Florida Senate - 2017                        COMMITTEE AMENDMENT
       Bill No. SB 1520
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/05/2017           .                                

       The Committee on Regulated Industries (Latvala) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsections (1) and (3) of section 718.117,
    6  Florida Statutes, are amended, and subsection (21) is added to
    7  that section, to read:
    8         718.117 Termination of condominium.—
    9         (1) LEGISLATIVE FINDINGS.—The Legislature finds that:
   10         (a) Condominiums are created as authorized by statute and
   11  are subject to covenants that encumber the land and restrict the
   12  use of real property.
   13         (b) In some circumstances, the continued enforcement of
   14  those covenants that may create economic waste and, areas of
   15  disrepair which threaten the safety and welfare of the public,
   16  or cause obsolescence of the a condominium property for its
   17  intended use and thereby lower property tax values, and the
   18  Legislature further finds that it is the public policy of this
   19  state to provide by statute a method to preserve the value of
   20  the property interests and the rights of alienation thereof that
   21  owners have in the condominium property before and after
   22  termination.
   23         (c)The Legislature further finds that It is contrary to
   24  the public policy of this state to require the continued
   25  operation of a condominium when to do so constitutes economic
   26  waste or when the ability to do so is made impossible by law or
   27  regulation.
   28         (d)It is in the best interest of the state to provide for
   29  termination of the covenants of a declaration of condominium in
   30  certain circumstances in order to:
   31         1.Ensure the continued maintenance, management, and repair
   32  of stormwater management systems, conservation areas, and
   33  conservation easements.
   34         2.Avoid transferring the expense of maintaining
   35  infrastructure serving the condominium property, including, but
   36  not limited to, stormwater systems and conservation areas, to
   37  the general tax bases of the state and local governments.
   38         3.Prevent covenants from impairing the continued
   39  productive use of the property.
   40         4.Protect state residents from health and safety hazards
   41  created by derelict, damaged, obsolete, or abandoned condominium
   42  properties.
   43         5.Provide fair treatment and just compensation for
   44  individuals and preserve property values and the local property
   45  tax base.
   46         6.Preserve the state’s long history of protecting
   47  homestead property and homestead property rights by ensuring
   48  that such protection is extended to homestead property owners in
   49  the context of a termination of the covenants of a declaration
   50  of condominium This section applies to all condominiums in this
   51  state in existence on or after July 1, 2007.
   52         (3) OPTIONAL TERMINATION.—Except as provided in subsection
   53  (2) or unless the declaration provides for a lower percentage,
   54  The condominium form of ownership may be terminated for all or a
   55  portion of the condominium property pursuant to a plan of
   56  termination meeting the requirements of this section and
   57  approved by the division. Before a residential association
   58  submits a plan to the division, the plan must be approved by at
   59  least 80 percent of the total voting interests of the
   60  condominium. However, if 5 10 percent or more of the total
   61  voting interests of the condominium have rejected the plan of
   62  termination by negative vote or by providing written objections,
   63  the plan of termination may not proceed.
   64         (a) The termination of the condominium form of ownership is
   65  subject to the following conditions:
   66         1. The total voting interests of the condominium must
   67  include all voting interests for the purpose of considering a
   68  plan of termination. A voting interest of the condominium may
   69  not be suspended for any reason when voting on termination
   70  pursuant to this subsection.
   71         2. If 5 10 percent or more of the total voting interests of
   72  the condominium reject a plan of termination, a subsequent plan
   73  of termination pursuant to this subsection may not be considered
   74  for 24 18 months after the date of the rejection.
   75         (b) This subsection does not apply to any condominium
   76  created pursuant to part VI of this chapter until 10 5 years
   77  after the recording of the declaration of condominium, unless
   78  there is no objection to the plan of termination.
   79         (c) For purposes of this subsection, the term “bulk owner”
   80  means the single holder of such voting interests or an owner
   81  together with a related entity or entities that would be
   82  considered an insider, as defined in s. 726.102, holding such
   83  voting interests. If the condominium association is a
   84  residential association proposed for termination pursuant to
   85  this section and, at the time of recording the plan of
   86  termination, at least 80 percent of the total voting interests
   87  are owned by a bulk owner, the plan of termination is subject to
   88  the following conditions and limitations:
   89         1. If the former condominium units are offered for lease to
   90  the public after the termination, each unit owner in occupancy
   91  immediately before the date of recording of the plan of
   92  termination may lease his or her former unit and remain in
   93  possession of the unit for 12 months after the effective date of
   94  the termination on the same terms as similar unit types within
   95  the property are being offered to the public. In order to obtain
   96  a lease and exercise the right to retain exclusive possession of
   97  the unit owner’s former unit, the unit owner must make a written
   98  request to the termination trustee to rent the former unit
   99  within 90 days after the date the plan of termination is
  100  recorded. Any unit owner who fails to timely make such written
  101  request and sign a lease within 15 days after being presented
  102  with a lease is deemed to have waived his or her right to retain
  103  possession of his or her former unit and shall be required to
  104  vacate the former unit upon the effective date of the
  105  termination, unless otherwise provided in the plan of
  106  termination.
  107         2. Any former unit owner whose unit was granted homestead
  108  exemption status by the applicable county property appraiser as
  109  of the date of the recording of the plan of termination shall be
  110  paid a relocation payment in an amount equal to 1 percent of the
  111  termination proceeds allocated to the owner’s former unit. Any
  112  relocation payment payable under this subparagraph shall be paid
  113  by the single entity or related entities owning at least 80
  114  percent of the total voting interests. Such relocation payment
  115  shall be in addition to the termination proceeds for such
  116  owner’s former unit and shall be paid no later than 10 days
  117  after the former unit owner vacates his or her former unit.
  118         3. For their respective units, all unit owners other than
  119  the bulk owner must be compensated at least 100 percent of the
  120  fair market value of their units. The fair market value shall be
  121  determined as of a date that is no earlier than 90 days before
  122  the date that the plan of termination is recorded and shall be
  123  determined by an independent appraiser selected by the
  124  termination trustee. For a person an original purchaser from the
  125  developer who rejects the plan of termination and whose unit was
  126  granted homestead exemption status by the applicable county
  127  property appraiser, or was an owner-occupied operating business,
  128  as of the date that the plan of termination is recorded and who
  129  is current in payment of both assessments and other monetary
  130  obligations to the association and any mortgage encumbering the
  131  unit as of the date the plan of termination is recorded, the
  132  fair market value for the unit owner rejecting the plan shall be
  133  at least the original purchase price paid for the unit. For
  134  purposes of this subparagraph, the term “fair market value”
  135  means the price of a unit that a seller is willing to accept and
  136  a buyer is willing to pay on the open market in an arms-length
  137  transaction based on similar units sold in other condominiums,
  138  including units sold in bulk purchases but excluding units sold
  139  at wholesale or distressed prices. The purchase price of units
  140  acquired in bulk following a bankruptcy or foreclosure shall not
  141  be considered for purposes of determining fair market value.
  142         4. The plan of termination must provide for payment of a
  143  first mortgage encumbering a unit to the extent necessary to
  144  satisfy the lien, but the payment may not exceed the unit’s
  145  share of the proceeds of termination under the plan. If the unit
  146  owner is current in payment of both assessments and other
  147  monetary obligations to the association and any mortgage
  148  encumbering the unit as of the date the plan of termination is
  149  recorded, the receipt by the holder of the unit’s share of the
  150  proceeds of termination under the plan or the outstanding
  151  balance of the mortgage, whichever is less, shall be deemed to
  152  have satisfied the first mortgage in full.
  153         5. Before a plan of termination is presented to the unit
  154  owners for consideration pursuant to this paragraph, the plan
  155  must include the following written disclosures in a sworn
  156  statement:
  157         a. The identity of any person or entity that owns or
  158  controls 25 50 percent or more of the units in the condominium
  159  and, if the units are owned by an artificial entity or entities,
  160  a disclosure of the natural person or persons who, directly or
  161  indirectly, manage or control the entity or entities and the
  162  natural person or persons who, directly or indirectly, own or
  163  control 10 20 percent or more of the artificial entity or
  164  entities that constitute the bulk owner.
  165         b. The units acquired by any bulk owner, the date each unit
  166  was acquired, and the total amount of compensation paid to each
  167  prior unit owner by the bulk owner, regardless of whether
  168  attributed to the purchase price of the unit.
  169         c. The relationship of any board member to the bulk owner
  170  or any person or entity affiliated with the bulk owner subject
  171  to disclosure pursuant to this subparagraph.
  172         d.The factual circumstances that show that the plan
  173  complies with the requirements of this section and that the plan
  174  supports the expressed public policies of this section.
  175         (d) If the members of the board of administration are
  176  elected by the bulk owner, unit owners other than the bulk owner
  177  may elect at least one-third of the members of the board of
  178  administration before the approval of any plan of termination.
  179         (e)The division shall examine the plan of termination to
  180  determine its procedural sufficiency and, within 45 days after
  181  receipt of the initial filing, the division shall notify the
  182  association by mail of any procedural deficiencies or that the
  183  filing is accepted. If the notice is not given within 45 days
  184  after the receipt of the filing, the plan of termination is
  185  presumed to be accepted. If the division determines that the
  186  conditions required by this section have been met and that the
  187  plan complies with the procedural requirements of this section,
  188  the division shall authorize the termination, and the
  189  termination may proceed pursuant to this section.
  190         (f)Subsection (2) does not apply to optional termination
  191  pursuant to this subsection.
  192         (21)APPLICABILITY.—This section applies to all
  193  condominiums in this state in existence on or after July 1,
  194  2007.
  195         Section 2. The amendments made by this act to s. 718.117,
  196  Florida Statutes, are intended to clarify existing law, are
  197  remedial in nature and intended to address the rights and
  198  liabilities of the affected parties, and apply to all
  199  condominiums created under the Condominium Act.
  200         Section 3. For the 2017-2018 fiscal year, the sums of
  201  $85,006 in recurring funds and $4,046 in nonrecurring funds from
  202  the Division of Florida Condominiums, Timeshares, and Mobile
  203  Homes Trust Fund are appropriated to the Department of Business
  204  and Professional Regulation, and one full-time equivalent
  205  position with associated salary rate of 56,791 is authorized,
  206  for the purpose of implementing this act.
  207         Section 4. This act shall take effect July 1, 2017.
  209  ================= T I T L E  A M E N D M E N T ================
  210  And the title is amended as follows:
  211         Delete everything before the enacting clause
  212  and insert:
  213                        A bill to be entitled                      
  214         An act relating to termination of a condominium
  215         association; amending s. 718.117, F.S.; revising
  216         legislative findings; requiring a plan of termination
  217         to be approved by the Division of Florida
  218         Condominiums, Timeshares, and Mobile Homes of the
  219         Department of Business and Professional Regulation and
  220         meet specified requirements for a condominium form of
  221         ownership to be terminated for all or a portion of the
  222         condominium property under certain circumstances;
  223         revising voting requirements for the rejection of a
  224         plan of termination; increasing the amount of time
  225         before a new plan of termination may be considered
  226         after a previous rejection under certain conditions;
  227         revising the requirements to qualify for payment as a
  228         homestead owner; revising and providing notice
  229         requirements; requiring the division to examine a plan
  230         of termination and provide specified notice within a
  231         certain timeframe; providing applicability; specifying
  232         that a plan of termination is presumed to be accepted
  233         if notice is not provided within the specified
  234         timeframe; providing an appropriation and authorizing
  235         a position; providing an effective date.