March 2, 2014 | Porges, Hamlin, Knowles & Hawk, P.A.
In the recently 2015 Legislative Session that ended in June, there were three bills passed affecting Associations that were signed by Governor Scott and which became law. These were HB 791, now Ch. 2015-97, Laws of Florida, which was the “catch-all” bill, HB 87, now Ch. 2015-165 dealing with construction defect claims under Ch. 558, F.S., and HB 643, now Ch. 2015-175, dealing with the termination of condominiums under Sec. 718.117, FS. There were several other bills filed that would have impacted Associations, including one dealing with the estoppel certificate process, but none of these were passed by the Legislature. Since the construction defects and termination bills have less impact on our CAI member Associations, I am going to first review those briefly before reviewing the impacts of HB 791 in more detail.
HB 87 makes amendments to the construction defects claim process in Ch. 558, FS, including amending the definition of “Completion of a building or improvement” to include the issuance of a “temporary” certificate of occupancy “that allows for occupancy or use” of an entire building. This change may alter the timing of when claims must be made. The section regarding description of alleged construction defects is now amended to require “a visual inspection by the claimant or its agents, the notice of claim must identify the location of each alleged construction defect sufficiently to enable the responding parties to locate the alleged defect without undue burden”, but no destructive testing is required by the claimant for purposes of preparing the notice of claim. If your Association may have possible claims under Ch. 558, Association counsel should be consulted to determine how HB 87 will impact your Association.
HB 63 substantially amends the process of terminating a condominium stated in Sec. 718.117 to address some of the abuses that have been perceived when Investor / Bulk Buyer owners would acquire significant numbers of Units in a condominium, usually having been created through the apartment conversion process, and which those Investors now sought to terminate to the detriment of owner occupants of the condominium. The details of the changes are really beyond the scope of this brief overview, so Association counsel should be consulted if an Association is faced with a “plan of termination” having been presented.
HB 791, sponsored by Representative Moraitis, received considerable input from various Association constituencies, including CAI-FLA, and is the “catch-all” bill for the 2015 Session. This bill contains provisions that will impact Condominium, Co-Operative, and Homeowner Associations members of CAI in various area of Association operations. These changes included in the 30 page bill can be summarized as follows:
1. For all types of associations, proxies need not be originals. As long as the copy
is a “reliable reproduction” it can be accepted.
2. For Condos the insurance statute, sec. 718.111(11)(j), Fla. Stat. has been corrected to finally plug the holes that have existed when losses have not been covered by the policy. They are handled by resort to the documentary maintenance provisions.
3. For Condos and Co-Ops the catch-all for official records has been narrowed somewhat by inserting the word “written” into the phrase, “All other written records of the association not specifically included in the foregoing…” thereby eliminating records kept in other formats, including video and audio formats, and leaving open the question of the status of electronic images.
4. Notice of association meetings (except Condo, Co-Op and HOA recall meetings) may be given electronically, without the need for the authority to do so appearing in the bylaws of the community. All that is needed is the written consent of the member to receive notices in this fashion.
5. For Condos it is no longer necessary to have all of the all line items shown in section 718.504(21), Fla. Stat. Only those that are applicable to a specific association need be included in the budget.
6. For Condos, Co-ops and HOAs, establishes a system allowing their boards, by resolution, to adopt systems for electronic voting. At a minimum, these systems must:
a. Permit voters to consent and to withdraw their consent to voting electronically which may effectively require an Association to conduct voting through both electronic and paper systems simultaneously.b. Provide a system to authenticate the voter’s identity and to keep the ballot secret and not tied to the voter’s identity.c. Provide a method to verify that the voter and the electronic voting system can communicate with each other.d. Transmit a receipt and store the ballot for later inspection and recounting.e. Consider persons voting electronically to be present for purposes of establishing a quorum at a members’ meeting.f. Not permit new business of a substantive basis to be presented for vote other than what is on the electronic ballot.
7. It is left to the board of the Condo, Co-Op or HOA to adopt rules to flesh out the electronic voting system.
8. In Condos, Co-ops and HOAs, the results of a bad 2014 case, St. Croix Lane Trust v. St. Croix at Pelican Marsh, have been legislatively reversed, by language that makes it clear (again) that restrictive endorsements on assessment payments do not constitute an accord and satisfaction and can be ignored and applied per the various statutes.
9. For Condos, Co-Ops and HOAs the method of fining and suspension through use of the impartial committee is clarified to ensure that the impartial committee merely approves or vetoes the actions of the Association in levying a fine or suspension.
10. At last, the Condo Act and the HOA statute now properly state that when voting rights are suspended the suspended votes are subtracted from the total number of voting interests in the community.
11. When a Condo or HOA owner owns multiple units, the use rights of all of them can be suspended for violations and delinquencies even though the violation or delinquency only relates to fewer than all of them.
12. Once again, the Distressed Condominium Relief Act has been extended, this time from 7/1/2016 to 7/1/2018.
13. Chapter 720, Fla. Stat, has been formally given a name. It is now, the “Homeowners’ Association Act.”
14. The definition of the “governing documents” of an HOA is expanded to include the rules and regulations adopted under the authority of the other governing documents.
15. The HOA statute has been helpfully clarified that the failure to record an amendment within 30 days – the time frame stated in the statute to take this action – does not affect the validity of the amendment.
16. The statute addresses the eligibility of delinquent HOA candidates to run and serve on the Board. Eligibility is determined as of the last day the person could be nominated for the board, either by others or by one’s self. Such persons may not be listed on the ballot. Persons who are serving and who fall more than 90 days delinquent in any monetary obligation are deemed to have resigned from the board.
The above is only a brief summary of the changes that have been made to all three of the association Acts, so please consult with your Association’s counsel to further discuss how these amendments will affect your particular Association.