Community Association Legislative Update 2021 – Part III
What Became Law?
The legislature had a busy session this year. Several bills impacting community associations and property owners throughout the state were enacted into law. The below summaries provide an overview of the new laws:
SB 630 – Community Associations –
Creates & amends numerous statutes effective July 1, 2021
The Following Laws Apply to Condominiums, Cooperatives and Homeowner Associations:
Arbitration
Allows recall and election disputes to be filed for arbitration with DBPR or court action. Previously, DBPR had primary jurisdiction. Also allows associations and owners to seek mediation instead of arbitration for qualifying disputes, other than election and recall disputes.
Official Records
Associations may not require an owner to provide an explanation or reason to inspect official records.
Associations may not require an owner to provide an explanation or reason to inspect official records and must provide owners a certified and itemized list of records provided in response to a request for records.
Information obtained in a gated community in connection with guests visiting homeowners or community residents are protected official records and cannot be inspected and copied by owners making official records requests.
Discriminatory Restrictions
Allows associations to remove discriminatory restrictions from governing documents without a membership vote.
Meetings
Allows board or committee members to participate remotely in meetings, including counting towards a quorum and voting.
Emergency Powers
Statutory emergency powers apply to states of emergency as a result of contagions such as COVID, but restricts associations from prohibiting owners, tenants, guests, agents, or invitees from accessing units and common elements in connection with the sale, lease, or other transfer of title to a unit.
The Following Laws Apply to Condominiums Only:
Insurance
If a condominium association’s insurance policy does not provide subrogation rights against the unit owners, an insurance policy issued to a unit owner may not provide subrogation rights against the condominium association.
Official Records
Bids for work to be performed, materials, or services must be maintained by the association for at least 1 year after receipt of the bid.
Renters only have the right to inspect the association’s declaration and bylaws. Renters are not entitled to inspect any other association official record.
Records can be made available through a mobile device application in lieu of posting on a website.
Meetings
Requires fourteen days-notice for all condominium membership meetings that are not annual meetings if the bylaws do not specify a specific notice requirement.
Board of Directors
Clarifies the condominium 8-year board term limit applies after July 1, 2018.
Deletes service provider conflicts of interest provisions.
Transfer Fees
Increases transfer fees limits from $100 to $150 and allows DBPR to adjust the limit every five years equal to the increase in the Consumer Price Index.
Energy Efficient Vehicles
Provides natural gas fuel vehicles similar rights and protections that electric vehicles enjoy.
Fines
Clarifies fines are due 5 days after notice.
The Following Laws Apply to Homeowner Associations Only:
Notices
The requirement to send notices to the owners’ addresses as listed on the property appraiser’s website is eliminated.
Official Records
Rules and regulations removed from the definition of governing documents.
Confirms election documents must be maintained for 1 year after date of election.
Reserves
Prior to this law, statutory reserves could be created by 1) the developer establishing them in the budget; 2) the governing documents mandating them; or 3) the members voted to establish them. Statutory reserves are now only created if they are mandated in the governing documents or by a vote of the members.
While a developer is in control of an association, the developer may, but is not required to, include reserves in the budget. If the developer does include reserves in the budget, the developer may determine the amount of reserves included. The developer is not obligated to pay for:
- Contributions to reserve accounts for capital expenditures and deferred maintenance, as well as any other reserves that the association or the developer may be required to fund pursuant to any state, municipal, county, or other governmental statute or ordinance;
- Operating expenses; or
- Any other assessments related to the developer’s parcels for any period of time for which the developer has provided in the declaration that in lieu of paying any assessments imposed on any parcel owned by the developer, the developer need only pay the deficit, if any, in any fiscal year of the association, between the total amount of the assessments receivable from other members plus any other association income and the lesser of the budgeted or actual expenses incurred by the association during such fiscal year.
Leasing Amendments
Provides leasing restriction amendments enacted after July 1, 2021 that “prohibit or regulate” rental agreements do not apply to units whose owner do not affirmatively vote for such amendment until the unit changes ownership.
Does not apply to restrictions of rental terms fewer than six months.
The law provides a change of ownership does not occur when an owner conveys the parcel to an “affiliated entity,” when beneficial ownership of the parcel does not change, or when an heir becomes the owner.
The term “affiliated entity” means “an entity that controls, is controlled by, or is under common control with the parcel owner or that becomes a parent or successor entity by reason of transfer, merger, consolidation, public offering, reorganization, dissolution or sale of stock, or transfer of membership partnership interests.”
Any such entity desiring to carry over the protections must furnish to the association a document certifying that they qualify and provide any organizational documents for the parcel owner and the affiliated entity which support the representations in the certificate, as requested by the association.
SB 72 – Civil Liability for Damages Relating to COVID-19 –
Creates F.S. Section 768.38 effective March 29, 2021
Provides entities relief from liability for Covid -19 related claims, including not-for-profit corporations such as community associations.
Pleading Requirements
Plaintiff’s complaint must be plead with particularity and include an affidavit signed by a Florida licensed physician attesting that within a reasonable degree of medical certainty that the plaintiff’s Covid – 19 related claims occurred as a result of the defendant’s acts or omissions.
A court must initially determine as a matter of law whether the defendant made a good faith effort to substantially comply with authoritative or controlling government issued health standards for guidance at the time the cause of action accrued. Evidence at this stage of the proceeding is limited to evidence tending to demonstrate whether the defendant made such a good faith effort. If the defendant made a good faith effort the defendant is immune from civil liability. If the defendant did not make such a good faith effort the case may proceed.
Standard of Proof
Claims must be proven by a clear and convincing evidence of gross negligence for the defendant to be liable.
Statute of Limitations
The statute of limitations for bringing a COVID-related claim is one year of the claim arising.
SB 56 – Community Association Assessment Notices –
Amends F.S. Sections 718.116, 718.121, 719.108, and 720.3085 effective July 1, 2021
Change of Address
If an association changes the method of delivery of invoices for assessments, the association must provide the owner written notice of the change of delivery method 30 days before issuance of the invoice. The owner must affirmatively acknowledge the change in delivery method before it can be implemented.
Notice of Late Assessment
Associations must provide an owner with a Notice of Late Assessment before attorney fees can be assessed to an account. The Notice of Late Assessment must be sent via first class mail and the association is required to keep a sworn affidavit attesting to the mailing in its records. The association must also substantially comply with the statutorily proposed notice.
Intents to Lien & Foreclose
Revised the deadline in condominium and cooperative Notices of Intent to Lien and Notices of Intent to Foreclosure from 30 days to 45 days. (Homeowner associations notices already provided 45 days.)
SB 1966 – Department of Business and Professional Regulation –
Amends F.S. Section 718.112 effective July 1, 2021
Board Eligibility When Delinquent
Removes delinquency of “any monetary obligation” (e.g., fines) as a disqualifier to be a condominium board candidate. Now only a delinquency in an “assessment” disqualifies individuals from board service. An owner is delinquent in payment of an assessment if payment is not made by the due date as specifically identified in the declaration of condominium, bylaws or articles. If no date is identified the due date is the first day of the assessment period.
Budgets
Provides the condominium association’s annual budget must be adopted no later than 30 days before the beginning of the fiscal year.
SB 76 – Property Insurance –
Creates F.S. Section 489.147 effective July 1, 2021
Even though two anti-consumer provisions eliminating attorney-fee multipliers and allowing insurers to reduce the replacement costs of roofs based on age and the type of roof being replaced were removed from the final bill, this legislation was a victory for insurance companies. These laws will reduce the time period for policy holders to submit claims, delay claims resolution, provide new technical defenses to insurance companies, and make it more difficult for policyholder attorneys’ fees to be fully paid.
Statute of Limitations
Reduces the time a property owner has to make an insurance claim from three years to two years.
Attorney Fees
Disincentivizes attorneys from handling claims against insurance companies by limiting the amount of an award of attorney fees for a claim arising under a property insurance policy.
Solicitation
Prohibits contractors from soliciting homeowners through advertisements that encourage consumers to use the contractor to file an insurance claim over roof damage. It also places limits on contractors from performing roof inspections that lead to claim filings. Violations can run as high as $10,000 each.
Citizens Insurance Property Insurance Corp.
Increases the eligibility threshold for property owners to obtain coverage from Citizens Property Insurance Corp. Property owners are only eligible to switch their policies to Citizens if their current policy costs at least 20 percent higher than a comparable Citizens policy. The previous eligibility threshold for taking on new policies was 15 percent.
HB 649 – Petition for Objection to Assessment –
Amends F.S. Sections 194.011, 194.181, and 718.111 effective July 1, 2021
Provides a process to allow condominium and cooperative associations to seek a joint petition on behalf of their unit owners to appeal property taxes with the value adjustment board. Unit owners can opt out within fourteen (14) days of receipt of the association’s notice. If requested by a unit owner, the tax collector shall accept payment of the estimated amount in controversy, as determined by the tax collector, as to that unit whereupon the unit shall be released from any lis pendens.
HB 463 – Community Association Pools –
Amends F.S. Section 514.0115 effective July 1, 2021
Exempts private community association pools with fewer than 32 units or parcels from supervision by the Department of Health, except to ensure water quality.
HB 403 – Home-Based Businesses –
Creates F.S. Section 514.0115 effective July 1, 2021
Prohibits local governments from taking certain actions relating to the licensure and regulation of home-based businesses and authorizes home-based businesses to operate in areas zoned for residential use under specific circumstances.
Does not apply to condominiums, cooperative, or homeowner association restrictions.