2018 Legislative Session Update

By Ellyn Setnor Bogdanoff, Esquire, and Yeline Goin, Esquire / Published March 2018

The 2018 Legislative Session began on January 9 and is scheduled to end on March 9. As usual, there are a number of bills that have been filed that will impact community associations if they become law. For this article, we will focus on two main issues that are addressed in some of these bills: (1) fire safety for high-rise condominiums and cooperatives; and (2) fixing the glitches and unintended consequences as a result of the 2017 condominium legislation. Please note that bills change quickly during the legislative process, and the bills discussed in this article may be different by the time you read this article. 

Fire Safety and Engineered Life Safety Systems

by Ellyn Setnor Bogdanoff, Esquire

       Given my background and personal experience when I served in the Florida House and Senate and was approached by residents in older Florida high-rises who were very concerned about costly sprinkler retrofits, I was excited to serve as Becker & Poliakoff’s lead lobbyist on our ELSS Opt-Out Legislation during the 2017 Legislative Session. We were ultimately successful with the passage of HB 653, with just one dissenting vote in the Florida Legislature. High-rises already have the ability to opt out of fire sprinklers, and HB 653 would have given them the ability to opt out of an engineered life safety system (ELSS) since it appeared that many Fire Marshalls were requiring fire sprinkler systems in order to meet the “score” to be in compliance with the ELSS criteria. Additionally, there was no uniformity throughout the state, and we were unable to find the “rule” that was promulgated to assist us in understanding the components of an ELSS.

       Unfortunately, we didn’t make it over the finish line in 2017 as Governor Scott vetoed the bill. The timing of the London fire (Grenfell Tower on June 14, 2017) clearly played a role in this decision. The loss of life in London was a tragedy that I believe gave all of us pause. We believed we had the Governor’s support, as we even increased the opt-out to a two-thirds vote at his request. I am sure our opposition seized the moment, and in an abundance of caution, Governor Scott vetoed the bill.

       There have been a lot of twists and turns since then, and there was yet another fire in Hawaii to add to the mix. Nevertheless, we have regrouped and Representative Moraitis has filed the bill again for the 2018 Legislative Session, HB 1061. Senator Farmer filed the identical bill in the Senate, SB 1432.  

  Another approach that we are pursuing is that arguably, the fire marshals have exceeded their statutory authority when they required fire sprinklers as part of an ELSS, because Florida Law allows associations to opt out. If you opted out and had the statutory right to do so, then to require it through another door constitutes an unpromulgated rule by policy that exceeds statutory authority.   The law says you do not have to have sprinklers, yet the fire marshals insist that you do by requiring it as part of an ELSS. It is my opinion that the fire marshals do not have such authority.

       We will continue to pursue the legislation, and as of the writing of this article, the bills are moving. I also met with the Chairs of the Joint Administrative Procedures Committee (JAPC), the Committee that oversees the overreach of the Executive Branch when implementing laws, and the Committee has requested a copy of this “scoring” sheet. It is a first step. I am also scheduled to meet with the CFO, Jimmy Patronis, who serves as the State Fire Marshal, to see if there is a way to stop this train that will cost hundreds of associations thousands, if not millions, of dollars without first pursuing legislation or challenging the rule. We can only hope there will be a resolution soon as this has been an exhausting journey. More than 770 associations have opted out since 2004.  

       Although it is unclear how many are required to comply with installing an ELSS, arguably it is a lot more than most think. 

Glitch Fixes for 2017 Condominium Legislation

By Yeline Goin, Esquire

       The primary community association bill that passed during the 2017 Legislative Session was HB 1237, Relating to Condominiums. HB 1237 included many substantive changes to the Condominium Act. How-ever, as frequently happens with legislation, there are a number of glitches that need to be fixed and unintended consequences that have arisen as a result of the legislation. The following are some of the issues that are being re-considered this year in three bills: SB 1274 and HB 841, Relating to Community Associations, by Sen. Passidomo and Rep. Moraitis, respectively, and SB 1530, Relating to Condominium Associations, by Sen. Mayfield.

Conflict of Interests

• 2017 Legislation: The 2017 legislation amended Section 718.111(3)(b), Florida Statutes, to provide that that an association may not hire an attorney who represents the management company of the association.
• Proposed 2018 Change: All three bills mentioned above, HB 841, SB 1274, and SB 1530, propose to eliminate this language. This would essentially allow attorneys to represent both the association and the association’s manager, however, attorneys would still be subject to the Florida Bar ethics rules. In our opinion, the 2017 law serves a valid purpose in that it is more specific than the Florida Bar ethics rules. We would like to see the law remain as it is currently written in order to avoid confusion and a potentially harmful conflict of interest from the association’s perspective.

Websites for Official Records

• 2017 Legislation:The 2017 legislation required all condominium associations with more than 150 units to post many of its official records on a website beginning on July 1, 2018.
• Proposed 2018 Change: HB 841 and SB 1274 propose to extend the date for the website requirement to July 1, 2019. In addition, SB 1530 proposes to amend Section 718.111(12)(g)2.e. so that instead of requiring the actual management agreements, leases, and contracts to be posted, only a list of all executory contracts or documents must be posted. Regarding bids, SB 1530 amends the statute to require a list of bids from the previous year be posted only if the bid amount is more than $2,500. SB 1530 also removes the requirement to post “any proposed financial report to be considered at a meeting”. SB 1530 also limits the association’s liability (and its agent’s liability) for disclosing information that is protected or restricted unless such disclosure was made with a knowing or intentional disregard of the protected or restricted nature of such information. Further, the failure of the association to post the required information is not in and of itself sufficient to invalidate any action or decision of the association’s board or its committees.

Term Limits

• 2017 Legislation: The 2017 legislation imposed term limits for condominium association directors. Specifically, it amended Section 718.112(2)(d)2., Florida Statutes, to provide that a board member may not serve more than four consecutive two-year terms, unless approved by an affirmative vote of two-thirds of the total voting interests or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.
• Proposed 2018 Change: SB 1530 removes the term limit provision and replaces it with language stating that board members may serve terms longer than 1 year if permitted by the bylaws. HB 841 and SB 1274 amend the existing language to provide that no board member may serve more than eight consecutive years, unless approved by an affirmative vote of two-thirds of the voting interests voting in the election or unless there are not enough eligible candidates to fill the vacancies. 

Recall of Board Members

• 2017 Legislation:The 2017 Legislation removed the requirement that the board “certify” or “not certify” the recall but retained a reference to the board filing a petition for recall arbitration. This is one of the most confusing provisions of the new law. The intent appears to be to make recalls effective immediately upon receipt by the board of directors of a recall petition. The intent also appears to be to require the individual board members who are recalled to file a petition for arbitration if they believe the recall to not be effective. However, there are many ambiguities in the law, including whether the board has to accept a recall petition that on its face is invalid or that clearly is not signed by a majority of the owners.
• Proposed 2018 Change: HB 841 and SB 1274 attempt to “clean-up” the 2017 legislation by requiring that the recall to be “facially valid” and removing the language, which suggests that the board may file a petition for recall arbitration. It also provides that a recalled board member may challenge the facial validity of the written agreement or ballots filed or the substantial compliance with the procedural requirements for the recall. Further, if the arbitrator determines the recall was invalid, the petitioning board member shall immediately be reinstated, and the recall is null and void. A board member who is successful in challenging a recall is entitled to recover reasonable attorney fees and costs from the respondents. The arbitrator may award reasonable attorney fees and costs to the respondents if they prevail and the arbitrator makes a finding that the petitioner’s claim is frivolous.

Ellyn Setnor Bogdanoff, Esquire

Becker & Poliakoff

Ellyn Setnor Bogdanoff is a shareholder and member of the firm’s Government Law and Lobbying Practice Group. She is a former State Representative and State Senator, having been elected to represent the Palm Beach and Broward communities in the Florida House of Representatives and State Senate. Her current practice includes governmental consulting in Tallahassee and at the local level. She may be contacted at ebogdanoff@bplegal.com or (954) 364-6005.

Yeline Goin, Esquire

Becker & Poliakoff

Yeline Goin, Esquire concentrates her practice on the law of community associations, primarily representing condominium, cooperative, and homeowners associations. She also represents local governments and other entities in Tallahassee as part of our State Legislative Lobbying Team, advancing their political and legislative interests and monitoring legislative and regulatory issues that impact them. She may be contacted at ygoin@bplegal.com or (407) 875-0955.