HB 391

1	A bill to be entitled
2	An act relating to community associations; creating s.
3	712.11, F.S.; providing for the revival of certain
4	declarations that have been extinguished; amending s.
5	718.110, F.S.; revising provisions relating to the
6	amendment of declarations; providing legislative findings
7	and a finding of compelling state interest; requiring a
8	holder of a recorded mortgage on a condominium unit that
9	requires the consent or joinder of a mortgagee to an
10	amendment to provide certain information to a condominium
11	association; providing definitions; providing criteria for
12	consent to an amendment; requiring notice regarding
13	proposed amendments to mortgagees; providing criteria for
14	notification; requiring the association to conduct a
15	diligent search to identify mortgagees; requiring the
16	association's representative to execute an affidavit
17	confirming that a diligent search was conducted;
18	prohibiting the declaration of condominium, articles of
19	incorporation, or bylaws from requiring the consent or
20	joinder of more than a specified percent of the eligible
21	mortgagees in connection with proposed amendments under
22	certain conditions; providing criteria for enforcement;
23	requiring mortgagees seeking to disapprove a proposed
24	amendment to provide certain information to the
25	association; providing for the recovery of certain costs
26	and attorney's fees; amending s. 720.302, F.S.; revising
27	governing provisions relating to corporations not for
28	profit that operate residential homeowners' associations;
29	amending s. 720.303, F.S.; providing that special
30	assessments may not be levied at a board meeting except
31	under certain circumstances; revising provisions relating
32	to the closed-circuit cable broadcast notice requirement;
33	authorizing the association to charge a reasonable fee for
34	providing good faith responses to certain requests for
35	information by or on behalf of a prospective purchaser or
36	lienholder; providing conditions for exemption from
37	liability for providing such information; revising when
38	the association must have its financial report completed
39	and provided to members; repealing s. 720.303(2), F.S., as
40	amended, relating to board meetings, to remove conflicting
41	versions of that subsection; amending s. 720.306, F.S.;
42	providing that certain mergers or consolidations of an
43	association shall not be considered a material or adverse
44	alteration of the proportionate voting interest
45	appurtenant to a parcel; revising provisions relating to
46	items that members and parcel owners may address at
47	membership meetings; amending s. 720.311, F.S.; revising
48	provisions relating to dispute resolution; providing that
49	the filing of any petition for arbitration or the serving
50	of an offer for presuit mediation shall toll the
51	applicable statute of limitations; providing that certain
52	disputes between an association and a parcel owner shall
53	be subject to presuit mediation; revising provisions to
54	conform; providing that temporary injunctive relief may be
55	sought in certain disputes subject to presuit mediation;
56	authorizing the court to refer the parties to mediation
57	under certain circumstances; requiring the aggrieved party
58	to serve on the responding party a written offer to
59	participate in presuit mediation; providing a form for
60	such offer; providing that service of the offer is
61	effected by the sending of such an offer in a certain
62	manner; providing that the prevailing party in any
63	subsequent arbitration or litigation proceedings is
64	entitled to seek recovery of all costs and attorney's fees
65	incurred in the presuit mediation process; requiring the
66	mediator or arbitrator to meet certain certification
67	requirements; removing a requirement relating to
68	development of an education program to increase awareness
69	of the operation of homeowners' associations and the use
70	of alternative dispute resolution techniques; amending s.
71	720.405, F.S.; revising provisions relating to the
72	proposed revived declaration and other governing documents
73	for the community; providing effective dates.
74
75	Be It Enacted by the Legislature of the State of Florida:
76
77	Section 1.  Section 712.11, Florida Statutes, is created to
78	read:
79	712.11  Covenant revitalization.--A homeowners' association
80	not otherwise subject to chapter 720 may use the procedures set
81	forth in ss. 720.403-720.407 to revive covenants that have
82	lapsed under the terms of this chapter.
83	Section 2.  Effective October 1, 2006, subsection (11) of
84	section 718.110, Florida Statutes, is amended to read:
85	718.110  Amendment of declaration; correction of error or
86	omission in declaration by circuit court.--
87	(11)(a)  Notwithstanding any provision to the contrary
88	contained in this section, any provision in the declaration of
89	condominium, articles of incorporation, or bylaws that requires
90	declaration recorded after April 1, 1992, may not require the
91	consent or joinder of some or all mortgagees of units or any
92	other portion of the condominium property to or in amendments to
93	the declaration of condominium, articles of incorporation, or
94	bylaws shall be void to the extent not, unless the requirement
95	is limited to amendments materially affecting the rights or
96	interests of the mortgagees, or as otherwise required by the
97	Federal National Mortgage Association or the Federal Home Loan
98	Mortgage Corporation, and any consent or joinder shall unless
99	the requirement provides that such consent may not be
100	unreasonably withheld. It shall be presumed that, except as to
101	those matters described in subsections (4) and (8) or other
102	issues materially affecting the mortgagee's security interest in
103	the property, amendments to the declaration of condominium,
104	articles of incorporation, or bylaws do not materially affect
105	the rights or interests of mortgagees. In the event mortgagee
106	consent is provided other than by properly recorded joinder,
107	such consent shall be evidenced by affidavit of the association
108	recorded in the public records of the county where the
109	declaration of condominium, articles of incorporation, or bylaws
110	are is recorded.
111	(b)  The Legislature finds that the procurement of
112	mortgagee consent or joinder to amendments that do not
113	materially affect the rights or interests of mortgagees is an
114	unreasonable and substantial logistical and financial burden on
115	the unit owners and condominium associations and that there is a
116	compelling state interest in enabling the members of a
117	condominium association to approve amendments. Accordingly, any
118	holder of a recorded mortgage on a condominium unit or any other
119	portion of a condominium, which mortgage is first recorded after
120	October 1, 2006, and for which the declaration of condominium,
121	articles of incorporation, or bylaws require the consent or
122	joinder of a mortgagee to an amendment, must provide written
123	notice by certified mail to the association of the address at
124	which the mortgagee may be contacted in regard to any proposed
125	amendments. The association shall maintain the names and
126	addresses of such mortgagees in a registry of mortgagees, which
127	the association shall utilize when sending a request for such
128	consent or joinder. A request for consent or joinder must be
129	mailed to a mortgagee by certified mail, return receipt
130	requested, to the address provided by the mortgagee and retained
131	in the registry of mortgagees. As used in this subsection,
132	"certified mail" means either certified or registered mail,
133	return receipt requested. Consent to an amendment shall be
134	deemed to have been given by any holder of a mortgage that is
135	first recorded after October 1, 2006, and who fails to provide
136	the required written notice and contact information. Also, any
137	mortgagee who fails to respond by certified mail within 30 days
138	after the date the association mails a request for consent or
139	joinder shall be deemed to have consented to the proposed
140	amendment.
141	(c)  As to mortgages in existence as of October 1, 2006, in
142	those condominiums where the consent or joinder of such
143	mortgagees is required in connection with amendments to the
144	governing documents, and where such mortgagees are not otherwise
145	required by the existing declaration of condominium, articles of
146	incorporation, or bylaws to provide notice to the association of
147	their contact information in order to be eligible to receive
148	notices regarding proposed amendments, those condominium
149	associations that wish to modify provisions in the declaration
150	of condominium, articles of incorporation, or bylaws that
151	require the consent or joinder of mortgagees must notify all
152	mortgagees who hold mortgages on units within the condominium or
153	other portions of the condominium property of the need to
154	provide the same contact information as required in paragraph
155	(b). Any mortgagee who does not provide contact information as
156	required will be deemed to have consented to all future proposed
157	amendments. Further, once the proper address for notifying
158	existing mortgagees has been obtained in the manner provided for
159	in this subsection, failure of any mortgagee to respond to a
160	request for the consent or joinder to a proposed amendment
161	within 30 days after the date that such request is sent to the
162	mortgagee by certified mail shall be deemed to have consented to
163	such amendment. In order to properly notify holders of existing
164	mortgages:
165	1.  The condominium association must first conduct a
166	diligent search to identify all existing mortgagees and an
167	address for the required notice to be sent to each mortgagee.
168	Service of the notice shall be on the mortgagee's registered
169	agent based upon the information available from the Secretary of
170	State. Where there is no registered agent, the notice shall be
171	sent to the address in the original recorded mortgage unless
172	there is a different address in a more recently recorded
173	assignment or modification instrument or in the records
174	maintained by the condominium association. All notices must be
175	sent by certified mail and must advise the mortgagee that if he
176	or she fails to provide the contact information requested within
177	30 days after the date of mailing of the certified letter from
178	the association, such mortgagee shall be deemed to have
179	consented to the proposed amendment.
180	2.  An affidavit must be executed by a representative of
181	the condominium association confirming that a diligent search
182	has been conducted to identify all outstanding mortgages on the
183	condominium in the manner provided for in subparagraph 1. and
184	summarizing the steps that were taken in connection with such
185	diligent search and the notification of all mortgagees, and such
186	affidavit shall be placed in the association's minute book as an
187	attachment to the minutes of the meeting in which the board of
188	directors considers such affidavit.
189	(d)  After October 1, 2006, no new declaration of
190	condominium, articles of incorporation, or bylaws may require
191	the consent or joinder of more than 51 percent of the eligible
192	mortgagees in connection with any proposed amendment unless a
193	higher percentage is required in order to comply with the
194	requirements of the Federal National Mortgage Association or
195	Federal Home Loan Mortgage Corporation. Any new declaration of
196	condominium, articles of incorporation, or bylaws must also
197	require mortgagees to provide to the condominium association the
198	address to which notices may be sent, as provided for in
199	paragraph (b), in order for such mortgagees to have the right to
200	be contacted in connection with any proposed amendment.
201	(e)  A provision requiring the consent or joinder of some
202	or all holders of mortgages on units or other portions of the
203	condominium property to any proposed amendment shall be
204	enforceable only by mortgagees of record as of the date an
205	amendment is recorded in the public records and only by those
206	mortgagees who have complied with the requirements of paragraph
207	(b) or paragraph (c). Any amendment adopted without the required
208	consent of a mortgagee shall be deemed voidable by any mortgagee
209	who was entitled to notice and the opportunity to consent, and
210	actions to void such amendments shall be subject to the statute
211	of limitations applicable to actions founded upon written
212	instruments, which statute shall commence to run as of the date
213	such amendment is recorded in the public records and, for
214	amendments recorded prior to October 1, 2006, shall commence on
215	October 1, 2006.
216	(f)  In order to establish that he or she is not
217	unreasonably withholding consent, any mortgagee who seeks to
218	disapprove of a proposed amendment by withholding his or her
219	consent or joinder must include in his or her reply to the
220	condominium association's request for consent or joinder a
221	statement of the specific reasons the proposed amendment is
222	claimed to materially and adversely affect the rights and
223	interests of such mortgagee.
224	(g)  In connection with any litigation between a
225	condominium association and a lender with regard to whether
226	consent has been improperly or unreasonably withheld, the
227	prevailing party shall be entitled to recover his or her costs
228	and reasonable attorney's fees.
229	Section 3.  Subsections (4) and (5) of section 720.302,
230	Florida Statutes, are amended to read:
231	720.302  Purposes, scope, and application.--
232	(4)  This chapter does not apply to any association that is
233	subject to regulation under chapter 718, chapter 719, or chapter
234	721; or to any nonmandatory association formed under chapter
235	723, except to the extent that a provision of chapter 718,
236	chapter 719, or chapter 721 is expressly incorporated into this
237	chapter for the purpose of regulating homeowners' associations.
238	(5)  Unless expressly stated to the contrary, corporations
239	not for profit that operate residential homeowners' associations
240	in this state shall be governed by and subject to chapter 607,
241	if the association was incorporated thereunder, or to chapter
242	617, if the association was incorporated thereunder, and this
243	chapter. This subsection is intended to clarify existing law.
244	Section 4.  Subsections (2) and (7) of section 720.303,
245	Florida Statutes, as amended by section 18 of chapter 2004-345
246	and section 135 of chapter 2005-2, Laws of Florida, are amended,
247	and paragraphs (d) and (e) are added to subsection (5) of that
248	section, to read:
249	720.303  Association powers and duties; meetings of board;
250	official records; budgets; financial reporting; association
251	funds; recalls.--
252	(2)  BOARD MEETINGS.--
253	(a)  A meeting of the board of directors of an association
254	occurs whenever a quorum of the board gathers to conduct
255	association business. All meetings of the board must be open to
256	all members except for meetings between the board and its
257	attorney with respect to proposed or pending litigation where
258	the contents of the discussion would otherwise be governed by
259	the attorney-client privilege. The provisions of this subsection
260	shall also apply to the meetings of any committee or other
261	similar body when a final decision will be made regarding the
262	expenditure of association funds and to meetings of any body
263	vested with the power to approve or disapprove architectural
264	decisions with respect to a specific parcel of residential
265	property owned by a member of the community.
266	(b)  Members have the right to attend all meetings of the
267	board and to speak on any matter placed on the agenda by
268	petition of the voting interests for at least 3 minutes. The
269	association may adopt written reasonable rules expanding the
270	right of members to speak and governing the frequency, duration,
271	and other manner of member statements, which rules must be
272	consistent with this paragraph and may include a sign-up sheet
273	for members wishing to speak. Notwithstanding any other law, the
274	requirement that board meetings and committee meetings be open
275	to the members is inapplicable to meetings between the board or
276	a committee and the association's attorney, with respect to
277	meetings of the board held for the purpose of discussing
278	personnel matters.
279	(c)  The bylaws shall provide for giving notice to parcel
280	owners and members of all board meetings and, if they do not do
281	so, shall be deemed to provide the following:
282	1.  Notices of all board meetings must be posted in a
283	conspicuous place in the community at least 48 hours in advance
284	of a meeting, except in an emergency. In the alternative, if
285	notice is not posted in a conspicuous place in the community,
286	notice of each board meeting must be mailed or delivered to each
287	member at least 7 days before the meeting, except in an
288	emergency. Notwithstanding this general notice requirement, for
289	communities with more than 100 members, the bylaws may provide
290	for a reasonable alternative to posting or mailing of notice for
291	each board meeting, including publication of notice, provision
292	of a schedule of board meetings, or the conspicuous posting and
293	repeated broadcasting of the notice on a closed-circuit cable
294	television system serving the homeowners' association. However,
295	if broadcast notice is used in lieu of a notice posted
296	physically in the community, the notice must be broadcast at
297	least four times every broadcast hour of each day that a posted
298	notice is otherwise required. When broadcast notice is provided,
299	the notice and agenda must be broadcast in a manner and for a
300	sufficient continuous length of time so as to allow an average
301	reader to observe the notice and read and comprehend the entire
302	content of the notice and the agenda. The bylaws or amended
303	bylaws may provide for giving notice by electronic transmission
304	in a manner authorized by law for meetings of the board of
305	directors, committee meetings requiring notice under this
306	section, and annual and special meetings of the members;
307	however, a member must consent in writing to receiving notice by
308	electronic transmission.
309	2.  A special An assessment may not be levied at a board
310	meeting unless the notice of the meeting includes a statement
311	that special assessments will be considered and the nature of
312	the special assessments. Written notice of any meeting at which
313	special assessments will be considered or at which amendments to
314	rules regarding parcel use will be considered must be mailed,
315	delivered, or electronically transmitted to the members and
316	parcel owners and posted conspicuously on the property or
317	broadcast on closed-circuit cable television not less than 14
318	days before the meeting.
319	3.  Directors may not vote by proxy or by secret ballot at
320	board meetings, except that secret ballots may be used in the
321	election of officers. This subsection also applies to the
322	meetings of any committee or other similar body, when a final
323	decision will be made regarding the expenditure of association
324	funds, and to any body vested with the power to approve or
325	disapprove architectural decisions with respect to a specific
326	parcel of residential property owned by a member of the
327	community.
328	(d)  If 20 percent of the total voting interests petition
329	the board to address an item of business, the board shall at its
330	next regular board meeting or at a special meeting of the board,
331	but not later than 60 days after the receipt of the petition,
332	take the petitioned item up on an agenda. The board shall give
333	all members notice of the meeting at which the petitioned item
334	shall be addressed in accordance with the 14-day notice
335	requirement pursuant to subparagraph (c)2. Each member shall
336	have the right to speak for at least 3 minutes on each matter
337	placed on the agenda by petition, provided that the member signs
338	the sign-up sheet, if one is provided, or submits a written
339	request to speak prior to the meeting. Other than addressing the
340	petitioned item at the meeting, the board is not obligated to
341	take any other action requested by the petition.
342	(5)  INSPECTION AND COPYING OF RECORDS.--The official
343	records shall be maintained within the state and must be open to
344	inspection and available for photocopying by members or their
345	authorized agents at reasonable times and places within 10
346	business days after receipt of a written request for access.
347	This subsection may be complied with by having a copy of the
348	official records available for inspection or copying in the
349	community. If the association has a photocopy machine available
350	where the records are maintained, it must provide parcel owners
351	with copies on request during the inspection if the entire
352	request is limited to no more than 25 pages.
353	(d)  The association or its authorized agent is not
354	required to provide a prospective purchaser or lienholder with
355	information about the residential subdivision or the association
356	other than information or documents required by this chapter to
357	be made available or disclosed. The association or its
358	authorized agent may charge a reasonable fee to the prospective
359	purchaser or lienholder or the current parcel owner or member
360	for providing good faith responses to requests for information
361	by or on behalf of a prospective purchaser or lienholder, other
362	than that required by law, if the fee does not exceed $150 plus
363	the reasonable cost of photocopying and any attorney's fees
364	incurred by the association in connection with the response.
365	(e)  An association and its authorized agent are not liable
366	for providing such information in good faith pursuant to a
367	written request if the person providing the information includes
368	a written statement in substantially the following form: "The
369	responses herein are made in good faith and to the best of my
370	ability as to their accuracy."
371	(7)  FINANCIAL REPORTING.--Within 90 days after the end of
372	the fiscal year, or annually on a date provided in the bylaws,
373	the association shall prepare and complete, or contract for the
374	preparation and completion of, a financial report for the
375	preceding fiscal year. Within 21 days after the final financial
376	report is completed by the association or received from the
377	third party, but not later than 120 days after the end of the
378	fiscal year or other date as provided in the bylaws, the
379	association shall prepare an annual financial report within 60
380	days after the close of the fiscal year. The association shall,
381	within the time limits set forth in subsection (5), provide each
382	member with a copy of the annual financial report or a written
383	notice that a copy of the financial report is available upon
384	request at no charge to the member. Financial reports shall be
385	prepared as follows:
386	(a)  An association that meets the criteria of this
387	paragraph shall prepare or cause to be prepared a complete set
388	of financial statements in accordance with generally accepted
389	accounting principles. The financial statements shall be based
390	upon the association's total annual revenues, as follows:
391	1.  An association with total annual revenues of $100,000
392	or more, but less than $200,000, shall prepare compiled
393	financial statements.
394	2.  An association with total annual revenues of at least
395	$200,000, but less than $400,000, shall prepare reviewed
396	financial statements.
397	3.  An association with total annual revenues of $400,000
398	or more shall prepare audited financial statements.
399	(b)1.  An association with total annual revenues of less
400	than $100,000 shall prepare a report of cash receipts and
401	expenditures.
402	2.  An association in a community of fewer than 50 parcels,
403	regardless of the association's annual revenues, may prepare a
404	report of cash receipts and expenditures in lieu of financial
405	statements required by paragraph (a) unless the governing
406	documents provide otherwise.
407	3.  A report of cash receipts and disbursement must
408	disclose the amount of receipts by accounts and receipt
409	classifications and the amount of expenses by accounts and
410	expense classifications, including, but not limited to, the
411	following, as applicable: costs for security, professional, and
412	management fees and expenses; taxes; costs for recreation
413	facilities; expenses for refuse collection and utility services;
414	expenses for lawn care; costs for building maintenance and
415	repair; insurance costs; administration and salary expenses; and
416	reserves if maintained by the association.
417	(c)  If 20 percent of the parcel owners petition the board
418	for a level of financial reporting higher than that required by
419	this section, the association shall duly notice and hold a
420	meeting of members within 30 days of receipt of the petition for
421	the purpose of voting on raising the level of reporting for that
422	fiscal year. Upon approval of a majority of the total voting
423	interests of the parcel owners, the association shall prepare or
424	cause to be prepared, shall amend the budget or adopt a special
425	assessment to pay for the financial report regardless of any
426	provision to the contrary in the governing documents, and shall
427	provide within 90 days of the meeting or the end of the fiscal
428	year, whichever occurs later:
429	1.  Compiled, reviewed, or audited financial statements, if
430	the association is otherwise required to prepare a report of
431	cash receipts and expenditures;
432	2.  Reviewed or audited financial statements, if the
433	association is otherwise required to prepare compiled financial
434	statements; or
435	3.  Audited financial statements if the association is
436	otherwise required to prepare reviewed financial statements.
437	(d)  If approved by a majority of the voting interests
438	present at a properly called meeting of the association, an
439	association may prepare or cause to be prepared:
440	1.  A report of cash receipts and expenditures in lieu of a
441	compiled, reviewed, or audited financial statement;
442	2.  A report of cash receipts and expenditures or a
443	compiled financial statement in lieu of a reviewed or audited
444	financial statement; or
445	3.  A report of cash receipts and expenditures, a compiled
446	financial statement, or a reviewed financial statement in lieu
447	of an audited financial statement.
448	Section 5.  Subsection (2) of section 720.303, Florida
449	Statutes, as amended by section 2 of chapter 2004-345 and
450	section 15 of chapter 2004-353, Laws of Florida, is repealed.
451	Section 6.  Paragraph (c) of subsection (1) and subsection
452	(6) of section 720.306, Florida Statutes, are amended to read:
453	720.306  Meetings of members; voting and election
454	procedures; amendments.--
455	(1)  QUORUM; AMENDMENTS.--
456	(c)  Unless otherwise provided in the governing documents
457	as originally recorded or permitted by this chapter or chapter
458	617, an amendment may not materially and adversely alter the
459	proportionate voting interest appurtenant to a parcel or
460	increase the proportion or percentage by which a parcel shares
461	in the common expenses of the association unless the record
462	parcel owner and all record owners of liens on the parcels join
463	in the execution of the amendment. For purposes of this section,
464	a change in quorum requirements is not an alteration of voting
465	interests. The merger or consolidation of one or more
466	associations under a plan of merger or consolidation under
467	chapter 607 or chapter 617 shall not be considered a material or
468	adverse alteration of the proportionate voting interest
469	appurtenant to a parcel.
470	(6)  RIGHT TO SPEAK.--Members and parcel owners have the
471	right to attend all membership meetings and to speak at any
472	meeting with reference to all items opened for discussion or
473	included on the agenda. Notwithstanding any provision to the
474	contrary in the governing documents or any rules adopted by the
475	board or by the membership, a member and a parcel owner have the
476	right to speak for at least 3 minutes on any agenda item,
477	provided that the member or parcel owner submits a written
478	request to speak prior to the meeting. The association may adopt
479	written reasonable rules governing the frequency, duration, and
480	other manner of member and parcel owner statements, which rules
481	must be consistent with this subsection.
482	Section 7.  Section 720.311, Florida Statutes, is amended
483	to read:
484	720.311  Dispute resolution.--
485	(1)  The Legislature finds that alternative dispute
486	resolution has made progress in reducing court dockets and
487	trials and in offering a more efficient, cost-effective option
488	to litigation. The filing of any petition for mediation or
489	arbitration or the serving of an offer for presuit mediation as
490	provided for in this section shall toll the applicable statute
491	of limitations. Any recall dispute filed with the department
492	pursuant to s. 720.303(10) shall be conducted by the department
493	in accordance with the provisions of ss. 718.112(2)(j) and
494	718.1255 and the rules adopted by the division. In addition, the
495	department shall conduct mandatory binding arbitration of
496	election disputes between a member and an association pursuant
497	to s. 718.1255 and rules adopted by the division. Neither
498	election disputes nor recall disputes are eligible for presuit
499	mediation; these disputes shall be arbitrated by the department.
500	At the conclusion of the proceeding, the department shall charge
501	the parties a fee in an amount adequate to cover all costs and
502	expenses incurred by the department in conducting the
503	proceeding. Initially, the petitioner shall remit a filing fee
504	of at least $200 to the department. The fees paid to the
505	department shall become a recoverable cost in the arbitration
506	proceeding, and the prevailing party in an arbitration
507	proceeding shall recover its reasonable costs and attorney's
508	fees in an amount found reasonable by the arbitrator. The
509	department shall adopt rules to effectuate the purposes of this
510	section.
511	(2)(a)  Disputes between an association and a parcel owner
512	regarding use of or changes to the parcel or the common areas
513	and other covenant enforcement disputes, disputes regarding
514	amendments to the association documents, disputes regarding
515	meetings of the board and committees appointed by the board,
516	membership meetings not including election meetings, and access
517	to the official records of the association shall be the subject
518	of an offer filed with the department for presuit mandatory
519	mediation served by an aggrieved party before the dispute is
520	filed in court. Presuit mediation proceedings must be conducted
521	in accordance with the applicable Florida Rules of Civil
522	Procedure, and these proceedings are privileged and confidential
523	to the same extent as court-ordered mediation. Disputes subject
524	to presuit mediation under this section shall not include the
525	collection of any assessment, fine, or other financial
526	obligation, including attorney's fees and costs, claimed to be
527	due or any action to enforce a prior mediation settlement
528	agreement between the parties. Also, in any dispute subject to
529	presuit mediation under this section where emergency relief is
530	required, a motion for temporary injunctive relief may be filed
531	with the court without first complying with the presuit
532	mediation requirements of this section. After any issues
533	regarding emergency or temporary relief are resolved, the court
534	may either refer the parties to a mediation program administered
535	by the courts or require mediation under this section. An
536	arbitrator or judge may not consider any information or evidence
537	arising from the presuit mediation proceeding except in a
538	proceeding to impose sanctions for failure to attend a presuit
539	mediation session or with the parties' agreement in a proceeding
540	seeking to enforce the agreement. Persons who are not parties to
541	the dispute may not attend the presuit mediation conference
542	without the consent of all parties, except for counsel for the
543	parties and a corporate representative designated by the
544	association. When mediation is attended by a quorum of the
545	board, such mediation is not a board meeting for purposes of
546	notice and participation set forth in s. 720.303. An aggrieved
547	party shall serve on the responding party a written offer to
548	participate in presuit mediation in substantially the following
549	form:
550
551	STATUTORY OFFER TO PARTICIPATE IN PRESUIT MEDIATION
552
553	The alleged aggrieved party,__________________, hereby
554	offers to _________________, as the responding party,
555	to enter into presuit mediation in connection with the
556	following dispute, which by statute is of a type that
557	is subject to presuit mediation:
558
559	(List specific nature of the dispute or disputes to be
560	mediated and the authority supporting a finding of a
561	violation as to each dispute.)
562
563	Pursuant to section 720.311, Florida Statutes, this
564	offer to resolve the dispute through presuit mediation
565	is required before a lawsuit can be filed concerning
566	the dispute. Pursuant to the statute, the aggrieved
567	party is hereby offering to engage in presuit
568	mediation with a neutral third-party mediator in order
569	to attempt to resolve this dispute without court
570	action, and the aggrieved party demands that you
571	likewise agree to this process. If you fail to agree
572	to presuit mediation, or if you agree and later fail
573	to follow through with your agreement to mediate, suit
574	may be brought against you without further warning.
575
576	The process of mediation involves a supervised
577	negotiation process in which a trained, neutral third-
578	party mediator meets with both parties and assists
579	them in exploring possible opportunities for resolving
580	part or all of the dispute. The mediation process is a
581	voluntary one. By agreeing to participate in presuit
582	mediation, you are not bound in any way to change your
583	position or to enter into any type of agreement.
584	Furthermore, the mediator has no authority to make any
585	decisions in this matter or to determine who is right
586	or wrong and merely acts as a facilitator to ensure
587	that each party understands the position of the other
588	party and that all reasonable settlement options are
589	fully explored.
590
591	If an agreement is reached, it shall be reduced to
592	writing and becomes a binding and enforceable
593	commitment of the parties. A resolution of one or more
594	disputes in this fashion avoids the need to litigate
595	these issues in court. The failure to reach an
596	agreement, or the failure of a party to participate in
597	the process, results in the mediator's declaring an
598	impasse in the mediation, after which the aggrieved
599	party may proceed to court on all outstanding,
600	unsettled disputes.
601
602	The aggrieved party has selected and hereby lists
603	three certified mediators who we believe to be neutral
604	and qualified to mediate the dispute. You have the
605	right to select any one of these mediators. The fact
606	that one party may be familiar with one or more of the
607	listed mediators does not mean that the mediator
608	cannot act as a neutral and impartial facilitator. Any
609	mediator who cannot act in this capacity ethically
610	must decline to accept engagement. The mediators that
611	we suggest, and their current hourly rates, are as
612	follows:
613
614	(List the names, addresses, telephone numbers, and
615	hourly rates of the mediators. Other pertinent
616	information about the background of the mediators may
617	be included as an attachment.)
618
619	You may contact the offices of these mediators to
620	confirm that the listed mediators will be neutral and
621	will not show any favoritism toward either party. The
622	names of certified mediators may be found through the
623	office of the clerk of the circuit court for this
624	circuit.
625
626	If you agree to participate in the presuit mediation
627	process, the statute requires that each party is to
628	pay one-half of the costs and fees involved in the
629	presuit mediation process unless otherwise agreed by
630	all parties. An average mediation may require 3 to 4
631	hours of the mediator's time, including some
632	preparation time, and each party would need to pay
633	one-half of the mediator's fees as well as his or her
634	own attorney's fees if he or she chooses to employ an
635	attorney in connection with the mediation. However,
636	use of an attorney is not required and is at the
637	option of each party. The mediator may require the
638	advance payment of some or all of the anticipated
639	fees. The aggrieved party hereby agrees to pay or
640	prepay one-half of the mediator's estimated fees and
641	to forward this amount or such other reasonable
642	advance deposits as the mediator may require for this
643	purpose. Any funds deposited will be returned to you
644	if these are in excess of your share of the fees
645	incurred.
646
647	If you agree to participate in presuit mediation in
648	order to attempt to resolve the dispute and thereby
649	avoid further legal action, please sign below and
650	clearly indicate which mediator is acceptable to you.
651	We will then ask the mediator to schedule a mutually
652	convenient time and place for the mediation conference
653	to be held. The mediation conference must be held
654	within 90 days after the date of this letter unless
655	extended by mutual written agreement. In the event
656	that you fail to respond within 20 days after the date
657	of this letter, or if you fail to agree to at least
658	one of the mediators that we have suggested and to pay
659	or prepay to the mediator one-half of the costs
660	involved, the aggrieved party will be authorized to
661	proceed with the filing of a lawsuit against you
662	without further notice and may seek an award of
663	attorney's fees or costs incurred in attempting to
664	obtain mediation.
665
666	Should you wish, you may also elect to waive presuit
667	mediation so that this matter may proceed directly to
668	court.
669
670	Therefore, please give this matter your immediate
671	attention. By law, your response must be mailed by
672	certified mail, return receipt requested, with an
673	additional copy being sent by regular first-class mail
674	to the address shown on this offer.
675
676	_____________________
677	_____________________
678
679	RESPONDING PARTY: CHOOSE ONLY ONE OF THE TWO OPTIONS
680	BELOW. YOUR SIGNATURE INDICATES YOUR AGREEMENT TO THAT
681	CHOICE.
682
683	AGREEMENT TO MEDIATE
684
685	The undersigned hereby agrees to participate in
686	presuit mediation and agrees to the following mediator
687	or mediators as acceptable to mediate this dispute:
688
689	(List acceptable mediator or mediators.)
690
691	I/we further agree to pay or prepay one-half of the
692	mediator's fees and to forward such advance deposits
693	as the mediator may require for this purpose.
694
695	_______________________
696	Signature of responding party #1
697
698	_______________________
699	Signature of responding party #2 (if applicable)(if
700	property is owned by more than one person, all owners
701	must sign)
702
703	WAIVER OF MEDIATION
704
705	The undersigned hereby waives the right to participate
706	in presuit mediation of the dispute listed above and
707	agrees to allow the aggrieved party to proceed in
708	court on such matters.
709
710	__________________________
711	Signature of responding party #1
712
713	___________________________
714	Signature of responding party #2 (if applicable)(if
715	property is owned by more than one person, all owners
716	must sign)
717
718	(b)  Service of the statutory offer to participate in
719	presuit mediation shall be effected by sending a letter in
720	substantial conformity with the above form by certified mail,
721	return receipt requested, with an additional copy being sent by
722	regular first-class mail, to the address of the responding party
723	as it last appears on the books and records of the association.
724	The responding party shall have 20 days from the date of the
725	mailing of the statutory offer to serve a response to the
726	aggrieved party in writing. The response shall be served by
727	certified mail, return receipt requested, with an additional
728	copy being sent by regular first-class mail, to the address
729	shown on the statutory offer. In the alternative, the responding
730	party may waive mediation in writing. Notwithstanding the
731	foregoing, once the parties have agreed on a mediator, the
732	mediator may reschedule the mediation for a date and time
733	mutually convenient to the parties. The department shall conduct
734	the proceedings through the use of department mediators or refer
735	the disputes to private mediators who have been duly certified
736	by the department as provided in paragraph (c). The parties
737	shall share the costs of presuit mediation equally, including
738	the fee charged by the mediator, if any, unless the parties
739	agree otherwise, and the mediator may require advance payment of
740	its reasonable fees and costs. The failure of any party to
741	respond to a demand or response, to agree upon a mediator, to
742	make payment of fees and costs within the time established by
743	the mediator, or to appear for a scheduled mediation session
744	shall operate as an impasse in the presuit mediation by such
745	party, entitling the other party to proceed in court and to seek
746	an award of the costs and fees associated with the mediation.
747	Additionally, if any presuit mediation session cannot be
748	scheduled and conducted within 90 days after the offer to
749	participate in mediation was filed, an impasse shall be deemed
750	to have occurred unless both parties agree to extend this
751	deadline. If a department mediator is used, the department may
752	charge such fee as is necessary to pay expenses of the
753	mediation, including, but not limited to, the salary and
754	benefits of the mediator and any travel expenses incurred. The
755	petitioner shall initially file with the department upon filing
756	the disputes, a filing fee of $200, which shall be used to
757	defray the costs of the mediation. At the conclusion of the
758	mediation, the department shall charge to the parties, to be
759	shared equally unless otherwise agreed by the parties, such
760	further fees as are necessary to fully reimburse the department
761	for all expenses incurred in the mediation.
762	(c)(b)  If presuit mediation as described in paragraph (a)
763	is not successful in resolving all issues between the parties,
764	the parties may file the unresolved dispute in a court of
765	competent jurisdiction or elect to enter into binding or
766	nonbinding arbitration pursuant to the procedures set forth in
767	s. 718.1255 and rules adopted by the division, with the
768	arbitration proceeding to be conducted by a department
769	arbitrator or by a private arbitrator certified by the
770	department. If all parties do not agree to arbitration
771	proceedings following an unsuccessful mediation, any party may
772	file the dispute in court. A final order resulting from
773	nonbinding arbitration is final and enforceable in the courts if
774	a complaint for trial de novo is not filed in a court of
775	competent jurisdiction within 30 days after entry of the order.
776	As to any issue or dispute that is not resolved at presuit
777	mediation, and as to any issue that is settled at presuit
778	mediation but is thereafter subject to an action seeking
779	enforcement of the mediation settlement, the prevailing party in
780	any subsequent arbitration or litigation proceeding shall be
781	entitled to seek recovery of all costs and attorney's fees
782	incurred in the presuit mediation process.
783	(d)(c)  The department shall develop a certification and
784	training program for private mediators and private arbitrators
785	which shall emphasize experience and expertise in the area of
786	the operation of community associations. A mediator or
787	arbitrator shall be certified to conduct mediation or
788	arbitration under this section by the department only if he or
789	she has been certified as a circuit court civil mediator or
790	arbitrator, respectively, pursuant to the requirements
791	established attended at least 20 hours of training in mediation
792	or arbitration, as appropriate, and only if the applicant has
793	mediated or arbitrated at least 10 disputes involving community
794	associations within 5 years prior to the date of the
795	application, or has mediated or arbitrated 10 disputes in any
796	area within 5 years prior to the date of application and has
797	completed 20 hours of training in community association
798	disputes. In order to be certified by the department, any
799	mediator must also be certified by the Florida Supreme Court.
800	The department may conduct the training and certification
801	program within the department or may contract with an outside
802	vendor to perform the training or certification. The expenses of
803	operating the training and certification and training program
804	shall be paid by the moneys and filing fees generated by the
805	arbitration of recall and election disputes and by the mediation
806	of those disputes referred to in this subsection and by the
807	training fees.
808	(e)(d)  The presuit mediation procedures provided by this
809	subsection may be used by a Florida corporation responsible for
810	the operation of a community in which the voting members are
811	parcel owners or their representatives, in which membership in
812	the corporation is not a mandatory condition of parcel
813	ownership, or which is not authorized to impose an assessment
814	that may become a lien on the parcel.
815	(3)  The department shall develop an education program to
816	assist homeowners, associations, board members, and managers in
817	understanding and increasing awareness of the operation of
818	homeowners' associations pursuant to this chapter and in
819	understanding the use of alternative dispute resolution
820	techniques in resolving disputes between parcel owners and
821	associations or between owners. Such education program may
822	include the development of pamphlets and other written
823	instructional guides, the holding of classes and meetings by
824	department employees or outside vendors, as the department
825	determines, and the creation and maintenance of a website
826	containing instructional materials. The expenses of operating
827	the education program shall be initially paid by the moneys and
828	filing fees generated by the arbitration of recall and election
829	disputes and by the mediation of those disputes referred to in
830	this subsection.
831	Section 8.  Paragraphs (c), (d), and (e) of subsection (4)
832	of section 720.405, Florida Statutes, are amended to read:
833	720.405  Organizing committee; parcel owner approval.--
834	(4)  The proposed revived declaration and other governing
835	documents for the community shall:
836	(c)  Contain the same respective amendment provisions as
837	the previous governing documents or, if there were no amendment
838	provisions in the previous governing document, amendment
839	provisions that require approval of not less than two-thirds of
840	the affected parcel owners; and
841	(d)  Contain no covenants that are more restrictive on the
842	affected parcel owners than the covenants contained in the
843	previous governing documents, except as permitted under s.
844	720.404(3); and
845	(e)  Comply with the other requirements for a declaration
846	of covenants and other governing documents as specified in this
847	chapter.
848	Section 9.  Except as otherwise expressly provided in this
849	act, this act shall take effect July 1, 2006.

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