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7/4/2015 - 2015 Florida Legislative Changes

The following new laws for Florida Condominiums, Cooperatives, and Homeowners’ Associations went into effect July 1st, 2015.

Florida State Capitol

(1) Electronic Voting (Condominiums, Cooperatives, and Homeowners’ Associations): The bill provides that associations may conduct elections and other membership votes by utilizing an electronic (interned-based) method. The bill also specifies the requirements necessary to establish an electronic voting method, including a board resolution. The bill requires that an owner consent to online voting, and if the owner does not consent, the owner is entitled to vote by paper ballot.

Comment: Both the condos and the townhomes are currently considering offering the option of voting online in addition to the existing options.

(2) Digital or Electronic Transmission of Proxies (Condominiums, Cooperatives and Homeowners’ Associations): The current law does not specifically authorize owners to transmit a copy of their proxy to the association (for example, by fax or a scan of the proxy sent via email). The intent of this language is to facilitate voting. Many owners are not available to be at meetings in person and may wish to bypass U.S. mail and send their proxy to the association in some other fashion. The proposed language is similar to language currently found in Section 607.0722(10), Florida Statutes, which governs corporations for-profit. The proposed language is being added to Section 617.0721, Florida Statutes, which governs corporations not-for-profit, and therefore, will also apply to condominium, cooperative, and homeowners’ associations.

Comment: Both the condos and the townhomes have historically allowed proxies to be submitted via fax or as an email attachment - so nothing new here for us.

(3) Electronic Notice to Owners (Condominiums, Cooperatives, and Homeowners’ Associations): Currently, in order to provide notice to owners electronically, the bylaws must provide for electronic notice and the owner must consent in writing. The bill removes the requirement that electronic notice be authorized by the bylaws. Therefore, as long as the owner consents in writing, the association can provide the owner with electronic notice.

Comment: There is little to be gained by using electronic notice for annual meetings, budget meetings, etc. because we would still need to mail the information to people who do not consent to electronic notice.

(4) Fines/Penalties (Condominiums, Cooperatives, and Homeowners’ Associations): The bill clarifies that it is the board of administration of the association that is responsible for levying any fines. It also clarifies that the role of the fining committee is to confirm or reject the fine levied by the Board.

Comment: The master, townhome, and condo fine processes have been updated to reflect these changes with the net result being that it will be easier for the associations to levy and collect fines for rules violations.

(5) Suspension of Voting Rights (Condominiums, Cooperatives, and Homeowners’ Associations): The bill provides that if an owner or member’s voting rights have been suspended for any reason, the total number of votes of the suspended member(s) must be reduced from the total number of voting interests of the association when calculating the vote needed for any action. The bill also provides that the suspension of voting rights or right to use common elements applies to members and tenants and guests, regardless of number of units owned by the member.

(6) Application of Payment/Assessments (Condominiums and Cooperatives): Current law provides for a specific order in which payments received from a unit owner are to be applied (first accrued interest shall be paid, followed by any administrative late fees, then any costs and attorney’s fees, and, finally, the delinquent assessment). The bill amends Sections 718.116(3) and 719.108(3), Florida Statutes to clarify that the required distribution of delinquent assessment payments applies in spite of any purported “accord and satisfaction.” This change is intended to overrule a 2014 appeals court case that held that if a check is tendered for less than the total amount of a disputed claim, the acceptance creates an accord and satisfaction if the tender is accompanied by an offer to settle for the tender amount. The case raised concerns as to whether an association could accept partial payment for a delinquent assessment.

(7) Official Records (Condominiums and Cooperatives): The bill amends the official records “catch-all” provision which currently provides that “all other records of the association…which are related to the operation of the association” are official records. The new law states that these “other” records are limited to “written” records. This makes the condominium and cooperative statute consistent with the HOA statute. So, non-written records (for example audio tapes of board meetings or security camera video recordings) are presumably not “official records” under the new law and thus not available for owner inspection as a matter of right.

(8) Extension of Distressed Condominium Relief Act (Condominiums): The bill extends the “distressed condominium relief act” also known as the “bulk buyer law” until July 1, 2018. Currently, the bulk buyer law is set to expire on July 1, 2016. This law gives companies that buy out distressed condominium projects immunity from various obligations affiliated with being a developer.

(9) Insurance (Condominiums): The bill removes the provision that requires the association to be responsible for “uninsured losses.” This is a glitch fix and is intended to clarify that the association’s obligation to subsidize insurance shortfalls for items that may otherwise be the unit owner’s responsibility and limited to situations where the association is responsible to insure the damaged element.

(10) Definition of Governing Documents (Homeowners’ Associations): The new law provides that the term “governing documents” of an HOA, as used throughout the statute includes rules and regulations.

(11) Amendments (Homeowners’ Associations): Under the new law, the failure to provide the statutorily required notice of recording an HOA governing document amendment does not affect the validity of the amendment.

(12) Names Chapter 720, Florida Statutes (Homeowners’ Associations): Chapter 720 of the Florida Statutes will know be officially known as the “Homeowners’ Association Act.”

(13) Board Member Eligibility (Homeowners’ Associations): The Homeowners’ Association Act now provides that a person who is delinquent in the payment of any financial obligation as of the last day that he or she could nominate himself or herself to the board, is not eligible to be a candidate and may not be listed on the ballot. Further, a person serving on the HOA board who becomes 90 days delinquent in the payment of any monetary obligation shall be deemed to have abandoned his or her seat on the board, creating a vacancy on the board to be filled according to law.

Click here for full text of Florida HB 791.

Peter Schulz - Editor - Email TC

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