Our 2011 Legislative Update for Community Associations

This 2011 legislative update addresses those changes that could likely affect your association. This information is presented with you, the reader, in mind. The 2011 legislative changes are first organized by the type of association to which the new law applies. For your overall ease in assimilating this new and important information we have provided both a reference to the statute that is being amended, and at the conclusion of each section, reference to the appropriate bill number is provided in the event you would like to refer the bill’s actual text for further reading.

While the bill with the most direct and extensive impact to community associations is House Bill 1195, signed into law by Governor Scott on June 21, 2011 and codified in the Laws of Florida in Chapter 2011-196, the following bills are also reviewed: House Bill 59, House Bill 883, Senate Bill 408, and Senate Bill 650. Unless otherwise stated, the effective date of the legislation is July 1, 2011.

Please contact your association’s attorney to discuss any questions you may have as to how these new laws may affect your association. Please contact our firm if you would like to receive additional information regarding one of the many 2011 legislative update seminars we are in the process of scheduling, or to host a seminar.

We hope that you find this information useful.

Sincerely,

The Lawyers at Siegfried, Rivera, Lerner, De La Torre & Sobel, P.A.

SIEGFRIED, RIVERA, LERNER, DE LA TORRE & SOBEL, P.A.
The Construction, Real Estate and Community Association Law Firm of Florida

TABLE OF CONTENTS PAGE(S)

Letter of Introduction ii

Table of Contents iii

Condominium Associations 1-5

Homeowners Associations 6-10

Cooperative Associations 11-12

Applicable to all Types of Associations 13

Property and Casualty Insurance 14

Public Lodging & Mobile Home Parks 15

CONDOMINIUM ASSOCIATIONS
§718.111 The Association §718.111(12) Official Records. The Condominium Act now requires associations to obtain facsimile numbers in addition to the existing requirement to obtain email addresses for those members who opt to receive notices electronically. The email address and facsimile numbers are not accessible to other unit owners unless they are provided to fulfill association notice requirements or the unit owner first provides the association with their written consent to disclose the information. However, there is no penalty for an association’s inadvertent disclosure of this information. HB 1195
Work Product Privilege. The work product privilege exception continues to include records prepared for litigation and is now broadened to include records “prepared in anticipation of litigation” as compared to the previous requirement that such litigation was “imminent civil or criminal litigation.” HB 1195
Other Records Not Subject to Disclosure. Other records of the association that are not subject to disclosure as a result of a unit owner’s official records request include personnel records of the association or management company employees including, but not limited to, disciplinary, payroll, health and insurance records. However, the term “personnel records,” does not include written employment agreements with an association employee or management company, or budgetary or financial records that indicate the compensation paid to an association employee. HB 1195
Recap: Official Records Exempt from Disclosure. As revised §718.111(12) (c) provides, in relevant part, that:

…Notwithstanding the provisions of this paragraph, the following records are not accessible to unit owners:

1. Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including a record prepared by an association attorney or prepared at the attorney’s express direction, which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association, and which was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings, or which was prepared in anticipation of such litigation or proceedings until the conclusion of the litigation or proceedings.

2. Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a unit.

3. Personnel records of association or management company employees, including, but not limited to, disciplinary, payroll, health, and insurance records. For purposes of this subparagraph, the term “personnel records” does not include written employment agreements with an association employee or management company, or budgetary or financial records that indicate the compensation paid to an association employee.

4. Medical records of unit owners.

5. Social security numbers, driver’s license numbers, credit card numbers, e-mail addresses, telephone numbers, facsimile numbers, emergency contact information, any addresses of a unit owner other than as provided to fulfill the association’s notice requirements, and other personal identifying information of any person, excluding the person’s name, unit designation, mailing address, property address, and any address, e-mail address, or facsimile number provided to the association to fulfill the association’s notice requirements. However, an owner may consent in writing to the disclosure of protected information described in this subparagraph. The association is not liable for the inadvertent disclosure of information that is protected under this subparagraph if the information is included in an official record of the association and is voluntarily provided by an owner and not requested by the association.

6. Electronic security measures that are used by the association to safeguard data, including passwords.

7. The software and operating system used by the association which allow the manipulation of data, even if the owner owns a copy of the same software used by the association. The data is part of the official records of the association.
[emphasis added]

§718.112 Bylaws Agendas. Agenda meeting notices must “identify all” agenda items. HB 1195

Board Member Candidacy. A “candidate” means an eligible person who has timely submitted the written notice of their intent to become a candidate. Except in a timeshare condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws. HB1195.

Note on Term Limits. Previously, in such situations board members could NOT stand for reelection unless it was “otherwise permitted in the bylaws.” The revised statutory language in §718.112, Florida Statutes, in italics immediately above, could be interpreted to mean that there are no statutory prohibitions on term limits.

Board Member Eligibility. A candidate running for the board must be eligible to serve at the time of submitting their notice of intent to run. In effect, this means that board candidates must be current in their assessments and meet all other qualification requirements, no later than 40 days prior to the annual meeting where the election will take place, as that is the deadline for the submission of candidate “intent to run” forms. HB 1195
Board Member Certification. Within 90 days after being elected or appointed to the board, each newly elected or appointed director shall certify in writing to the secretary of the association that he or she has read the association’s declaration of condominium, articles of incorporation, bylaws, and current written policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members. In lieu of this written certification, within 90 days after being elected or appointed to the board, the newly elected or appointed director may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved condominium education provider within 1 year before or 90 days after the date of election or appointment. The written certification or educational certificate is valid and does not have to be resubmitted as long as the director serves on the board without interruption. A director who fails to timely file the written certification or educational certificate is suspended from service on the board until he or she complies with this sub-subparagraph. The board may temporarily fill the vacancy during the period of suspension. The secretary shall cause the association to retain a director’s written certification or educational certificate for inspection by the members for 5 years after a director’s election. Failure to have such written certification or educational certificate on file does not affect the validity of any board action. HB 1195
Board Discussion of Personnel Matters. The requirement that board and committee meetings be open to the unit owners does not apply to board meetings held for the purpose of discussing personnel matters. Notwithstanding, such meetings must be properly noticed at least 48 hours in advance and minutes must be kept. HB 1195
Timeshare Condominiums. Restrictions pertaining to the use of limited or general proxies, written ballot or voting machine for any agenda item or election as set forth in Chapter 718, the Condominium Act, does not apply to a timeshare condominium association. HB 1195
§718.113 Hurricane Protection
In addition to hurricane shutters, upon approval of a majority of the voting interests of the association, the association may install and maintain impact glass or other code compliant windows. HB 1195
§718.114 Association Powers.
Acquiring an interest in Leaseholds, Memberships, Land and Facilities. This revised law provides a mechanism for a majority vote of the total voting interests to acquire an interest in leaseholds, memberships, land, and facilities. Previously this law provided as follows:

i) an association may enter into agreements, to acquire leaseholds, memberships, and other possessory or use interests in lands or facilities such as country clubs, golf courses, marinas, and other recreational facilities, whether or not the lands or facilities are contiguous to the lands of the condominium, if such lands and facilities are intended to provide enjoyment, recreation, or other use or benefit to the unit owners;

ii) all of these leaseholds, memberships, and other possessory or use interests existing or created at the time of recording the declaration must be stated and fully described in the declaration;

iii) the declaration may provide that the rental, membership fees, operations, replacements, and other expenses are common expenses and may impose covenants and restrictions concerning their use and may contain other provisions not inconsistent with this chapter; and
iv) subsequent to the recording of the declaration, agreements acquiring these leaseholds, memberships, or other possessory or use interests which are not entered into within 12 months following the recording of the declaration are a material alteration or substantial addition to the real property that is association property, and the association may not acquire or enter into such agreements as authorized by the declaration as provided in s. 718.113.

The revised law now provides that in addition to iv, above, upon a vote of, or written consent by a majority of the total voting interests the association, may enter into such agreements.

§718.116 Assessments; Lien and Priority; Collection
Sub-Association Lien Priority. An association, or its successor or assignee, that acquires title to a unit through the foreclosure of its lien for assessments is not liable for any unpaid assessments, late fees, interests or reasonable attorney fees and costs that came due before the association’s acquisition of title in favor of any other association which holds a superior lien interest on the unit. Included in the text of this new statutory provision is the following phrase: “This provision is intended to clarify existing law.” HB 1195
This means that upon the successful foreclosure of a sub-association lien, where the sub-association acquires title to the unit as a result of its own lien foreclosure action, the sub-association would not be responsible to satisfy a superior master association’s lien. Nevertheless, the sub-association would be required to pay all master association assessments that become due and owing from the date title to the unit vests in the name of the sub-association.

With each year’s legislative updates, there is usually a change or two which generates debate among practitioners. This provision is one of those. In addition to possible challenges as to its constitutionality, implications might also arise in connection with situations involving “sub-associations” and “master-associations” competing for collection of their assessments from the same delinquent owner.

Tenant Demands. The requirement that a delinquent unit owner’s tenant pay rent to the association is clarified to include that the tenant must pay the association the subsequent rental payments (as compared to future monetary obligations) and continue to make such payments until all monetary obligations of the unit owner related to the unit are paid in full to the association. The tenant is immune from claims by the unit owner or landlord after the association sends its demand to the tenant. If the tenant prepaid its rent to the landlord, then the tenant must notify the association within 14 days of receiving the association’s demand and begin sending the rent to the association beginning on the next rental period. The tenant must continue to make rental payments to the association until all monetary obligations of the unit owner have been paid in full to the association. The unit owner must be provided a copy of the demand made upon the tenant. The association may issue the required eviction notices and commence eviction proceedings after the association’s written demand is made upon the tenant, if the tenant fails to issue required payments to the association.

The notice which the association must provide to the tenant, by hand delivery or United States mail, must be made in substantially the following form:

Pursuant to Section 718.116(11), Florida Statutes, the association demands that you pay your rent directly to the condominium association and continue doing so until the association notifies you otherwise. Payment due the condominium association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to …(full address)…, payable to …(name)….

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to Section 718.116(11), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord for all amounts timely paid to the association.

HB 1195

§718.117 Termination of Condominium Economic Waste. There are some new provisions pertaining to termination of condominiums in the event of total destruction that we certainly hope you’ll never need to implement as it applies to termination of all or a part of the condominium. In the event of total destruction, any unit owner can petition the court for judicial termination of the condominium. HB 1195
Optional/Partial Termination. In addition, the condominium form of ownership may be terminated for all or a part of the condominium property upon preparing a plan of termination or partial termination, so long as not more than 10% of the voting interests vote against and at least 80% of the voting interests vote in favor of the termination plan. In a partial termination, a vote of all owners and lien holders is not required so long as the surviving units’ share in the same proportion of the common elements as in the pre-termination setting. The units that survive the termination must be identified in an amendment to the declaration. The plan of termination must adhere to numerous other requirements included in 718.117. HB 1195
§718.303 Use Right Suspensions and Fines Use Right Suspensions and Fining for Non-Compliance. For failure to comply with the declaration, bylaws or reasonable rules, the association, through its Board, may suspend use rights or levy a fine not to exceed $100.00 per violation or $1,000.00 in the aggregate. Prior to levying a use right suspension or fine, the offending unit owner(s) must first be provided 14 days’ notice and an opportunity to appear in front of a committee comprised of other unit owners who are not on the board or residing with a board member. HB 1195
Use Right Suspensions for Delinquent Monetary Obligations. Use right suspensions for failing to pay delinquent monetary obligations that are greater than 90 days past due must be levied BY THE BOARD at a properly noticed meeting without a need for a prior committee hearing. As in the past, upon board approval, the use right suspension and/or fine is not deemed to be in effect until the association first mails or hand delivers notice of the suspension to the unit owner, occupants and any licensee. HB 1195
The Effect of Voting Right Suspensions on Quorum Requirements and Voting. A voting interest or consent right allocated to a unit or member that has been suspended by the association may not be counted towards the total number of voting interests necessary to constitute a quorum, the number of voting interests required to conduct an election, or the number of voting interests required to approve an action pursuant to the condominium act, the declaration, articles or bylaws. HB 1195
Recap:
What Can Be Suspended? Use right suspensions for nonpayment of monetary obligations and for violations of the declaration, bylaws, and reasonable rules of the association include the right to suspend the owner, or the owner’s tenant, guest, or invitee from use of the common elements, common facilities, or other association property. Use right suspensions for nonpayment of a monetary obligation may NOT include the limited common elements intended to be used solely by that unit, common elements needed to access the unit, utility services to the unit, parking spaces, or elevators.

When is the committee meeting and notice required? The 14 days’ notice to appear in front of a committee IS required for fining and use right suspensions for failing to comply with the declaration, bylaws and/or the rules and regulations. The 14 days’ notice and an opportunity to appear in front of a committee is NOT required for voting right suspensions or use right suspensions for failure to pay monetary obligations that are greater than 90 days past due.

Who levies the use right suspension and voting right suspension? All use right suspensions and voting right suspensions enacted for failing to pay monetary obligations that are greater than 90 days past due must be levied by the board at a properly noticed board meeting, and are not effective until notice is provided by mail or hand delivery to the parcel owner, and if applicable, the parcels occupant, licensee, or invitee.

When does the suspension end? All use right suspensions and voting right suspensions end by operation of law upon the association’s receipt of full payment due.

Can the fine become a lien? As distinguished from homeowner associations, fines, regardless of the amount, may NOT become the basis for a lien against the parcel.

§718.703 Bulk Buyer Provisions These changes provide clarity as to the meaning of the terms “bulk assignee” and “bulk buyer” as they were initially intended when this legislation was adopted, effective July 1, 2010, to mean one who acquired more than 7 units in a single condominium. Most importantly, the legislation provides that one may not be deemed to be a bulk assignee or bulk buyer unless the condominium parcels were acquired on or after July 1, 2010, but before July 1, 2012. HB 1195
A bulk assignee can avoid liability for construction defect warranties as further described in §718.203, except as expressly set forth in an offering circular, prospectus, or purchase and sale contract. Notwithstanding the foregoing, the bulk assignee cannot avoid liability for work it performs. Turnover is not triggered solely by virtue of the bulk assignee’s purchase of the units nor the purchase of units by a subsequent bulk assignee. Certain filing requirements are required by the Division of Condominiums where the bulk buyer or bulk assignee offers more than 7 units in a condominium for sale or for lease for a period of greater than 5 years. HB 1195

HOMEOWNERS ASSOCIATIONS
§720.303 Association Powers and Duties…
A Member’s Right to Speak at Board Meetings. Finally, the right of a member to speak on all board agenda items is provided (as compared to previous years where the members only had a right to speak on just those agenda items that were placed on the agenda as a result of a member’s petition.) The board can adopt regulations governing the frequency duration and other manner of member statements. HB 1195
Official Records. The Homeowners’ Act now requires associations to obtain facsimile numbers in addition to the existing requirement to obtain email addresses for those parcel owners who opt to receive notices electronically. The email address and facsimile numbers are not accessible to other members unless they are provided to fulfill association notice requirements or the parcel owner first provides the association with their written consent to disclose the information. However, there is no penalty for an association’s inadvertent disclosure of this information. HB 1195
Work Product Privilege. The work product privilege exception continues to include records prepared for litigation and is now broadened to include records “prepared in anticipation of litigation” as compared to the previous requirement that such litigation was “imminent civil or criminal litigation.” HB 1195
Other Records Not Subject to Disclosure. Other records of the association that are not subject to disclosure as a result of a unit owner’s official records request include personnel records of the association or management company employees including, but not limited to, disciplinary, payroll, health and insurance records. However, the term “personnel records,” does not include written employment agreements with an association employee or management company, or budgetary or financial records that indicate the compensation paid to an association employee. HB 1195
Recap: Official Records Exempt from Disclosure. As revised §720.303(5)(c) provides, in relevant part:

…Notwithstanding the provisions of this paragraph, the following records are not accessible to members or parcel owners:

1. Any record protected by the lawyer-client privilege as described in s. 90.502 and any record protected by the work-product privilege, including a record prepared by an association attorney or prepared at the attorney’s express direction, which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association, and which was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings, or which was prepared in anticipation of such litigation or proceedings until the conclusion of the litigation or proceedings.

2. Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a parcel.

3. Personnel records of association employees including, but not limited to, disciplinary, payroll, health, and insurance records. For purposes of this subparagraph, the term “personnel records” does not include written employment agreements with an association employee or budgetary or financial records that indicate the compensation paid to an association employee.

4. Medical records of parcel owners or community residents.

5. Social security numbers, driver’s license numbers, credit card numbers, e-mail addresses, telephone numbers, facsimile numbers, emergency contact information, any addresses of a unit owner other than as provided to fulfill the association’s notice requirements, and other personal identifying information of any person, excluding the person’s name, unit designation, mailing address, property address, and any address, e-mail address, or facsimile number provided to the association to fulfill the association’s notice requirements. However, an owner may consent in writing to the disclosure of protected information described in this subparagraph. The association is not liable for the inadvertent disclosure of information that is protected under this subparagraph if the information is included in an official record of the association and is voluntarily provided by an owner and not requested by the association.

6. Electronic security measures that are used by the association to safeguard data, including passwords.

7. The software and operating system used by the association which allow the manipulation of data, even if the owner owns a copy of the same software used by the association. The data is part of the official records of the association.
[emphasis added]

HB 1195 [Please note that as to subparagraph 3 above, in comparison, the Condominium Act includes as a part of the records not accessible to the unit owners, “personnel records of a management company” while the Homeowner’s act fails to include a similar provision. Nevertheless, as applied, both of the Acts require the disclosure of any written employment agreement with a management company.]

§720.305 Obligations of Members Use Right Suspensions and Fining for Non-Compliance. For failure to comply with the declaration, bylaws or reasonable rules, the association, through its board, may suspend use rights and/or levy a fine. The offending member must be provided at least after 14 days’ notice and an opportunity to appear before a committee of at least three members appointed by the board who are not officers, directors or employees of the association or the spouse, parent, child, brother or sister of an officer, director or employee of the association. Upon the committee’s recommendation to the board, use rights may be suspended or a fine may be imposed not to exceed $100.00 per violation or $1,000.00 in the aggregate unless otherwise provided in the governing documents. If the committee does not agree with the fine or use right suspension, they may not be enacted. HB 1195
Use Right Suspensions for Failing to Pay Delinquent Monetary Obligations. As a result of the 2011 legislative session, HOA’s are now treated similar to condominium associations in that neither are required to provide 14 days hearing notice to appear in front of a committee for use right suspensions so long as the use right suspension is the result a member’s delinquency that is greater than 90 days past due. Therefore, without the need to appear before a committee and without the previously required 14 days notice, use right suspensions for failing to pay delinquent monetary obligations which are more than 90 days past due may be levied BY THE BOARD at a properly noticed meeting without a need for a committee hearing. As in the past, upon board approval, the use right suspension is not in effect until the association first mails or hand delivers notice of the suspension to the parcel owner, and if applicable, its occupants, licensees and invitees. HB 1195
The Effect of Voting Right Suspensions on Quorum Requirements and Voting. Without regard to language in the declaration, a homeowners association may suspend voting rights of a parcel owner or member for the nonpayment of any monetary obligation that is more than 90 days delinquent. A voting interest or consent right allocated to an owner or member which has been suspended by the association may not be counted towards the total number of voting interests necessary to constitute a quorum, the number of voting interests required to conduct an election, or the number of voting interests required to approve an action pursuant to the Homeowners Association Act, the declaration, articles or bylaws. If the voting right suspension is levied by the board for failing to pay a monetary obligation that is greater than 90 days past due, then 14 days notice and a hearing in front of a committee is not required. Notwithstanding, the suspension must be approved by the board at a properly noticed board meeting and is not effective until the association provides notice by mail or hand delivery to the parcel’s owner, and if applicable, the parcel’s occupant, licensee, or invitee. HB 1195
Recap:
What can be suspended? Use right suspensions for nonpayment of a monetary obligation and for violations of the declaration, articles and reasonable rules of the association include the right to suspend the member, or the member’s tenant, guest, or invitee from use of the common areas and facilities. Suspensions for nonpayment of a monetary obligation may not include or otherwise apply to that portion of the common areas used to provide access, or utility services, to a parcel.

When is the committee notice and hearing required? The 14 days’ notice to appear in front of a committee IS required for fining, use right suspensions and voting right suspensions for failing to comply with declaration, bylaws and/or the rules and regulations. The 14 days’ notice to appear in front of a committee is NOT required for use right suspensions and voting right suspensions for failing to pay monetary obligations that are greater than 90 days past due. All use right suspensions and voting right suspensions enacted for failing to pay monetary obligations that are greater than 90 days past due must be levied by the board at a properly noticed board meeting, and are not effective until notice is provided by mail or hand delivery to the parcel owner, and if applicable, the parcels occupant, licensee, or invitee
When does the suspension end? All use right suspensions and voting right suspensions end by operation of law upon the Association’s receipt of the full payment due.

Can the fine become a lien against the parcel? As distinguished from condominium associations, fines in excess of $1,000.00 MAY become a lien against the parcel.

§720.306 Elections and Board Vacancies Delinquent monetary obligation. A person who is greater than 90 days delinquent in the payment of monetary obligation to the association is not eligible for board membership. HB 1195
Felons. A person who has been convicted of a felony is not eligible for board membership if their civil rights have not been restored for at least five years prior as of the date the person seeks election to the board. HB1195

Effect on Prior Board Acts. Previous board action is not invalidated if it is later discovered that the person was ineligible to serve on the board. HB 1195
§720.3085 Payment for assessments; lien claims Sub-Association Lien Priority. An association, or its successor or assignee, that acquires title to a parcel through the foreclosure of its lien for assessments is not liable for any unpaid assessments, late fees, interests or reasonable attorney fees and costs that came due before the association’s acquisition of title in favor of any other association which holds a superior lien interest on the parcel. HB 1195
This means that upon the successful foreclosure of a sub-association lien, where the sub-association acquires title to the parcel as a result of its own lien foreclosure action, the sub-association would not be responsible to satisfy a superior master association’s lien. Nevertheless, the sub-association would be required to pay all master association assessments that become due and owing from the date title to the parcel vests in the name of the sub-association.

With each year’s legislative updates, there is usually a change or two which generates debate among practitioners. This provision is one of those. In addition to possible challenges as to its constitutionality, implications might also arise in connection with situations involving “sub-associations” and “master-associations” competing for collection of their assessments from the same delinquent owner.

Tenant Demands. The requirement that a delinquent parcel owner’s tenant pay rent to the association is clarified to include that the tenant must pay the association the subsequent rental payments (as compared to future monetary obligations) and continue to make such payments until all monetary obligations of the parcel owner related to the parcel are paid in full to the association. The tenant is immune from claims by the parcel owner or landlord after the association sends its demand to the tenant. If the tenant prepaid its rent to the landlord, then the tenant must notify the association within 14 days of receiving the association’s demand and begin sending the rent to the association beginning on the next rental period. The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The parcel owner must be provided a copy of the demand made upon the tenant. The association may issue the required eviction notices and commence eviction proceedings after the association’s written demand is made upon the tenant, if the tenant fails to issue required payments to association.

The notice which the association must provide to the tenant, by hand delivery or United States mail, must be made in substantially the following form:

Pursuant to Section 720.3085(8), Florida Statutes, we demand that you make your rent payments directly to the homeowners’ association and continue doing so until the association notifies you otherwise. Payment due the homeowners’ association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to …(full address)…, payable to …(name)….

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to Section 720.3085(8), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord.

§720.309 Agreements Entered Into By the Association Communication Services. If the governing documents provide for the cost of communications services as defined in s. 202.11, Fla. Stat., information services or internet services obtained pursuant to a bulk contract shall be deemed an operating expense of the association. If the governing documents do not provide for such services, the board may contract for the services, and the cost shall be deemed an operating expense of the association. However, the expenses must be allocated on a per-parcel basis rather than on a percentage basis, even if the governing documents provide for other than equal sharing of operating expenses. Any contract entered into before July 1, 2011, in which the cost of the service is not equally divided among all parcel owners may be changed by a majority of the voting interests present at a regular or special meeting of the association in order to allocate the cost equally among all parcels. HB 1195
Cancellation of communication contract by the members. Any contract for communication, information or internet services entered into by the board may be canceled by a majority of the voting interests present at the next regular or special meeting of the association, whichever occurs first. Any member may make a motion to cancel such contract, but if no motion is made or if such motion fails to obtain the required vote, the contract shall be deemed ratified for the term expressed therein. HB 1195
Any contract entered into by the board for communications services, information or internet services, must provide, and shall be deemed to provide if not expressly set forth therein, that a hearing-impaired or legally blind parcel owner who does not occupy the parcel with a non-hearing-impaired or sighted person, or a parcel owner who receives supplemental security income under Title XVI of the Social Security Act or food assistance as administered by the Department of Children and Family Services pursuant to s. 414.31, may discontinue the service without incurring disconnect fees, penalties, or subsequent service charges, and may not be required to pay any operating expense charges related to such service for those parcels. As a result, if fewer than all parcel owners share the expenses of the communications services, information services, or Internet services, the expense must be shared by all participating parcel owners. The association may use the provisions of s. 720.3085 to enforce payment by the parcel owners receiving such services. HB 1195
Other Providers. A resident of any parcel, whether a tenant or parcel owner, may not be denied access to available franchised, licensed, or certificated cable or video service providers if the resident pays the provider directly for services. A resident or a cable or video service provider may not be required to pay anything of value in order to obtain or provide such service except for the charges normally paid for like services by residents of single-family homes located outside the community but within the same franchised, licensed, or certificated area, and except for installation charges agreed to between the resident and the service provider. HB 1195
COOPERATIVE ASSOCIATIONS
§719.108 Rents and Assessments Collection Services. The language that provided that an association could lien a shareholder for the reasonable costs for collection services incurred by the cooperative has been removed from the statute. HB 1195
Tenant Demands. The requirement that a delinquent unit owner’s tenant pay rent to the association is clarified to include that the tenant must pay the association the subsequent rental payments (as compared to future monetary obligations) and continue to make such payments until all monetary obligations of the unit owner related to the unit are paid in full to the association. The tenant is immune from claims by the unit owner or landlord after the association sends its demand to the tenant. If the tenant prepaid its rent to the landlord, then the tenant must notify the association within 14 days of receiving the association’s demand and begin sending the rent to the association beginning on the next rental period. The tenant must continue to make rental payments to the association until all monetary obligations of the unit owner have been paid in full to the association. The unit owner must be provided a copy of the demand made upon the tenant. The association may issue the required eviction notices and commence eviction proceedings after the association’s written demand is made upon the tenant, if the tenant fails to issue required payments to association.

The notice which the association must provide to the tenant, by hand delivery or United States mail, must be made in substantially the following form:

Pursuant to Section 719.108(10), Florida Statutes, we demand that you make your rent payments directly to the cooperative association and continue doing so until the association notifies you otherwise. Payment due the cooperative association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to …(full address)…, payable to …(name)….

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to Section 719.108(10), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord.

§719.303 Obligation of Owners Use Right Suspensions and Fining for Non-Compliance. For failure to comply with the cooperative documents or reasonable rules of the association, the association, through its Board, may suspend use rights or levy a fine against the unit owner or the unit’s occupant, licensee or invitee not to exceed $100.00 per violation or $1,000.00 in the aggregate, unless otherwise provided in the cooperative documents. Prior to levying a use right suspension or fine, the offending unit owner(s) must first be provided “reasonable notice” and an opportunity to appear in front of a committee comprised of “other unit owners.” HB 1195
Use Right Suspensions for Delinquent Monetary Obligations. Cooperative associations are now authorized to suspend use rights and voting rights in the event a unit owner is delinquent in the payment of monetary obligations for over 90 days. Use right suspensions for failing to pay delinquent monetary obligations that are greater than 90 days past due must be levied BY THE BOARD at a properly noticed meeting without a need of a prior committee hearing. As with condominium associations, upon board approval, the use right suspension and/or fine is not deemed to be in effect until the association first mails or hand delivers notice of the suspension to the unit owner, occupants and any licensee. HB 1195
The Effect of Voting Right Suspensions on Quorum Requirements and Voting. A voting interest or consent right allocated to a unit or member that has been suspended by the association may not be counted towards the total number of voting interests necessary to constitute a quorum, the number of voting interests required to conduct an election, or the number of voting interests required to approve an action pursuant to the Ch. 719, F.S., the cooperative documents, articles or bylaws. HB 1195
Recap:
What Can Be Suspended? Use right suspensions for nonpayment of monetary obligations and for violations of the declaration, bylaws, and reasonable rules of the association include the right to suspend the owner, or the owner’s tenant, guest, or invitee from use of the common elements, common facilities, or other association property. Use right suspensions for nonpayment of a monetary obligation may NOT include the limited common elements intended to be used solely by that unit, common elements needed to access the unit, utility services to the unit, parking spaces, or elevators.

When is the committee notice and hearing required? “Reasonable notice” to appear in front of a committee IS required for fining and use right suspensions for failing to comply with the cooperative documents, bylaws and/or the rules and regulations. The notice and opportunity to appear in front of a committee is NOT required for voting right suspensions or use right suspensions for failure to pay monetary obligations that are greater than 90 days past due. All use right suspensions and voting right suspensions enacted for failing to pay monetary obligations that are greater than 90 days past due must be levied by the board at a properly noticed board meeting, and are not effective until notice is provided by mail or hand delivery to the parcel owner, and if applicable, the parcel’s occupant, licensee, or invitee.

When does the suspension end? All use right suspensions and voting right suspensions end by operation of law upon the association’s receipt of full payment due.

Can the fine become a lien against the parcel? As distinguished from homeowner associations, fines, regardless of the amount, may NOT become the basis for a lien against the parcel.

APPLICABLE TO ALL TYPES OF ASSOCIATIONS
§633.0215 Fire Prevention Code A condominium, cooperative, or other multifamily residential building that is less than four stories in height and has an exterior corridor for egress is exempt from the requirement to install a manual fire alarm system. Simply, this change adds a floor to the exemption. In the past the limit was two stories, now it’s three. Also, the newly revised law applies far more broadly than its predecessor that only applied to condominiums. HB 1195
§48.031 Service of process generally; service of witness subpoenas A condominium, cooperative or other gated community must allow the unannounced entry of a Process Server into the community, including common areas and common elements, where the Process Server is attempting to serve process on a defendant or witness who lives in the community or is known to be within the community. HB 59

PROPERTY AND CASUALTY INSURANCE (effective May 17, 2011)

§95.11 Limitations other than for the recovery of real property
While most applicable statute of limitations in which to file a lawsuit is “x” number of years from the time the plaintiff knew or should have known of the incident that gives rise to the litigation, Senate Bill 408 provides that an action (a/k/a a lawsuit) for breach of a property insurance contract must be brought within 5 years from the date of the loss. SB 408

§626.70132 Notice of windstorm or hurricane claim The period of time in which a claim can be filed for damages incurred as a result of a hurricane/windstorm is greatly reduced from 5 to 3 years. SB 408
§627.062 Rate standards Premiums for reinsurance are increased from 10% per year to an allowable 15% per year. SB 408
§627.351 Insurance risk apportionment plans Claims in regard to sinkhole damages are now limited to “structural damage” to primary buildings.
SB 408
§627.706 Sinkhole insurance; catastrophic ground cover collapse; definitions The term “structural damage” is defined to minimize what might otherwise be considered a frivolous claim. In addition, as applied to sinkhole coverage, the policy holder is required to provide notice to the insurer within 2 years from the time the policy holder knew or reasonably should have known of the claim. SB 408
§627.7011 Homeowners’ policies; offer of replacement cost coverage and law and ordinance coverage In the event of a total loss (total destruction) where the insurance policy is based on replacement cost, the insurer must pay the complete replacement costs without holdback for any depreciation of value. In less than total loss situations, where the insurance policy is based on replacement cost, the insurer must pay the cash value of the insured loss, less any applicable deductible. All remaining amounts are paid as expenses are incurred and work is performed. SB 408
§626.854 Public adjuster defined, prohibitions In so far as public adjusters are concerned, compensation for any reopened claim or supplemental claim cannot exceed 20% of the reopened supplement claim payment. SB 408

PUBLIC LODGING & MOBILE HOME PARKS (effective June 2, 2011)

Chapter 509, Part 1, Public Lodging and Public Food Service Establishments
The terms “resort condominium” and “resort dwellings” are changed to “vacation rental”. HB 883
§509.032 Duties Unless adopted on or before June 1, 2011, no local law, ordinance, or regulation may restrict the use of vacation rental, prohibit vacation rentals, or regulate vacation rentals based only on their classification, use, or occupancy. HB 883
§509.242 Public lodging establishments; classifications
The term “vacation rental” means any unit or group of units in a cooperative, condominium, or timeshare or any individually or collectively owned single, two, or four family home, that is also a transient public lodging establishment. HB 883
Chapter 723 Mobile Home Parks
This legislation pertains to those situations where the park owner is effectuating a change in land use of the mobile home park. SB 650

Parting Thoughts
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In addition to the foregoing, many changes were made in HB 1195 to Chapter 718 (the Condominium Act), Chapter 719 (the Cooperative Act) and Chapter 720 (the Homeowners’ Association Act) that are more grammatical, than substantive, in nature. For example, where prior legislation provided that “nothing contained herein shall apply,” it may now provide that, “This paragraph does not apply to…” or the word “before” is used in place of “preceding.” These changes evidence an attempt by the Florida Legislature to provide more clarity through better draftsmanship. Only time will tell if the legislation succeeds in this respect. In any event, where such changes were made and they did not affect the intent or application of the relevant statute, then such changes were not addressed herein.

Please remember to contact your association’s lawyer with any questions or comments that you may have.

This 2011 Legislative update is intended for clients of Siegfried, Rivera, Lerner, De La Torre & Sobel, P.A.