Today, we continue our look at new bills affecting cooperative (co-op), condominium, and homeowners associations (HOAs). For Part I, please visit: (http://jacksonlawgroup.com/blog/condominium-and-homeowner-association-law/new-community-association-bills-to-keep-an-eye-on-during-the-2014-florida-legislative-session-part-i/).
Senate Bill 1348 – Homeowners’ Associations and DBPR. This bill filed by Senator Hays requires that HOAs be regulated by the Department of Business and Professional Regulation (DBPR). As a result, the bill renames the “Division of Florida Condominiums, Timeshares, and Mobile Homes” (“Division”) to the “Division of Florida Condominiums, Homeowners’ Associations, Timeshares, and Mobile Homes.”
Below are some highlights and impacts of Senate Bill 1348:
- Creates Sections 720.3021-720.3029 of the Florida Statutes, which:
- Gives the Division powers and duties, including the authority to investigate complaints, enforce compliance when developers are still in control, and levy civil penalties against the developer, the association, and individual officers and board members.
- Creates the office of the Community Association Ombudsman.
- Effective January 1, 2015, requires each homeowner’s association that operates more than two parcels to pay to the Division an annual fee of $4 for each residential parcel operated by the association.
- Defines “Special Assessment,” which “means any assessment levied against a parcel owner other than the assessment required by a budget adopted annually.”
- Removes any ability of a homeowner’s association to file a lien based on fines.
- “Unless otherwise provided in the governing documents,” the declaration, bylaws, or articles of incorporation of an association “may be amended by the affirmative vote of two-thirds of the voting interests of the association.”
- Prohibits general proxies for most homeowner’s association votes.
- Incorporates the two-notice method used by condominiums in the election process.
- Requires majority approval of the total voting interests to allow two-year staggered terms of board members, even if the provision is already in the bylaws.
This bill has not been heard/voted on in any committee meetings as of yet and does not presently have a companion bill in the House.
Senate Bill 1462 / House Bill 871 – Changes in “Safe Harbor” Amounts. The Firm posted a blog recently about a case impacting the ability of associations to collect the “safe harbor” amounts the first mortgagee pays to the association after it forecloses on a mortgage (http://jacksonlawgroup.com/blog/condominium-and-homeowner-association-law/condominium-and-hoa-collections-recent-federal-court-decision-may-result-in-lenders-seeking-limitation-or-elimination-of-liability-for-past-due-amounts/). Senate Bill 1462 (Sen. Stargel) and House Bill 871 (Rep. Trujillo) are companion bills that would change the safe harbor amount to allow recovery of assessments “and other costs” that accrued or came due “pursuant to the association’s governing documents” during the 24 months before acquisition of title “by the first mortgage holder or the acquisition of title by the association, whichever occurs first,” or 2% of the original mortgage debt, whichever is less. Currently, the law provides that the safe harbor amount is 12 months of past expenses and regular periodic assessments (including special assessments for HOAs) or 1% of the original mortgage debt, whichever is less. The new bill also states that the liability of a first mortgagee for attorney’s fees is limited to $4,000, unless a court finds exceptional circumstances that justify a greater reward.
Senate Bill 1462 was passed in the Senate Regulated Industries Committee, one step closer to being considered by the full Senate. However, House Bill 871 has not been heard and voted on so far in any committees.
Also, associations and managers are encouraged to look to Senate Bill 1458 (Sen. Arbruzzo) and House Bill 1405 (Rep. Rader), which would increase the safe harbor amount to 24 months past due assessments, or 3% of the original mortgage debt, whichever is less. Neither bill has been heard yet in any committees.
Senate Bill 1466 / House Bill 7037 – Activities of Community Association Managers (CAMs). Senate Bill 1466 (Sen. Lee) and House Bill 7037 (Rep. Spano) are companion bills that expand the services that may be performed by community association managers (CAMs) on behalf of condominiums, cooperatives, and homeowner associations. These bills add a number of responsibilities to the definition of a CAM, including but not limited to the following:
- Determining the number of days required for statutory notices;
- Determining the amounts due to the association;
- Collecting amounts due to the association before filing a civil action;
- Calculating the votes required for a quorum or to approve a proposition or amendment;
- Completing forms relating to the management of a community association that have been created by statute or by a state agency;
- Drafting meeting notices, agendas, and pre-arbitration demands; and
- Coordinating or performing maintenance for real or personal property and other routine services involved in the operation of a community association.
Senate Bill 1466 is moving along and being approved in the Senate Regulated Industries Committee.
Related bills, Senate Bill 1496 (Sen. Evers) and House Bill 7039 (Rep. Hill), would allow CAMs to perform certain activities without being considered the unlicensed practice of law. Neither of these bills have been approved by a committee.
Senate Bill 440 / House Bill 425 – Non-Residential Condominiums. Senate Bill 440 (Sen. Altman) and House Bill 425 (Rep. J. Rodriguez) limit many condominium laws to only “residential” condominiums, thereby giving “non-residential” condominiums exemptions from certain provision of Chapter 718 of the Florida Statutes. Both bills are ready to be considered by the full Senate and House of Representatives.