2015 Legislative Update on Community Association Issues Numerical Index Summary of 2015 Legislative Issues July 2015

By August 11, 2015Articles, Case Study, Memos, News

2015 LEGISLATIVE UPDATE ON COMMUNITY ASSOCIATION ISSUES

NUMERICAL INDEX SUMMARY OF 2015 LEGISLATIVE ISSUES

July 2015


The following is our post-Session report on residential housing law changes from the 2015 Legislative Session. The Governor has taken final action on the measures. The full text of each bill, as well as applicable legislative staff reports, are available on the legislative web sites (www.flsenate.gov; www.myfloridahouse.com; and www.leg.state.fl.us.). All changes are effective as of July 1, 2015.

NOT FOR PROFIT CORPORATIONS (Chapter 617) (Applicable to condominium, homeowner and cooperative associations)

Proxies – 617.0721(2) – Notwithstanding anything contained in the governing documents, any copy, facsimile or other reliable reproduction of an original proxy may be substituted or used in place of the original as long as the copy is a complete reproduction of the entire original proxy.

CONDOMINIUMS – RESIDENTIAL (Chapter 718)

Uninsured Losses – 718.111(11)(j) – Removes the term “uninsured losses” from items the Association is responsible to pay for as a common expense, and further clarifies that if the damaged item is “uninsured” then the governing documents determine who is responsible to pay for the item based on the maintenance, repair and replacement provisions of the governing documents.

Official Records – 718.111(12)(a)(15) – Section (15) is the catch all provision for Association official records and provides that all other records not listed by name but related to the operation of the Association are considered official records that must be kept and made available to the owners. This Section has been modified to only apply to all other “written” records. Therefore, if the record is not in writing and not specifically listed in categories (1) through (14) then it does not have to be kept or provided to owners. This would include things such as tape recordings of meetings and security camera footage. (NOTE: The HOA law was NOT modified in this manner).

Electronic Notice of Meetings – 718.111(12)(d)6. – Removes the requirement that in order to give notice of Board, Member, and Committee meetings electronically it must be provided for in the Bylaws. Owner must still consent to receive notice electronically.

Budget Expenses – 718.112(2)(f)1. – At minimum a proposed budget must include any applicable line item expenses found in 718.504(21).

Developer Waiving Reserves – 718.112(2)(f)2.b. – Provides that before turnover the developer may vote the voting interests allocated to its units to waive reserves or reduce funding of reserves through the period at the end of the second fiscal year after the fiscal year in which the surveyors certificate is recorded or the transfer of title of the first unit, whichever occurs first.

No Accord and Satisfaction – 718.116 (3). – Negates the effect of the St. Croix decision in which a person tendered a check in full satisfaction of the debt and despite the statutory provision that provides restrictive endorsements have no effect, the Court determined that the debt was paid in full. (NOTE: The HOA law was NOT modified in this manner).

Lien for Late Fees – 718.116(5)(b). – Provides that in addition to securing unpaid assessments that are due and accrue after the lien is recorded late fees are now also expressly secured.

Termination – 718.117 – Clarifies that if 10% or more vote against termination then plan fails. All voting interests are counted even suspended voting interests. If the termination plan is not approved a new plan cannot be re-introduced for 18 months. A condominium that has been created through a conversion of an existing apartment building cannot be terminated until 5 years after the recording of the Declaration unless there is no opposition to the termination.

If at least 80% of the units are owned by a bulk buyer/bulk assignee then the following special conditions apply:

  1. If following termination the units are offered for lease the former owner in occupancy gets first right of refusal to lease at prevailing market rate for 12 months. Request to lease must be submitted within 90 days of termination, and the lease must be signed within 15 days of presentation.
  2. Any former owner who declared their unit to be homestead is entitled to a relocation payment equal to 1% of the termination proceeds allocated to the unit, and it must be paid within 10 days of the former owner vacating unit.
  3. All owners other than the bulk owner must receive 100% of the fair market value (“FMV”) of their unit. FMV is determined (a) as of the date that is no earlier than 90 days before plan of termination is recorded, and (b) by an independent appraiser.
  4. Owners must receive at least the original purchase price for their unit who: (a) reject the plan, (b) purchased their unit from the Developer, (c) claim homestead, and (d) are current in the payment of assessments and other amounts including any mortgage.
  5. The plan of termination must provide for full payment of any mortgage on the unit but may not exceed the unit’s share of proceeds under the plan. If an owner is current in assessments and the mortgage then any amount received shall be deemed to satisfy the mortgage in full.
  6. Before plan is submitted to a vote it must disclose the name of the person or entity that owns or controls 50% or more of the units, including the names of actual natural persons who control or own at least 20% of the bulk buyer/assignee, if the bulk buyer/assignee is not a person.
  7. The bulk buyer must disclose the date it acquired every unit and the compensation paid to the prior owner.
  8. The bulk buyer must disclose the relationship between the bulk buyer and any board member.
  9. If the Board is elected by the bulk owner, then the non-bulk unit owners are entitled to elect at least 1/3 of the Board.

If the termination plan is voted on at a meeting the members can vote in person, by proxy or by written objection. If the termination plan is approved by written consent and joinder without a meeting, then owners who did not participate may still vote no within 20 days after notice has been given that the termination plan was approved.

Unless the termination plan provides otherwise, the right to use common elements and all leases and rights to occupy a unit end on date of termination.

Termination can be rescinded or amended by the same vote as it was approved.

An approved plan of termination must be contested within 90 days of approval and can only be contested based on: (a) fairness and reasonableness of proceeds apportionment; (b) that mortgages will not be satisfied as required by law; or (c) the proper vote of approval was not obtained.

Electronic Voting – 718.128 – The Association may conduct elections and other unit owner votes through an internet-based online voting system if a unit owner consents, in writing, to online voting and if the following requirements are met:

  1. There is a method to authenticate the owner’s identity to the online system.
  2. There is a method to transmit the ballot to the online system that ensures secrecy.
  3. There is a method to confirm at least 14 days before the voting deadline that the system works.
  4. Other security measures are required.
  5. Voting electronically counts toward the quorum.
  6. The Board must adopt a resolution to allow online voting at a special Board meeting.
  7. Must allow people to vote by traditional ballot if they want to.

Fines and Suspensions – 718.303 (3) – Clarifies that the Board levies fines and suspensions but the fines or suspensions cannot be imposed until the Owner has been provided 14 days’ notice and an opportunity for a hearing. The fining/suspension committee’s sole authority is to confirm or reject the fine or suspension only.

Fee, Fine or Other Monetary Obligation – 718.303(4)-(5) – Adds “Fee and Fine” to the phrase overdue monetary obligation more than 90 days which allows voting and use rights to be suspended.

Discount Suspended Votes – 718.303(5). Further clarifies that when a voting right is suspended it is not counted for any purpose including quorum and the percentage by which an item must have approval from the members. For example if an item must receive approval of a majority of the total of 100 voting interests and 5 votes have been suspended then the item must only be approved by a majority of 95 voting interests.

Suspensions and Multiple Units -718.303(7) – Provides that if an owner owns multiple units and only one unit is delinquent the suspension of use rights for the delinquent unit applies to all occupants of the others units too.

Bulk Buyer Bulk Assignee -718.707 – Extends the sunset date on the law from July 1, 2016 to July 1, 2018.

COOPERATIVES (Chapter 719).

Electronic Voting – 719.129 – The Association may conduct elections and other unit owner votes through an internet-based online voting system if a unit owner consents, in writing, to online voting and if the following requirements are met:

  1. There is a method to authenticate the owner’s identity to the online system.
  2. There is a method to transmit the ballot to the online system that ensures secrecy.
  3. There is a method to confirm at least 14 days before the voting deadline that the system works.
  4. Other security measures are required.
  5. Voting electronically counts toward the quorum.
  6. The Board must adopt a resolution to allow online voting at a special Board meeting.
  7. Must allow people to vote by traditional ballot if they want to.

Written Records – 719.104(2)(a)13 – Section (13) is the catch all provision for Association official records that provides that all other records not listed by name but related to the operation of the Association are considered official records that must be kept and made available to the owners. This Section has been modified to only apply to all other “written” records. So if the record is not in writing and not specifically listed in categories (1) through (12) then it does not have to be kept or provided to owners. This would include things such as tape recordings of meetings and security camera footage.

Accord and Satisfaction – 719.108(3) – Negates the effect of the St. Croix decision in which a person tendered a check in full satisfaction of the debt and despite the statutory provision that provides restrictive endorsements have no effect, the Court determined that the debt was paid in full.

Fines and Suspensions – 719.303(3) – Clarifies that the Board levies fines and suspensions but the fines or suspensions cannot be imposed until the Owner has been provided 14 days’ notice and an opportunity for a hearing. The fining/suspension committee’s sole authority is to confirm or reject the fine or suspension only.

HOMEOWNER ASSOCIATIONS (Chapter 720).

Rules – 720.301(8)(c) – Adds Rules and Regulations to the definition of Governing Documents.
Homeowners’ Association Act – 720.3015 – Officially names Chapter 720 as the Homeowners’ Association Act.

Amendments – 720.306(1)(b) – In 2013 the law was changed to require that within 30 days of recording an amendment a copy of the amendment must be sent to all owners. This requirement was deleted in 2014 and replaced with the requirement that within 30 days all owners be notified that the amendment was recorded, and a copy did not have to be sent. Now the law provides that failure to send the notice does not invalidate the amendment.

Elections – 720.306(9)(b) – Aligns HOA law with Condominium law which provides that if a candidate is delinquent in payment of any monetary amount, without regard for the period of time the owner is delinquent, they are not eligible to be listed on the ballot. To be eligible to be listed on the ballot the candidate must be current on the day he or she could last nominate themselves for the Board. Also clarifies that this applies to a candidate even if he or she owns multiple parcels and is current on other parcels.

Electronic Voting – 720.317 – The Association may conduct elections and other unit owner votes through an internet-based online voting system if a unit owner consents, in writing, to online voting and if the following requirements are met:

  1. There is a method to authenticate the owner’s identity to the online system.
  2. There is a method to transmit the ballot to the online system that ensures secrecy.
  3. There is a method to confirm at least 14 days before the voting deadline that the system works.
  4. Other security measures are required.
  5. Voting electronically counts toward the quorum.
  6. The Board must adopt a resolution to allow online voting at a special Board meeting.
  7. Must allow people to vote by traditional ballot if they want to.

LANDLORD TENANT LAW (Chapter 83).

Post-Foreclosure Occupancy Rights – 83.56 – A tenant occupying a residential dwelling that is subject to a foreclosure sale may remain in possession of the dwelling for 30 days after notice of termination of occupancy. A writ of possession may only be applied for after delivery of the 30 day notice. This occupancy right does not apply if: (a) the “tenant” is the mortgagor or the child, spouse or parent of the mortgagor, (b) the rental agreement is not the result of an arm’s length transaction, or (c) the rent is substantially less than fair market value. A purchaser at a foreclosure sale is not deemed to be a “landlord” except for notice purposes as long as the purchaser does not assume the existing rental agreement. This law affords existing bona-fide tenants that are occupying foreclosed dwellings some of the same rights, albeit lesser, previously afforded under the Federal Protecting Tenants at Foreclosure Act of 2009, which expired on December 31, 2014.

DISCLAIMER: The foregoing is a summary of the statutory changes and should not be relied on as legal advice or a complete explanation of the changes. Every situation is different and you should seek qualified legal advice before relying on the foregoing.