On June 21, 2011, Governor Rick Scott signed House Bill 1195 (the “Bill”) into law. The Bill amends Florida Statutes, Chapter 718 (the “Condominium Act”) and Florida Statutes, Chapter 720 (the “HOA Statute”), along with other relevant sections of Florida Statutes. The changes to law being effectuated by the Bill are briefly discussed below and take effect July 1, 2011.

Changes to the Condominium Act

Official Records – The Bill amends F.S. 718.111(12) to provide that management company personnel records are not accessible by the Unit Owners. The Bill further amends F.S. 718.111(12) to allow Unit Owners to authorize the disclosure of certain personal information which has been voluntarily submitted to the Association and which information is not required to be given to the Association by the governing documents. Additionally, any information required pursuant to the governing documents for notice must be disclosed to Unit Owners upon request.

Board Meetings – The Bill amends F.S. 718.112(2) to provide that meetings of the Board where personnel matters are discussed are not required to be open to the Unit Owners.

Unit Owner Meetings – The Bill amends F.S. 718.112(2)(d) to clarify the definition of a “candidate” for a Board position and that a candidate must be eligible to run at the time of the deadline for submitting the notice of intent to run for election. The Bill further provides that in elections where the number of vacancies on the Board exceeds the number of candidates, the candidates will become members of the Board and shall appoint members to fill any vacancies.

Board Members – The Bill amends F.S. 718.112(2)(d)(4)(b) in order to provide that newly elected Directors may submit a certificate of having satisfactorily completed the educational curriculum administered by a division approved condominium education provider within 1 year before or 90 days after the election in lieu of certifying that they have read the governing documents of the association and will work to uphold such documents.

Maintenance – The Bill amends F.S. 718.113(5)(a) in order to allow the Board to contract to install impact glass or other code-compliant windows subject to the provisions of F.S. 718.326 and a vote of the membership. Please note that a membership vote is not required if the Association is responsible for the repair and maintenance of the windows and/or shutters.

Master Association Liens – The Bill creates F.S. 718.116(1)(b)(2) in order to provide that a condominium association that acquires title to a unit through foreclosure is not liable for any unpaid assessments, late fees, interest, or reasonable attorney’s fees and costs that came due before the association’s acquisition of title in favor of any other Association which holds a superior lien interest on the unit. Please note that a similar provision was inserted into F.S. 720.3085(2)(d) for HOAs.

Rent Demands on Tenants Occupying Delinquent Units – The Bill amends F.S. 718.116(11) in order to clarify that the tenant must pay the full rental payment to the Association upon demand if such tenant is occupying a unit owned by a Unit Owner who is delinquent in paying any monetary obligation due to the Association. The Bill also amends F.S. 718.116(11) in order to provide statutorily required language that must be included in each rent demand. *Please note that the full text of the statutory required language can be found at the end of this bulletin.

Termination of Condominium – The Bill amends the provisions of F.S. 718.117 relating to the termination of condominiums containing timeshare estates and further amends portions of such statute relating to partial terminations.

Fines, Suspensions and Voting Rights – the Bill amends the provisions of F.S. 718.303 as follows:

• To allow the Association to suspend Unit Owners from the common elements for failure to comply with the governing documents;
• To require 14 days notice and an opportunity for a hearing in the case of suspensions of Unit Owners except for suspensions due to the non-payment of monetary amounts which are only required to be approved at a properly noticed board meeting with notification to the Owner and/or occupant by mail or hand delivery;
• To remove the provision allowing the Association to impose fines for failure to pay any amounts due to the Association at a board meeting;
• To clarify that voting rights which have been suspended may not be counted towards achieving a quorum, the number of voting interests necessary to constitute a quorum or approving actions under the Condominium Act or the governing documents; and
• To clarify that the suspension of voting rights is not subject to the notice and hearing requirements of F.S. 718.303(3).

Changes to Distressed Condominium Relief Act

Definitions – The Bill amends F.S. 718.703 to clarify the definitions of Bulk Buyer and Bulk Assignee.

Assignment and Assumption of Developer Rights – The Bill amends F.S. 718.104 to clarify the rights and liabilities assumed by Bulk Assignee and Bulk Buyer.

Turnover – The Bill amends F.S. 718.705(1) to clarify the turnover timing and responsibilities affecting Bulk Assignees.

Division Filings – The Bill amends F.S. 718.706(1) to provide that Bulk Assignees and Bulk Buyers must file a prospectus with the Division only if they are offering more than seven units for sale in a single condominium. The Bill further amends F.S. 718.706(1)(d) in order to clarify the Bulk Assignee or Bulk Buyer’s financial reporting obligations in connection with the prospectus documents being delivered to potential purchasers as well as the disclosures which must be made to potential purchasers regarding such financial information. The Bill also amends F.S. 718.706(5) to remove language which required Bulk Buyers to comply with the conveyance restrictions found in the applicable Declaration and to state that Bulk Assignees and Bulk Buyers are not required to comply with the filing and disclosure requirements found in F.S. 718.706(1) & (2) if all units owned by such Bulk Assignee or Bulk Buyer are being conveyed to a single purchaser in a single transaction.

Sunset Provision – The Bill clarifies F.S. 718.707 in order to provide that a person acquiring condominium parcels may not be classified as a Bulk Buyer or Bulk Assignee unless such condominium parcels were acquired on or after July 1, 2010 and before July 1, 2012.

Changes to the HOA Statute

Official Records - The Bill amends F.S. 720.303(5) to allow Owners to authorize the disclosure of certain personal information which has been voluntarily submitted to the Association and which information is not required to be given to the Association by the governing documents. Additionally, any information required pursuant to the governing documents for notice must be disclosed to Owners upon request.

Board Meetings – the Bill amends F.S. 720.301 to clarify that each Owner has a right to speak at Board Meetings.

Fines, Suspensions and Voting Rights – the Bill amends the provisions of F.S. 720.305(2) as follows:

• To allow the Association to suspend Unit Owners from the common areas for failure to comply with the governing documents;
• To remove the provision allowing the Association to impose fines for failure to pay any amounts due to the Association at a board meeting;
• To clarify that voting rights which have been suspended may not be counted towards achieving a quorum, the number of voting interests necessary to constitute a quorum or approving actions under the HOA Statute or the governing documents; and
• To clarify that the suspension of voting rights is not subject to the notice and hearing requirements of F.S. 720.305(2)(b).

Board Members – The Bill creates F.S. 720.306(9)(b) to provide that persons more than 90 days delinquent in the payment of any monetary obligation due to the Association is not eligible for Board membership. Additionally, the Bill provides that a person convicted of a felony is not eligible for Board membership unless such person has had their civil rights restored for at least five years.

Rent Demands on Tenants Occupying Delinquent Units – The Bill amends F.S. 720.3085(8) in order to clarify that the tenant must pay the full rental payment to the Association upon demand if such tenant is occupying a home owned by an Owner who is delinquent in paying any monetary obligation due to the Association. The Bill also amends F.S. 720.3085(8) in order to provide statutorily required language that must be included in each rent demand. **Please note that the full text of the statutory required language can be found at the end of this bulletin.

Communications Services – The Bill creates F.S. 720.309(2) to provide that if the governing documents allow, communications services, information services or internet services obtained pursuant to a bulk services contract shall be deemed an operating expense of the Association. The Bill also provides for certain requirements which must be contained in such bulk services contracts. Additionally, the Bill states that any such contract can be cancelled by a majority of the voting interests present at the next regular or special meeting of the association, whichever occurs first.

We trust that this bulletin is helpful to you in better understanding some of the 2011 changes to Florida Statutes being effectuated by House Bill 1195. However, please understand that this bulletin is a summary of the changes to law being effectuated by House Bill 1195 and is not an exhaustive list of all the changes being made to Florida law. This bulletin is also not a guarantee of how a court might decide certain matters in question were the same litigated and all of the pertinent facts known. If you need a more detailed explanation on any of the issues addressed in this bulletin or if you need us to conduct additional research, please contact our firm. Please further note that this bulletin is for informational purposes only and should not be relied upon as a legal opinion.

*Full Text of Statutorily Required Language in Florida Statutes, Section 718.116(11)

Pursuant to section 718.116(11), Florida Statutes, the association demands that you pay your rent directly to the condominium association and continue doing so until the association notifies you otherwise. Payment due the condominium association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to …(full address)…, payable to …(name)….

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period. Pursuant to section 718.116(11), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord for all amounts timely paid to the association.

**Full Text of Statutorily Required Language in Florida Statutes, Section 720.3085(8)

Pursuant to section 720.3085(8), Florida Statutes, we demand that you make your rent payments directly to the homeowners’ association and continue doing so until the association notifies you otherwise. Payment due the homeowners’ association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to …(full address)…, payable to …(name)….

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to section 720.3085(8), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord.