2017  COMMUNITY ASSOCIATION LEGISLATION

The Florida Legislature adopted several revisions to Florida Statutes that impact on community associations and community association managers.

HOUSE BILL 1237 — Effective July 1, 2017 (website requirement changed to implementation date of July 1, 2018 – but superseded by amendment in 2018 to delay implementation date to January 1, 2019).  Governor Scott signed on June 26, 2017.

HB 1237 Applies to Condominium Associations Only

Website Requirement

By July 1, 2018, a condominium association with 150 or more units must post digital copies of certain official records on its website.  This requirement does not apply to a condominium association that manages timeshare units.

Note:  2018 amendment effective 7/1/18 — deadline is now January 1, 2019)

Term Limits

A director may not serve more than 4 consecutive 2 year terms, unless: (i) approved by 2/3 of voting interests; or (ii) there are not sufficient eligible candidates to fill the vacancies at the time of the vacancy.

Note: 2018 legislative amendment effective 7/1/18 — term limit now 8 consecutive years.

Criminal Penalties

Criminal penalties can be imposed for the following:

  • Officer, director or manager solicits, offers or accepts anything of service or value or kickback for which consideration has not been provided (also applies if given to immediate family member).
  • Forgery of election ballot envelope or voting certificate
  • Theft or embezzlement of association funds
  • Destruction of or refusal to allow inspection or copying of official records in furtherance of a crime.

(Officer or director charged by information or indictment for crime is removed from office.  He or she may not be appointed or elected as a director or officer of any association and may not have access to official records of any association, except pursuant to court order)

  • Officer or director shall be reinstated for remainder of term of office if charges are resolved without finding of guilt

Suspending Voting Rights

May suspend voting rights only if the delinquent amount is more than 90 days delinquent and exceeds $1,000.

Evidence of the monetary obligation must be provided to the member 30 days before the suspension can take effect.

Official Records

A renter has the right to inspect and copy the association’s bylaws and rules.

Bids for materials, equipment and services are considered official records

Financial Records

A condominium association that operates fewer than 50 units is no longer exempt from preparing a financial statement.   Rather, it must prepare the applicable financial statement based upon gross receipts, in absence of membership vote waiving statutory requirement.

A condominium association must provide an annual report to the Department of Business and Professional Regulation identifying the financial institutions with which it maintains accounts.   Any member of the condominium association can obtain a copy of the report from DBPR.

If a condominium association fails to deliver to a member a copy of its most recent financial report within 5 business days after receipt of written request from that member, the member may file a complaint with the Division of Florida Condominiums.  If the condominium association then fails to comply with the Division’s directive to comply with the Condominium Act, it may not waive the financial reporting requirements contained therein.

Conflicts of Interest

A condominium association may not hire an attorney who represents the condominium association’s management company.

A director, manager or management company may not purchase a unit at a foreclosure sale resulting from the condominium association’s lien foreclosure or take title by deed in lieu of foreclosure.

In addition, a party contracting with a non-timeshare condominium association after turnover of control, or an officer or director of such party, may not purchase a unit at a foreclosure sale resulting from the condominium association’s lien foreclosure or take title by deed in lieu of foreclosure.  If 50% or more of the units in the condominium are owned by a party contracting to provide maintenance or management services to an association managing a non-timeshare residential condominium after turnover of control, or by an officer of director of such party, the contract with such party may be cancelled by a majority vote of the unit owners than the contracting party of an officer or director of such party.

A non-timeshare condominium association may not employ or contract with any service provider that is owned or operated by a director or with any person who has a financial relationship with a director or officer, or a relative within the third degree of consanguinity by blood or marriage of a director or officer.  However, this prohibition does not apply to a service provider in which a director or officer, a relative within the third degree of consanguinity by blood or marriage of a director or officer, owns less than 1% of the equity shares.

Directors and officers of a non-timeshare condominium association, and the relatives of such directors and officers, must disclose to the board any activity that may reasonably be construed to be a conflict of interest.  A rebuttable presumption of a conflict of interest exists if any of the following occurs without prior notice:  (i) a director or officer, or a relative, enters into a contract for goods and services with the condominium association; and (ii) a director or officer, or a relative, holds an interest in a corporation, limited liability company, partnership, limited liability partnership or other business entity that conducts business with the condominium association or proposes to enter into a contract or other transaction with the condominium association.

If a director or an officer, or a relative, proposes to engage in activity is a conflict of interest, as described above, the proposed activity must be listed on, and all contracts and transactional documents related to the proposed activity must be attached to the meeting agenda.  If the board votes against the proposed activity, the director or officer, or the relative, must provide written notice to the board of his or her intention not to pursue the proposed activity or to withdraw from office.  If the board finds that an officer or a director has violated the restriction described in this paragraph, the officer or director shall be deemed removed from office and the vacancy shall be filled according to general law.

A director of an officer, or a relative, who is a party to, or has an interest in, an activity that is a possible conflict of interest, may attend the meeting at which the board considers the activity and make a presentation to the board.    After the presentation, the director or officer, or the relative, must leave the meeting during the discussion of, and the vote on, the activity.  A director or an officer who is a party to, or has an interest in, the activity must recuse himself or herself from the vote.

A contract that has not been properly disclosed as a conflict or possible conflict of interest is voidable and terminates upon the filing of a written notice terminating the contract with the board which contains the consent of at least 20% of the voting interests in the non-timeshare condominium association.

As used in the statute, the term “relative” means a relative within the third degree of consanguinity by blood or marriage.

Ombudsman

The Ombudsman has the authority to review secret ballots cast at a vote of a condominium association.

Prohibition on Debit Cards

A condominium association and its officers, directors, employees and agents may not use a debit card issued in the condominium association’s name, or billed directly to the condominium association, for the payment of any condominium association expense.

The use of a debit card, for any expense that is not a lawful obligation of the condominium association, may be prosecuted as credit card fraud.

Credit card use is permissible!

Receivers

A receiver does not have the authority to exercise voting rights of a unit owner whose unit is placed in receivership for the condominium association’s benefit.

Recalls

After the recall of director(s) in compliance with the Condominium Act, the recalled director(s) must turn over to the boards all records and property of the condominium association in their possession, within 10 full business days after the vote (formerly 5 full business days).

The Condominium Act was also amended to provide that a board is not required to certify or not certify the recall.   However, the board may file a Petition for Recall in which is challenges the recall.

SENATE BILL 398 ESTOPPEL CERTIFICATES — Effective July 1, 2017.   Governor Scott signed on 6/14/17.

APPLIES TO CONDOMINIUM, COOPERATIVE AND HOMEOWNERS ASSOCIATIONS

This legislation revised the Condominium, Cooperative and Homeowners Association Acts regarding “estoppel certificates” (sometimes known as “payoff letters”).   An estoppel certificate is referred to below as an “estoppel”.

Each community association must:

  • Issue an estoppel within 10 business days after receiving a written request (formerly 15 days).
  • Designate on its website a person or entity with a street or email address to which an estoppel request must be made.
  • Deliver, mail or email the estoppel to the requesting party on the date it is issued.

The estoppel must include information regarding assessments, and be substantially in the following form:

1. Date of issuance:                           

2. Name(s) of the owner(s) as reflected in the official records:

3. Unit designation and address:                           

4. Parking or garage space number as reflected in the official records:

5. Attorney’s name and contact information if the account is delinquent and has been turned over to an attorney for collection. No fee may be charged for this information.

6. Fee for the preparation and delivery of the estoppel certificate: $

7. Name of the requestor:                           

8. Assessment information and other information:                          

ASSESSMENT INFORMATION

  • The regular periodic assessment levied against the unit is $____ per _______ (insert frequency of payment).
  • The regular periodic assessment is paid through ____________(insert date paid through).
  • The next installment of the regular periodic assessment is due __________ (insert due date) in the amount of $_______________.
  • An itemized list of all assessments, special assessments and other moneys owed on the date of issuance to the association by the owner for a specific unit is provided.
  • An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate is provided. In calculating the amounts that are scheduled to become due, the association may assume that any delinquent amounts will remain delinquent during the effective period of the estoppel certificate.

OTHER INFORMATION:

  • Is there a capital contribution fee, resale fee, transfer fee or other fee due? Yes            If yes, specify the type and the amount of the fee:                                                                          .
  • Is there any open violation of rule or regulation noticed to the unit owner in the association’s official records?             Yes           
  • Do the rules and regulations of the association applicable to the unit require approval by the board of directors of the association for the transfer of the unit?       Yes             If yes, has the board approved the transfer of the unit?                        Yes               No.
  • Is there a right of first refusal provided to the members or the association? Yes             If yes, have the members or the association exercised that right of first refusal?               Yes              No.
  • Provide a list of, and contact information for, all other associations of which the unit is a member.
  • Provide contact information for all insurance maintained by the association.
  • Provide the signature of an officer or authorized agent of the association.
  • A community association has the option to include additional information in the estoppel.
  • The estoppel may be completed by any director, authorized agent or representative (includes employee of a management company).
  • Estoppel has a 30 day effective period if hand delivered or sent by electronic means. Estoppel certificate has a 35 day effective period if sent by regular mail.
  • If additional information or a mistake related to the estoppel becomes known to the association within the effective period (i.e., 30 or 35 days, as applicable), an amended estoppel may be delivered and becomes effective if a sale or refinancing of the unit has not been completed during the effective period.
  • Fee may not be charged for an amended estoppel certificate. An amended estoppel certificate must be delivered on the date of issuance, and a new 30 or 35 day effective period begins on that date.
  • Association waives right to collect any moneys owed in excess of the amounts in the estoppel from any person who in good faith relies upon the estoppel and from the person’s successors and assigns. Note: The statute no longer explicitly provides that the unit owner is not a person who can rely in good faith on erroneous information. Query whether an owner can rely upon erroneous information when owner should know whether he or she is delinquent.
  • Fee may not be charged for an estoppel if the association fails to deliver it within 10 business days after receipt of a request from a unit owner, unit mortgagee or the unit owner’s or unit mortgagee’s designee.
  • Requestor may use summary (expedited) procedure to compel issuance of estoppel against cooperative associations (already in effect for condominiums and homeowners associations).
  • Cooperative associations may now charge a fee for preparation and delivery of estoppel if authorization is established by a written board resolution or a written management/bookkeeping contract.
  • Maximum estoppel fee is $250.00 if no delinquent amounts owed to the association as of the date the estoppel is issued.
  • An additional $100.00 may be charged if the estoppel is requested on an expedited basis and is delivered within 3 business days after a request.
  • An additional $150.00 fee may be charged if a delinquent amount is owed to the association.
  • If there are no past due monetary obligations owed to the association, the total fee that may be charged when an association receives a request for estoppel certificates for multiple units owned by the same owner is:
    • $750.00 for 25 or fewer units.
    • $1,000.00 for 26 to 50 units.
    • $1,500.00 for 51 to 100 units.
    • $2,500.00 for more than 100 units.
  • The right to reimbursement for payment of an estoppel fee (if the sale or mortgage of a unit does not close) may not be waived or modified by any contract or agreement. Prevailing party shall be awarded damages, attorney’s fees and costs in an action brought to enforce the right of reimbursement.
  • Statutory estoppel fee amounts are adjusted every 5 years in an amount equal to the total of the annual increases for that 5 year period in the CPI for All Urban Consumers, U.S. City Average, All Items. DBPR must periodically calculate the estoppel fee amounts, rounded to the nearest dollar and publish those amounts on its website.

SENATE BILL 1520 TERMINATIONS OF CONDOMINIUMS  Effective July 1, 2017.   Governor Scott signed on 6/16/17.

The percentage of voting interests in a condominium association required to defeat a plan of optional termination has been reduced from 10% to 5%.

The Division of Florida Condominiums must approve a plan of termination.

Waiting period necessary to submit a plan of termination a second time (i.e., if the plan of termination is not approved the first time) increased from 18 to 24 months.

HOUSE BILL 6027 FINANCIAL REPORTING   Effective July 1, 2017.  Governor Scott signed on 6/23/17.

APPLIES TO CONDOMINIUM, COOPERATIVE AND HOMEOWNERS ASSOCIATIONS

This legislation eliminates the exemption previously afforded to community associations that operate fewer than 50 units from preparing a financial report based upon gross receipts.   Under the prior version of the Condominium, Cooperative and Homeowners Association Acts, a community association operating fewer than 50 units was permitted to prepare a report of cash receipts and expenditures, regardless of gross receipts in a fiscal year.

Effective July 1, 2017, a community association with fewer than 50 units must prepare a financial report based upon the level of gross receipts in a fiscal year, unless the members vote to waive the applicable financial reporting requirements.

In addition, condominium and cooperative associations are now permitted to waive financial reporting requirements for more than 3 consecutive years.  Homeowners associations were never subject to a prohibition on waiving financial reporting requirements for more than 3 consecutive years.

HOUSE BILL 615 (APPLICABLE TO COMMUNITY ASSOCIATION MANAGERS AMONG OTHER REGULATED PROFESSIONALS)   Effective July 1, 2017. Governor Scott signed on 6/23/17.

Licensure of surviving spouses of members of the armed forces shall be kept in good standing and not subject to renewal requirements.

DBPR must issue permanent license to all current and former active duty members of the armed forces, and their current or surviving spouses, if they hold a license in another jurisdiction, foreign or domestic.  Application and licensure fees waived.   However, such persons licensed pursuant to legislative amendment may renew licenses upon completing conditions for renewal.

License fees for low-income individuals are waived.

SENATE BILL 818  TIMESHARES   Effective May 23, 2017.  Governor Scott signed on 5/23/17.

Amends Section 721.05, Florida Statutes to provide that the term “interestholder” does not include specified parties to a type of multisite timeshare plan.

Amends Section 721.125, Florida Statutes to provide that if timeshare property is managed by an owners’ association that is separate from the underlying condominium, cooperative or homeowners’ association, the termination of the timeshare plan does not change the corporate status of the owners’ association.  In addition, after termination of a timeshare plan, the owner’s association serves as the termination trustee.

Creates a new Section 721.1255, Florida Statutes regarding extension of timeshare plans, with an emphasis on older timeshare properties.

  • Unless the timeshare instrument specifically provides a lower percentage, the vote or written consent (or both) of at least 66% of all eligible voting interests present in person or by proxy at a duly noticed meeting of the owners’ association may, at any time, extend the timeshare plan.
  • Unless the timeshare instrument specifically provides a lower quorum, the quorum for the owners’ association is 50% of all eligible voting interests in the timeshare plan.
  • Extension vote must held before termination of the timeshare plan.
  • Board of the owners’ association may determine that any voting interest that ins delinquent in the payment of more than 2 years of assessments is ineligible to vote on any extension of the timeshare plan unless the delinquency is paid in full before the vote.
  • Proxy is valid for up to 3 years and is revocable unless the proxy states it is irrevocable.

HOUSE BILL 241  ALARM SYSTEMS   Effective June 2, 2017.  Governor Scott signed on 6/2/17.

Amends Section 553.793, Florida Statues to include “low-voltage electrical fences” in streamlined low-voltage alarm system permitting.

A “low voltage electrical fence” is an alarm system, as defined in Section 489.505, Florida Statutes that consists of a fence structure and an energizer powered by a commercial storage battery not exceeding 12 volts which produces an electric charge upon contact with the fence structure.

Section 489.529, Florida Statutes provides that all residential or commercial intrusion/burglary systems that have central monitoring must have a central monitoring verification call made to a telephone number associated with the premises generating the alarm system, before alarm monitoring personnel contact a law enforcement agency for alarm dispatch.  However, verification calling is not required if:

  • The intrusion/burglary system has a properly operating visual or auditory sensor that enables the monitoring personnel to verify the alarm system; or
  • With respect to premises that are used for storage of firearms or ammunition by a firearms/ammunition dealer.