Although Florida’s 2015 Legislative Session ended earlier than expected when the House of Representatives abruptly adjourned prior to the scheduled end of the Session, some new legislation affecting community associations was passed and subsequently signed into law by the Governor and became, for the most part, effective July 1, 2015. Following is a brief summary of these new laws.
ELECTRONIC VOTING
Electronic voting is now available for condominium, cooperative and homeowners’ associations. Under these new provisions, an association, through resolution of the board, may conduct its elections and any other owner votes through an online voting system.
1) The advanced written consent of the owner is required in order to participate in online voting.
2) The association is required to provide:
(a) a method to authenticate the owner’s identity to the online voting system;
(b) a method to confirm, at least 14 days before the voting deadline, that the owner’s electronic device can successfully communicate with the online voting system;
(c) for condominium and cooperative elections of the board, a method to transmit an electronic ballot that ensures the secrecy and integrity of each ballot; and
(d) for homeowners’ association elections of the board, a method that is consistent with the homeowners’ association’s election procedures as set out in its bylaws.
3) The online voting system must be able to authenticate the owner’s identity and the validity of each electronic vote to ensure that the vote is not altered in transit.
4) A receipt for the vote received through the online voting system must be provided to the owner.
5) For board member elections, the electronic voting system must be able to permanently separate any authentication or identifying information from the electronic election ballot so that it is impossible to tie an election ballot to a specific owner.
6) The voting system must also be able to store and keep electronic votes accessible for recount, inspection and review purposes.
7) In order to use this voting procedure, the board of directors must adopt a resolution containing specific requirements, including notices to the owners of the option, requirement of their consent and opportunity to opt out. If the resolution is to be considered at a board meeting, written notice of that meeting must be mailed, delivered or electronically transmitted to the owners and posted at the property.
8) Once an owner consents to online voting, the consent is valid until the owner opts out.
FINING AND SUSPENSION OF USE AND VOTING RIGHTS
Clarification is provided to condominium, cooperative and homeowners’ associations regarding the order of the proceedings that are necessary for imposing a fine or use right suspension for non-monetary violations. First, the board must levy the fine or use right suspension, and then the offending owner must be provided at least 14 days’ notice of the fining/suspension committee’s meeting where it will hold a hearing to approve or disapprove the fine or use right suspension for non-monetary violations levied by the board. If the committee does not agree with the fine/suspension, then it cannot be imposed against the offending owner.
The legislation also clarifies that the role of the committee is only to confirm or reject the fine or use right suspension (non-monetary) levied by the board. This means that if the committee wishes to impose a fine of a different amount, it is powerless to do so. Rather, the modification of the fine would have to be done at a properly noticed board meeting first.
As to cooperative associations, the qualifications for those who serve on the fining committee must be “other owners who are neither board members nor persons residing in the board member’s household.”
Both the Condominium Act and Homeowners’ Association Act were amended to clarify that:
1) the “monetary obligations” that qualify for suspension of use rights include a fee, fine or other monetary obligation;
2) when the voting rights of an owner are suspended, the total number of eligible units is reduced for the purpose of calculating the necessary percentage to pass a proposal;
3) any authorized suspension applies not only to the member, but also to the tenants, guests or invitees, and even if the delinquency or failure that resulted in the suspension arose from less than all of the multiple units or lots owned by a member. This means that if an owner owns three units and is delinquent more than 90 days on one of the units, the voting rights on all three units may be suspended.
PROXIES
As to condominium, cooperative and homeowners’ associations, a complete copy, facsimile transmission or other reliable reproduction of the original proxy may be used instead of requiring the original proxy. This change appears to formally legalize a process already in existence by many associations and applies to all not-for-profit corporations, which includes condominium, cooperative and homeowners’ associations.
INSURANCE
As to condominiums, if there is no insurable casualty event that caused the damage, the maintenance provisions of the governing documents are to be used to provide for the determination of responsibility for the repairs caused by events other than casualty.
OFFICIAL RECORDS
As to condominiums, relative to the “catch-all” provision of what is identified as the Official Records of a condominium association, open to inspection to owners or their authorized representatives, has been modified to add the word “written” regarding such records.
MEETING NOTICES
It is no longer required to have the authority in the association’s bylaws to use electronic mail (e-mail) for association notices. As a result, all meeting notices, including for condominium, homeowners’ and cooperative board and committee meetings, may be provided by e-mail. However, the requirement that owners provide their advanced written consent to receive such notices by e-mail, remain. So, the owners must still opt-in to receive electronic notices.
ANNUAL BUDGETS
As to condominiums, statutory provisions regarding the annual budget have been revised to clarify that minimally, the items listed in section 718.504(21), Florida Statutes, must be included in a proposed budget. Although no substantive provisions were made, the provisions addressing reserves have been split into two parts, with subsection (a) addressing the reserves in general, and subsection (b) addressing reserves before the turnover of control of the association by the developer to the non-developer owners. Subsection (b) further clarifies the ability of the developer to vote its units to waive reserves.
ASSESSMENT PAYMENTS
As to condominium and cooperative associations, a legislative fix was provided in response to St. Croix Lane Trust v. St. Croix at Pelican March Condominium Association, Inc., 144 So.3d 639 (Fla. 2d DCA 2014) regarding the application of accord and satisfaction to a restrictive endorsement placed on an assessment payment. These sections have been revised to clarify that the application of payments made on a delinquent account are to be applied in the manner specified within the Florida Statutes, notwithstanding any purported “accord and satisfaction” or settlement agreement claimed by the payer by delivery of the payment. These provisions also state that they are intended to clarify existing law, which makes the application of the change retroactive. Noticeably lacking is a similar amendment to the Homeowners’ Association Act.
BULK BUYERS
This legislation applies to the condominium bulk assignee or bulk purchaser of units, and extends the period of time for qualification from July 1, 2016 to July 1, 2018. In plain English, this means an investor can acquire seven or more condominium units without concern of acquiring the predecessor developer’s liability for such things as construction defects and other obligations.
HOA RULES AND REGULATIONS
The rules and regulations of the homeowners’ associations are now included within the definition of the “governing documents.”
CHAPTER 720, FLORIDA STATUTES
This new statute appropriately names Chapter 720, Florida Statutes, as the “Homeowners’ Association Act.”
TENANT PROTECTION
A new section 83.561, Florida Statutes, has been added, entitled “termination of rental agreement upon foreclosure.” This new Statute creates certain rights and entitlements in tenants following the foreclosure sale.
The tenant is allowed to remain in possession of the premises for a 30 day period following the date that the purchaser at the foreclosure sale delivers the 30-day notice of termination. The Statute also provides a form of suggested language that the 30-day notice should include. A writ of possession may only be applied for after the expiration of the 30-day period.