RECENT NEWS & LEGISLATION Keep Me Informed!
Ontario Court Orders Owner To Sell Condominium Unit
In what appears to be a first, an Ontario Court ordered a unit owner to sell the condominium he owned. The owner’s behavior was apparently so egregious, that several injunctions and restraining orders were entered against him. The Court finally ordered this drastic remedy.
Prior to the Court order requiring the owner’s removal and sale of the property, the community suffered from his harassment, abuse, and threatening behavior. It was only after a lengthy period of well documented behavior that included violations of Court orders that the Condominium was able to have him successfully removed from the premises. Peel Standard Condominium Corporation No. 984 v. 8645361 Canada Limited, 2018 ONSC 4339 (CanLII).
A similar case in Florida involved a condominium owner named Beate Kittel-Glass. The Appellate Court found that “between 1986 and 1994, [Kittle-Glass] committed a multiplicity of disorderly acts on the condominium premises that included: indecent exposure, public intoxication, reckless display of a firearm, and assault and battery. Twenty-two police reports were presented detailing Kittel-Glass's misconduct. Evidence was also introduced that an Association subcommittee had found that Kittel-Glass violated 79 condominium rules and had assessed her a total fine of $3,950, calculated at $50 per violation. Kittel-Glass presented no witnesses at trial.” Kittel-Glass v. Oceans Four Condominium Assn., 684 So. 2d 827 (Fla. 5th DCA 1995).
The result of the trial was that she and her agents and guests were permanently enjoined from occupying or entering upon any part of the condominium premises. This was based in part on the Trial Court's finding that Kittel-Glass's misbehavior continued during the existence of the temporary injunction. On Appeal, the Court overturned the Trial Court’s ruling and stated that what essentially amounts to a judicially forced sale or lease of Kittel-Glass's unit is improper. The remedies for violation of Court orders only include fines, and possibly jail. See generally City of Ocala v. Nye, 608 So.2d 15 (Fla. 1992) (eminent domain power can only be exercised by governmental entities to which the state has delegated that power).
The takeaway from the Kittel-Glass case is that the law does not always produce satisfactory results despite lengthy litigation efforts. Even if Kittel-Glass was found in contempt, Courts are reluctant to jail individuals, and will only do so in extreme cases. To deal with nuisance owners who wreak havoc in a community, the Association will need to demonstrate the abusive owner has engaged in persistent, intolerable behavior that has deprived the other owners and/or the Association’s directors, employees, managers and agents of a sense of safety and security. Unfortunately for the Association, this is not a speedy process. Furthermore, Courts may be reluctant to act forcefully.
As more and more people move to Florida, Associations will increasingly need assistance as they take on more human management responsibilities, as opposed to building operation and maintenance. This presents a challenge the law has not given much consideration. Laws will need to evolve as the nature of the role of the Association changes. Given the difficulties in obtaining satisfactory results when faced with a nuisance owner, the Tankel Law Group strongly encourages Associations document the troubled behavior and take quick legal action.
Date: August 17, 2018
Is Your Community Ready for Electric Vehicles?
Recognizing the increasing popularity of electric vehicles (EVs), the Florida Legislature recently enacted a statute providing condominium owners limited independence to install charging stations. Is your Association ready for this evolving trend?
More than half a million plug-in EVs have been sold in the United States over the past ten years, and it is estimated annual sales will continue to drastically rise. EV use has presented a challenge for Association managers and boards who run Condominium and Homeowner Associations. As these vehicles become more mainstream, it is wise to be proactive and set clear policy standards for your EV owning members.
EV owners in Homeowner Associations do the majority of their electric charging at home. For EV owners with private garages and separate metering it’s simple – they plug directly into an outlet or install a charging station. But where do EV owners with a communal parking garage or assigned parking space charge where power is paid for by the community?
Florida’s recently enacted statute, Section 718.113(8), attempts to resolve potential issues that may arise when a member of a Condominium Association who owns an EV seeks to install a charging station on a limited common element, such as their personal parking space. The new law forbids a Condominium Association from prohibiting an owner from installing an EV charging station within the boundaries of the unit owner’s limited common element parking area. That being said, the Statute does allow an Association to adopt a number of rules and restrictions so as not to impair other unit owners’ rights, or force non-EV owners to pay for the expenses and electricity associated with the charging station.
Specifically, the Statute allows an Association to require the EV owner to adhere to applicable building codes, safety standards, and reasonable architectural standards. The placement of the EV charging station cannot cause irreparable harm to Association property, and the electricity consumed by the EV owner must be separately metered and charged only to that unit owner. The EV owner who installs the charging station will be responsible for costs of installation, repair, operation, and maintenance. Finally, the EV owner who installs the charging station will be liable for hazards caused by the station, and for liability insurance or any increases in the Association’s insurance policy as a result of the charging station.
Although we are still in the early days of electric-car adoption, Condominium Associations should be proactive and take advantage of the leeway provided by the Florida Legislature and regulate the use of EV charging stations within a community. Condominium Boards should enact reasonable rules requiring architectural approval, compliance with safety and building codes, and proper insurance.
Forward thinking Condominium Associations may want to consider installing their own charging stations. This would help to ensure uniformity and provide greater control over the location of the charging stations. Such a move would also serve as a high-end marketing point for Associations to portray themselves as environmentally friendly.
Date: August 7, 2018
Guidelines for Association Rules
The “Dog Days” of summer are officially upon us. Rainstorms, 90 degree weather, incessant humidity, and new Condominium and Homeowner Association (HOA) legislation are in full swing. New law is in effect, and worth reviewing for best practices in your community.
Beginning July 1, all changes to Rules and Regulation in HOAs regulated by Chapter 720 must be recorded. Note that this does not apply to Chapter 718 entities. The Legislature, in its infinite wisdom, chose only to require HOAs to record any rule changes. For reasons unknown, it does not require existing rules to be recorded, only new ones.
It is important to understand what is meant by a “Rule.” Generally, it means a restriction on use of the property imposed by the Board of Director, without a membership vote. In Condominium Associations, older communities may have a caveat in the Articles of Incorporation that Rules need to be approved by the members, so be on the lookout. Make sure to understand the basis of the authority to promulgate Rules before doing so. In HOAs, the power to make Rules is often limited to the Common Areas only. A Condominium Association intending to make Rules affecting unit use must mail/distribute and post notice, of the meeting of the Board at which the changes will be considered, at least 14 days in advance of the meeting.
Please note, Rules are separate and apart from Restrictions contained in an Association’s Declaration. It is bad practice to rephrase Restrictions found in an Association’s Declaration and incorporate them into a document called “Rules.” Restrictions in governing documents are voted on by the members and have a higher dignity than mere Rules adopted by a Board. Do not mix apples and oranges, they are two distinct types of regulations.
If your community wants an easy to distribute set of the Rules, and a document containing Restrictions found in the governing documents, separate the two. Create one document containing the Rules, and another document stating, “The following are excerpts from the Declaration, found in Article “X,” and are for quick reference only; see the Declaration for a full list of the Restrictions.”
An additional observation - in older Condominium Associations, the Bylaws occasionally contain a set of “House Rules.” It is not clear where these Rules stand on the hierarchy of enforcement, but if we adhere to the “legal fiction” that anything recorded in the Official Records puts the world on notice of its contents, they have a higher dignity than Board made Rules. The reasons being because these Rules were in place since the inception of the Condominium, and a membership vote is required to change them. Voting by members to impose limits on the behavior within a community will be given deference by Courts and Mediators/Arbitrators.
Date: July 9, 2018
Association Self-Help for Nuisance Dogs
Pets are a ubiquitous part of living in homeowner and condominium associations. While there was once a time when pets, primarily dogs, were highly restricted in associations, today many associations permit dogs as they have become more commonplace and communities have become more friendly to life with four legged friends. However, not all dogs are “good dogs.” When a dog (or cat or bird, see Hillsborough and Pasco County below) creates a nuisance, typically through incessant barking, homeowners and unit owners often turn to the Board of Directors for relief.
An association’s declaration will typically have provisions forbidding “nuisances.” Such a term is rarely defined and can be difficult to enforce. Though Florida Statutes have mediation and arbitration provisions which can be enforced through court orders, the process is slow and offers little relief to those suffering from non-stop barking.
To obtain peace and quiet, we recommend a multi-prong approach to dog barking, including self-help methods associations can take while the Tankel Law Group works to enforce the association’s declaration and rules.
Counties throughout the State have recognized the frustration of those forced to endure endless barking. Local government ordinances now include provisions to allow individuals to easily file complaints under certain circumstances. If the proper steps are taken, counties may impose fines of up to $500 for nuisance dogs. As an added benefit, putting the tools in individuals’ hands helps alleviate the pressure on Boards of Directors to solve barking dog problems. Those individuals seeking relief must be prepared to document the nuisance and file an affidavit attesting to the following:
• Hillsborough County - “A nuisance animal that barks, meows, whines, or howls non-stop for 20 minutes or longer with less than 20 seconds of interruption during that 20 minute time period.”
• Pinellas County - “Makes excessive noises, including, but not limited to, continued or repeated howling, barking, whining, or other utterances. Noises that, on at least two separate dates during a three-day period, are produced for more than one sustained period of at least 15 minutes over the course of eight hours, shall be considered excessive for the purpose of this definition.”
• Pasco County - “It shall be a violation of this chapter for any person who owns, keeps, or harbors a dog or bird, or any person charged with the care, custody, or control of any dog or bird to fail to exercise sufficient care and control of their dog or bird, to prevent it from becoming nuisance.”
“Frequent or continued barking, frequent or continued howling, or making frequent or continued sound or noise, between the hours of 11:00 p.m. and 6:00 a.m., with the exception of dogs housed at commercial businesses.” “Frequent or continued barking, frequent or continued howling, or making frequent or continued sound or noise for periods of ten minutes or more, at any time, with the exception of dogs housed at commercial businesses.”
• Duval County - “Barking habitually, or by making other objectionable animal noises habitually; or by doing any other thing habitually which is so offensive as to create a nuisance.” “At least two separate occurrences within a time period of no more than one month; except that barking habitually, or making other objectionable animal noises habitually, means making the sound persistently or continuously for at least 30 minutes occurring at least three separate times within a period of no more than eight hours. For the purposes of this Section, "persistently" or "continuously" shall mean nonstop utterances for 30 consecutive minutes with interruption of less than 30 seconds at a time during the 30 minute utterances.”
In addition to the barking time limit provisions, many counties require either multiple complaints by separate individuals, or video evidence to substantiate a violation. Affidavits may be found online for specific counties, and will need to be returned to the proper authority. Providing individuals self-help remedies conserves the associations time and resources, and may be just as effective as legal action.
In conjunction with the steps above, the Tankel Law Group recommends consulting with our office to review the association’s documents and ensure the declaration, rules, and regulations are sufficient to enforce legal action should it be necessary.
Tankel Law Group at BABA
The Tankel Law Group was featured at Become A Better Agent's (BABA) January 11, 2018 seminar at The Rusty Pelican in Tampa. Bob and Scott assisted real estate agents interested in buying and selling properties in homeowner and condominium associations. BABA is a real estate professional development program that offers bi-monthly seminars focusing on leading trends within the industry.
Is Speeding a Problem in Your Community? Try Law Enforcement
Like many community associations, you may have traffic issues which can include speeding, the disregard of stop signs and other types of careless and reckless driving. For the safety and enjoyment of your residents, it’s worth examining the options available to control dangerous drivers. Remedies may be different for communities with public streets versus gated communities with private roads, but they both involve the association taking direct action.
Communities with public streets can request local law enforcement to patrol more vigorously, with an increased presence of officers in your community at random times. Florida Statutes Sections 316.640(2)(a) and 316.640(3)(a) grant the sheriff’s office and municipal police departments jurisdiction to enforce the traffic laws on all public streets throughout the county (for the sheriff’s office) and throughout the city limits (for the municipal police department).
Additional sections of the Florida Statutes grant the sheriff’s office and municipal police departments jurisdiction to enforce the traffic laws on private or limited access roads, if there is a written agreement to do so between the community association and either the county or city. Sections 316.006(2)(b) and 316.006(3)(b) govern the written agreements between either the county or city and a community association. The written agreement for traffic control jurisdiction over the private road or roads encompassed by such agreement must provide for reimbursement for the actual costs, for liability insurance and indemnification by the association. Other terms and conditions may be included as well. The law specifically allows the board of directors of a homeowners association to contract to have state traffic laws enforced by local law enforcement agencies on private roads that are controlled by the association by majority vote of the board. Contact your local law enforcement office or community resource officer for more information.
2017 LEGISLATIVE UPDATE
The Legislature, like hurricane season, can have periods of high and low volatility. Just as this year experienced a busy hurricane season, the changes in law for condominium associations was similarly intense.
The Legislature was especially influenced by the actions of a Grand Jury in Miami, where criminal conduct occurred in a condominium, which resulted in changes for all condominiums. Additionally, laws which regulate the preparation and costs of Estoppel Certificates were approved. It remains to be seen whether the changes will improve the governance of such community associations or drive away otherwise qualified persons from volunteering to serve as directors.
The following is a summary of the laws passed during the 2017 Legislative Session which affect Florida condominium and homeowners’ associations.
HB 1237 - APPLIES TO CONDOMINIUM ASSOCIATIONS AS DOES MOST OF THE LEGISLATION
1. Criminal Penalties.
One effect of HB 1237 allows for application of criminal penalties for directors, officers, or managers who receive anything of value, or “kickbacks,” from any person providing goods or services to the Association. It also imposes possible felony charges for forgery of a ballot envelope or voting certificate used in a condominium association election; theft or embezzlement of association funds; and destruction of or refusal to allow the inspection or copy of an official record that is accessible to unit owners within time periods proscribed by law, if the destruction or refusal to permit access is in furtherance of a crime.
2. Legislature as Supreme Court; No More Joint Representation of Association & Management.
The Florida Supreme Court has a set of rules that regulate attorneys. They call for full disclosure when representing clients with possible conflicts of interest. The Legislature now approved a law which prohibits condominium associations from hiring an attorney who represents the association’s management company. This is likely an unconstitutional encroachment on the authority of the Supreme Court, but time will tell if challenged.
3. Official Records.
HB 1237 changed the law regarding access to condominium association official records. Bids for materials, equipment, or services will be considered official records that must be maintained by the association. Also, the law clarified that association members’ authorized representatives have the right to inspect and copy official records. Further, renters of units will have the right to inspect the association’s “bylaws and rules.”
4. Website and Electronic Records Requirement
By July 1, 2018, a condominium association with 150 or more units (the initial draft started with communities over 1000 units) that does not manage timeshare units must post digital copies of various official records on a website. The website must be Internet accessible and the association must ensure the records are password protected so as to only be accessed by unit owners and association employees. The documents must include: all governing documents and amendments; all management agreements, leases, and other contracts to which the association is a party; “summaries of bids” for materials, equipment, or services; the annual budget and any proposed budget; the financial report; and director certifications. In addition, associations must post meeting notices and agendas for membership and board meetings either on the front page of the website or on a separate subpage labeled “Notices.” The association must also upload a copy of any document to be considered or voted on by the members during any membership meeting. Note that while the records requirement part of the statute provides until July 1, 2018 for compliance, the obligation to designate a person or entity with a street or e-mail address on the association’s website for Estoppel Certificate requests commenced July 1, 2017.
5. Financial Reports.
Condominium associations that operate fewer than 50 units are no longer permitted (without a membership vote) to prepare a report of cash receipts and expenditures in lieu of financial statements based on the association’s annual revenue. In addition, unit owners may complain to the Division of Florida Land Sales, Condominiums and Mobile Homes if the association does not furnish a copy of the most recent financial report within 5 business days after receipt of a written request. If the Division finds that the association failed to deliver the financial report as required, it may require the association to provide a copy of the report to the owner within 5 business days. If the association fails to comply with the Division’s notice, it may not waive the financial reporting requirement (presumably for the following year). The change also has a requirement that an association provide an annual report to the Division containing the names of all financial institutions with which it maintains accounts and allows an association member to request that information from the Division.
6. Prohibition on Use of Debit Cards.
The law prohibits the use of a debit card issued in the condominium association’s name, or billed directly to the association for the payment of any association expense. Note, this law doesn’t regulate credit cards, which can result in greater liability due to availability of credit versus only what is in an associations’ bank account. If a person uses a debit card issued in the association’s name or billed directly to the association for payment of an expense that is not the association’s lawful obligation, he or she may be prosecuted for credit card fraud.
7. Director Term Limits.
Section 718.112 of the Condominium Act was amended to implement a term limit for association directors. The new legislation provides that a board member may not serve more than four consecutive 2-year terms (so a total of 8 consecutive years), unless approved by an affirmative vote of two-thirds of the total voting interest of the association, or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.
8. Recall of Directors.
Prior to the amendment, the condominium association’s board of directors were required to hold a meeting within 5 business days of receipt of a written recall petition or the meeting at which the members voted to recall the director to determine whether to certify the recall. If the board voted to not certify the recall, the association was required to file a petition for recall arbitration with the Division. A Division arbitrator would then determine whether the board’s decision to not certify the recall was proper.
The amendment deleted the portion of the statute which provided for the board’s determination to certify a recall. Now, it is unclear what the association must do if it deems a recall effort to be invalid. Does the Legislature intend for recall efforts to be presumed valid, and if a recalled director wishes to challenge the recall, he or she must file a petition for arbitration with the Division? The amendment provides little guidance as to what the board must do if it considers the recall effort to be invalid (for example, for failure to obtain a majority vote of the membership).
9. Conflicts of Interest.
Condominium associations are now prohibited from employing or contracting with a service provider that is owned or operated by a board member or officer, any person who has a “financial relationship” with a board member or officer, or a relative within the third degree of consanguinity by blood or marriage of a board member or officer. Relatives within the third degree of consanguinity include: children – great grandchildren; parents – great grandparents; siblings; aunts, uncles, nieces and nephews. First cousins are not within the third degree of consanguinity. The amendment includes an exception which states that it does not apply to any service provider for which the board member or officer owns less than 1 percent of the equity shares.
Additionally, directors and officers of a condominium association must disclose any activity that may reasonably be construed to be a conflict of interest. There is now a procedure for a director or officer to who may have a conflict of interest, which provides that the director or officer may make a presentation on the issue but must excuse himself or herself from the board’s discussion on the issue, and abstain from voting. If the director or officer fails to follow the required disclosure procedure, he or she is deemed removed from office and the contract (if any) may be terminated with the consent of 20 percent of the voting interests in the association.
The law eliminated the requirement for the Division to employ full-time attorney arbitrators and instead established a procedure for independent certified attorneys to preside over arbitration proceedings. Arbitrators are now required to conduct a hearing within 30 days of being assigned a petition unless the petition is withdrawn or a continuance is granted for good cause. Further, the arbitrator is required to render a written decision within 30 days after the hearing. Failure to do so may result in cancellation of the arbitrator’s certification.
11. Acquisition of Units in Foreclosure.
The law prohibits any party contracting to provide maintenance or management services to an association managing a residential condominium after transition of control of the association, and any officer or board member of such party, from purchasing a condominium unit or taking a deed-in-lieu of foreclosure of a lien for nonpayment of assessments.
12. Cancellation of Management & Maintenance Contract.
If 50 percent or more of the units in a residential condominium are owned by a party contracting to provide maintenance or management services to an association, or by an officer or board member of any such party, after transition of association control (turnover), the contract may be cancelled by majority vote of the unit owners other than the contracting party.
13. Voting Rights.
Prior to the amendment, a condominium association could suspend a member’s voting rights if he or she were 90 days’ delinquent in the payment of any monetary obligation due to the association. The amendment requires the monetary delinquency to exceed$1,000.00 and be more than 90 days’ delinquent. In addition, the amendment requires the association to provide proof of the obligation 30 days before the suspension takes effect. Further, the amendment provides that a receiver may not exercise voting rights of any unit owner whose unit is placed in receivership.
ESTOPPEL CERTIFICATE-APPLIES TO ALL ASSOCIATIONS
1. Estoppel Response Time & Designation of Address on Website.
The law requires the association to respond to an estoppel request within 10 business days after receiving a written or electronic request from a unit owner or mortgagee, or their representative. Under previous law, the estoppel certificate request had to be made in writing, and the association had 15 days to respond. The statute did not specify whether the days were business days or calendar days. The amendment also requires the association to designate on its website (if it currently has one) a person or entity with a street or email address for receipt of estoppel certificate requests. If the association fails to deliver an estoppel certificate within 10 business days after receipt of a request, it may not charge a fee for the preparation and delivery of the certificate.
2. Content of Estoppel Certificate.
Prior to the amendments, only limited information regarding the assessments and other charges due to the association was required to be included in the estoppel certificate. The amendment established a form and prescribes the content that must be included in all estoppel certificates. The law requires that the certificate include the following information:
1. The date of issuance of the certificate.
2. The names of the unit owner(s) as reflected in the books and records of the association.
3. Unit designation and address (designation likely means the unit number).
4. Parking or garage space number, as reflected in the association’s records.
5. Attorney’s name and contact information if the account is delinquent and has been given to an attorney for collection. No fee may be charged for this information.
6. Fee for preparation and delivery of the estoppel certificate.
7. Name of the estoppel requester.
8. Assessment information and other information:
- The amount and frequency of the regular periodic assessment (e.g., $100 monthly).
- The date the regular periodic assessment is paid through.
- The date and amount of the next installment of the regular periodic assessment.
- An itemized list of all assessments, special assessments, and “other moneys owed” on the date of issuance to the association by the unit owner for a specific unit.
- An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate.
- In calculating the amounts scheduled to become due, the association may assume that any delinquent accounts will remain delinquent during the effective period of the estoppel certificate.
- Is there a capital contribution fee, resale fee, transfer fee, or other fee due? (Yes/No). If yes, specify the type and amount of the fee.
- Is there any open violation of rule or regulation noticed to the owner in the association official records? (Yes/No).
- Do the rules and regulation of the association applicable to the unit require the approval by the board of directors of the association to transfer the unit? (Yes/No). If yes, has the board approved the transfer of the unit? (Yes/No).
- Is there a right of first refusal provided to the members or the association? (Yes/No). If yes, have the members or the association exercised that right of first refusal?
- Provide a list of, and contact information for, all other associations of which the unit is a member.
- Provide contact information for all insurance maintained by the association.
- Provide the signature of an officer or authorized agent of the association.
- The association may include additional information in the estoppel if desired. Also, the amendment provides that an association waives the right to collect any monies owed in excess of the amounts specified in the estoppel certificate from any person who in good faith relies upon the estoppel certificate (and his or her successors and assigns).
3. Effective Period for Estoppel Certificates.
An estoppel certificate that is hand delivered or sent via electronic means has a 30-day effective period. An estoppel certificate that is sent be regular mail has a 35-day effective period. If the association makes a mistake in the estoppel certificate, it can provide an amended estoppel certificate and it will be effective if the sale or refinancing of the unit has not been completed during the effective period. If an amended estoppel certificate is provided, it will have a new effective date period from the date of transmission.
4. Fees Permitted to be Charged for Estoppel Certificate.
The amendment establishes a schedule of fees that may be charged for the “preparation and delivery” of an estoppel certificate: The authority to charge a fee for the preparation and delivery of the estoppel certificate must be established by a written resolution adopted by the board or in the management, bookkeeping, or maintenance contract. The fees prescribed by statute will be adjusted every 5 years based on the total of the annual increases in the Consumer Price Index and the Division is obligated to calculate the fees and publish them on its website. Moreover, the amendments provide that the estoppel certificate fee is “payable upon the preparation of the certificate,” which does not appear to clearly specify whether payment may be required before delivery of the Certificate.
5. Reimbursement of Estoppel Certificate if Closing Does Not Occur.
Under prior law, there was an obligation to reimburse the fee charged for the estoppel certificate prior to the amendments, but it was not often requested by title companies and other parties requesting estoppel certificates. We foresee requests for reimbursement increasing as title companies and other parties become aware of the right to reimbursement. The right to reimbursement may not be waived or modified in any agreement (e.g., association governing documents) and a party may file a lawsuit and recover attorney’s fees and costs to enforce a right to reimbursement. The association may recover the estoppel certificate fee from the unit owner in the same manner as an assessment; however, there are situations where that might not be a helpful remedy (e.g., estoppel certificates requested prior to a short sale).
To become entitled to reimbursement, the estoppel certificate preparer must receive a written request for reimbursement accompanied by “reasonable documentation” that the sale did not occur from a payor that is not the parcel owner within 30 days after the closing date for which the certificate was sought. The fee must be refunded to the party who paid for the estoppel certificate within 30 days after receipt of the request.
FINANCIAL REPORTS FOR CONDOMINIUMS
1. Chapter 718 now eliminates the ability of associations that operate fewer than 50 units to prepare a report of cash receipts and expenditures in lieu of financial statements based on the annual revenues of the Association. The amendment also eliminates a provision of current law prohibiting condominium and cooperative associations from waiving the financial reporting requirements for more than 3 consecutive years.
1. This area of law has been in a state of flux because the Florida Constitution prohibits laws that retroactively impair the rights of parties under contracts. Declarations are contracts and the law cannot change the way condominiums are terminated by the Declaration unless it incorporates changes in the law from time to time. So, in the case of Tropicana Condominium Association, Inc. v. Tropical Condominium, LLC, 208 So. 3d 755 (Fla. 3d DCA 2016), the court ruled that the provisions of that Declaration of Condominium controlled over the conflicting statutory provisions regarding termination, which were adopted after the Declaration of Condominium was recorded in the public records.
2. Division Approval Now Required.
The law now gives the Division authority to approve the plan of termination in residential condominium associations. Before a plan of termination is submitted to the Division, it must be approved by at least 80 percent of the total voting interests in the condominium. However, if 5 percent (previously 10 percent) or more of the total voting interests reject the plan of termination, the plan of termination may not proceed. Once received, the Division has 45 days to notify the association of any procedural deficiencies or that the filing has been accepted.
3. Multiple Termination Plans.
Prior to the amendment, if a plan of termination failed because the requisite number of voting interests rejected it, a subsequent plan of termination could not be proposed for 18 months after the date of the rejection. The law now require a waiting period of 24 months.
4. Bulk Owner Termination.
If a bulk owner initiates a termination, the other unit owners must be paid at least 100% of the “fair market value” for their units. A “bulk owner” in this context is an owner of at least 80 percent of the total voting interests in the condominium. If a person has homestead statue on a unit, under a plan of termination, the fair market value of the unit must be at least the purchase price the person paid for the unit (so long as the person is current in payment of monetary obligations due to the association).
2017 CHANGES OF INTEREST TO COMMUNITY ASSOCIATIONS
House Bill 615 – Licensing
HB 615 provides that the licensure of surviving spouses of members of the armed forces shall be kept in good standing and not be subject to renewal requirements. It also requires the DBPR, for the boards included within s. 20.165, F.S., to issue a permanent license to all current and former active duty members of the armed forces, and their current spouses or surviving spouses, if they hold a license in another jurisdiction, foreign or domestic. Application and licensure fees shall be waived; however, persons licensed pursuant to this provision may renew their license upon completing conditions for renewal required of license holders. In addition, licensure fees for low-income individuals are waived.
Senate Bill 818 – Timeshares
This bill revises the definition of the term “interest holder” to clarify that the term does not include certain parties to a certain multisite timeshare plan; revising requirements for the termination of a timeshare plan; specifying the percentage of votes required to extend the term of a timeshare plan under certain circumstances, etc.
House Bill 241 – Alarm Systems
This legislation amends s. 553.793, F.S., “Streamlined low-voltage alarm system installation permitting” to include “low-voltage electrical fences” and defines a “low-voltage electrical fence”. It allows such systems to be permitted under the provisions of s. 553.793, F.S., which provides that contractors can purchase uniform basic permit labels without any detailed information about the project, and exempts the contractor from having to notify the building department prior to installation. The bill also amends s. 489.529, F.S, “alarm verification calls required” to provide that verification calls are not required before contacting law enforcement for dispatch under certain conditions, including instances where the premises is used for storage of firearms or ammunition by a firearms/ammunition dealer.
House Bill 6027 – Financial Reporting
This legislation deletes the provision requiring associations with less than 50 units or parcels to prepare a report of cash receipts and expenditures in lieu of certain financial statements. It further deletes the provision limiting the ability of condominium and cooperative associations to waive the financial reporting requirements for more than three (3) consecutive year.