Florida Senate - 2016                                    SB 1122
       By Senator Hays
       11-00923C-16                                          20161122__
    1                        A bill to be entitled                      
    2         An act relating to homeowners’ associations; amending
    3         s. 718.509, F.S.; revising the uses of the Florida
    4         Condominiums, Timeshares, and Mobile Homes Trust Fund
    5         to include reimbursement of costs to the Division of
    6         Florida Condominiums, Timeshares, and Mobile Homes for
    7         the administration and operation of the Homeowners’
    8         Association Act; amending s. 720.303, F.S.; increasing
    9         certain fines; providing a cause of action for a
   10         member against a community association manager or
   11         management firm under certain circumstances;
   12         authorizing related fines; prohibiting reimbursement
   13         to a community association manager or management firm
   14         for certain fines; requiring the community association
   15         manager, the management firm, or the association to
   16         annually provide a specified report beginning on a
   17         specified date, and to resubmit the report under
   18         certain circumstances to the Division of Florida
   19         Condominiums, Timeshares, and Mobile Homes; revising
   20         the dates by which the Department of Business and
   21         Professional Regulation must meet certain reporting
   22         requirements; extending the scheduled expiration of
   23         specified statutory text; amending s. 720.305, F.S.;
   24         providing that a fine may not become a lien against a
   25         parcel; amending s. 720.307, F.S.; revising the
   26         circumstances under which members other than the
   27         developer are entitled to elect at least a majority of
   28         the board of directors of the association; amending s.
   29         720.311, F.S.; providing presuit mediation for
   30         election and recall disputes; providing for binding
   31         arbitration by the department for certain disputes
   32         between a parcel owner and a homeowners’ association;
   33         authorizing mediation or arbitration by a mediator or
   34         arbitrator, respectively, who has been certified by a
   35         county court; creating s. 720.318, F.S.; requiring the
   36         department to provide training and educational
   37         programs for homeowners’ association members,
   38         directors, and officers; providing that the training
   39         may include certain methods; authorizing the
   40         department to review and approve training and
   41         educational programs for members, directors, and
   42         officers; requiring the department to maintain a
   43         current list of approved programs and providers and to
   44         make the list available to homeowners’ associations in
   45         a reasonable and cost-effective manner; creating s.
   46         720.319, F.S.; authorizing the department to enforce
   47         and ensure compliance with the Homeowners’ Association
   48         Act and specified rules; providing the department
   49         jurisdiction to investigate complaints relating to
   50         homeowners’ associations; requiring homeowners’
   51         associations to pay a specified fee to cover the
   52         administrative and operational costs of the
   53         department; prohibiting the department from imposing
   54         the fee under certain circumstances; amending s.
   55         720.401, F.S.; requiring a seller of a parcel to
   56         provide a prospective buyer with specified association
   57         documents under certain circumstances; authorizing a
   58         prospective buyer to terminate a contract for purchase
   59         within a specified timeframe under certain
   60         circumstances; amending s. 720.402, F.S.; providing a
   61         cause of action against developers by nondeveloper
   62         members of a homeowners’ association or the
   63         homeowners’ association; providing an effective date.
   65  Be It Enacted by the Legislature of the State of Florida:
   67         Section 1. Subsection (1) of section 718.509, Florida
   68  Statutes, is amended to read:
   69         718.509 Division of Florida Condominiums, Timeshares, and
   70  Mobile Homes Trust Fund.—
   71         (1) There is created within the State Treasury the Division
   72  of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund
   73  to be used for the administration and operation of this chapter
   74  and chapters 718, 719, 720, 721, and 723 by the division.
   75         Section 2. Paragraph (b) of subsection (5) and subsection
   76  (13) of section 720.303, Florida Statutes, are amended to read:
   77         720.303 Association powers and duties; meetings of board;
   78  official records; budgets; financial reporting; association
   79  funds; recalls.—
   80         (5) INSPECTION AND COPYING OF RECORDS.—The official records
   81  shall be maintained within the state for at least 7 years and
   82  shall be made available to a parcel owner for inspection or
   83  photocopying within 45 miles of the community or within the
   84  county in which the association is located within 10 business
   85  days after receipt by the board or its designee of a written
   86  request. This subsection may be complied with by having a copy
   87  of the official records available for inspection or copying in
   88  the community or, at the option of the association, by making
   89  the records available to a parcel owner electronically via the
   90  Internet or by allowing the records to be viewed in electronic
   91  format on a computer screen and printed upon request. If the
   92  association has a photocopy machine available where the records
   93  are maintained, it must provide parcel owners with copies on
   94  request during the inspection if the entire request is limited
   95  to no more than 25 pages. An association shall allow a member or
   96  his or her authorized representative to use a portable device,
   97  including a smartphone, tablet, portable scanner, or any other
   98  technology capable of scanning or taking photographs, to make an
   99  electronic copy of the official records in lieu of the
  100  association’s providing the member or his or her authorized
  101  representative with a copy of such records. The association may
  102  not charge a fee to a member or his or her authorized
  103  representative for the use of a portable device.
  104         (b) A member who is denied access to official records is
  105  entitled to the actual damages or minimum damages for the
  106  association’s willful failure to comply with this subsection.
  107  The minimum damages are $500 to be $50 per calendar day up to 30
  108  10 days, the calculation to begin on the 11th business day after
  109  receipt of the written request. If the association delegates to
  110  a community association manager or management firm the
  111  responsibility to provide members with access to official
  112  records, as provided in this section, a member who is denied
  113  access to official records by the community association manager
  114  or management firm has a cause of action against the community
  115  association manager or management firm for the actual or minimum
  116  damages provided in this paragraph. A community association
  117  manager or management firm may not be reimbursed or otherwise
  118  indemnified by the association for payment of any actual or
  119  minimum damages provided in this paragraph.
  120         (13) REPORTING REQUIREMENT.—The community association
  121  manager or management firm, or the association when there is no
  122  community association manager or management firm, must submit a
  123  shall report to the division by November 22, 2016 2013, and each
  124  year thereafter, in a manner and form prescribed by the
  125  division.
  126         (a) The report must shall include the association’s:
  127         1. Legal name.
  128         2. Federal employer identification number.
  129         3. Mailing and physical addresses.
  130         4. Total number of parcels.
  131         5. Total amount of revenues and expenses from the
  132  association’s annual budget.
  133         (b) For associations in which control of the association
  134  has not been transitioned to nondeveloper members, as set forth
  135  in s. 720.307, the report shall also include the developer’s:
  136         1. Legal name.
  137         2. Mailing address.
  138         3. Total number of parcels owned on the date of reporting.
  139         (c) The reporting requirement provided in this subsection
  140  shall be a continuing obligation on each association until the
  141  required information is reported to the division. The community
  142  association manager or management firm, or the association if
  143  there is no community association manager or management firm,
  144  must resubmit the report required under this subsection upon the
  145  occurrence of a material change in the information required to
  146  be reported pursuant to paragraphs (a) and (b).
  147         (d) By October 1, 2016 2013, the department shall establish
  148  and implement a registration system through an Internet website
  149  that provides for the reporting requirements of paragraphs (a)
  150  and (b).
  151         (e) The department shall prepare an annual report of the
  152  data reported pursuant to this subsection and present it to the
  153  Governor, the President of the Senate, and the Speaker of the
  154  House of Representatives by December 1, 2016 2013, and each year
  155  thereafter.
  156         (f) The division shall adopt rules pursuant to ss.
  157  120.536(1) and 120.54 to implement the provisions of this
  158  subsection.
  159         (g) This subsection shall expire on July 1, 2026 2016,
  160  unless reenacted by the Legislature.
  161         Section 3. Subsection (2) of section 720.305, Florida
  162  Statutes, is amended to read:
  163         720.305 Obligations of members; remedies at law or in
  164  equity; levy of fines and suspension of use rights.—
  165         (2) The association may levy reasonable fines. A fine may
  166  not exceed $100 per violation against any member or any member’s
  167  tenant, guest, or invitee for the failure of the owner of the
  168  parcel or its occupant, licensee, or invitee to comply with any
  169  provision of the declaration, the association bylaws, or
  170  reasonable rules of the association unless otherwise provided in
  171  the governing documents. A fine may be levied by the board for
  172  each day of a continuing violation, with a single notice and
  173  opportunity for hearing, except that the fine may not exceed
  174  $1,000 in the aggregate unless otherwise provided in the
  175  governing documents. A fine of less than $1,000 may not become a
  176  lien against a parcel. In any action to recover a fine, the
  177  prevailing party is entitled to reasonable attorney fees and
  178  costs from the nonprevailing party as determined by the court.
  179         (a) An association may suspend, for a reasonable period of
  180  time, the right of a member, or a member’s tenant, guest, or
  181  invitee, to use common areas and facilities for the failure of
  182  the owner of the parcel or its occupant, licensee, or invitee to
  183  comply with any provision of the declaration, the association
  184  bylaws, or reasonable rules of the association. This paragraph
  185  does not apply to that portion of common areas used to provide
  186  access or utility services to the parcel. A suspension may not
  187  prohibit an owner or tenant of a parcel from having vehicular
  188  and pedestrian ingress to and egress from the parcel, including,
  189  but not limited to, the right to park.
  190         (b) A fine or suspension may not be imposed by the board of
  191  administration without at least 14 days’ notice to the person
  192  sought to be fined or suspended and an opportunity for a hearing
  193  before a committee of at least three members appointed by the
  194  board who are not officers, directors, or employees of the
  195  association, or the spouse, parent, child, brother, or sister of
  196  an officer, director, or employee. If the committee, by majority
  197  vote, does not approve a proposed fine or suspension, it may not
  198  be imposed. The role of the committee is limited to determining
  199  whether to confirm or reject the fine or suspension levied by
  200  the board. If the board of administration imposes a fine or
  201  suspension, the association must provide written notice of such
  202  fine or suspension by mail or hand delivery to the parcel owner
  203  and, if applicable, to any tenant, licensee, or invitee of the
  204  parcel owner.
  205         Section 4. Subsection (1) of section 720.307, Florida
  206  Statutes, is amended to read:
  207         720.307 Transition of association control in a community.
  208  With respect to homeowners’ associations:
  209         (1) Members other than the developer are entitled to elect
  210  at least a majority of the members of the board of directors of
  211  the homeowners’ association upon the occurrence of any of the
  212  following when the earlier of the following events occurs:
  213         (a) For a homeowners’ association consisting of fewer than
  214  100 lots, the passage of 3 months after 75 percent of the
  215  parcels in all phases of the community which will ultimately be
  216  operated by the homeowners’ association have been conveyed to
  217  members.
  218         (b)For a homeowners’ association consisting of fewer than
  219  200 lots, the passage of 10 years after the governing documents
  220  of the homeowners’ association are filed with the local
  221  government.
  222         (c) For a homeowners’ association consisting of 200 or more
  223  lots, the earlier of the passage of 20 years after the governing
  224  documents of the homeowners’ association are filed with the
  225  local government or 3 months after 90 percent of the parcels in
  226  all phases of the community which will ultimately be operated by
  227  the homeowners’ association have been conveyed to members. Three
  228  months after 90 percent of the parcels in all phases of the
  229  community that will ultimately be operated by the homeowners’
  230  association have been conveyed to members;
  231         (h)(b)Conveyance of another Such other percentage of the
  232  parcels has been conveyed to members, or the occurrence of such
  233  other date or event has occurred, as is set forth in the
  234  governing documents in order to comply with the requirements of
  235  any governmentally chartered entity with regard to the mortgage
  236  financing of parcels.;
  237         (d)(c)Abandonment by the developer, or the developer’s
  238  failure of Upon the developer abandoning or deserting its
  239  responsibility to maintain and complete the amenities or
  240  infrastructure as disclosed in the governing documents. There is
  241  a rebuttable presumption that the developer has abandoned and
  242  deserted the property if the developer has unpaid assessments or
  243  guaranteed amounts under s. 720.308 for a period of more than 2
  244  years.;
  245         (e)(d)Upon the developer Filing by the developer of a
  246  petition seeking protection under chapter 7 of the federal
  247  Bankruptcy Code.;
  248         (f)(e)Loss of Upon the developer losing title to the
  249  property by the developer through a foreclosure action or the
  250  transfer of a deed in lieu of foreclosure, unless the successor
  251  owner has accepted an assignment of developer rights and
  252  responsibilities first arising after the date of such
  253  assignment.; or
  254         (g)(f)Appointment of Upon a receiver for the developer
  255  being appointed by a circuit court, if the receiver is and not
  256  being discharged within 30 days after such appointment, unless
  257  the court determines within 30 days after such appointment that
  258  transfer of control would be detrimental to the association or
  259  its members.
  261  For purposes of this section, the term “members other than the
  262  developer” does shall not include builders, contractors, or
  263  others who purchase a parcel for the purpose of constructing
  264  improvements thereon for resale.
  265         Section 5. Subsection (1) and paragraph (d) of subsection
  266  (2) of section 720.311, Florida Statutes, are amended to read:
  267         720.311 Dispute resolution.—
  268         (1) The Legislature finds that alternative dispute
  269  resolution has made progress in reducing court dockets and
  270  trials and in offering a more efficient, cost-effective option
  271  to litigation. The filing of any petition for arbitration or the
  272  serving of a demand for presuit mediation as provided for in
  273  this section shall toll the applicable statute of limitations.
  274  Any recall dispute filed with the department pursuant to s.
  275  720.303(10) shall be conducted by the department in accordance
  276  with the provisions of ss. 718.112(2)(j) and 718.1255 and the
  277  rules adopted by the division. In addition, the department shall
  278  conduct mandatory binding arbitration of election disputes
  279  between a member and an association pursuant to s. 718.1255 and
  280  rules adopted by the division. Neither Election disputes and nor
  281  recall disputes are eligible for presuit mediation; these
  282  disputes shall be arbitrated by the department. At the request
  283  of the parcel owner or homeowners’ association, the department
  284  shall provide binding arbitration in disputes involving
  285  covenants, restrictions, rule enforcement, and duties to
  286  maintain and make safe pursuant to the declaration of covenants,
  287  rules and regulations, and other governing documents; disputes
  288  involving assessments; and disputes involving the official
  289  records of the homeowners’ association. At the conclusion of the
  290  proceeding, the department shall charge the parties a fee in an
  291  amount adequate to cover all costs and expenses incurred by the
  292  department in conducting the proceeding. Initially, the
  293  petitioner shall remit a filing fee of at least $200 to the
  294  department. The fees paid to the department shall become a
  295  recoverable cost in the arbitration proceeding, and the
  296  prevailing party in an arbitration proceeding shall recover its
  297  reasonable costs and attorney attorney’s fees in an amount found
  298  reasonable by the arbitrator. The department shall adopt rules
  299  to effectuate the purposes of this section.
  300         (2)
  301         (d) A mediator or arbitrator shall be authorized to conduct
  302  mediation or arbitration under this section only if he or she
  303  has been certified as a county court or circuit court civil
  304  mediator or arbitrator, respectively, pursuant to the
  305  requirements established by the Florida Supreme Court.
  306  Settlement agreements resulting from mediation do shall not have
  307  precedential value in proceedings involving parties other than
  308  those participating in the mediation to support either a claim
  309  or defense in other disputes.
  310         Section 6. Section 720.318, Florida Statutes, is created to
  311  read:
  312         720.318 Training and educational programs.—The department
  313  shall provide training and educational programs for homeowners’
  314  association members, directors, and officers. At the
  315  department’s discretion, the training and educational programs
  316  may include web-based electronic media, live training, and
  317  seminars in various locations throughout the state. The
  318  department may review and approve training and educational
  319  programs for members, directors, and officers of homeowners’
  320  associations which are offered by providers. The department
  321  shall maintain a current list of approved programs and providers
  322  and shall make such list available to homeowners’ associations
  323  in a reasonable and cost-effective manner.
  324         Section 7. Section 720.319, Florida Statutes, is created to
  325  read:
  326         720.319 Authority of the department.—
  327         (1)The department may enforce and ensure compliance with
  328  this chapter and rules relating to records access, financial
  329  management, and elections of homeowners’ associations and may
  330  investigate any complaint made to the department against a
  331  homeowners’ association.
  332         (2)Homeowners’ associations must pay to the department an
  333  annual fee of $2 per lot to cover the department’s
  334  administrative and operational costs in complying with this
  335  chapter. The fee must be submitted to the department with the
  336  annual report required under s. 720.303(13) and deposited into
  337  the Division of Florida Condominiums, Timeshares, and Mobile
  338  Homes Trust Fund. However, the department may not impose this
  339  fee when it has determined, based on the long-range estimates of
  340  such revenue, that the funds collected exceed those required to
  341  cover such costs.
  342         Section 8. Present subsection (2) of section 720.401,
  343  Florida Statutes, is redesignated as subsection (3), and a new
  344  subsection (2) is added to that section, to read:
  345         720.401 Prospective purchasers subject to association
  346  membership requirement; disclosure required; covenants;
  347  assessments; contract cancellation.—
  348         (2) A seller of a parcel for which membership in a
  349  homeowners’ association is a condition of ownership must provide
  350  a prospective buyer with the association’s governing documents,
  351  including the declaration of covenants, articles and bylaws,
  352  rules and regulations, and operating budget for the current
  353  year, and any amendment to such documents. The seller must
  354  provide the prospective buyer with such documents at least 7
  355  days before closing. The prospective buyer may terminate the
  356  contract for purchase within 3 days after receipt of such
  357  documents.
  358         Section 9. Section 720.402, Florida Statutes, is amended to
  359  read:
  360         720.402 Publication of false and misleading information;
  361  developer’s use of homeowners’ association fund prohibited.—
  362         (1) Any person who, in reasonable reliance upon any
  363  material statement or information that is false or misleading
  364  and published by or under authority from the developer in
  365  advertising and promotional materials, including, but not
  366  limited to, a contract of purchase, the declaration of
  367  covenants, exhibits to a declaration of covenants, brochures,
  368  and newspaper advertising, pays anything of value toward the
  369  purchase of a parcel in a community located in this state has a
  370  cause of action to rescind the contract or collect damages from
  371  the developer for his or her loss before the closing of the
  372  transaction. After the closing of the transaction, the purchaser
  373  has a cause of action against the developer for damages under
  374  this section from the time of closing until 1 year after the
  375  date upon which the last of the events described in paragraphs
  376  (a) through (d) occurs:
  377         (a) The closing of the transaction;
  378         (b) The issuance by the applicable governmental authority
  379  of a certificate of occupancy or other evidence of sufficient
  380  completion of construction of the purchaser’s residence to allow
  381  lawful occupancy of the residence by the purchaser. In counties
  382  or municipalities in which certificates of occupancy or other
  383  evidences of completion sufficient to allow lawful occupancy are
  384  not customarily issued, for the purpose of this section,
  385  evidence of lawful occupancy shall be deemed to be given or
  386  issued upon the date that such lawful occupancy of the residence
  387  may be allowed under prevailing applicable laws, ordinances, or
  388  statutes;
  389         (c) The completion by the developer of the common areas and
  390  such recreational facilities, whether or not the same are common
  391  areas, which the developer is obligated to complete or provide
  392  under the terms of the written contract, governing documents, or
  393  written agreement for purchase or lease of the parcel; or
  394         (d) In the event there is not a written contract or
  395  agreement for sale or lease of the parcel, then the completion
  396  by the developer of the common areas and such recreational
  397  facilities, whether or not they are common areas, which the
  398  developer would be obligated to complete under any rule of law
  399  applicable to the developer’s obligation.
  400         (2)(a) A nondeveloper parcel owner has a cause of action
  401  against the developer for damages resulting from the developer’s
  402  abandonment or failure of his or her responsibility to maintain
  403  and complete amenities or infrastructure disclosed in the
  404  governing documents, written contract, or written agreement for
  405  purchase of the parcel.
  406         (b) A nondeveloper parcel owner has a cause of action
  407  against the developer for the developer’s failure to perform or
  408  comply with any duty or obligation required under the governing
  409  documents, written contract, or written agreement for purchase
  410  of the parcel.
  411         (3) A developer may not use association funds for any
  412  purpose not specifically authorized in a homeowners’ association
  413  budget adopted in accordance with the governing documents and s.
  414  720.303. Any use of association funds by a developer in
  415  violation of this section is actionable by a nondeveloper parcel
  416  owner or the homeowners’ association. This subsection is
  417  intended to clarify existing law and applies to all homeowners’
  418  associations existing on July 1, 2016 and created thereafter.
  419         (4) Under no circumstances may a cause of action created or
  420  recognized under this section survive for a period of more than
  421  5 years after the closing of the transaction.
  422         (5)(2) In any action for relief under this section, the
  423  prevailing party may recover reasonable attorney attorney’s
  424  fees. A developer may not expend association funds in the
  425  defense of any suit under this section.
  426         Section 10. This act shall take effect July 1, 2016.