The Homeowners Association Law was supposed to be in response to homeowners associations requests for guidance as to what homeowners associations could and could not do. Condominium associations had a statutory and regulatory scheme which set down basic rules for governance. Many homeowners associations sought the same type of rules so that the directors knew where to "draw the line."

Unfortunately, the legislature's final product not only failed in reaching its goal, but quite possibly made matters worse. The Homeowners Association Law is incomplete, inconsistent, and confusing. For example, the law requires ballots to be distributed before an election, but unlike condominium associations, the law did not require all nominations to be made before ballots are distributed.

To rectify this situation, the legislature created a Homeowners Association Study Commission. One of the Commission's goals was to draft a proposed set of laws that would assist association governance. At the time this article was prepared, the Commission was in the process of finalizing its report.

The report is expected to suggest that the legislature adopt laws for homeowners associations that parallel condominium associations. There will be some notable differences. For example, there will be no requirements for construction defect warranties from developers to owners. Additionally, associations under developer control most likely will not be subject to the provisions of the draft law. It is understood that the Commission made these concessions to ensure that developer interests do not mercilessly destroy the bill before it reaches the legislature.

Some of the expected proposals are as follows:

1) Applicability. The "annual dues" test will be deleted. The Act will apply to residential communities, including master associations with fifty or more members. Developer controlled associations will still be exempt. Associations will not be responsible for legal compliance for technical statutory violations that took place before the law, such as budget reporting requirements.

2) Documents. All homeowners associations "governing" documents must be recorded. Presumably associations will have a window of time to record their documents.

3) Meetings. Members' and directors' meetings will remain open to members. Committee meetings that consider and decide matters on behalf of an association will also be open. Quorum requirements for business to occur at a members' meeting will be reduced to thirty percent of the membership, instead of a majority if the bylaws are silent.

4) Enforcement. Associations will have the explicit authority to levy fines. Fines will be limited to $50.00 maximum per infraction. Fines cannot accumulate. In case of a violation, associations will be entitled to suspend an owner's use of common areas, but not an owner's voting rights.

5) Hurricane Shutters. Unlike condominium associations, hurricane shutter installations probably will not be regulated.

6) Assessments. Developers may be required to either pay assessments, or guarantee that the association's budget will be able to pay anticipated expenses. Developers may not avoid the responsibility of paying post-turnover assessments.

7) ADR. A mandatory "Alternate Dispute Resolution" process is adopted, paralleling the Condominium Act's arbitration program and requiring the Division of Land Sales to participate in that effort.

8) Resales. Associations may be held liable for non-disclosure of pertinent documents to a resale purchaser. A purchaser would have a right to rescind or cancel a purchase agreement, similar to the cancellation rights held by the purchaser of a condominium.

If the legislature adopts the suggestions, then it is expected that the laws will be effective October 1, 1995.