HB 957

1	A bill to be entitled
2	An act relating to homeowners' and community associations;
3	creating s. 712.11, F.S.; authorizing certain associations
4	to revive lapsed covenants; amending s. 718.114, F.S.;
5	providing that certain leaseholds, memberships, or other
6	possessory or use interests shall be considered a material
7	alteration or substantial addition to certain real
8	property; amending s. 720.302, F.S.; revising certain
9	purposes for regulation; amending s. 720.303, F.S.;
10	revising notice requirements relating to the levy of
11	special assessments; authorizing associations to charge
12	specified fees for providing certain information to
13	prospective purchasers or lienholders; limiting liability
14	for providing such information; revising certain time
15	requirements relating to annual reports of associations;
16	amending s. 720.305, F.S.; prohibiting a fine levied by an
17	association from becoming a lien unless the governing
18	documents claimed to have been violated are recorded in
19	the public records; amending s. 720.306, F.S.; providing
20	that certain mergers or consolidations do not alter
21	specified voting interests; limiting the right of members
22	to speak at membership meetings; amending s. 720.402,
23	F.S., relating to publication of false or misleading
24	information; clarifying that the section does not limit
25	common-law rights; amending s. 720.405, F.S.; deleting a
26	requirement that a proposed revived governing document not
27	contain certain restrictive covenants; repealing s.
28	720.311, F.S., relating to an alternative dispute
29	resolution process; amending s. 34.01, F.S.; conforming a
30	cross-reference; providing an effective date.
31
32	Be It Enacted by the Legislature of the State of Florida:
33
34	Section 1.  Section 712.11, Florida Statutes, is created to
35	read:
36	712.11  Covenant revitalization.--A homeowners' association
37	that is not subject to chapter 720 may use the procedures in ss.
38	720.403-720.407 to revive covenants that have lapsed pursuant to
39	this chapter.
40	Section 2.  Section 718.114, Florida Statutes, is amended
41	to read:
42	718.114  Association powers.--An association has the power
43	to enter into agreements, to acquire leaseholds, memberships,
44	and other possessory or use interests in lands or facilities
45	such as country clubs, golf courses, marinas, and other
46	recreational facilities. It has this power whether or not the
47	lands or facilities are contiguous to the lands of the
48	condominium, if they are intended to provide enjoyment,
49	recreation, or other use or benefit to the unit owners. All of
50	these leaseholds, memberships, and other possessory or use
51	interests existing or created at the time of recording the
52	declaration must be stated and fully described in the
53	declaration. Subsequent to the recording of the declaration,
54	agreements acquiring these leaseholds, memberships, or other
55	possessory or use interests shall be considered a material
56	alteration or substantial addition to the real property that is
57	association property, and the association may not acquire or
58	enter into agreements acquiring these leaseholds, memberships,
59	or other possessory or use interests except as authorized by the
60	declaration as provided in s. 718.113. The declaration may
61	provide that the rental, membership fees, operations,
62	replacements, and other expenses are common expenses and may
63	impose covenants and restrictions concerning their use and may
64	contain other provisions not inconsistent with this chapter. A
65	condominium association may conduct bingo games as provided in
66	s. 849.0931.
67	Section 3.  Section 720.302, Florida Statutes, is amended
68	to read:
69	720.302  Purposes, scope, and application.--
70	(1)  The purposes of this chapter are to give statutory
71	recognition to corporations not for profit that operate
72	residential communities in this state, to provide procedures for
73	operating homeowners' associations, and to protect the rights of
74	association members without unduly impairing the ability of such
75	associations to perform their functions.
76	(2)  The Legislature recognizes that it is not in the best
77	interest of homeowners' associations or the individual
78	association members thereof to create or impose a bureau or
79	other agency of state government to regulate the affairs of
80	homeowners' associations. However, in accordance with s.
81	720.311, the Legislature finds that homeowners' associations and
82	their individual members will benefit from an expedited
83	alternative process for resolution of election and recall
84	disputes and presuit mediation of other disputes involving
85	covenant enforcement and authorizes the department to hear,
86	administer, and determine these disputes as more fully set forth
87	in this chapter. Further, the Legislature recognizes that
88	certain contract rights have been created for the benefit of
89	homeowners' associations and members thereof before the
90	effective date of this act and that ss. 720.301-720.407 are not
91	intended to impair such contract rights, including, but not
92	limited to, the rights of the developer to complete the
93	community as initially contemplated.
94	(3)  Except as specifically provided in this chapter, this
95	chapter does not apply to:
96	(a)  A community that is composed of property primarily
97	intended for commercial, industrial, or other nonresidential
98	use; or
99	(b)  The commercial or industrial parcels in a community
100	that contains both residential parcels and parcels intended for
101	commercial or industrial use.
102	(4)  This chapter does not apply to any association that is
103	subject to regulation under chapter 718, chapter 719, or chapter
104	721; or to any nonmandatory association formed under chapter
105	723.
106	(5)  Unless expressly stated to the contrary, corporations
107	not for profit that operate residential homeowners' associations
108	in this state shall be governed by and subject to chapter 617
109	and this chapter or chapter 607 if incorporated under that
110	chapter. This subsection is intended to clarify existing law.
111	Section 4.  Subsections (2), (5), and (7) of section
112	720.303, Florida Statutes, are amended to read:
113	720.303  Association powers and duties; meetings of board;
114	official records; budgets; financial reporting; association
115	funds; recalls.--
116	(2)  BOARD MEETINGS.--
117	(a)  A meeting of the board of directors of an association
118	occurs whenever a quorum of the board gathers to conduct
119	association business. All meetings of the board must be open to
120	all members except for meetings between the board and its
121	attorney with respect to proposed or pending litigation where
122	the contents of the discussion would otherwise be governed by
123	the attorney-client privilege.
124	(b)  Members have the right to attend all meetings of the
125	board and to speak on any matter placed on the agenda by
126	petition of the voting interests for at least 3 minutes. The
127	association may adopt written reasonable rules expanding the
128	right of members to speak and governing the frequency, duration,
129	and other manner of member statements, which rules must be
130	consistent with this paragraph and may include a sign-up sheet
131	for members wishing to speak. Notwithstanding any other law, the
132	requirement that board meetings and committee meetings be open
133	to the members is inapplicable to meetings between the board or
134	a committee and the association's attorney, with respect to
135	meetings of the board held for the purpose of discussing
136	personnel matters.
137	(c)  The bylaws shall provide for giving notice to parcel
138	owners and members of all board meetings and, if they do not do
139	so, shall be deemed to provide the following:
140	1.  Notices of all board meetings must be posted in a
141	conspicuous place in the community at least 48 hours in advance
142	of a meeting, except in an emergency.  In the alternative, if
143	notice is not posted in a conspicuous place in the community,
144	notice of each board meeting must be mailed or delivered to each
145	member at least 7 days before the meeting, except in an
146	emergency. Notwithstanding this general notice requirement, for
147	communities with more than 100 members, the bylaws may provide
148	for a reasonable alternative to posting or mailing of notice for
149	each board meeting, including publication of notice, provision
150	of a schedule of board meetings, or the conspicuous posting and
151	repeated broadcasting of the notice on a closed-circuit cable
152	television system serving the homeowners' association. However,
153	if broadcast notice is used in lieu of a notice posted
154	physically in the community, the notice must be broadcast at
155	least four times every broadcast hour of each day that a posted
156	notice is otherwise required. When broadcast notice is provided,
157	the notice and agenda must be broadcast in a manner and for a
158	sufficient continuous length of time so as to allow an average
159	reader to observe the notice and read and comprehend the entire
160	content of the notice and the agenda. The bylaws or amended
161	bylaws may provide for giving notice by electronic transmission
162	in a manner authorized by law for meetings of the board of
163	directors, committee meetings requiring notice under this
164	section, and annual and special meetings of the members;
165	however, a member must consent in writing to receiving notice by
166	electronic transmission.
167	2.  A special An assessment may not be levied at a board
168	meeting unless the notice of the meeting includes a statement
169	that special assessments will be considered and the nature of
170	such the assessments. Written notice of any meeting at which
171	special assessments will be considered or at which amendments to
172	rules regarding parcel use will be considered must be mailed,
173	delivered, or electronically transmitted to the members and
174	parcel owners and posted conspicuously on the property or
175	broadcast on closed-circuit cable television not less than 14
176	days before the meeting.
177	3.  Directors may not vote by proxy or by secret ballot at
178	board meetings, except that secret ballots may be used in the
179	election of officers. This subsection also applies to the
180	meetings of any committee or other similar body, when a final
181	decision will be made regarding the expenditure of association
182	funds, and to meetings of any body vested with the power to
183	approve or disapprove architectural decisions with respect to a
184	specific parcel of residential property owned by a member of the
185	community.
186	(d)  If 20 percent of the total voting interests petition
187	the board to address an item of business, the board shall at its
188	next regular board meeting or at a special meeting of the board,
189	but not later than 60 days after the receipt of the petition,
190	take the petitioned item up on an agenda. The board shall give
191	all members notice of the meeting at which the petitioned item
192	shall be addressed in accordance with the 14-day notice
193	requirement pursuant to subparagraph (c)2. Each member shall
194	have the right to speak for at least 3 minutes on each matter
195	placed on the agenda by petition, provided that the member signs
196	the sign-up sheet, if one is provided, or submits a written
197	request to speak prior to the meeting. Other than addressing the
198	petitioned item at the meeting, the board is not obligated to
199	take any other action requested by the petition.
200	(5)  INSPECTION AND COPYING OF RECORDS.--The official
201	records shall be maintained within the state and must be open to
202	inspection and available for photocopying by members or their
203	authorized agents at reasonable times and places within 10
204	business days after receipt of a written request for access.
205	This subsection may be complied with by having a copy of the
206	official records available for inspection or copying in the
207	community. If the association has a photocopy machine available
208	where the records are maintained, it must provide parcel owners
209	with copies on request during the inspection if the entire
210	request is limited to no more than 25 pages.
211	(a)  The failure of an association to provide access to the
212	records within 10 business days after receipt of a written
213	request creates a rebuttable presumption that the association
214	willfully failed to comply with this subsection.
215	(b)  A member who is denied access to official records is
216	entitled to the actual damages or minimum damages for the
217	association's willful failure to comply with this subsection.
218	The minimum damages are to be $50 per calendar day up to 10
219	days, the calculation to begin on the 11th business day after
220	receipt of the written request.
221	(c)  The association may adopt reasonable written rules
222	governing the frequency, time, location, notice, records to be
223	inspected, and manner of inspections, but may not impose a
224	requirement that a parcel owner demonstrate any proper purpose
225	for the inspection, state any reason for the inspection, or
226	limit a parcel owner's right to inspect records to less than one
227	8-hour business day per month. The association may impose fees
228	to cover the costs of providing copies of the official records,
229	including, without limitation, the costs of copying. The
230	association may charge up to 50 cents per page for copies made
231	on the association's photocopier. If the association does not
232	have a photocopy machine available where the records are kept,
233	or if the records requested to be copied exceed 25 pages in
234	length, the association may have copies made by an outside
235	vendor and may charge the actual cost of copying. The
236	association shall maintain an adequate number of copies of the
237	recorded governing documents, to ensure their availability to
238	members and prospective members. Notwithstanding the provisions
239	of this paragraph, the following records shall not be accessible
240	to members or parcel owners:
241	1.  Any record protected by the lawyer-client privilege as
242	described in s. 90.502 and any record protected by the work-
243	product privilege, including, but not limited to, any record
244	prepared by an association attorney or prepared at the
245	attorney's express direction which reflects a mental impression,
246	conclusion, litigation strategy, or legal theory of the attorney
247	or the association and was prepared exclusively for civil or
248	criminal litigation or for adversarial administrative
249	proceedings or which was prepared in anticipation of imminent
250	civil or criminal litigation or imminent adversarial
251	administrative proceedings until the conclusion of the
252	litigation or adversarial administrative proceedings.
253	2.  Information obtained by an association in connection
254	with the approval of the lease, sale, or other transfer of a
255	parcel.
256	3.  Disciplinary, health, insurance, and personnel records
257	of the association's employees.
258	4.  Medical records of parcel owners or community
259	residents.
260	(d)  The association is not required to give a prospective
261	purchaser or lienholder information about the subdivision or the
262	association other than that required to be disclosed under this
263	chapter. It may charge the prospective purchaser, lienholder, or
264	current parcel owner or member a reasonable fee not to exceed
265	$150 to provide such information, other than information
266	required by law, plus the reasonable cost of photocopying and
267	attorney's fees incurred by the association in connection with
268	the response.
269	(e)  An association is not liable for providing such
270	information in good faith pursuant to a written request if the
271	person providing the information includes a written statement in
272	substantially the following form: "The responses herein are made
273	in good faith and to the best of my ability as to their
274	accuracy."
275	(7)  FINANCIAL REPORTING.--The association shall prepare an
276	annual financial report by a date specified in the bylaws or
277	within 90 60 days after the close of the fiscal year. The
278	association shall, within 21 days after the report is prepared
279	but not later than 120 days after the end of the fiscal year the
280	time limits set forth in subsection (5), provide each member
281	with a copy of the annual financial report or a written notice
282	that a copy of the financial report is available upon request at
283	no charge to the member. Financial reports shall be prepared as
284	follows:
285	(a)  An association that meets the criteria of this
286	paragraph shall prepare or cause to be prepared a complete set
287	of financial statements in accordance with generally accepted
288	accounting principles. The financial statements shall be based
289	upon the association's total annual revenues, as follows:
290	1.  An association with total annual revenues of $100,000
291	or more, but less than $200,000, shall prepare compiled
292	financial statements.
293	2.  An association with total annual revenues of at least
294	$200,000, but less than $400,000, shall prepare reviewed
295	financial statements.
296	3.  An association with total annual revenues of $400,000
297	or more shall prepare audited financial statements.
298	(b)1.  An association with total annual revenues of less
299	than $100,000 shall prepare a report of cash receipts and
300	expenditures.
301	2.  An association in a community of fewer than 50 parcels,
302	regardless of the association's annual revenues, may prepare a
303	report of cash receipts and expenditures in lieu of financial
304	statements required by paragraph (a) unless the governing
305	documents provide otherwise.
306	3.  A report of cash receipts and disbursement must
307	disclose the amount of receipts by accounts and receipt
308	classifications and the amount of expenses by accounts and
309	expense classifications, including, but not limited to, the
310	following, as applicable: costs for security, professional, and
311	management fees and expenses; taxes; costs for recreation
312	facilities; expenses for refuse collection and utility services;
313	expenses for lawn care; costs for building maintenance and
314	repair; insurance costs; administration and salary expenses; and
315	reserves if maintained by the association.
316	(c)  If 20 percent of the parcel owners petition the board
317	for a level of financial reporting higher than that required by
318	this section, the association shall duly notice and hold a
319	meeting of members within 30 days of receipt of the petition for
320	the purpose of voting on raising the level of reporting for that
321	fiscal year. Upon approval of a majority of the total voting
322	interests of the parcel owners, the association shall prepare or
323	cause to be prepared, shall amend the budget or adopt a special
324	assessment to pay for the financial report regardless of any
325	provision to the contrary in the governing documents, and shall
326	provide within 90 days of the meeting or the end of the fiscal
327	year, whichever occurs later:
328	1.  Compiled, reviewed, or audited financial statements, if
329	the association is otherwise required to prepare a report of
330	cash receipts and expenditures;
331	2.  Reviewed or audited financial statements, if the
332	association is otherwise required to prepare compiled financial
333	statements; or
334	3.  Audited financial statements if the association is
335	otherwise required to prepare reviewed financial statements.
336	(d)  If approved by a majority of the voting interests
337	present at a properly called meeting of the association, an
338	association may prepare or cause to be prepared:
339	1.  A report of cash receipts and expenditures in lieu of a
340	compiled, reviewed, or audited financial statement;
341	2.  A report of cash receipts and expenditures or a
342	compiled financial statement in lieu of a reviewed or audited
343	financial statement; or
344	3.  A report of cash receipts and expenditures, a compiled
345	financial statement, or a reviewed financial statement in lieu
346	of an audited financial statement.
347	Section 5.  Subsection (2) of section 720.305, Florida
348	Statutes, is amended to read:
349	720.305  Obligations of members; remedies at law or in
350	equity; levy of fines and suspension of use rights; failure to
351	fill sufficient number of vacancies on board of directors to
352	constitute a quorum; appointment of receiver upon petition of
353	any member.--
354	(2)  If the governing documents so provide, an association
355	may suspend, for a reasonable period of time, the rights of a
356	member or a member's tenants, guests, or invitees, or both, to
357	use common areas and facilities and may levy reasonable fines,
358	not to exceed $100 per violation, against any member or any
359	tenant, guest, or invitee. A fine may be levied on the basis of
360	each day of a continuing violation, with a single notice and
361	opportunity for hearing, except that no such fine shall exceed
362	$1,000 in the aggregate unless otherwise provided in the
363	governing documents. A fine shall not become a lien against a
364	parcel unless it is levied for a violation of governing
365	documents that have been recorded in the public records of the
366	county where the property is located. In any action to recover a
367	fine, the prevailing party is entitled to collect its reasonable
368	attorney's fees and costs from the nonprevailing party as
369	determined by the court.
370	(a)  A fine or suspension may not be imposed without notice
371	of at least 14 days to the person sought to be fined or
372	suspended and an opportunity for a hearing before a committee of
373	at least three members appointed by the board who are not
374	officers, directors, or employees of the association, or the
375	spouse, parent, child, brother, or sister of an officer,
376	director, or employee. If the committee, by majority vote, does
377	not approve a proposed fine or suspension, it may not be
378	imposed.
379	(b)  The requirements of this subsection do not apply to
380	the imposition of suspensions or fines upon any member because
381	of the failure of the member to pay assessments or other charges
382	when due if such action is authorized by the governing
383	documents.
384	(c)  Suspension of common-area-use rights shall not impair
385	the right of an owner or tenant of a parcel to have vehicular
386	and pedestrian ingress to and egress from the parcel, including,
387	but not limited to, the right to park.
388	Section 6.  Subsections (1) and (6) of section 720.306,
389	Florida Statutes, are amended to read:
390	720.306  Meetings of members; voting and election
391	procedures; amendments.--
392	(1)  QUORUM; AMENDMENTS.--
393	(a)  Unless a lower number is provided in the bylaws, the
394	percentage of voting interests required to constitute a quorum
395	at a meeting of the members shall be 30 percent of the total
396	voting interests. Unless otherwise provided in this chapter or
397	in the articles of incorporation or bylaws, decisions that
398	require a vote of the members must be made by the concurrence of
399	at least a majority of the voting interests present, in person
400	or by proxy, at a meeting at which a quorum has been attained.
401	(b)  Unless otherwise provided in the governing documents
402	or required by law, and other than those matters set forth in
403	paragraph (c), any governing document of an association may be
404	amended by the affirmative vote of two-thirds of the voting
405	interests of the association.
406	(c)  Unless otherwise provided in the governing documents
407	as originally recorded or permitted by this chapter or chapter
408	617, an amendment may not materially and adversely alter the
409	proportionate voting interest appurtenant to a parcel or
410	increase the proportion or percentage by which a parcel shares
411	in the common expenses of the association unless the record
412	parcel owner and all record owners of liens on the parcels join
413	in the execution of the amendment. For purposes of this section,
414	a change in quorum requirements is not an alteration of voting
415	interests. The merger or consolidation of associations under a
416	plan of merger or consolidation pursuant to chapter 607 or
417	chapter 617 is not a material or adverse alteration of the
418	proportionate voting interest appurtenant to a parcel.
419	(6)  RIGHT TO SPEAK.--Members and parcel owners have the
420	right to attend all membership meetings and to speak at any
421	meeting with reference to all items opened for discussion or
422	included on the agenda. Notwithstanding any provision to the
423	contrary in the governing documents or any rules adopted by the
424	board or by the membership, a member and a parcel owner have the
425	right to speak for at least 3 minutes on any agenda item, if
426	provided that the member or parcel owner submits a written
427	request to speak prior to the meeting. The association may adopt
428	written reasonable rules governing the frequency, duration, and
429	other manner of member and parcel owner statements, which rules
430	must be consistent with this subsection.
431	Section 7.  Subsection (3) is added to section 720.402,
432	Florida Statutes, to read:
433	720.402  Publication of false and misleading information.--
434	(3)  This section does not limit any rights provided by
435	common law.
436	Section 8.  Subsection (4) of section 720.405, Florida
437	Statutes, is amended to read:
438	720.405  Organizing committee; parcel owner approval.--
439	(4)  The proposed revived declaration and other governing
440	documents for the community shall:
441	(a)  Provide that the voting interest of each parcel owner
442	shall be the same as the voting interest of the parcel owner
443	under the previous governing documents;
444	(b)  Provide that the proportional-assessment obligations
445	of each parcel owner shall be the same as proportional-
446	assessment obligations of the parcel owner under the previous
447	governing documents;
448	(c)  Contain the same respective amendment provisions as
449	the previous governing documents or, if there were no amendment
450	provisions in the previous governing document, amendment
451	provisions that require approval of not less than two-thirds of
452	the affected parcel owners; and
453	(d)  Contain no covenants that are more restrictive on the
454	affected parcel owners than the covenants contained in the
455	previous governing documents, except as permitted under s.
456	720.404(3); and
457	(d)(e)  Comply with the other requirements for a
458	declaration of covenants and other governing documents as
459	specified in this chapter.
460	Section 9.  Section 720.311, Florida Statutes, is repealed.
461	Section 10.  Subsection (1) of section 34.01, Florida
462	Statutes, is amended to read:
463	34.01  Jurisdiction of county court.--
464	(1)  County courts shall have original jurisdiction:
465	(a)  In all misdemeanor cases not cognizable by the circuit
466	courts;
467	(b)  Of all violations of municipal and county ordinances;
468	(c)  Of all actions at law in which the matter in
469	controversy does not exceed the sum of $15,000, exclusive of
470	interest, costs, and attorney's fees, except those within the
471	exclusive jurisdiction of the circuit courts; and
472	(d)  Of disputes occurring in the homeowners' associations
473	as described in s. 720.311(2)(a), Florida Statutes 2005, which
474	shall be concurrent with jurisdiction of the circuit courts.
475	Section 11.  This act shall take effect July 1, 2006.

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