Category: Legislation Updates

In anticipation of Florida’s 2016 legislative session, Representative John Cortes of Florida’s House of Representatives filed three bills affecting community associations and managers. Omnibus style House Bill 667 is massive in its scope. Its author begins by fully repealing Chapter 719 regulating Florida’s cooperatives and Chapter 720 regulating Florida’s homeowners’ associations and then amends Chapter 718 to include many of the provisions of the repealed Florida Statutes, albeit, at times, with many significant differences. A new term is created, “common interest community” which refers to all types of residential communities and makes them subject to the provisions of the significantly overhauled Chapter 718. This Bill is 441 pages long.

While all the changes are too numerous to mention, a few of the major changes which appear in the first 150 pages include:

• Without regard to constitutional protections against impairment of existing contracts, House Bill 667 makes all future legislative amendments to Chapter 718, which would regulate all common interest communities, applicable to your community whether you want it to or not.
• The transfer of homes (referred to as “units”) cannot be restricted unless the transfer is likely to threaten the security of the residents, association property, and the financial status of the association or the ability of the association to qualify for institutional mortgage financing. This diminishes many associations otherwise existing broad approval rights.
• Upon receipt of a certified written inquiry from a member, the association’s obligation is to provide what is defined in this legislation as a “substantive response.” Further, any substantive response must include, at a minimum, a restatement of the issue presented by the owner, the board’s written response to the issue, and the board’s actions or intended actions in response to the issue, in addition to all other facts, opinions, requests, and positions taken that are relevant to the issue. A unit owner who does not receive a substantive response within 15 days is entitled to the actual damages or minimum damages for the association’s willful failure to comply with this paragraph. The minimum damages will be $100 per calendar day for up to 20 business days, beginning on the 16th business day after receipt of the written request.

Thus, while the concept of one chapter of law to govern all types of residential associations may one day prove worthwhile, in its present form, House Bill 667 needs work. As yet, this Bill does not have a Senate sponsor.

While Representative Cortes’ House Bill 667 seeks to completely revamp all existing Florida community association legislation, he has also filed House Bill 653 which attempts to bring the statutes regarding homeowners’ associations closer to those which govern condominiums and cooperatives (i.e., requiring the use of limited proxies for votes of the owners and conducting elections in the same manner as condominium elections). As was attempted during last year’s legislative session, House Bill 653 also seeks to make homeowners’ associations subject to the oversight (and fees) of the, to be renamed, “Division of Florida Condominiums, Homeowners’ Associations, Timeshares, and Mobile Homes.”

With regard to community association managers, Representative Cortes’ House Bill 665 creates liability on the part of a community association manager for damages incurred from offering incorrect advice. The Regulatory Council of Community Association Managers name is changed to the “Board of Community Association Managers” and additional new regulations regarding the membership and authority of the “Board of Community Association Managers” have also been amended and added in this Bill. House Bill 665 revises provisions relating to licensure of community association managers and community association management firms to require that a community association manager’s license expires on September 30^th of even numbered years requiring renewal every two years.

House Bill 665 also requires community association manager pre-licensure education consisting of not more than 40 hours of in-person instruction by a department-approved provider which must cover all areas of the examination including a new list of 22 fundamental management skills and knowledge. This is 18 hours more than what is presently required. The odd part is the sentence structure. If “not more than 40 hours of in-person instruction” is required, does that mean the course can be taught in as little as 1 hour (not that it could)?

Based on these few bills, Florida’s 2016 legislative session, which was expected to be a quiet year as related to community associations, could turn out to be quite active.

Happy New Year! The regular session of the Florida Legislature begins on the first Tuesday after the first Monday in March and continues for 60 consecutive days. The 2013 Florida legislative session will officially begin on March 5, 2013 and looks to be a busy one! So far, House Bills 73 and 87, and Senate Bill 120, are already filed and winding their way through the legislative process.

House Bill 73 was filed on December 28, 2012 by Representative Moraitis and, if voted into law, its provisions become effective July 1, 2013. It is a fairly comprehensive Bill that:

• exempts certain elevators from specific code update requirements;
• revises provisions relating to terms of condominium board of administration members;
• revises condominium unit owner election & association meeting notice & record keeping requirements;
• provides requirements for condominiums relating to election challenges, recalls, & installation of impact glass or other code-compliant windows;
• provides requirements for condominiums created within condominium parcels;
• revises provisions relating to imposing remedies;
• revises liability of unit owners;
• provides liability limitations of certain first mortgagee or its successors or assignees;
• revises records not accessible to members or parcel owners;
• revises provisions relating to amendment of declarations;
• provides criteria for consent to amendments; and
• requires notice to mortgagees regarding proposed amendments.

On January 3, 2013, House Bill 87 was filed by its co-sponsors, Representatives Passidomo and Moraitis. This Bill only addresses the foreclosure process and would be effective upon becoming law. This Bill:

• revises the limitations period for commencing an action to enforce claim of deficiency judgment after foreclosure action;
• specifies required contents of complaint seeking to foreclose on certain types of residential properties;
• authorizes sanctions against plaintiffs who fail to comply with complaint requirements;
• requires the court to treat collateral attack on final judgment of foreclosure on mortgage as a claim for monetary damages;
• prohibits the court from granting certain relief affecting title to foreclosed property;
• limits the amount of a deficiency judgment;
• revises a class of persons authorized to move for expedited foreclosure;
• provides requirements & procedures with respect to order directed to defendants to show cause;
• provides that failures by a defendant to make filings or appearances may have legal consequences;
• requires the court to enter a final judgment of foreclosure & order foreclosure sale; and
• provides for liability of persons who wrongly claim to be holders of, or entitled to enforce, a lost, stolen, or destroyed note & cause mortgage secured thereby to be foreclosed.

On December 14, 2012, Senator Latvala filed Senate Bill 120 dealing with condominiums. This Bill, if passed into law, becomes effective upon becoming law and provides for:

• condominium units to come into existence regardless of requirements or restrictions in a declaration;
• extending the amount of time that a clerk may hold a sum of money before notifying the registered agent of an association that the sum is still available and the purpose for which it was deposited;
• changing the requirements relating to the circumstances under which a declaration of condominium or other documents are effective to create a condominium; and
• revising the conditions under which a developer may amend a declaration of condominium governing a phase condominium, and provides for an extension of the 7-year period for the completion of a phase, etc.

Free Seminars, Save the Dates

On February 27, the PM-EXPO will once again host a fabulous all day community association expo. In addition to the amazing exhibitor hall, numerous seminars of interest to managers and board members are presented.  You will not want to miss the advanced manager and accountant panel, which I will be moderating, where your questions are fair game! Joining me on this bright and esteemed panel are Joe Gilbert, LCAM and owner of GRS Management; Nikki Monahan, LCAM and Vice President of The Continental Group; and association auditor Donna Seidenberg, CPA of the Fuoco Group. More information coming soon.

In addition, Kaye Bender Rembaum announces that it will be hosting free seminars providing insight into the developments in the law over the past year, and answers to questions submitted in advance.

• Wednesday, January 9, 9:30 a.m. at South County Civic Center in Delray Beach;
• Wednesday, January 23, 6:45 p.m.:  McDonald Center,  North Miami Beach;
• Wednesday, Feb. 6, 2013 6:30 p.m.: Bonaventure Town Center Club, Weston;
• Tuesday, Feb. 12, 2013, 6:45p.m.: ArtServe,  Fort Lauderdale; and
• Tuesday March 5, 6:45 p.m.: Deerfield Beach Chamber of Commerce.

Interested attendees should specify which seminar location they want to attend, and send questions or topics for discussion, to [email protected] or call 954-776-1999, ext. 230.

Around this time every year, association boards everywhere want to know how this year’s proposed legislation will affect their association.  Me too! The truth is, it is impossible to guess which parts of a proposed bill will actually survive the legislative process.

As far as 2012 is concerned, this year’s legislative bill that most affects community associations is House Bill 319.  Since this bill was originally proposed a few short weeks ago, it has undergone five amendments and is now officially labeled “HB 319c2.”  The “C2” means that the bill is going through the committee hearing process and may have numerous amendments, or the amendments change the original concept of the bill.  In some instances, the bill can be rewritten and a “committee substitute” takes the place of the original.  The next committee may again rewrite the bill, and sometimes more than one bill may be combined.  The committee’s substitute bill continues to carry the identifying number(s) of the original bill(s) filed.  The “c2” designation is a committee substitute for the initial committee substitute.  As to HB319, there are too many committee amendments to list them all.  Three such amendments that might be of interest follow.

In this latest version of the bill, the author makes what is referred to as a “clarification” (remember, that is the author’s term, not mine) to the amount of assessments a first mortgagee lender owes an association for back assessments after the conclusion of its foreclosure lawsuit.  Lawyers have debated this issue for far too long, and clarification is needed.  Some say this clarification is too one sided in favor of the lenders…see what you think.

The revised text of this bill provides that, in determining the assessment liability of the first mortgagee who successfully completed their foreclosure, the assessment calculation excludes interest, administrative late fees, attorneys’ fees, or any other fee, cost or expense the came due prior to the lenders’ acquisition of title.  The underlined text below is the new language that is being proposed to Section 718.116, Florida Statutes.

“The liability of a first mortgagee or its successors or assignees who acquire title to a unit by foreclosure or by deed in lieu of foreclosure for the unpaid assessments, interest, administrative late fees, reasonable costs and attorney fees, and any other fee, cost, or expense incurred in the collection process that became due before the mortgagee’s acquisition of title is limited to the lesser of: Only the unit’s unpaid common expenses and regular periodic assessments that which accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or b. One percent of the original mortgage debt…the first mortgagee or its successors or assignees who acquire title to a unit by foreclosure or by deed in lieu of foreclosure are NOT liable for any interest, administrative late fee, reasonable cost or attorney fee, or any other fee, cost, or expense that came due prior to its acquisition of title. This subparagraph is intended to clarify existing law.”

Two other proposed changes include election challenges and hurricane preparedness. As to the former, any challenge to the election process must be commenced within 60 days after the election results are announced.  As to the latter, the Condominium Act would include code compliant windows, doors, or other types of code-compliant hurricane protection in addition to shutters and impact glass.