Florida Senate - 2018                                     SB 734
       By Senator Baxley
       12-00497B-18                                           2018734__
    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; reviving, reenacting, and amending s.
    9         720.303, F.S.; increasing certain fines; providing a
   10         cause of action for a member against a community
   11         association manager or management firm under certain
   12         circumstances; authorizing related fines; prohibiting
   13         reimbursement to a community association manager or
   14         management firm for certain fines; requiring the
   15         community association manager, the management firm, or
   16         the association to annually provide a specified report
   17         beginning on a specified date, and to resubmit the
   18         report under certain circumstances to the Division of
   19         Florida Condominiums, Timeshares, and Mobile Homes;
   20         revising the dates by which the Department of Business
   21         and Professional Regulation must meet certain
   22         reporting requirements; extending the expiration of
   23         reporting requirements; 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
   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 homeowners’ association;
   29         amending s. 720.311, F.S.; providing presuit mediation
   30         for election and recall disputes; providing for
   31         binding arbitration by the department for certain
   32         disputes between a parcel owner and a homeowners’
   33         association; authorizing mediation or arbitration by a
   34         mediator or arbitrator, respectively, who has been
   35         certified by a county court; creating s. 720.318,
   36         F.S.; requiring the department to provide training and
   37         educational programs for homeowners’ association
   38         members, directors, and officers; providing that the
   39         training 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 and
   43         make available a current list of approved programs and
   44         providers; creating s. 720.319, F.S.; authorizing the
   45         department to enforce and ensure compliance with the
   46         Homeowners’ Association Act and specified rules;
   47         providing the department jurisdiction to investigate
   48         complaints relating to homeowners’ associations;
   49         amending s. 720.401, F.S.; requiring a seller of a
   50         parcel to provide a prospective buyer with specified
   51         association documents under certain circumstances;
   52         authorizing a prospective buyer to terminate a
   53         contract for purchase within a specified timeframe
   54         under certain circumstances; amending s. 720.402,
   55         F.S.; providing a cause of action against developers
   56         by nondeveloper members of a homeowners’ association
   57         or the homeowners’ association; providing an effective
   58         date.
   60  Be It Enacted by the Legislature of the State of Florida:
   62         Section 1. Subsection (1) of section 718.509, Florida
   63  Statutes, is amended to read:
   64         718.509 Division of Florida Condominiums, Timeshares, and
   65  Mobile Homes Trust Fund.—
   66         (1) There is created within the State Treasury the Division
   67  of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund
   68  to be used for the administration and operation of this chapter
   69  and chapters 718, 719, 720, 721, and 723 by the division.
   70         Section 2. Paragraph (b) of subsection (5) of section
   71  720.303, Florida Statutes, is amended, and, notwithstanding the
   72  repeal of subsection (13) of that section, which occurred on
   73  July 1, 2016, subsection (13) of that section is revived,
   74  reenacted, and amended, to read:
   75         720.303 Association powers and duties; meetings of board;
   76  official records; budgets; financial reporting; association
   77  funds; recalls.—
   78         (5) INSPECTION AND COPYING OF RECORDS.—The official records
   79  shall be maintained within the state for at least 7 years and
   80  shall be made available to a parcel owner for inspection or
   81  photocopying within 45 miles of the community or within the
   82  county in which the association is located within 10 business
   83  days after receipt by the board or its designee of a written
   84  request. This subsection may be complied with by having a copy
   85  of the official records available for inspection or copying in
   86  the community or, at the option of the association, by making
   87  the records available to a parcel owner electronically via the
   88  Internet or by allowing the records to be viewed in electronic
   89  format on a computer screen and printed upon request. If the
   90  association has a photocopy machine available where the records
   91  are maintained, it must provide parcel owners with copies on
   92  request during the inspection if the entire request is limited
   93  to no more than 25 pages. An association shall allow a member or
   94  his or her authorized representative to use a portable device,
   95  including a smartphone, tablet, portable scanner, or any other
   96  technology capable of scanning or taking photographs, to make an
   97  electronic copy of the official records in lieu of the
   98  association’s providing the member or his or her authorized
   99  representative with a copy of such records. The association may
  100  not charge a fee to a member or his or her authorized
  101  representative for the use of a portable device.
  102         (b) A member who is denied access to official records is
  103  entitled to the actual damages or minimum damages for the
  104  association’s willful failure to comply with this subsection.
  105  The minimum damages are $500 to be $50 per calendar day up to 30
  106  10 days, the calculation to begin on the 11th business day after
  107  receipt of the written request. If the association delegates to
  108  a community association manager or management firm the
  109  responsibility to provide members with access to official
  110  records, as provided in this section, a member who is denied
  111  access to official records by the community association manager
  112  or management firm has a cause of action against the community
  113  association manager or management firm for the actual or minimum
  114  damages provided in this paragraph. A community association
  115  manager or management firm may not be reimbursed or otherwise
  116  indemnified by the association for payment of any actual or
  117  minimum damages provided in this paragraph.
  118         (13) REPORTING REQUIREMENT.—The community association
  119  manager or management firm, or the association when there is no
  120  community association manager or management firm, must submit a
  121  shall report to the division by November 22, 2018 2013, and each
  122  year thereafter, in a manner and form prescribed by the
  123  division.
  124         (a) The report must shall include the association’s:
  125         1. Legal name.
  126         2. Federal employer identification number.
  127         3. Mailing and physical addresses.
  128         4. Total number of parcels.
  129         5. Total amount of revenues and expenses from the
  130  association’s annual budget.
  131         (b) For associations in which control of the association
  132  has not been transitioned to nondeveloper members, as set forth
  133  in s. 720.307, the report shall also include the developer’s:
  134         1. Legal name.
  135         2. Mailing address.
  136         3. Total number of parcels owned on the date of reporting.
  137         (c) The reporting requirement provided in this subsection
  138  shall be a continuing obligation on each association until the
  139  required information is reported to the division. The community
  140  association manager or management firm, or the association if
  141  there is no community association manager or management firm,
  142  must resubmit the report required under this subsection upon the
  143  occurrence of a material change in the information required to
  144  be reported pursuant to paragraphs (a) and (b).
  145         (d) By October 1, 2018 2013, the department shall establish
  146  and implement a registration system through an Internet website
  147  that provides for the reporting requirements of paragraphs (a)
  148  and (b).
  149         (e) The department shall prepare an annual report of the
  150  data reported pursuant to this subsection and present it to the
  151  Governor, the President of the Senate, and the Speaker of the
  152  House of Representatives by December 1, 2018 2013, and each year
  153  thereafter.
  154         (f) The division shall adopt rules pursuant to ss.
  155  120.536(1) and 120.54 to implement the provisions of this
  156  subsection.
  157         (g) This subsection shall expire on July 1, 2028 2016,
  158  unless reenacted by the Legislature.
  159         Section 3. Subsection (2) of section 720.305, Florida
  160  Statutes, is amended to read:
  161         720.305 Obligations of members; remedies at law or in
  162  equity; levy of fines and suspension of use rights.—
  163         (2) The association may levy reasonable fines. A fine may
  164  not exceed $100 per violation against any member or any member’s
  165  tenant, guest, or invitee for the failure of the owner of the
  166  parcel or its occupant, licensee, or invitee to comply with any
  167  provision of the declaration, the association bylaws, or
  168  reasonable rules of the association unless otherwise provided in
  169  the governing documents. A fine may be levied by the board for
  170  each day of a continuing violation, with a single notice and
  171  opportunity for hearing, except that the fine may not exceed
  172  $1,000 in the aggregate unless otherwise provided in the
  173  governing documents. A fine of less than $1,000 may not become a
  174  lien against a parcel. In any action to recover a fine, the
  175  prevailing party is entitled to reasonable attorney fees and
  176  costs from the nonprevailing party as determined by the court.
  177         (a) An association may suspend, for a reasonable period of
  178  time, the right of a member, or a member’s tenant, guest, or
  179  invitee, to use common areas and facilities for the failure of
  180  the owner of the parcel or its occupant, licensee, or invitee to
  181  comply with any provision of the declaration, the association
  182  bylaws, or reasonable rules of the association. This paragraph
  183  does not apply to that portion of common areas used to provide
  184  access or utility services to the parcel. A suspension may not
  185  prohibit an owner or tenant of a parcel from having vehicular
  186  and pedestrian ingress to and egress from the parcel, including,
  187  but not limited to, the right to park.
  188         (b) A fine or suspension may not be imposed by the board of
  189  administration without at least 14 days’ notice to the person
  190  sought to be fined or suspended and an opportunity for a hearing
  191  before a committee of at least three members appointed by the
  192  board who are not officers, directors, or employees of the
  193  association, or the spouse, parent, child, brother, or sister of
  194  an officer, director, or employee. If the committee, by majority
  195  vote, does not approve a proposed fine or suspension, it may not
  196  be imposed. The role of the committee is limited to determining
  197  whether to confirm or reject the fine or suspension levied by
  198  the board. If the board of administration imposes a fine or
  199  suspension, the association must provide written notice of such
  200  fine or suspension by mail or hand delivery to the parcel owner
  201  and, if applicable, to any tenant, licensee, or invitee of the
  202  parcel owner.
  203         Section 4. Subsection (1) of section 720.307, Florida
  204  Statutes, is amended to read:
  205         720.307 Transition of association control in a community.
  206  With respect to homeowners’ associations:
  207         (1) Members other than the developer are entitled to elect
  208  at least a majority of the members of the board of directors of
  209  the homeowners’ association upon the occurrence of any of the
  210  following when the earlier of the following events occurs:
  211         (a) For a homeowners’ association consisting of fewer than
  212  100 lots, the passage of 3 months after 75 percent of the
  213  parcels in all phases of the community which will ultimately be
  214  operated by the homeowners’ association have been conveyed to
  215  members.
  216         (b)For a homeowners’ association consisting of fewer than
  217  200 lots, the passage of 10 years after the governing documents
  218  of the homeowners’ association are filed with the local
  219  government.
  220         (c)For a homeowners’ association consisting of 200 or more
  221  lots, the earlier of the passage of 20 years after the governing
  222  documents of the homeowners’ association are filed with the
  223  local government or 3 months after 90 percent of the parcels in
  224  all phases of the community which will ultimately be operated by
  225  the homeowners’ association have been conveyed to members. Three
  226  months after 90 percent of the parcels in all phases of the
  227  community that will ultimately be operated by the homeowners’
  228  association have been conveyed to members;
  229         (b)Such other percentage of the parcels has been conveyed
  230  to members, or such other date or event has occurred, as is set
  231  forth in the governing documents in order to comply with the
  232  requirements of any governmentally chartered entity with regard
  233  to the mortgage financing of parcels;
  234         (d)(c)Abandonment by the developer, or the developer’s
  235  failure Upon the developer abandoning or deserting its
  236  responsibility to maintain and complete the amenities or
  237  infrastructure as disclosed in the governing documents. There is
  238  a rebuttable presumption that the developer has abandoned and
  239  deserted the property if the developer has unpaid assessments or
  240  guaranteed amounts under s. 720.308 for a period of more than 2
  241  years.;
  242         (e)(d)Upon the developer Filing by the developer of a
  243  petition seeking protection under chapter 7 of the federal
  244  Bankruptcy Code.;
  245         (f)(e)Loss of Upon the developer losing title to the
  246  property by the developer through a foreclosure action or the
  247  transfer of a deed in lieu of foreclosure, unless the successor
  248  owner has accepted an assignment of developer rights and
  249  responsibilities first arising after the date of such
  250  assignment.; or
  251         (g)(f)Appointment of Upon a receiver for the developer
  252  being appointed by a circuit court, if the receiver is and not
  253  being discharged within 30 days after such appointment, unless
  254  the court determines within 30 days after such appointment that
  255  transfer of control would be detrimental to the association or
  256  its members.
  257         (h) Conveyance of another percentage of the parcels to
  258  members, or the occurrence of such other date or event, as
  259  provided in the governing documents in order to comply with the
  260  requirements of any governmentally chartered entity with regard
  261  to the mortgage financing of parcels.
  263  For purposes of this section, the term “members other than
  264  the developer” does shall not include builders,
  265  contractors, or others who purchase a parcel for the
  266  purpose of constructing improvements thereon for resale.
  267         Section 5. Subsection (1) and paragraph (d) of subsection
  268  (2) of section 720.311, Florida Statutes, are amended to read:
  269         720.311 Dispute resolution.—
  270         (1) The Legislature finds that alternative dispute
  271  resolution has made progress in reducing court dockets and
  272  trials and in offering a more efficient, cost-effective option
  273  to litigation. The filing of any petition for arbitration or the
  274  serving of a demand for presuit mediation as provided for in
  275  this section shall toll the applicable statute of limitations.
  276  Any recall dispute filed with the department pursuant to s.
  277  720.303(10) shall be conducted by the department in accordance
  278  with the provisions of ss. 718.112(2)(j) and 718.1255 and the
  279  rules adopted by the division. In addition, the department shall
  280  conduct mandatory binding arbitration of election disputes
  281  between a member and an association pursuant to s. 718.1255 and
  282  rules adopted by the division. Neither Election disputes and nor
  283  recall disputes are eligible for presuit mediation. At the
  284  request of the parcel owner or homeowners’ association, the
  285  department shall provide binding arbitration in disputes
  286  involving covenants, restrictions, rule enforcement, and duties
  287  to maintain and make safe pursuant to the declaration of
  288  covenants, rules and regulations, and other governing documents;
  289  disputes involving assessments; and disputes involving the
  290  official records of the homeowners’ association; these disputes
  291  shall be arbitrated by the department. At the conclusion of the
  292  proceeding, the department shall charge the parties a fee in an
  293  amount adequate to cover all costs and expenses incurred by the
  294  department in conducting the proceeding. Initially, the
  295  petitioner shall remit a filing fee of at least $200 to the
  296  department. The fees paid to the department shall become a
  297  recoverable cost in the arbitration proceeding, and the
  298  prevailing party in an arbitration proceeding shall recover its
  299  reasonable costs and attorney attorney’s fees in an amount found
  300  reasonable by the arbitrator. The department shall adopt rules
  301  to effectuate the purposes of this section.
  302         (2)
  303         (d) A mediator or arbitrator shall be authorized to conduct
  304  mediation or arbitration under this section only if he or she
  305  has been certified as a county court or circuit court civil
  306  mediator or arbitrator, respectively, pursuant to the
  307  requirements established by the Florida Supreme Court.
  308  Settlement agreements resulting from mediation do shall not have
  309  precedential value in proceedings involving parties other than
  310  those participating in the mediation to support either a claim
  311  or defense in other disputes.
  312         Section 6. Section 720.318, Florida Statutes, is created to
  313  read:
  314         720.318Training and educational programs.—The Department
  315  of Business and Professional Regulation shall provide training
  316  and educational programs for homeowners’ association members,
  317  directors, and officers. At the department’s discretion, the
  318  training and educational programs may include web-based
  319  electronic media, live training, and seminars in various
  320  locations throughout the state. The department may review and
  321  approve training and educational programs for members,
  322  directors, and officers of homeowners’ associations which are
  323  offered by providers. The department shall maintain a current
  324  list of approved programs and providers and shall make such list
  325  available to homeowners’ associations in a reasonable and cost
  326  effective manner.
  327         Section 7. Section 720.319, Florida Statutes, is created to
  328  read:
  329         720.319Authority of department.—The Department of Business
  330  and Professional Regulation may enforce and ensure compliance
  331  with this chapter and rules relating to records access,
  332  financial management, and elections of homeowners’ associations
  333  and may investigate any complaint made to the department against
  334  a homeowners’ association.
  335         Section 8. Subsection (2) of section 720.401, Florida
  336  Statutes, is renumbered as subsection (3), and a new subsection
  337  (2) is added to that section, to read:
  338         720.401 Prospective purchasers subject to association
  339  membership requirement; disclosure required; covenants;
  340  assessments; contract cancellation.—
  341         (2)A seller of a parcel for which membership in a
  342  homeowners’ association is a condition of ownership must provide
  343  a prospective buyer with the association’s governing documents,
  344  including the declaration of covenants, articles and bylaws,
  345  rules and regulations, and operating budget for the current
  346  year, and any amendment to such documents. The seller must
  347  provide the prospective buyer with such documents at least 7
  348  days before closing. The prospective buyer may terminate the
  349  contract for purchase within 3 days after receipt of such
  350  documents.
  351         Section 9. Section 720.402, Florida Statutes, is amended to
  352  read:
  353         720.402 Publication of false and misleading information;
  354  developer’s use of homeowners’ association fund prohibited.—
  355         (1) Any person who, in reasonable reliance upon any
  356  material statement or information that is false or misleading
  357  and published by or under authority from the developer in
  358  advertising and promotional materials, including, but not
  359  limited to, a contract of purchase, the declaration of
  360  covenants, exhibits to a declaration of covenants, brochures,
  361  and newspaper advertising, pays anything of value toward the
  362  purchase of a parcel in a community located in this state has a
  363  cause of action to rescind the contract or collect damages from
  364  the developer for his or her loss before the closing of the
  365  transaction. After the closing of the transaction, the purchaser
  366  has a cause of action against the developer for damages under
  367  this section from the time of closing until 1 year after the
  368  date upon which the last of the events described in paragraphs
  369  (a) through (d) occurs:
  370         (a) The closing of the transaction;
  371         (b) The issuance by the applicable governmental authority
  372  of a certificate of occupancy or other evidence of sufficient
  373  completion of construction of the purchaser’s residence to allow
  374  lawful occupancy of the residence by the purchaser. In counties
  375  or municipalities in which certificates of occupancy or other
  376  evidences of completion sufficient to allow lawful occupancy are
  377  not customarily issued, for the purpose of this section,
  378  evidence of lawful occupancy shall be deemed to be given or
  379  issued upon the date that such lawful occupancy of the residence
  380  may be allowed under prevailing applicable laws, ordinances, or
  381  statutes;
  382         (c) The completion by the developer of the common areas and
  383  such recreational facilities, whether or not the same are common
  384  areas, which the developer is obligated to complete or provide
  385  under the terms of the written contract, governing documents, or
  386  written agreement for purchase or lease of the parcel; or
  387         (d) In the event there is not a written contract or
  388  agreement for sale or lease of the parcel, then the completion
  389  by the developer of the common areas and such recreational
  390  facilities, whether or not they are common areas, which the
  391  developer would be obligated to complete under any rule of law
  392  applicable to the developer’s obligation.
  393         (2)A nondeveloper parcel owner has a cause of action
  394  against the developer for:
  395         (a)Damages resulting from the developer’s abandonment or
  396  failure of his or her responsibility to maintain and complete
  397  amenities or infrastructure disclosed in the governing
  398  documents, written contract, or written agreement for purchase
  399  of the parcel.
  400         (b)The developer’s failure to perform or comply with any
  401  duty or obligation required under the governing documents,
  402  written contract, or written agreement for purchase of the
  403  parcel.
  404         (3)A developer may not use association funds for a purpose
  405  not specifically authorized in a homeowners’ association budget
  406  adopted in accordance with the governing documents and s.
  407  720.303. Any use of association funds by a developer in
  408  violation of this section is actionable by a nondeveloper parcel
  409  owner or the homeowners’ association. This subsection is
  410  intended to clarify existing law and applies to all homeowners’
  411  associations in existence on July 1, 2018, and created
  412  thereafter.
  413         (4) Under no circumstances may a cause of action created or
  414  recognized under this section survive for a period of more than
  415  5 years after the closing of the transaction.
  416         (5)(2) In any action for relief under this section, the
  417  prevailing party may recover reasonable attorney attorney’s
  418  fees. A developer may not expend association funds in the
  419  defense of any suit under this section.
  420         Section 10. This act shall take effect July 1, 2018.