June 14, 2019

2019 Legislative Update – What Became Law?

As we discussed in our previous Legislative Update post, the Florida Legislature was working on number of bills that would have impacted community associations on a wide range of issues, and would have resulted in major revisions to Florida’s Condominium Act and Homeowners Association Act. However, as the 2019 legislative session came to a close, most of the major bills that were specifically geared toward community associations did not pass. With that being said, there are still a few bills that did pass which will affect community associations and owners alike. Here is a brief summary of some of the bills that are of interest.

Fire Sprinkler Retrofitting and Florida Fire Prevention Code Requirements for Residential Condominiums – House Bill 7103

NOTE – While House Bill 7103 was approved by the Florida Legislature back on May 3, 2019, it does not appear it has been officially provided to Governor DeSantis yet. Once the bill is provided to the Governor, he will have 15 days to either approve the bill by his signature, veto the bill, or allow it to become law without his signature. However, there is mounting pressure by various interest groups for the Governor to veto HB 7103, so it is not clear whether these changes will actually become law.

From a condominium association standpoint, HB 7103 requires a condominium association to comply with the Florida Fire Prevention Code and any applicable retrofitting requirements for fire sprinkler systems or an engineered life safety system (ELSS). Specifically, this bill:

Allows unit owners, by majority vote, to forego retrofitting with a fire sprinkler system;
Extends the deadline to January 1, 2024 for condominiums that are not exempt and have not opted out of retrofitting requirements to install a fire sprinkler system or ELSS (note associations cannot opt out of ELSS retrofitting requirements – they can only opt out of fire sprinkler retrofitting requirements);
Removes a provision allowing a licensed electrician or electrical contractor to certify a condominium is in compliance with the Fire Code;
Provides that retrofitting requirements in Section 718.112(2)(l), F.S. do not apply to timeshare condominium associations, which are governed by Section 721.24, F.S.;
Specifies that individual balconies are not considered “common areas” for purposes of mandatory retrofitting requirements;
Extends the deadline to retrofit condominium common areas with guardrails or handrails from 2014 to 2024; and
Requires the State Fire Marshal to collect data on high-rise condominiums greater than 75 feet in height that have not been retrofitted with a fire sprinkler system or an ELSS, and report such information to the Governor and the Legislature by September 1, 2020.

Assignment of Benefits Limitations and Requirements – House Bill 7065

This new law, which is effective July 1, 2019, will have a major impact on property damage insurance policies and claims in Florida, and establishes new requirements and limitations on what are referred to as “assignments of benefits.”

Generally, following an insured loss, the policy holder, or insured, files a claim for the loss and then submits receipts or invoices for repairs to its insurance carrier in order to receive reimbursement. However, sometimes insureds will execute a restoration and repair contract that includes an assignment of benefits provision (“AOB”), which assigns the benefits of the insured’s policy to the contractor. To learn more about AOBs please read our previous article on the issue.

Among other provisions, this bill:

Gives the insured 14 days to rescind the assignment;
Gives the insured 30 days to rescind the assignment if the assignee has not begun substantial work during that 30 days;
Requires the assignee to provide a copy of the assignment agreement to the insurance company within 3 days;
Limits assignments of benefits to $3,000 or 1% of “Coverage A” in policies during emergencies;
Prohibits assignee from charging fees or penalties for mortgage processing, rescission or cancellation of the agreement, or administrative fees to insureds;
Limits the ability of assignees to collect payment from insureds;
Requires insurers to report information about assignments to the Office of Insurance Regulation; and
Provides that Citizens Property Insurance Corporation cannot implement rate changes unless the rate filing reflects projected savings from the bill.

This new law will have significant impact for Florida condominium associations, homeowner associations, and individual owners alike. As such, we will be provided a more in-depth review of this new law in a separate blog post in the coming weeks.

Interspousal Transfers – House Bill 7123

HB 7123 has already been signed by the Governor and went into effect on May 15, 2019. It further amends Florida’s documentary stamp tax statute to extend a benefit to all married couples that transfer title to homestead property among themselves, when the only consideration involved in those conveyances is the amount of a mortgage or other lien encumbering the homestead property. Under the current law, only newlywed couples are exempt from paying documentary stamp taxes if the conveyance is recorded within one year after the date of marriage. The new law removes the 1-year limitation, meaning that married couples will have more time to plan and coordinate transfers of homestead property among themselves. It’s the legislative version of an endless honeymoon.

County Court Jurisdictional Increases – House Bill 337

HB337 was signed by the Governor and is effective July 1, 2019. The new law will gradually raise the county courts’ maximum jurisdictional amount for civil cases demanding money. The current maximum jurisdictional amount of the county courts in civil cases is $15,000 or less, an amount that was set back in 1992. The bill requires that the county courts’ jurisdictional amount be raised incrementally over the next three years as follows:

For cases filed on or after January 1, 2020, the amount is raised to $30,000; and
For cases filed on or after January 1, 2023, the amount is raised to $50,000.

As the maximum of the county courts’ jurisdictional amount is raised, the minimum of the circuit courts’ jurisdictional amount will be raised to match, with cases in excess of $30,000 effective January 1, 2020, and then $50,000 effective January 1, 2023.

Medical Use of Marijuana – Senate Bill 182

SB 182, which was signed by the Governor is effective March 18, 2019, removes language from the definition of “medical use” of marijuana (cannabis) indicating that medical use does not include the possession, use, or administration of marijuana in a form for smoking or the possession, use, or administration of marijuana flower except for flower in a sealed, tamper-proof receptacle for vaping. This effectively eliminates the prohibition against the smoking of medical marijuana.

From a community association perspective, this may have an impact on associations that have relied upon “unlawful activity” provisions to address the use of marijuana within the community. To be clear, this is an emerging area of the law, which will require analysis on a case by case basis. However, associations can no longer assume that the smoking of marijuana within a residence is unlawful in all circumstances.

While there are a number of bills that were not approved in this year’s legislative session, the changes that will become law in the coming weeks will have far ranging and varied impact on the operation and governance of Florida’s community associations. We will continue to keep you informed on the changing legal landscape.