Legislative Update

Legislative Update

The Final Association Report

By Michael Gelfand, Esq. / Published June 2018

Photo by iStockphoto.com/Rauluminate

Disproving the naysayers, the 2018 Florida legislative session did not repeat the meltdown of last year. The concern was heightened because this year is an election year with every statewide office subject to election, as well as a number of contested legislative races as a result of reapportionment. Overcoming that concern was the State treasury, seemingly flush with post-recession dollars, allowing for a relatively easy budget process.

       Then came the students! The gun safety protests following the Stoneman Douglas High School massacre arrived by happenstance at a critical point in the legislative process. The House Appropriations Committee was just starting its final push with most matters awaiting final hearing when the students arrived. Because of mandated timing for budget approval, the bottleneck that followed as time was running out assisted the students in their efforts to obtain some legislative action and forced legislators to either quickly compromise on other issues or watch their bills languish.

       Florida community associations are likely most directly impacted by two bills, House Bill 841 entitled “Community Associations” which has been enacted as Florida Laws Chapter 2018-096, and House Bill 617 entitled “Covenants and Restrictions” [Marketable Record Title Act] enacted as Florida Laws Chapter 2018-55. Those two bills are summarized initially; the other bills that might be of interest can be viewed at gelfandarpe.com/resources/memorandum-to-clients/ if you are a client of Gelfand & Arpe, P.A. Please note that unless otherwise specified each new law is effective July 1, 2018. Listings that do not reflect a Florida Law designation are still awaiting the Governor’s signature or veto.

Community Associations Florida Laws 2018-096/House Bill 841

       Official Records: Condominium and Cooperative Associations. The time for retaining many records has been extended. For example, association minute books must be retained indefinitely, deleting the seven-year minimum retention period. All other records unless specified now must be kept for at least seven years. An exception exists for most election documents, confirming a one-year retention period, noting that “electronic records relating to voting” are included in records to be retained. An owner’s request for records must normally be granted within ten working days, doubling the five-day requirement. §718.111(12); 719.104(2).

       Website: Condominium Associations. Which condominium associations must have websites has been narrowed. The threshold was “an association with 150 or more units….” This is now “an association managing a condominium with 150 or more units…” which may exempt many multi-condominium associations that have condominiums with less than 150 units. The deadline for creation has been extended from July 1, 2018, to January 1, 2019. The items to be posted on the website have been limited, agreement now limited to executory contracts or documents in lieu of all agreements. All bids have been limited to those received within the past year, and in certain situations, summaries are permitted. Liability for improper disclosure is significantly narrowed to knowing or intentional disregard of protections or restrictions for the association or its agent. It is unclear as to whether directors are included in this protection. §718.111(12)(g).

       Financial Statements: Condominium Associations. The penalty for failing to respond in a timely manner to an owner request for financial statements; the inability to waive reporting is limited to the fiscal year in which the owner’s request was made and the immediately following year. §718.111(13).

       Directors, Number (Condominium and Cooperative Associations). The number of directors shall be five unless stated in the bylaws; however, for associations with five or fewer units, the number of directors shall not be less than three. §718.112(a)1; 719.106(1)(a)1.

       Assessment Notices: Condominium and Cooperative Associations. A notice of board of directors’ meetings in which assessments are to be considered must specifically state that assessments will be considered, the estimated cost of the assessment, and the description of the purpose or purposes of the assessment. §718.112(2)(c)1 and §719.106(1)(c).

       Electronic Notice: Condominium and Cooperative Associations. As an alternative to paper notice of board of directors’ meetings, notice may be provided by posting the meeting notice and agenda on the association’s website if a separate electronic notice is provided to the members with a hyperlink to the website. Owners who consent to electronic notice have the duty to unblock or unfilter for notices provided on behalf of the association. §718.112(2)(c)1 and §719.106(1)(c).

       Recalls: Condominium and Cooperative Associations. Within ten days of a board of directors’ meeting determining that a recall is facially valid, a recalled director must return to the association books and records in his or her possession. If a board of directors meeting concludes that a recall is not “facially valid,” then a challenging unit owner must file an arbitration action within 60 days, the petition limited to challenging the sufficiency of service and “facial validity” of the ballots or written agreements. A recalled director may challenge the decision to recall in arbitration. A recalled director who successfully challenges the recall is entitled to recover reasonable attorneys’ fees and costs from the arbitration respondent. If the respondents prevail, then they may be entitled to an award of attorneys’ fees and costs. §718.112(2)(j).

       Directors’ Terms: Condominium Associations. A person may not serve as a director for more than eight consecutive years unless approved by two-thirds of all votes cast in the election. Terms longer than one year are permitted if stated in the association’s articles or bylaws.

       Alterations: Condominium Associations. The Condominium Act’s cure, allowing alterations when governing documents are silent, must be invoked before the alteration commences.

       Electric vehicle charging stations within a unit owner’s limited common element parking area are exempt from many statutory alterations requirements, when not causing irreparable damage, the electricity is paid for by the utilizing unit owner, the unit owner is responsible for maintenance and repair, and the unit owner pays for removal when there isn’t a need for the station.

       An association may require compliance with building codes and architectural standards and must utilize a licensed contractor or engineer, provide a certificate of insurance, and pay the expense of additional insurance. The expense shall not be a lien against the common elements, only the limited common elements. §718.113 and §718.121.

       Conflicts of Interest: Condominium Association. The approval and disclosure requirements for contracts that pose a conflict of interest have been moved from §718.3026 to §718.3067.

       Fines: Condominium and Cooperative Associations. Clarifying, a committee of three independent persons must approve a fine before it can be imposed. Fines are due five days after the committee meeting when the fine is approved. Written notice of a fine or suspension must be provided to the unit owner, tenant, and other persons impacted.

       Bulk Buyers: Condominium Associations. The sunsetting of the bulk buyer provisions has been removed, allowing the provisions to continue indefinitely. §718.707.

       Email: Condominium and Cooperative Associations. Directors may utilize email to communicate but not to vote. §718.112(2)(c); §719.106(1)(c) and §720.303(2)(a).

       Director Delinquencies: Cooperative Associations. Similar to the Condominium Act’s provisions, a director who is more than 90 days delinquent; however, a director who is delinquent will be deemed to have abandoned the office to be filled as provided by law. §719.101(m).

       Communications: Cooperative. The provisions for allowing bulk contracts for cable are extended to include defining communication services such as the Internet. §719.107(1)(b).

       Fines: Cooperative Association. The process for levying a fine or suspension is updated to parallel the Condominium Act’s provisions including a notice of hearing before a committee of at least three persons independent of the board of directors and management and clarifying that the fining committee must approve a fine by a majority vote. §719.303.

       Amendments: Homeowners Associations. The manner of presenting an amendment is amended to parallel the Condominium Act’s requirement for specifying the text and providing that effectiveness is upon the date of recording. Errors in the amendment process do not automatically lead to defeat. Notices pursuant to this section shall be delivered to the address shown on the property appraisers website. §720.306(1)(a).

       Elections: Homeowners Associations. Nominations from the floor are not required. §720.306(a).

       Assessments: Homeowners Associations. Replicating the Condominium Act’s requirement, cooperative associations shall accept partial payments and that restrictive endorsements shall not be a basis for rejections. §720.3085(3)(c).

Marketable Record Title Act Covenants and Restrictions Florida Law 2018-55/House Bill 617

       The governor signed House Bill 617, revising the Marketable Record Title Act, including providing a formal title for the Act. Overall, the new law provides greater specificity, removing some uncertainties. Nevertheless, many will be disappointed as the new law does not rescind the requirement for homeowners associations to preserve covenants or lose the covenants! Note that the law refers to “property owners’ association” which largely, but not entirely, includes homeowners associations.

       Covenants. A “community covenant or restriction” to be preserved must be recorded and submits parcels to a lien, or a charge or assessment against a parcel owner. §712.01.

       Process. The process to file a notice preservation is revised deleting the board of directors’ vote after notice to all members.

       Organizations. The statutory revitalization process is extended to certain communities which do not have an established homeowners association. §712.12.

       Consideration. After the organizational meeting, annually, the board of directors must consider whether to undertake a preservation project. §720.303(2)(e).

       Notice. The process of providing notice to the members is specified providing for a certificate process and recording. §720.3032.

       Organizations. Paralleling the change to Chapter 712 concerning preservation, revitalization is extended to all communities, not just residential communities. §720.404.

Michael J. Gelfand, Esq.

Senior Partner of Gelfand & Arpe, P.A.

       Michael J. Gelfand, Esq., the Senior Partner of Gelfand & Arpe, P.A., emphasizes a community association law practice, counseling associations and owners how to set legitimate goals and effectively achieve those goals. Gelfand is a Florida Bar Board-Certified Real Estate Lawyer, Certified Circuit and County Civil Court Mediator, Homeowners Association Mediator, an Arbitrator, and Parliamentarian. He is a past Chair of the Real Property Division of the Florida Bar’s Real Property, Probate & Trust Law Section, and a Fellow of the American College of Real Estate Lawyers. Contact him at ga@gelfandarpe.com or (561) 655-6224.