2018 Legislative Update for New Condominium Association Laws

By April 19, 2018Memos, News

NUMERICAL INDEX SUMMARY OF LAWS AMENDED IN THE 2018 LEGISLATIVE SESSION

The following is our post-Session report on residential housing law changes from the 2018 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.).  Note: HB = House Bill.  SB=Senate Bill. All changes are effective as of July 1, 2018 or October 1, 2018 as noted.

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

No changes.

CONDOMINIUMS – (Chapter 718)  Effective July 1, 2018.

  1. Official Records – 718.111(12)(b)/HB841.  Plans, permits, warranties, declaration, articles, bylaws, rules. meeting minutes and accounting records from the inception of the association must now be kept forever.  Chapter 718 previously required these documents to be kept for only 7 years. All other records must still be kept for 7 years with exception of ballots, proxies and related voting material that only needs to be kept for 1 year.
  1. Access to Official Records – 718.111(12)(b)/HB841.  Access to official records must be made available within 10 “working” days.  Formerly it was 5 working days but since the penalty did not arise until after 10 working days effectively nothing has changed.  Records must still be made available within 10 “working” days.
  1. Website Creation – 718.111(12)(g)1/HB841.  The requirement imposed in 2017 that condominiums (excluding timeshares) must create a website and post digital copies of most of its official records on its website by July 1, 2018 has been extended to January 1, 2019.  The term “association” has been replaced by the term “condominium” thereby making it clear that multi-condominium associations that manage several condominiums each with less than 150 units but cumulatively 150 or more units are now exempt from the website requirement.
  1. Website Records – 718.111(12)(g)2.e and g/HB841.  A list of all bids in excess of $500 received by the association for materials, equipment or services within the past year must now be posted on the website if a website is required.  Additionally, the “monthly income or expense statement” must be posted.
  1. Website Records Failure to Post – 718.111(12)(g)4/HB841.  The failure to post required records on the website is not sufficient to invalidate any action or decision of the association’s board or any committee.
  1. Board and Members Meeting Notices on Website – 718.112(2)(c)1 and (d)/HB841.  In addition to sending and posting notices for board and members meetings by regular mail, the board may now adopt a rule to allow the posting such notices on the website if a website is required.  The rule must also require that an e-mail be sent to all owners who have requested electronic notice with a link to the posted notice.
  1. Term Limits – 718.112(2)(d)2/HB841.  The 2017 law limiting a director from serving no more than 4 consecutive 2 year terms has been changed.  The law now provides that regardless of the length of the term (1 year or 2 years) a director cannot serve more than 8 consecutive years unless no other eligible candidates run or at least 2/3 of those who vote approve the person to continue serving beyond 8 consecutive years.  The revised language also clarifies that if the governing documents so provide, directors may be elected to serve terms of more than 2 years each.
  1. Electronic Notice – 718.112(2)(d)6/HB841.  An owner who consents to electronic notice is solely responsible for removing or bypassing filters that block receipt of e-mails.  This will prevent an owner from objecting to a lack of notice if the notice is stopped by the owner’s spam filter.
  1. Recalls – 718.112(2)(j)1/HB841.  A director is recalled immediately at the conclusion of the board meeting held to consider the recall if the recall is deemed “facially valid.”  Under the prior 2017 change in the law which created a number of procedural ambiguities, the director was apparently recalled even if the recall agreements were clearly insufficient in number to effectuate a recall.  Note that a definition of facially valid is not provided.
  1. Recalls Attorney Fees – 718.112(2)(j)6/HB841.  If a recalled board member files a petition for arbitration to challenge the recall and is successful, then the arbitrator may award reasonable attorneys’ fees and costs.  If the board member is unsuccessful, the arbitrator may award the other party its attorneys’ fees and costs but only if the challenge is found to have been “frivolous.”
  2. Material Alterations – 718.113(2)(a)/HB841. Clarifies that any material alteration or substantial addition to the common elements that requires owner approval must be approved before the work is commenced.
  1. Electronic Vehicle Charging – 718.112(8) and 718.121(2)/HB841.  Allows unit owners to install electronic vehicle charging stations in their limited common element parking spaces under certain conditions and subject to certain requirements.  Among other things, the owner must pay to install a separate meter and pay for the electricity. Further, the owner’s insurance must also name the association as an additional insured, and if the association’s insurance premium goes up as a result of the charging station, the owner must pay the increase.  Moreover, if the owner fails to pay the contractor that installs the charging equipment, the contractor cannot file a construction lien against the association.
  1. Contracts with Directors – 718.3026(3) and 718.3027(2)/HB841. The 2017 change in the law allowing an association to contract with a director under certain circumstances but allowing owners to void any such contract with a vote at the next members meeting was removed from 718.3026 and relocated to 718.3027.
  1. Fines and Suspension Committees / Payment of Fine – 718.303(3)(b)/HB841.  Provides that the fining committee has 3 members and that the members cannot be the “spouse, parent, child, brother, sister or employee” of any director.  Formerly, the condominium law did not set the number of members and only prohibited board members and persons residing with a board member from being on the committee.  Oddly, the new law removes the prohibition that a member of the committee cannot be residing with a director. If the committee approves the fine it must be paid within 5 days of the committee meeting.  The association must give written notice of the fine or suspension after the committee approves it by mail or hand delivery.
  1. Bulk Buyer/Bulk Assignee – 718.707/HB841.  The sunset date of July 1, 2018 at which time the bulk buyer and bulk assignee law was to end has been removed.  The law is now permanent.

COOPERATIVES (Chapter 719)  Effective July 1, 2018.

  1. Official Records – 719.104(2)(a)4 and 9/HB841.  Meeting minutes and accounting records must now be kept forever.  Chapter 719 previously required these documents to be kept for only 7 years.
  1. Co-Owners Serving on the Board – 719.106(1)(a)1./HB841.  In residential cooperatives of more than 10 units, co-owners of a unit may not serve on the board at the same time unless they own more than 1 unit or unless there are not enough eligible candidates.  This aligns Chapter 719 with Chapter 718 on this point.
  1. E-Mail Communication by Directors – 719.106(1)(c)/HB841.  Board members may communicate via e-mail but may not cast votes via e-mail.  This aligns Chapter 719 with Chapter 718 on this point.
  1. Board and Members Meeting Notices on Website  – 719.106(1)(c) and (d)/HB841. In addition to sending and posting notices for board and members meetings by regular mail, the board may now adopt a rule to allow the posting such notices on the website if a website is required.  The rule must also require that an e-mail be sent to all owners who have requested electronic notice with a link to the posted notice. This aligns Chapter 719 with Chapter 718 on this point.
  1. Electronic Notice – 719.106(1)(d)3/HB841.  An owner who consents to electronic notice is solely responsible for removing or bypassing filters that block receipt of e-mails.  This will prevent an owner from objecting to a lack of notice if the notice is stopped by the owner’s spam filter.
  1. Director Delinquencies – 719.106(1)(m)/HB841.  A director or officer that is more than 90 days delinquent in the payment of any monetary amount shall be deemed to have abandoned the office.  This aligns Chapter 719 with Chapters 718 and 720.
  1. Bulk Communications Services – 719.107(1)(b)11/HB841.  Replaces the term “master antenna television system” with “communication services” allowing associations to contract for a greater spectrum of bulk services including internet and telephone.  This aligns Chapter 719 with Chapters 718 and 720.
  1. Fines and Suspensions – 719.303(3)(b)12/HB841.  Provides that the fining committee has 3 members and that the members cannot be the “spouse, parent, child, brother, sister or employee” of any director.  Formerly, the law did not set the number of members and only prohibited board members and persons residing with a board member from being on the committee.  Oddly, the new law removes the prohibition that a member of the committee cannot be residing with a director. If the committee approves the fine it must be paid within 5 days of the committee meeting.  The association must give written notice of the fine or suspension after the committee approves it by mail or hand delivery. This aligns Chapter 719 with Chapter 718.

HOMEOWNER ASSOCIATIONS (Chapter 720).

  1. E-Mail Communication by Directors – 720.303(2)(a)/HB841 Effective July 1, 2018.  Board members may communicate via e-mail but may not cast votes via e-mail.  This aligns Chapter 720 with Chapter 718 and Chapter 719 on this point.
  1. Fines and Suspensions – 720.305(2)(b)14/HB841 Effective July 1, 2018.  If the committee approves the fine it must be paid within 5 days of the committee meeting.  This aligns 720 with 718 and 719 on the 5 day to pay requirement.
  1. Amendments – 720.306(1)(e)-(f)/HB841 Effective July 1, 2018.  Amendments must be presented to owners for a vote in the underline and strike through format or with the “substantial amendment” notation just like condominiums and cooperatives.  Allows that an “immaterial error or omission” in the amendment process does not invalidate an otherwise properly adopted amendment.  All amendments to the governing documents must be recorded in the public records to be legally affective. This includes amendments to the Board adopted rules which in the past did not have to be recorded.
  1. Elections – 720.305(9)(a)/HB841 Effective July 1, 2018.  If an election of directors is not required because there are not more candidates than there are available seats on the Board, and if nominations are not required from the floor, then those candidates that submitted their names to run for the board are automatically seated at the annual membership meeting even if a quorum does not exist.
  1. Restrictive Endorsements – 720.3085(3)(b)/HB841 Effective July 1, 2018.  Clarifies that any purported accord and satisfaction or restrictive endorsement on an assessment payment is void and the payment is applied according to the law.
  1. Covenant Preservation Summary Notice – 720.303 and 720.3032/HB617 Effective October 1, 2018.  Substantially revises the method and notice requirements for a board to preserve the declaration of covenants from being extinguished by MRTA.  This is important for homeowners associations that are approaching 30 years from the date that the original Declaration of Covenants was recorded.
  1. Covenant Revitalization – 720.403(3)/HB617 Effective October 1, 2018.  Expands the ability to revitalize covenants beyond residential homeowner associations so that commercial property associations and other non-residential associations can revitalize the covenants.

TIMESHARES (Chapter 721)

No Changes.

MISCELLANEOUS

  1. HOA Covenant Preservation under the Marketable Record Title Act – 712.05(2)/HB617 Effective October 1, 2018.  In addition to the existing method to preserve covenants, this allows an association to preserve covenants from extinguishment at any time prior to the running of the 30 year period from the root title by:  (1) Filing a summary notice as provide in Chapter 720.303; or (2) Recording an amendment to the covenants or restrictions that is indexed under the association’s name and references the recording information of the covenants or restrictions to be preserved.  Item (2) is a major change and effectively removes the application of MRTA extinguishment if an amendment referencing by Official Records Book and Page has been recorded in the prior 30 years.  Thus, every new amendment referencing the Official Records Book and Page of the original Declaration starts the 30 year clock again.HOA Covenant Revitalization under the Marketable Record Title Act for Associations that Do Not Have the Authority to Enforce Covenants – 712.12/HB617 Effective October 1, 2018.  Existing law did not allow associations without express enforcement authority to revitalize covenants.  This new law allows covenants that have been extinguished by the marketable record title act to be revitalized by the parcel owners without an association using the provisions of Section 720.403-407, Florida Statutes.

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.