We have some exciting news to share with you and your community members. This years Legislative Session turned out to be a very productive session that we believe has produced many positive changes to the Florida Statutes that govern Community Associations.
Earlier this year we provided a brief summary of the many changes being considered by Legislators in Tallahassee. Below we are happy to provide you with a summary of the Legislative changes that have fortunately (and finally) been signed into Law which will take effect July 1st, 2010. Please note that we have only summarized the changes we feel will be most valuable to our clients, not all changes or amendments have been included below.
For over a month we have been reviewing the 103 page Bill (SB 1196), as well as held meetings with Association Attorneys to familiarize ourselves as best as possible with the new Laws in order to best assist our client communities to take advantage of the new resources available to them.
Common Elements:
1. Common elements that serve only one (1) unit may be reclassified as Limited Common Elements by a vote of the membership to amend the Declaration.
Official Records:
1. An Association is clearly not responsible for the misuse of information provided to an owner or representative of an owner in compliance for their request for a records inspection.
2. Any person who intentionally harms, destroys, or who fails to create or maintain the Associations accounting records with the intent to cause harm to the Association, will be subject to a Civil Penalty.
3. The following records are not accessible to owners: personnel records of association employees (including payroll), e-mail addresses, telephone numbers, website passwords or property access codes, accounting software or backups.
Elections and Director Eligibility:
1. Co-owners are now permitted to serve on the Board where such co-owners own more then one (1) unit, or where there are not enough eligible candidates to fill the Board vacancies.
2. The director delinquency restriction has been expanded to include any director delinquent more than ninety (90) days in the payment of ANY monetary obligation. This includes fines, fees, regular and special assessments. Such owner will not be permitted to serve on the Board.
3. Each newly elected or appointed director must certify in writing within ninety (90) days of being elected/appointed that he or she has read the governing documents and that they will work to uphold those documents to the best of his or her ability. In lieu of providing such written certification, a director may submit a certificate of satisfactory completion of the educational curriculum provided by the Division. A Director not completing this certification will be suspended from service.
Collection of Assessments:
1. The liability of a Lender (First Mortgagee) that acquires title to a unit through foreclosure has increased from six (6) months to twelve (12) months of unpaid assessments. However, it remains constant that a Lender is only responsible for the lesser of twelve (12) months or one (1%) percent of the mortgage debt. We are of the opinion that most, if not all mortgage foreclosure cases will now receive the one (1%) percent value as opposed to the new twelve (12) month amendment.
2. This change will take effect on all foreclosed units in which a lender acquires title after July 1st, 2010.
Collection of Rents:
1. If a unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation to the Association, the Association may make a written demand that the tenant pay the future monetary obligations related to the unit to the Association, and the tenant must make such payment until the Association releases the tenant.
2. A tenant who acts in good faith in response to the Association's request will be immune from any legal claim from the unit owner (i.e. eviction, etc).
3. The tenant, like a unit owner, must be notified of any increases in monetary obligations.
4. The unit owner shall provide his or her tenant a credit for any rents or amounts paid directly to the Association.
5. Should the tenant fail to act in response to the Associations demand for payment, the Association may file for eviction under the Florida Residential Landlord and Tenant Act (FRLTA). However, the Association is in no way considered a Landlord under the FRLTA and has no obligations there under.
6. The tenant does not have any rights of a unit owner in any election or vote, and does not have any right to examine the books or records of the Association.
7. This new law does not supersede the appointment by any court of a Receiver.
Budgets and Financial Reporting:
1. The Division of Florida Condominiums, Timeshares, and Mobile Homes shall adopt a set of revised rules outlining the uniform accounting principles and the standards to be used by all Associations.
2. The revised rules must include standards for presenting a summary of Association reserves, including an estimate on the amount of reserves necessary to fully fund annual reserves per each reserve item.
3. A Condominium Association operating fewer than seventy five (75) units shall prepare a report of cash receipts and expenditures, as opposed to financial statements.
Fining:
1. Previously Associations were only able to issue fines if their declarations or by-laws granted the Association such right. The new statutory amendment now grants all Associations the right to issue fines pursuant to statute, regardless of what the declaration may state.
2. An Association may only levy a fine for failure to comply with provisions in the governing documents.
3. Previously the Condominium Act stated that fines should be levied "against a unit". The new changes expand the Associations fining ability by permitting fines to be levied against any individual that is authorized to be on the property and who fails to comply with the provisions of the governing documents, this shall include owners, invitees, licensees, and occupants.
4. Fines still may not exceed $100.00 per violation for a maximum of 10 days. Additionally, fines can only be properly levied at a properly noticed hearing of a non-board member committee of unit owners.
5. Unfortunately, non-payment of fines may not be collected through lien or foreclosure. Therefore, because collecting on a delinquent fine is somewhat difficult, this enforcement ability is not always practical.
Suspension of Use Rights:
1. Condominium Associations may now, in limited cases, suspend the use rights of unit owners, their invitees, licensees, and occupants, who are more than ninety (90) days in the payment of ANY monetary obligation.
2. The use rights that can be suspended include the right to use common areas, facilities, and other Association property. Use rights shall not be suspended for Limited Common Elements, common elements needed for unit access, parking spaces, elevators, or utility services provided to the unit. The statute is not clear as to whether cable and other bulk services are defined as "utilities", however, we believe that they may be, but this is yet to be determined.
3. A unit owners' voting rights may also be suspended, however, their unit shall still count towards the necessary quorum requirements for any meeting or amendment.
4. A use right suspension ends upon payment in full of all monetary obligations.
Property Insurance Requirements:
1. Unit owners are still responsible for insuring their personal property within the boundaries of their unit, including their limited common elements, and their floors, walls, ceiling coverings, electrical fixtures, appliances, water heaters, cabinets, window treatments, and all other items which are located within the boundaries of their unit and serve only such unit.
2. Condominium Associations are no longer required to obtain evidence of a unit owner’s insurance coverage for their personal property located within the unit.
3. Condominium Associations are no longer authorized to force place coverage on behalf of a unit owner for failure to provide proper proof of insurance.
4. Unit owners’ insurance policies are no longer required to name the Association as an additional insured and a loss payee. As such, unit owners are no longer required to obtain the Associations endorsement for payment they receive on an insurance claim on their policy.
Fire Prevention Code:
1. A condominium that is less than four (4) stories in height and has an exterior corridor providing a means of egress is exempt from the requirement to install a manual fire alarm system under the Life Safety Code adopted under the Florida Fire Prevention Code.
2. A Condominium Association may now vote to waive the requirement of retrofitting the common areas in a high rise building with a fire sprinkler system by recording such vote in the public records of the county. A high rise building is defined as a building greater than seventy five (75) feet in height.
3. Shall an Association not be able to obtain the necessary votes to waive the fire sprinkler retrofitting requirement; the deadline for retrofitting completion was extended to 2019.
Elevator Safety Code:
1. The Legislature has created a moratorium on the enforcement of amendments to the Safety Code for Existing Elevators and Escalators (ASME A17.1 and A17.3) requiring modifications to elevators in condominiums. Such retrofitting requirements cannot be enforce for five (5) years. However, shall a building require an elevator replacement or major modifications before the expiration of the five (5) year moratorium the building must meet the Elevator Modification requirements.
2. A Condominium Association may waive the requirement for installing alternate power sources for elevators upon an affirmative vote of a majority of the membership.
Distressed Condominium Relief Act:
1. In response to the downturn in the condominium market affecting the economy, developers, lenders, unit owners, and associations, the Legislature created the Distressed Condominium Relief Act (DCRA).
2. The DCRA establishes that a bulk buyer purchasing seven (7) units or more within a condominium association shall receive an assignment of some or all of the developers rights except those related to warranties, obligations to fund reserves, auditing requirements, and liability to issues or claims made prior to their assignment.
3. The DCRA creates a detailed process for the assignment of units within a condominium to a bulk buyer and the management of such association thereof.
