The 2014 Legislative Session is about roughly halfway through since its commencement on March 4, 2014. There are several bills that present potential impacts to cooperatives, condominiums, and homeowners’ associations (HOAs). This post (and a subsequent post on Part II) should give the reader some insight on bills affecting community associations and potential impacts if said bills are passed by the time the Session adjourns on May 2, 2014. This post represents Part I, which will discuss Senate Bill 798 and House Bill 807. These legislative efforts are some of the most anticipated and discussed bills concerning community associations. Part II will be forthcoming shortly and will discuss other important Senate and House Bills that could impact community associations.
SB 798 / HB 807
SB 798 (Sen. Ring) and HB 807 (Rep. Moraitis) are companion bills to pay close attention to because of their numerous impacts on condominiums (COA), cooperatives (co-op), and homeowners’ (HOA) associations. Below is a summary of the bills:
Marketable Record Title Act (HOA). Our Firm recently provided information on the Marketable Record Title Act (MRTA) and its effect on Homeowners’ Associations. (http://jacksonlawgroup.com/blog/condominium-and-homeowner-association-law/the-marketable-record-title-act-mrta-may-nullify-homeowners-associations-covenants-conditions-and-restrictions/). These bills clarify the notice requirements of the board before covenant renewal. They provide that no notice other than the statutory notice is required.
Distressed Condominium Relief Act (“Bulk Buyer Law”) (COA). Bulk assignees and bulk buyers are real estate investors who buy seven or more condominium units from a developer. Current law requires turnover of association control to the owners when a developer has sold a percentage of the units, but the requirement of an early turnover discourages investors from buying distressed units. To encourage investors to rehabilitate financially troubled condominiums, the provisions in Sections 718.701-.708 of the Florida Statutes, delay the turnover requirement and provide other legal protections to bulk assignees and bulk buyers. These protections are currently set to expire by a requirement that the bulk transfer occur no later than July 1, 2015. These bills amend Section 718.707 of the Florida Statutes to extend the acquisition deadline to July 1, 2016.
Official Records (COA, Co-op, & HOA). These bills create Section 718.11(12)(f) of the Florida Statutes to provide that an outgoing board member or committee member must relinquish all official records and property of the association in his or her possession or under his or her control to the incoming board within 5 days after the election. Civil penalties may be imposed against those members who willfully and knowingly fail to relinquish such records and property. The bills make similar changes to the cooperative and HOA Acts.
Assessments (COA, Co-op, & HOA). SB 798 amends Section 718.116(1)(a) of the Florida Statutes to provide that a unit owner is jointly and severally liable with the previous owner not only for all unpaid assessments, but also interest, late charges, and reasonable costs and attorney fees incurred by the association incident to the collection process. The bill makes similar changes to the cooperative and HOA Acts. This provision is currently not in HB 807.
Board Meetings (COA & HOA). These bills amend Section 718.112(2)(b)5 of the Florida Statutes to permit a board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication to count towards a quorum and that the member can vote as if they were present. This amendment aligns with current cooperative law, and makes similar changes to the HOA Act. The bills include a provision unique to condominium associations, which provides that a board member may use e-mail as a means of communication but may not cast a vote on an association matter via e-mail.
Financial Reporting (Co-op). These bills amend Section 719.104(4) of the Florida Statutes to specify the type of financial reporting that a cooperative association must prepare. This amendment matches current provisions in the Condominium Act.
Officers and Directors (Co-op). These bills amend Section 719.106(1)(a)2 of the Florida Statutes to prohibit the holding of office in the cooperative upon delinquency in payment of monies owned to the association, or upon arrest for a felony theft or embezzlement charge involving association funds. Additionally, the bills provide that a person, who has been convicted of any felony in this state or other jurisdiction, is not eligible for board membership unless such felon’s civil rights have been restored for at least five years. This provision aligns with current condominium law.
Emergency Powers (Co-op & HOA). These bills create Sections 719.128 and 720.316 of the Florida Statutes, respectively, to provide boards the power to exercise emergency powers provided in currently in the Condominium Act.
So far, both bills were unanimously passed during their first committee stop. Jackson Law Group’s attorneys that serve associations in St. Augustine, Flagler County, Jacksonville, and many other areas in Florida will make sure to keep you updated on these bills. Expect more posts relating to bills impacting Florida condominiums, co-ops, and HOAs.