Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. CS for CS for SB 580
                                Barcode 446246                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/17/2013           .                                

       The Committee on Rules (Richter) recommended the following:
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Paragraph (b) of subsection (2) of section
    6  468.436, Florida Statutes, is amended to read:
    7         468.436 Disciplinary proceedings.—
    8         (2) The following acts constitute grounds for which the
    9  disciplinary actions in subsection (4) may be taken:
   10         (b)1. Violation of any provision of this part.
   11         2. Violation of any lawful order or rule rendered or
   12  adopted by the department or the council.
   13         3. Being convicted of or pleading nolo contendere to a
   14  felony in any court in the United States.
   15         4. Obtaining a license or certification or any other order,
   16  ruling, or authorization by means of fraud, misrepresentation,
   17  or concealment of material facts.
   18         5. Committing acts of gross misconduct or gross negligence
   19  in connection with the profession.
   20         6. Contracting, on behalf of an association, with any
   21  entity in which the licensee has a financial interest that is
   22  not disclosed.
   23         7. Violating any provision of chapters 718, 719, or 720
   24  during the course of performing community association management
   25  services pursuant to a contract with a community association as
   26  defined in s. 468.431(1).
   27         Section 2. Subsection (5) and paragraph (d) of subsection
   28  (6) of section 720.303, Florida Statutes, are amended, and
   29  subsection (13) is added to that section, to read:
   30         720.303 Association powers and duties; meetings of board;
   31  official records; budgets; financial reporting; association
   32  funds; recalls.—
   33         (5) INSPECTION AND COPYING OF RECORDS.—The official records
   34  shall be maintained within the state for at least 7 years and
   35  shall be made available to a parcel owner for inspection or
   36  photocopying within 45 miles of the community or within the
   37  county in which the association is located within 10 business
   38  days after receipt by the board or its designee of a written
   39  request must be open to inspection and available for
   40  photocopying by members or their authorized agents at reasonable
   41  times and places within 10 business days after receipt of a
   42  written request for access. This subsection may be complied with
   43  by having a copy of the official records available for
   44  inspection or copying in the community or, at the option of the
   45  association, by making the records available to a parcel owner
   46  electronically via the Internet or by allowing the records to be
   47  viewed in electronic format on a computer screen and printed
   48  upon request. If the association has a photocopy machine
   49  available where the records are maintained, it must provide
   50  parcel owners with copies on request during the inspection if
   51  the entire request is limited to no more than 25 pages. An
   52  association shall allow a member or his or her authorized
   53  representative to use a portable device, including a smartphone,
   54  tablet, portable scanner, or any other technology capable of
   55  scanning or taking photographs, to make an electronic copy of
   56  the official records in lieu of providing the member or his or
   57  her authorized representative with a copy of such records. The
   58  association may not charge a fee to a member or his or her
   59  authorized representative for such use of a portable device.
   60         (a) The failure of an association to provide access to the
   61  records within 10 business days after receipt of a written
   62  request submitted by certified mail, return receipt requested,
   63  creates a rebuttable presumption that the association willfully
   64  failed to comply with this subsection.
   65         (b) A member who is denied access to official records is
   66  entitled to the actual damages or minimum damages for the
   67  association’s willful failure to comply with this subsection.
   68  The minimum damages are to be $50 per calendar day up to 10
   69  days, the calculation to begin on the 11th business day after
   70  receipt of the written request.
   71         (c) The association may adopt reasonable written rules
   72  governing the frequency, time, location, notice, records to be
   73  inspected, and manner of inspections, but may not require a
   74  parcel owner to demonstrate any proper purpose for the
   75  inspection, state any reason for the inspection, or limit a
   76  parcel owner’s right to inspect records to less than one 8-hour
   77  business day per month. The association may impose fees to cover
   78  the costs of providing copies of the official records,
   79  including, without limitation, the costs of copying and the
   80  costs required for personnel to retrieve and copy the records if
   81  the time spent retrieving and copying the records exceeds one
   82  half hour and if the personnel costs do not exceed $20 per hour.
   83  No personnel costs may be charged for records requests that
   84  result in 25 or fewer pages. The association may charge up to 25
   85  50 cents per page for copies made on the association’s
   86  photocopier. If the association does not have a photocopy
   87  machine available where the records are kept, or if the records
   88  requested to be copied exceed 25 pages in length, the
   89  association may have copies made by an outside duplicating
   90  service vendor or association management company personnel and
   91  may charge the actual cost of copying, as supported by the
   92  vendor invoice including any reasonable costs involving
   93  personnel fees and charges at an hourly rate for vendor or
   94  employee time to cover administrative costs to the vendor or
   95  association. The association shall maintain an adequate number
   96  of copies of the recorded governing documents, to ensure their
   97  availability to members and prospective members. Notwithstanding
   98  this paragraph, the following records are not accessible to
   99  members or parcel owners:
  100         1. Any record protected by the lawyer-client privilege as
  101  described in s. 90.502 and any record protected by the work
  102  product privilege, including, but not limited to, a record
  103  prepared by an association attorney or prepared at the
  104  attorney’s express direction which reflects a mental impression,
  105  conclusion, litigation strategy, or legal theory of the attorney
  106  or the association and which was prepared exclusively for civil
  107  or criminal litigation or for adversarial administrative
  108  proceedings or which was prepared in anticipation of such
  109  litigation or proceedings until the conclusion of the litigation
  110  or proceedings.
  111         2. Information obtained by an association in connection
  112  with the approval of the lease, sale, or other transfer of a
  113  parcel.
  114         3. Personnel records of the association’s employees,
  115  including, but not limited to, disciplinary, payroll, health,
  116  and insurance records. For purposes of this subparagraph, the
  117  term “personnel records” does not include written employment
  118  agreements with an association employee or budgetary or
  119  financial records that indicate the compensation paid to an
  120  association employee.
  121         4. Medical records of parcel owners or community residents.
  122         5. Social security numbers, driver’s license numbers,
  123  credit card numbers, electronic mailing addresses, telephone
  124  numbers, facsimile numbers, emergency contact information, any
  125  addresses for a parcel owner other than as provided for
  126  association notice requirements, and other personal identifying
  127  information of any person, excluding the person’s name, parcel
  128  designation, mailing address, and property address. However, an
  129  owner may consent in writing to the disclosure of protected
  130  information described in this subparagraph. The association is
  131  not liable for the disclosure of information that is protected
  132  under this subparagraph if the information is included in an
  133  official record of the association and is voluntarily provided
  134  by an owner and not requested by the association.
  135         6. Any electronic security measure that is used by the
  136  association to safeguard data, including passwords.
  137         7. The software and operating system used by the
  138  association which allows the manipulation of data, even if the
  139  owner owns a copy of the same software used by the association.
  140  The data is part of the official records of the association.
  141         (d) The association or its authorized agent is not required
  142  to provide a prospective purchaser or lienholder with
  143  information about the residential subdivision or the association
  144  other than information or documents required by this chapter to
  145  be made available or disclosed. The association or its
  146  authorized agent may charge a reasonable fee to the prospective
  147  purchaser or lienholder or the current parcel owner or member
  148  for providing good faith responses to requests for information
  149  by or on behalf of a prospective purchaser or lienholder, other
  150  than that required by law, if the fee does not exceed $150 plus
  151  the reasonable cost of photocopying and any attorney’s fees
  152  incurred by the association in connection with the response.
  153         (6) BUDGETS.—
  154         (d) An association is deemed to have provided for reserve
  155  accounts if reserve accounts have been initially established by
  156  the developer or if the membership of the association
  157  affirmatively elects to provide for reserves. If reserve
  158  accounts are established by the developer, the budget must
  159  designate the components for which the reserve accounts may be
  160  used. If reserve accounts are not initially provided by the
  161  developer, the membership of the association may elect to do so
  162  upon the affirmative approval of a majority of the total voting
  163  interests of the association. Such approval may be obtained by
  164  vote of the members at a duly called meeting of the membership
  165  or by the written consent of a majority of the total voting
  166  interests of the association. The approval action of the
  167  membership must state that reserve accounts shall be provided
  168  for in the budget and must designate the components for which
  169  the reserve accounts are to be established. Upon approval by the
  170  membership, the board of directors shall include the required
  171  reserve accounts in the budget in the next fiscal year following
  172  the approval and each year thereafter. Once established as
  173  provided in this subsection, the reserve accounts must be funded
  174  or maintained or have their funding waived in the manner
  175  provided in paragraph (f).
  176         (13) REPORTING REQUIREMENT.—The community association
  177  manager or management firm, or the association when there is no
  178  community association manager or management firm, shall report
  179  to the division by November 22, 2013, in a manner and form
  180  prescribed by the division.
  181         (a) The report shall include the association’s:
  182         1. Legal name.
  183         2. Federal employer identification number.
  184         3. Mailing and physical addresses.
  185         4. Total number of parcels.
  186         5. Total amount of revenues and expenses from the
  187  association’s annual budget.
  188         (b) For associations in which control of the association
  189  has not been transitioned to nondeveloper members, as set forth
  190  in s. 720.307, the report shall also include the developer’s:
  191         1. Legal name.
  192         2. Mailing address.
  193         3. Total number of parcels owned on the date of reporting.
  194         (c) The reporting requirement provided in this subsection
  195  shall be a continuing obligation on each association until the
  196  required information is reported to the division.
  197         (d) By October 1, 2013, the department shall establish and
  198  implement a registration system through an Internet website that
  199  provides for the reporting requirements of paragraphs (a) and
  200  (b).
  201         (e) On or before December 1, 2013, and annually thereafter
  202  by December 1, the department shall submit a report to the
  203  Governor, the President of the Senate, and the Speaker of the
  204  House of Representatives providing the homeowner association
  205  data reported pursuant to this subsection.
  206         (f) The division may adopt rules pursuant to ss. 120.536(1)
  207  and 120.54 to implement the provisions of this subsection.
  208         (g) This subsection shall expire on July 1, 2016, unless
  209  reenacted by the Legislature.
  210         Section 3. Section 720.3033, Florida Statutes, is created
  211  to read:
  212         720.3033 Officers and directors.—
  213         (1)(a) Within 90 days after being elected or appointed to
  214  the board, each director shall certify in writing to the
  215  secretary of the association that he or she has read the
  216  association’s declaration of covenants, articles of
  217  incorporation, bylaws, and current written rules and policies;
  218  that he or she will work to uphold such documents and policies
  219  to the best of his or her ability; and that he or she will
  220  faithfully discharge his or her fiduciary responsibility to the
  221  association’s members. Within 90 days after being elected or
  222  appointed to the board, in lieu of this written certification,
  223  the newly elected or appointed director may submit a certificate
  224  of having satisfactorily completed the educational curriculum
  225  administered by a division-approved education provider within 1
  226  year before or 90 days after the date of election or
  227  appointment.
  228         (b) The written certification or educational certificate is
  229  valid for the uninterrupted tenure of the director on the board.
  230  A director who does not timely file the written certification or
  231  educational certificate shall be suspended from the board until
  232  he or she complies with the requirement. The board may
  233  temporarily fill the vacancy during the period of suspension.
  234         (c) The association shall retain each director’s written
  235  certification or educational certificate for inspection by the
  236  members for 5 years after the director’s election. However, the
  237  failure to have the written certification or educational
  238  certificate on file does not affect the validity of any board
  239  action.
  240         (2) If the association enters into a contract or other
  241  transaction with any of its directors or a corporation, firm,
  242  association that is not an affiliated homeowners' association,
  243  or other entity in which an association director is also a
  244  director or officer or is financially interested, the board
  245  must:
  246         (a) Comply with the requirements of s. 617.0832.
  247         (b) Enter the disclosures required by s. 617.0832 into the
  248  written minutes of the meeting.
  249         (c) Approve the contract or other transaction by an
  250  affirmative vote of two-thirds of the directors present.
  251         (d) At the next regular or special meeting of the members,
  252  disclose the existence of the contract or other transaction to
  253  the members. Upon motion of any member, the contract or
  254  transaction shall be brought up for a vote and may be canceled
  255  by a majority vote of the members present. If the members cancel
  256  the contract, the association is only liable for the reasonable
  257  value of goods and services provided up to the time of
  258  cancellation and is not liable for any termination fee,
  259  liquidated damages, or other penalty for such cancellation.
  260         (3) An officer, director, or manager may not solicit, offer
  261  to accept, or accept any good or service of value for which
  262  consideration has not been provided for his or her benefit or
  263  for the benefit of a member of his or her immediate family from
  264  any person providing or proposing to provide goods or services
  265  to the association. If the board finds that an officer or
  266  director has violated this subsection, the board shall
  267  immediately remove from office the officer or director. The
  268  vacancy shall be filled according to law until the end of the
  269  period of the end of the director’s term of office. However, an
  270  officer, director, or manager may accept food to be consumed at
  271  a business meeting with a value of less than $25 per individual
  272  or a service or good received in connection with trade fairs or
  273  education programs.
  274         (4) A director or officer charged by information or
  275  indictment with a felony theft or embezzlement offense involving
  276  the association’s funds or property is removed from office. The
  277  board shall fill the vacancy according to general law until the
  278  end of the period of the suspension or the end of the director’s
  279  term of office, whichever occurs first. However, if the charges
  280  are resolved without a finding of guilt or without acceptance of
  281  a plea of guilty or nolo contendere, the director or officer
  282  shall be reinstated for any remainder of his or her term of
  283  office. A member who has such criminal charges pending may not
  284  be appointed or elected to a position as a director or officer.
  285         (5) All associations shall maintain insurance or a fidelity
  286  bond for all persons who control or disburse funds of the
  287  association. The insurance policy or fidelity bond must cover
  288  the maximum funds that will be in the custody of the association
  289  or its management agent at any one time. As used in this
  290  subsection, the term “persons who control or disburse funds of
  291  the association” includes, but is not limited to, persons
  292  authorized to sign checks on behalf of the association, and the
  293  president, secretary, and treasurer of the association. The
  294  association shall bear the cost of any insurance or bond.
  295         Section 4. Paragraph (a) of subsection (9) of section
  296  720.306, Florida Statutes, is amended to read:
  297         720.306 Meetings of members; voting and election
  298  procedures; amendments.—
  299         (9)(a) ELECTIONS AND BOARD VACANCIES.—Elections of
  300  directors must be conducted in accordance with the procedures
  301  set forth in the governing documents of the association. All
  302  members of the association are eligible to serve on the board of
  303  directors, and a member may nominate himself or herself as a
  304  candidate for the board at a meeting where the election is to be
  305  held; provided, however, that or, if the election process allows
  306  candidates to be nominated in advance of the meeting voting by
  307  absentee ballot, in advance of the balloting, the association is
  308  not required to allow nominations at the meeting. An election is
  309  not required unless more candidates are nominated than vacancies
  310  exist. Except as otherwise provided in the governing documents,
  311  boards of directors must be elected by a plurality of the votes
  312  cast by eligible voters.
  313         Section 5. Subsection (1) of section 720.307, Florida
  314  Statutes, is amended, present subsections (2) through (4) are
  315  renumbered as subsections (3) through (5), respectively, and new
  316  subsection (2) is added to that section, to read:
  317         720.307 Transition of association control in a community.
  318  With respect to homeowners’ associations:
  319         (1) Members other than the developer are entitled to elect
  320  at least a majority of the members of the board of directors of
  321  the homeowners’ association when the earlier of the following
  322  events occurs:
  323         (a) Three months after 90 percent of the parcels in all
  324  phases of the community that will ultimately be operated by the
  325  homeowners’ association have been conveyed to members; or
  326         (b) Such other percentage of the parcels has been conveyed
  327  to members, or such other date or event has occurred, as is set
  328  forth in the governing documents in order to comply with the
  329  requirements of any governmentally chartered entity with regard
  330  to the mortgage financing of parcels;
  331         (c) Upon the developer abandoning or deserting its
  332  responsibility to maintain and complete the amenities or
  333  infrastructure as disclosed in the governing documents. There is
  334  a rebuttable presumption that the developer has abandoned and
  335  deserted the property if the developer has unpaid assessments or
  336  guaranteed amounts under s. 720.308 for a period of more than 2
  337  years;
  338         (d) Upon the developer filing a petition seeking protection
  339  under chapter 7 of the federal Bankruptcy Code;
  340         (e) Upon the developer losing title to the property through
  341  a foreclosure, or the transfer of a deed in lieu of foreclosure,
  342  unless the successor owner has accepted an assignment of
  343  developer rights and responsibilities first arising after the
  344  date of such assignment; or
  345         (f) Upon a receiver for the developer being appointed by a
  346  circuit court and not being discharged within 30 days after such
  347  appointment, unless the court determines within 30 days after
  348  such appointment that transfer of control would be detrimental
  349  to the association or its members.
  351         For purposes of this section, the term “members other than
  352  the developer” shall not include builders, contractors, or
  353  others who purchase a parcel for the purpose of constructing
  354  improvements thereon for resale.
  355         (2) Members other than the developer are entitled to elect
  356  at least one member of the board of directors of the homeowners’
  357  association if 25 percent of the parcels in all phases of the
  358  community which will ultimately be operated by the association
  359  have been conveyed to members.
  360         Section 6. Subsection (5) is added to section 720.3075,
  361  Florida Statutes, to read:
  362         720.3075 Prohibited clauses in association documents.—
  363         (5) It is declared that the public policy of this state is
  364  that prior to transition of homeowners’ association control in a
  365  community from the developer to the nondeveloper members, as set
  366  forth in s. 720.307, a developer is prohibited from unilaterally
  367  making amendments to the governing documents which bind members
  368  of the association, which would unreasonably modify the original
  369  plan of development, radically change the community scheme, or
  370  prejudice the rights of the existing nondeveloper members to use
  371  and enjoy the benefits of the common property. An amendment to
  372  the governing documents shall not be deemed to unreasonably
  373  modify the original plan of development, radically change the
  374  community scheme, or prejudice the rights of the existing
  375  nondeveloper members to use and enjoy the benefits of the common
  376  property unless the developer’s authority to make such
  377  amendments was not reserved in the original governing documents,
  378  and the amendment is arbitrary, capricious or in bad faith,
  379  destroys the general plan of development, or materially shifts
  380  economic burdens from the developer to the existing nondeveloper
  381  members.
  382         Section 7. Paragraph (b) of subsection (2) of section
  383  720.3085, Florida Statutes, is amended to read:
  384         720.3085 Payment for assessments; lien claims.—
  385         (2)
  386         (b) A parcel owner is jointly and severally liable with the
  387  previous parcel owner for all unpaid assessments that came due
  388  up to the time of transfer of title. This liability is without
  389  prejudice to any right the present parcel owner may have to
  390  recover any amounts paid by the present owner from the previous
  391  owner. For the purposes of this subsection, the term “previous
  392  owner” shall not include an association that acquires title to a
  393  delinquent property through foreclosure or by deed in lieu of
  394  foreclosure. The present parcel owner’s liability for unpaid
  395  assessments is limited to any unpaid assessments that accrued
  396  before the association acquired title to the delinquent property
  397  through foreclosure or by deed in lieu of foreclosure.
  398         Section 8. This act shall take effect July 1, 2013.
  401  ================= T I T L E  A M E N D M E N T ================
  402         And the title is amended as follows:
  403         Delete everything before the enacting clause
  404  and insert:
  405                        A bill to be entitled                      
  406         An act relating to homeowners’ associations; amending
  407         s. 468.436, F.S.; providing grounds for disciplinary
  408         actions against community association managers;
  409         amending s. 720.303, F.S.; requiring official records
  410         to be maintained within a specified distance of the
  411         association for a specified time; authorizing
  412         associations to maintain such records online;
  413         requiring associations to allow a member to use a
  414         portable device to make an electronic copy of the
  415         official records and prohibiting associations from
  416         charging a fee for such an electronic copy; removing
  417         provisions allowing the association to charge fees for
  418         personnel costs related to records access; requiring
  419         budgets to designate permissible uses of reserve
  420         accounts; requiring a community association manager,
  421         or the association in the absence of a community
  422         association manager, to report certain information to
  423         the Division of Florida Condominiums, Timeshares, and
  424         Mobile Homes; providing an expiration date for the
  425         reporting requirements; creating s. 720.3033, F.S.;
  426         requiring association directors to file with the
  427         association secretary written certification that they
  428         have read certain association documents, will uphold
  429         the documents, and will uphold their fiduciary
  430         responsibility to the members; providing for an
  431         educational certificate in lieu of written
  432         certification; providing that such certification is
  433         valid while the director is on the board; providing
  434         penalties for failure to file such certification;
  435         requiring the association secretary to retain such
  436         certification for 5 years; requiring the board to
  437         follow specified procedures relating to contracts or
  438         transactions between the association and certain
  439         entities; providing for disclosure of the contract or
  440         transaction to members; providing for the cancellation
  441         of such contract or transaction under certain
  442         circumstances; prohibiting any association officer,
  443         director, or manager from soliciting or receiving
  444         certain personal benefits from any person providing or
  445         offering to provide goods or services to the
  446         association and providing for removal for knowingly
  447         taking such action; providing an exception; providing
  448         for the removal of any director or officer charged
  449         with a felony theft or embezzlement offense involving
  450         association funds or property; providing for the
  451         reinstatement of such person under certain
  452         circumstances; prohibiting a member with pending
  453         criminal charges from certain positions; requiring the
  454         association to maintain insurance or a bond to cover
  455         funds that will be in the custody of the association
  456         or its management agent; providing a definition;
  457         amending s. 720.306, F.S.; revising procedures for the
  458         election of directors; amending s. 720.307, F.S.;
  459         providing additional circumstances for authorizing
  460         members to elect a majority of association board
  461         members; providing circumstances under which members
  462         other than the developer are authorized to elect a
  463         specified number of members to the board of directors;
  464         amending s. 720.3075, F.S.; providing public policy
  465         regarding prohibited clauses in association documents;
  466         providing prohibited clauses in association documents;
  467         amending s. 720.3085, F.S.; defining the term
  468         “previous owner” to exclude certain associations from
  469         provisions relating to the liability of previous
  470         owners of parcels for unpaid assessments; limiting a
  471         present owner’s liability for certain assessments;
  472         providing an effective date.