  property, and the approximate number of each item of personal

17  property, that the developer is committing to furnish for each

18  room or other facility or, in the alternative, a

19  representation as to the minimum amount of expenditure that

20  will be made to purchase the personal property for the

21  facility.

22         (f)  If there are leases, a description thereof,

23  including the length of the term, the rent payable, and a

24  description of any option to purchase.

25  

26  Descriptions shall include location, areas, capacities,

27  numbers, volumes, or sizes and may be stated as approximations

28  or minimums.

29         (8)  Recreation lease or associated club membership:

30         (a)  If any recreational facilities or other facilities

31  offered by the developer and available to, or to be used by,

                                  20

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 1  unit owners are to be leased or have club membership

 2  associated, the following statement in conspicuous type shall

 3  be included:  THERE IS A RECREATIONAL FACILITIES LEASE

 4  ASSOCIATED WITH THIS CONDOMINIUM; or, THERE IS A CLUB

 5  MEMBERSHIP ASSOCIATED WITH THIS CONDOMINIUM.  There shall be a

 6  reference to the location in the disclosure materials where

 7  the recreation lease or club membership is described in

 8  detail.

 9         (b)  If it is mandatory that unit owners pay a fee,

10  rent, dues, or other charges under a recreational facilities

11  lease or club membership for the use of facilities, there

12  shall be in conspicuous type the applicable statement:

13         1.  MEMBERSHIP IN THE RECREATIONAL FACILITIES CLUB IS

14  MANDATORY FOR UNIT OWNERS; or

15         2.  UNIT OWNERS ARE REQUIRED, AS A CONDITION OF

16  OWNERSHIP, TO BE LESSEES UNDER THE RECREATIONAL FACILITIES

17  LEASE; or

18         3.  UNIT OWNERS ARE REQUIRED TO PAY THEIR SHARE OF THE

19  COSTS AND EXPENSES OF MAINTENANCE, MANAGEMENT, UPKEEP,

20  REPLACEMENT, RENT, AND FEES UNDER THE RECREATIONAL FACILITIES

21  LEASE (OR THE OTHER INSTRUMENTS PROVIDING THE FACILITIES); or

22         4.  A similar statement of the nature of the

23  organization or the manner in which the use rights are

24  created, and that unit owners are required to pay.

25  

26  Immediately following the applicable statement, the location

27  in the disclosure materials where the development is described

28  in detail shall be stated.

29         (c)  If the developer, or any other person other than

30  the unit owners and other persons having use rights in the

31  facilities, reserves, or is entitled to receive, any rent,

                                  21

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 1  fee, or other payment for the use of the facilities, then

 2  there shall be the following statement in conspicuous type:

 3  THE UNIT OWNERS OR THE ASSOCIATION(S) MUST PAY RENT OR LAND

 4  USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES.

 5  Immediately following this statement, the location in the

 6  disclosure materials where the rent or land use fees are

 7  described in detail shall be stated.

 8         (d)  If, in any recreation format, whether leasehold,

 9  club, or other, any person other than the association has the

10  right to a lien on the units to secure the payment of

11  assessments, rent, or other exactions, there shall appear a

12  statement in conspicuous type in substantially the following

13  form:

14         1.  THERE IS A LIEN OR LIEN RIGHT AGAINST EACH UNIT TO

15  SECURE THE PAYMENT OF RENT AND OTHER EXACTIONS UNDER THE

16  RECREATION LEASE.  THE UNIT OWNER'S FAILURE TO MAKE THESE

17  PAYMENTS MAY RESULT IN FORECLOSURE OF THE LIEN; or

18         2.  THERE IS A LIEN OR LIEN RIGHT AGAINST EACH UNIT TO

19  SECURE THE PAYMENT OF ASSESSMENTS OR OTHER EXACTIONS COMING

20  DUE FOR THE USE, MAINTENANCE, UPKEEP, OR REPAIR OF THE

21  RECREATIONAL OR COMMONLY USED FACILITIES.  THE UNIT OWNER'S

22  FAILURE TO MAKE THESE PAYMENTS MAY RESULT IN FORECLOSURE OF

23  THE LIEN.

24  

25  Immediately following the applicable statement, the location

26  in the disclosure materials where the lien or lien right is

27  described in detail shall be stated.

28         (9)  If the developer or any other person has the right

29  to increase or add to the recreational facilities at any time

30  after the establishment of the condominium whose unit owners

31  have use rights therein, without the consent of the unit

                                  22

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 1  owners or associations being required, there shall appear a

 2  statement in conspicuous type in substantially the following

 3  form:  RECREATIONAL FACILITIES MAY BE EXPANDED OR ADDED

 4  WITHOUT CONSENT OF UNIT OWNERS OR THE ASSOCIATION(S).

 5  Immediately following this statement, the location in the

 6  disclosure materials where such reserved rights are described

 7  shall be stated.

 8         (10)  A statement of whether the developer's plan

 9  includes a program of leasing units rather than selling them,

10  or leasing units and selling them subject to such leases.  If

11  so, there shall be a description of the plan, including the

12  number and identification of the units and the provisions and

13  term of the proposed leases, and a statement in boldfaced type

14  that:  THE UNITS MAY BE TRANSFERRED SUBJECT TO A LEASE.

15         (11)  The arrangements for management of the

16  association and maintenance and operation of the condominium

17  property and of other property that will serve the unit owners

18  of the condominium property, and a description of the

19  management contract and all other contracts for these purposes

20  having a term in excess of 1 year, including the following:

21         (a)  The names of contracting parties.

22         (b)  The term of the contract.

23         (c)  The nature of the services included.

24         (d)  The compensation, stated on a monthly and annual

25  basis, and provisions for increases in the compensation.

26         (e)  A reference to the volumes and pages of the

27  condominium documents and of the exhibits containing copies of

28  such contracts.

29  

30  Copies of all described contracts shall be attached as

31  exhibits.  If there is a contract for the management of the

                                  23

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 1  condominium property, then a statement in conspicuous type in

 2  substantially the following form shall appear, identifying the

 3  proposed or existing contract manager:  THERE IS (IS TO BE) A

 4  CONTRACT FOR THE MANAGEMENT OF THE CONDOMINIUM PROPERTY WITH

 5  (NAME OF THE CONTRACT MANAGER).  Immediately following this

 6  statement, the location in the disclosure materials of the

 7  contract for management of the condominium property shall be

 8  stated.

 9         (12)  If the developer or any other person or persons

10  other than the unit owners has the right to retain control of

11  the board of administration of the association for a period of

12  time which can exceed 1 year after the closing of the sale of

13  a majority of the units in that condominium to persons other

14  than successors or alternate developers, then a statement in

15  conspicuous type in substantially the following form shall be

16  included:  THE DEVELOPER (OR OTHER PERSON) HAS THE RIGHT TO

17  RETAIN CONTROL OF THE ASSOCIATION AFTER A MAJORITY OF THE

18  UNITS HAVE BEEN SOLD. Immediately following this statement,

19  the location in the disclosure materials where this right to

20  control is described in detail shall be stated.

21         (13)  If there are any restrictions upon the sale,

22  transfer, conveyance, or leasing of a unit, then a statement

23  in conspicuous type in substantially the following form shall

24  be included:  THE SALE, LEASE, OR TRANSFER OF UNITS IS

25  RESTRICTED OR CONTROLLED.  Immediately following this

26  statement, the location in the disclosure materials where the

27  restriction, limitation, or control on the sale, lease, or

28  transfer of units is described in detail shall be stated.

29         (14)  If the condominium is part of a phase project,

30  the following information shall be stated:

31  

                                  24

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 1         (a)  A statement in conspicuous type in substantially

 2  the following form:  THIS IS A PHASE CONDOMINIUM.  ADDITIONAL

 3  LAND AND UNITS MAY BE ADDED TO THIS CONDOMINIUM.  Immediately

 4  following this statement, the location in the disclosure

 5  materials where the phasing is described shall be stated.

 6         (b)  A summary of the provisions of the declaration

 7  which provide for the phasing.

 8         (c)  A statement as to whether or not residential

 9  buildings and units which are added to the condominium may be

10  substantially different from the residential buildings and

11  units originally in the condominium.  If the added residential

12  buildings and units may be substantially different, there

13  shall be a general description of the extent to which such

14  added residential buildings and units may differ, and a

15  statement in conspicuous type in substantially the following

16  form shall be included: BUILDINGS AND UNITS WHICH ARE ADDED TO

17  THE CONDOMINIUM MAY BE SUBSTANTIALLY DIFFERENT FROM THE OTHER

18  BUILDINGS AND UNITS IN THE CONDOMINIUM.  Immediately following

19  this statement, the location in the disclosure materials where

20  the extent to which added residential buildings and units may

21  substantially differ is described shall be stated.

22         (d)  A statement of the maximum number of buildings

23  containing units, the maximum and minimum numbers of units in

24  each building, the maximum number of units, and the minimum

25  and maximum square footage of the units that may be contained

26  within each parcel of land which may be added to the

27  condominium.

28         (15)  If a condominium created on or after July 1,

29  2000, is or may become part of a multicondominium, the

30  following information must be provided:

31  

                                  25

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 1         (a)  A statement in conspicuous type in substantially

 2  the following form:  THIS CONDOMINIUM IS (MAY BE) PART OF A

 3  MULTICONDOMINIUM DEVELOPMENT IN WHICH OTHER CONDOMINIUMS WILL

 4  (MAY) BE OPERATED BY THE SAME ASSOCIATION. Immediately

 5  following this statement, the location in the prospectus or

 6  offering circular and its exhibits where the multicondominium

 7  aspects of the offering are described must be stated.

 8         (b)  A summary of the provisions in the declaration,

 9  articles of incorporation, and bylaws which establish and

10  provide for the operation of the multicondominium, including a

11  statement as to whether unit owners in the condominium will

12  have the right to use recreational or other facilities located

13  or planned to be located in other condominiums operated by the

14  same association, and the manner of sharing the common

15  expenses related to such facilities.

16         (c)  A statement of the minimum and maximum number of

17  condominiums, and the minimum and maximum number of units in

18  each of those condominiums, which will or may be operated by

19  the association, and the latest date by which the exact number

20  will be finally determined.

21         (d)  A statement as to whether any of the condominiums

22  in the multicondominium may include units intended to be used

23  for nonresidential purposes and the purpose or purposes

24  permitted for such use.

25         (e)  A general description of the location and

26  approximate acreage of any land on which any additional

27  condominiums to be operated by the association may be located.

28         (16)  If the condominium is created by conversion of

29  existing improvements, the following information shall be

30  stated:

31         (a)  The information required by s. 718.616.

                                  26

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 1         (b)  A caveat that there are no express warranties

 2  unless they are stated in writing by the developer.

 3         (17)  A summary of the restrictions, if any, to be

 4  imposed on units concerning the use of any of the condominium

 5  property, including statements as to whether there are

 6  restrictions upon children and pets, and reference to the

 7  volumes and pages of the condominium documents where such

 8  restrictions are found, or if such restrictions are contained

 9  elsewhere, then a copy of the documents containing the

10  restrictions shall be attached as an exhibit.

11         (18)  If there is any land that is offered by the

12  developer for use by the unit owners and that is neither owned

13  by them nor leased to them, the association, or any entity

14  controlled by unit owners and other persons having the use

15  rights to such land, a statement shall be made as to how such

16  land will serve the condominium.  If any part of such land

17  will serve the condominium, the statement shall describe the

18  land and the nature and term of service, and the declaration

19  or other instrument creating such servitude shall be included

20  as an exhibit.

21         (19)  The manner in which utility and other services,

22  including, but not limited to, sewage and waste disposal,

23  water supply, and storm drainage, will be provided and the

24  person or entity furnishing them.

25         (20)  An explanation of the manner in which the

26  apportionment of common expenses and ownership of the common

27  elements has been determined.

28         (21)  An estimated operating budget for the condominium

29  and the association, and a schedule of the unit owner's

30  expenses shall be attached as an exhibit and shall contain the

31  following information:

                                  27

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 1         (a)  The estimated monthly and annual expenses of the

 2  condominium and the association that are collected from unit

 3  owners by assessments.

 4         (b)  The estimated monthly and annual expenses of each

 5  unit owner for a unit, other than common expenses paid by all

 6  unit owners, payable by the unit owner to persons or entities

 7  other than the association, as well as to the association,

 8  including fees assessed pursuant to s. 718.113(1) for

 9  maintenance of limited common elements where such costs are

10  shared only by those entitled to use the limited common

11  element, and the total estimated monthly and annual expense.

12  There may be excluded from this estimate expenses which are

13  not provided for or contemplated by the condominium documents,

14  including, but not limited to, the costs of private telephone;

15  maintenance of the interior of condominium units, which is not

16  the obligation of the association; maid or janitorial services

17  privately contracted for by the unit owners; utility bills

18  billed directly to each unit owner for utility services to his

19  or her unit; insurance premiums other than those incurred for

20  policies obtained by the condominium; and similar personal

21  expenses of the unit owner. A unit owner's estimated payments

22  for assessments shall also be stated in the estimated amounts

23  for the times when they will be due.

24         (c)  The estimated items of expenses of the condominium

25  and the association, except as excluded under paragraph (b),

26  including, but not limited to, the following items, which

27  shall be stated either as an association expense collectible

28  by assessments or as unit owners' expenses payable to persons

29  other than the association:

30         1.  Expenses for the association and condominium:

31         a.  Administration of the association.

                                  28

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 1         b.  Management fees.

 2         c.  Maintenance.

 3         d.  Rent for recreational and other commonly used

 4  facilities.

 5         e.  Taxes upon association property.

 6         f.  Taxes upon leased areas.

 7         g.  Insurance.

 8         h.  Security provisions.

 9         i.  Other expenses.

10         j.  Operating capital.

11         k.  Reserves.

12         l.  Fees payable to the division.

13         2.  Expenses for a unit owner:

14         a.  Rent for the unit, if subject to a lease.

15         b.  Rent payable by the unit owner directly to the

16  lessor or agent under any recreational lease or lease for the

17  use of commonly used facilities, which use and payment is a

18  mandatory condition of ownership and is not included in the

19  common expense or assessments for common maintenance paid by

20  the unit owners to the association.

21         (d)  The estimated amounts shall be stated for a period

22  of at least 12 months and may distinguish between the period

23  prior to the time unit owners other than the developer elect a

24  majority of the board of administration and the period after

25  that date.

26         (22)  A schedule of estimated closing expenses to be

27  paid by a buyer or lessee of a unit and a statement of whether

28  title opinion or title insurance policy is available to the

29  buyer and, if so, at whose expense.

30         (23)  The identity of the developer and the chief

31  operating officer or principal directing the creation and sale

                                  29

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 1  of the condominium and a statement of its and his or her

 2  experience in this field.

 3         (24)  Copies of the following, to the extent they are

 4  applicable, shall be included as exhibits:

 5         (a)  The declaration of condominium, or the proposed

 6  declaration if the declaration has not been recorded.

 7         (b)  The articles of incorporation creating the

 8  association.

 9         (c)  The bylaws of the association.

10         (d)  The ground lease or other underlying lease of the

11  condominium.

12         (e)  The management agreement and all maintenance and

13  other contracts for management of the association and

14  operation of the condominium and facilities used by the unit

15  owners having a service term in excess of 1 year.

16         (f)  The estimated operating budget for the condominium

17  and the required schedule of unit owners' expenses.

18         (g)  A copy of the floor plan of the unit and the plot

19  plan showing the location of the residential buildings and the

20  recreation and other common areas.

21         (h)  The lease of recreational and other facilities

22  that will be used only by unit owners of the subject

23  condominium.

24         (i)  The lease of facilities used by owners and others.

25         (j)  The form of unit lease, if the offer is of a

26  leasehold.

27         (k)  A declaration of servitude of properties serving

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

29  or the association.

30  

31  

                                  30

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 1         (l)  The statement of condition of the existing

 2  building or buildings, if the offering is of units in an

 3  operation being converted to condominium ownership.

 4         (m)  The statement of inspection for termite damage and

 5  treatment of the existing improvements, if the condominium is

 6  a conversion.

 7         (n)  The form of agreement for sale or lease of units.

 8         (o)  A copy of the agreement for escrow of payments

 9  made to the developer prior to closing.

10         (p)  A copy of the documents containing any

11  restrictions on use of the property required by subsection

12  (17).

13         (25)  Any prospectus or offering circular complying,

14  prior to the effective date of this act, with the provisions

15  of former ss. 711.69 and 711.802 may continue to be used

16  without amendment or may be amended to comply with the

17  provisions of this chapter.

18         (26)  A brief narrative description of the location and

19  effect of all existing and intended easements located or to be

20  located on the condominium property other than those described

21  in the declaration.

22         (27)  If the developer is required by state or local

23  authorities to obtain acceptance or approval of any dock or

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

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

26  with the division under s. 718.502(1) or a statement that such

27  acceptance or approval has not been acquired or received.

28         (28)  Evidence demonstrating that the developer has an

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

30  which the condominium is to be developed.

31  

                                  31

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 1         Section 7.  The Department of Business and Professional

 2  Regulation may continue to prosecute any existing judicial or

 3  administrative legal proceedings that are in existence on the

 4  effective date of this act.

 5         Section 8.  This act shall take effect upon becoming a

 6  law.

 7  

 8          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 9                         Senate Bill 2498

10                                 

11  The committee substitute deletes the provisions that provided
    for: new definitions; eligibility restrictions on association
12  members; increasing the percentage of mortgage debt used as a
    limit on liability in certain foreclosure actions; all
13  provisions relating to liens; criminal penalties for willful
    and malicious imposition, enforcement or overvaluation of a
14  lien; requiring a super majority board approval for excess
    funds from a special assessment to be credited against future
15  assessment; requiring board actions imposing financial
    hardships to be ratified by a majority of all voting
16  interests; requiring additional disclosures for contract
    validity or enforceability; providing that certain business
17  entities may be contracted by the association to provide
    certain services if approved by a majority of all unit owners;
18  authorization to conduct criminal background checks of
    potential unit owners and tenants; mandatory training for
19  certain board members.

20  It requires that at least a majority rather than three fourths
    of the voting interests are needed to amend the declaration of
21  condominium relating to rental of units, keeping of pets, or
    allocation of parking spaces.
22  
    It provides that the Governor shall appoint the Condominium
23  Ombudsman rather than the Joint Legislative Auditing Committee
    and the Governor shall approve the administering of a uniform
24  personnel job classification and pay plan for the
    administrative staff of the Office of the Ombudsman.
25  
    It clarifies that the Director of the Division of Florida Land
26  Sales, Condominiums, and Mobile Homes shall be an ex officio
    nonvoting member of the Advisory Council on Condominiums.
27  

28  

29  

30  

31  

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