HOA Regulations--Florida

Starting July 1, 2013, Florida has a new set of laws affecting HOA’s (Home Owner Associations) and Condos. Here are the HOA changes for your reading enjoyment.

1. Community Association Managers: § 468.436(2).

The Department of Business and Professional Regulation may discipline community association managers for any violations of chapters 718, 719, or 720 of the Florida Statutes that are committed during the course of performing community management services pursuant to a contract with an association.

2. Official Records: § 720.303.

The bill changes the official records provisions for homeowners’ associations to more closely conform to the Condominium Act. Of particular note, official records must be maintained for 7 years, within 45 miles of the community or within the same county, and associations may also maintain records electronically.

The statute also reduces the amount an association may charge for copying records. From 50 cents per page to 25 cents per page.  An association’s ability to charge for personnel costs is also now limited to requests exceeding a half hour to complete and only if the pages copied exceed 25 pages at a rate of no more than $20.00 per hour, and members must now be allowed to photograph records using a camera or other electronic device at no charge.

3. Reporting Requirement: § 720.303(13).

Community association managers are now required to report certain information about the homeowners’ associations they manage to the State DBPR by November 22, 2013. The association’s legal name, federal employer identification number, mailing and physical addresses, the total number of parcels, and the total amount of revenues and expenses from the association’s annual budget must be reported.  Registration will be available on an internet website developed by the DBPR to report the required information by October 1, 2013. 

This law creates somewhat of a trap for community association managers who are subject to disciplinary proceedings under F.S. § 468.436(2) for failing to comply with these new reporting requirements.

4. Officers and Directors: § 720.3033.

A new section has been created that governs officers and directors. It also brings into conformity certain requirements of directors of homeowners’ associations to that of directors of condominium associations.

Board member certification: The section imposes a board certification or education requirement for board members, as is currently required for condominium board members.

Newly elected directors must certify in writing, within 90 days, that they have

1) read the association’s governing documents and policies;

2) they will work to uphold the documents and policies; and

3) that they will faithfully discharge their fiduciary responsibility to the association’s members.

Instead of written certification, a newly elected director may also submit a certificate that he or she has completed the Division’s educational curriculum within one year prior to election or 90 days after election or appointment.

Disclosures: If the association enters into a contract or other transaction with any of its directors certain disclosures are now required. The section also provides that the contract or transaction may be canceled by a majority vote of the members present at the next regular or special meeting of the members.

Solicitation/Acceptance of anything of value: Another important aspect of the law to be aware of is that officers, directors and managers are prohibited from soliciting or accepting anything of service or value from any person providing or proposing to provide goods or services to the association for which consideration has not been provided. However, there is an exception for accepting food to be consumed at a business meeting with a value of less than $25 per individual or services or items in connection to trade fairs or education programs.

Board removal: The section provides that officers or directors charged with felony theft or embezzlement involving association funds must be removed from office.  However, if the charges are resolved without a finding of guilt, the director or officer must be reinstated for any remainder of the term of office.

Insurance/Fidelity Bond: All associations are required to maintain insurance or a fidelity bond for anyone who controls or disburses funds of the association. However, the members of the association may waive this requirement by a majority of the voting interests present at a properly called meeting of the association.

5. Amendments to Governing Documents: §720.306.

Within 30 days after recording an amendment to the governing documents, the association now must provide copies of the amendment to the members.

6. Suspension of Use Rights.

New Florida Statute Section 720.305(2), as amended, clarifies existing law and provides that in a HOA setting a suspension of use rights in common areas does not allow the association to suspend access to and from a member’s home or the right to suspend utility services to their home.

7. Mortgagee Consents to HOA (Amendments).

Florida Statute Section 720.306 has been amended to alleviate the need for an HOA to solicit and receive mortgagee consents to certain amendments.

For any mortgage recorded after July 1, 2013, any provision in the HOA’s governing documents that requires consent and joinder of some or all the mortgagees of record will only apply if the proposed amendment will adversely affect the priority of the mortgagee’s lien. As to mortgages recorded before July 1, 2013, any provision (s) in the HOA’s governing documents requiring mortgagee consents is still enforceable.  However, in securing these consents, the HOA is entitled to rely upon the public records to identify the mortgagees and the HOA is entitled to request the mortgagee for their consent. Any mortgagee who fails to respond within 60 days after being requested in writing is deemed to have consented to the amendment.

8. Right to Speak.

HOA members already had a right to attend membership meetings and the right to speak for at least three minutes on any agenda item. But, effective July 1, 2013, the member is no longer required to submit a written request to speak prior to the meeting and the association may not require the member to submit a written request to speak prior to the meeting. Florida Statute Section 720.306(6).

9. Elections and Board Vacancies: §720.306(9)(a).

The statute has been amended to clarify that nominations from the floor are not required if the election process allows candidates to be nominated in advance of the meeting. This is an important change and should alleviate the need for HOAs to accept nominations from the floor. The section has also been amended to provide that an election is not required unless more candidates are nominated than vacancies exist.

10. Turnover of Association Control: §720.307.

The statute, as amended, adds several scenarios that trigger the transition of control of the board from the developer to nondeveloper parcel owners. The statute also now permits members other than the developer to elect at least one member of the board when 50% of the parcels in all phases of the community which will ultimately be operated by the homeowners association have been conveyed to the members.

11. Prohibited Clauses in AssociationDocuments: § 720.3075.

A new subsection is added which limits the ability of the developer to make certain unilateral amendments to the declaration subject to a test of reasonableness.

12. Payment for Assessments; Lien Claims: §720.3085(2)(b).

The statute has been amended to clarify that the term “previous owner” shall not include an association that acquires title to a delinquent property through foreclosure or by deed in lieu of foreclosure. The subsection further provides that a present parcel owner’s liability for unpaid assessments is limited to any unpaid assessments that accrued before the association acquired title to the delinquent property through foreclosure or by deed in lieu of foreclosure.

Dane Hahn is a real estate professional serving the “Suncoast” of SW Florida. He can be reached at dane.hahn@gmail.com. Or by phone at 941-681-0312.  See him on the net at www.danesellsflorida.com