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July 2004 MEMORANDUM TO CLIENTS Governor Bush recently signed several bills into law which will have a significant impact on Florida community associations. Surprisingly, two of the bills, Senate Bill 1184 and Senate Bill 2984, were substantially but not exactly identical. Unfortunately, the Governor signed both, creating Florida Laws 2004-345 and Florida Laws 2004-353, respectively, resulting in some uncertainty as to how the differences between the two Laws will work out. It is important to note that some, but not all of the provisions are effective now! There are significant changes to the Homeowners’ Association Act as a result of the legislative study commission that met last year. One immediate impact is that many homeowners’ association enforcement disputes now must be submitted to mediation before claims may be formally filed. Also, a homeowners’ association fine can no longer become a lien on a home. Condominium associations will also have to take swift action. The mandate that unit owner sellers provide prospective buyers questions and answers sheets will provide pressure upon condominium associations to swiftly update this information. Recognizing the potential problems that can arise when disclosures are inaccurate and when materials are prepared in haste, advance planning is key! Similarly, though the policy for a disclaimer seems to be counter the policy for disclosures, condominium associations will desire to immediately add the new statutory disclosure disclaimer to written materials to reduce liability for good faith information mistakes. Those provisions anticipated to have the greatest impact
are summarized below. Links to the Laws can be found at . To assist the
reader, because many of the new Laws have different sections affecting
different types of associations, the summary is organized by the type of
association affected by a new law. Developer. §718.103(16) provides that when acting as a lessor, the State, counties and municipalities are exempted from the definition of a developer. Amendments. §718.110(13) limits unit owners’ amendment rights, providing that an amendment restricting unit owners’ rental rights applies only to unit owners who consent to the amendment and unit owners who purchase their units after the effective date of that amendment. Disclosure Liability. §718.111(12) provides immunity from liability for certain information provided by associations to prospective purchasers or lienholders if the information is provided in good faith. In response to a written request, the person providing the information must include a written statement in substantially the following form: "The responses herein are made in good faith and to the best of my ability as to their accuracy." Fire Sprinklers. §718.112(2) revises notification and voting procedures for membership votes to forego installation of the fire sprinkler system in common areas of a condominium. Advisory Council. §718.5015 creates the Advisory Council on Condominiums consisting of seven appointed members to receive public suggestions, assist the Division of Land Sales concerning rules and make recommendations concerning educational programs. Ombudsman. §718.5011 through §718.5014 creates an office of the Condominium Ombudsman located within the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund in Leon County. The Ombudsman is to act as a type of liaison between owners and the Division of Land Sales, develop procedures and policies concerning education matters, prepare reports, monitor dispute resolution processes concerning elections and meetings, monitor violation investigations and recommend division action. Q & A. §718.503(2) requires unit owners to provide prospective purchasers with the Frequently Asked Questions and Answers Document.
Arbitration. §720.302 reaffirms that it is not in the best interest for members to have a state regulatory agency; provides for alternative dispute resolution procedures for disputes involving elections and recalls and pre-suit mediation of other disputes involving covenant enforcement. Powers and Duties. §720.303(1) permits members to speak at and to place issues on the agenda of directors’ meetings; regulates meetings including adding meeting notice materials to be maintained as records; inspection of records; procedures for recall of directors. Board Meetings. §720.303(2) requires at least fourteen days notice to association members before certain assessment or rule changes may be considered at a directors’ meeting. Flags. §720.304(2) prescribes members’ rights to fly flags, including the flag of the State of Florida and flags representing the Army, Navy, Air Force, Marine Corps or Coast Guard. Litigation. §720.304(4) prescribes that lawsuits planned as "Strategic Lawsuits Against Public Participation," also known as SLAPP, are prohibited by an individual or business organization against an owner for speaking before a governmental entity on matters related to homeowners’ associations, and if filed, then courts shall expedite their resolution. Disabilities. §720.304(5), effective immediately, allows parcel owners to construct a ramp for medical necessity or disability, though the Association may have an approval process. Signage. §720.304(5), effective immediately, permits parcel owners to display certain security services signs. Fines §720.305(2), effective immediately, prohibits fines becoming a lien against a home. Contracts. §720.3055, effective immediately, mandates bidding for certain contracts. Members’ Meetings. §720.306, effective immediately, requires detailed notice of members’ meetings; allows members to speak at all members’ meetings; and provides that election disputes be submitted to mandatory binding arbitration. Disputes. §720.311, effective immediately, mandates mediation and arbitration regarding disputes between an association and owners concerning use of or changes to a parcel or the common areas and other covenant enforcement disputes before filing suit in civil court. MRTA. §720.401 through §720.405 responds to problems created in communities over thirty years old when the Marketable Title Record Act (MRTA) extinguishes covenants. Criteria and processes direct filing with and review by the Department of Community Affairs before new covenants are effective. Disclosure Summary. §720.601, effective immediately, modifies the disclosure form sellers must provide prospective purchasers before executing a contract for sale. Misleading Information. §720.602, effective immediately, provides remedies for publication of false and misleading information by the developer of a homeowners’ subdivision. Financial Report. §720.3086, effective immediately, clarifies that operators of certain subdivisions, including certain developers must provide financial reports. COOPERATIVES Fire Sprinklers. §719.1055(5) revises notification and voting procedures for votes to forego installation of the fire sprinkler system in common areas of a cooperative. ALL COMMUNITY ASSOCIATIONS Jurisdiction. §34.01, effective immediately, gives the county courts, with the circuit courts, jurisdiction over disputes occurring in homeowners’ associations. Elections. §190.006, effective immediately, specifies procedures for selecting a chair at the initial landowners’ meeting; specifies requirements for proxy voting and election procedures. Deed Restrictions. §190.012(4), effective immediately, provides enforcement of deed restrictions by Community Development Districts for property where there is no homeowners’ association having enforcement powers. Termination. §190.046, effective immediately, provides for termination of a Community Development District when it has no outstanding financial obligations and no operating or maintenance responsibilities. Defibrillators. §768.1325(3) immunizes associations that provide automated defibrillator devices and prohibits insurers from requiring associations to purchase medical malpractice coverage as a condition of issuing other coverage or excluding damages resulting from the use of a defibrillator from coverage under a general liability policy issued to the association. * * * * * * * * * * * * In addition to the two Acts summarized above, the Governor signed into law several other bills which will have an impact on Florida community associations. These laws are as follows: Waiver of Handrail Installation. Florida Laws 2004-80 (SB 1728). Condominium unit owners in over 55 communities may opt out of retrofitting requirements regarding handrails and guardrails. This waiver does not apply to high-rise buildings. This act takes effect July 1, 2004. Construction Defects. Florida Laws 2004-342 (HB 1899). Provides requirements for filing actions alleging construction defects; revises the requirements, procedures, criteria and limitations in provisions relating to notice and opportunity to repair construction defects; provides requirements for settlement offers. This act takes effect July 1, 2004. FIRM NEWS The firm’s offices will be closed on Monday, July 5, 2004 in observance of Independence Day. Happy 4th of July! Michael Gelfand has been selected to provide the Condominium Laws lecture for The Florida Bar’s Real Property, Probate and Trust Law Section’s "Legislative Update Seminar." This year the Seminar will occur Friday, August 6 at The Breaker’s in Palm Beach. Attorneys desiring to attend can make reservations at
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