MEMORANDUM

TO:                 Condominium & Homeowners Associations

                        Board of Directors

FROM:          Christine & Christine, P.A.

                        Edward Ronsman, Esq.

                        Preferred Management Services, Inc.

DATE:           March 12, 2010

RE:                 2010 Legislative Session - Bills Affecting Community Associations

                        Contact Information of State Legislators

______________________________________________________________________________

             The law firm of Christine & Christine, P.A. and Preferred Management Services, Inc. are happy to provide this 2010 Legislative Update for the review by our community association clients.  Please note that this memorandum does not constitute legal advice and is not inclusive of every item introduced by the respective legislative bills.  Please feel free to contact Lea Stokes at Preferred Management Services, Inc. with any questions or to request further clarification, including any legal memorandums or opinions as to how proposed legislation will affect your association specifically. 

            Finally, and in conjunction with Preferred Management Services, Inc., please find enclosed prepared correspondence for the Association's use in contacting your local legislator.  At the end of this document there includes a list of State senators and representatives for Duval, St. Johns, Flagler, and Volusia Counties.  The Association is encouraged to contact Lea Stokes or its community association manager to facilitate the mailing of this information on behalf of all members of the Association. 

Florida Community Associations:  2010 Legislative Update 

            There are numerous bills proposed by the State legislature which would affect community associations throughout Florida, especially in the area of mortgage foreclosure and lender obligation for payment of assessments.  The Firm will send a memorandum to all of its association clients upon conclusion of the 2010 legislative session should any of these bills be approved, along with pertinent analysis and recommendations.

             Please note that numerous bills are proposed during each legislative session, with many bills not being acted upon.  That being said, it is evident that the issue of association financial stability is the primary focus of this legislative session.  Numerous bills support Association ability to demand payment of rent directly from tenants, as well as restricting use of common areas and facilities in condominiums where an owner is more than 90 days delinquent in payment of assessments.  

            The below summaries are a brief synopsis of proposed bills and do not encompass all of the proposed changes.  The Firm is happy to provide legal opinions and analysis upon request to a specific association.  Please contact your community association manager with further questions in this regard. 

            A URL address to each bill is included at the end of each summary.  Bills can be viewed in their entirety at the linked address in .pdf form.  Session history and the current status of the bill can be found at www.flsenate.gov , which contains information for proposed House and Senate Bills. 

This memorandum shall not be disseminated without prior consent of Christine & Christine, P.A. or Preferred Management Services, Inc.

HB 115: 

·         Permits further restriction of candidates for condominium Board of Directors by making ineligible any member who is delinquent in payment of fine, fee, or special or regular assessment.

·         Condominium director who fails to sign a certificate of compliance – certifying that he/she has read the governing documents and will work to uphold the documents and policies – is automatically disqualified and removed from the Board.

·         Condominium associations may suspend use of common elements and facilities (excluding utility services) by owner or tenant if owner is delinquent in payment of regular or special assessments.  Currently, this restriction is found in Chapter 720 governing homeowner associations.  Voting rights may also be restricted for non-payment of an assessment, fine, or other charge.

·         Condominium association may demand payment of rents directly to association during pendency of foreclosure; Association also has right of eviction for non-compliance.

·         Similar amendments on the above are also proposed for homeowner associations governed under Chapter 720.

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h011501c1.pdf

SB 164:

·         Would require foreclosing lenders to pay the statutory cap of the lesser of 6 months assessments or 1% of the original mortgage amount to condominium associations if foreclosure is not completed within 6 months.  Currently, this obligation is not triggered until the foreclosing lender obtains title to the property after the judicial sale.  This applies to condominiums only.

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s0164.pdf

HB 327/SB 840:

·         Removes bulk assignees and bulk buyers defined in Fla. Stat. 718.703 from possible definition of “developer”

·         Establishes Chapter 718, Part VII, “Distressed Condominium Relief”

·         Relaxes the requirements of bulk assignees and purchasers by removing warranty and reserve funding obligation (to limited extent) in order to persuade potential buyers to purchase bulk units.

·         Further defines transition protocol when defined bulk assignee/purchaser acquires title to units.

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h032700.pdf

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s0840c1.pdf

HB 329:

·         Like HB 115, requires tenants to pay rent directly to condominium association when owner is delinquent (more than 30 days) in payment of assessments.  This includes payment of attorney fees and costs incurred as a result of the delinquency. 

·         Also restricts common element use (owners and tenants) and voting rights for members delinquent in payment of assessments.

·         Eliminates statutory cap imposed upon first mortgagees and would require foreclosing lender to pay all amounts owing if foreclosure is not completed within one year.  First mortgagee required to pay six months of assessments upon commencement of foreclosure.

·         This bill applies only to condominium associations.

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h032900.pdf

HB 337/SB 968:

·         Condominium owners shall receive “notice of delinquency” specifying each assessment sought by the association and corresponding interest, fee, and cost attached to such unpaid assessments.

·         No restriction or condition can be placed upon owner until 20 days after receipt of this notice of delinquency.  Restriction or condition includes any restriction on running for office, holding office, serving on committee, leasing the unit, or using common areas.

·         This bill applied only to condominium associations.

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h033700.pdf

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s0968.pdf

SB 780

·         Requires foreclosing lenders to pay all fees associated with residential property, including HOA/COA assessments, maintenance fees, and property taxes.

·         Law retroactively applied to all currently filed foreclosure matters

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s0780.pdf

HB 419/SB 864

·         This is a very large bill directed at community associations; however, they were recently withdrawn.  The firm will advise if alternative bills are filed.

·         Among many other items, allows associations to demand rent directly from tenants to pay amounts owing

·         Association claim of lien would be able to include cost of collection efforts by management companies or managers.

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h041900.pdf

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s0864.pdf

SB 1196 (compare with HB 1317)

·         Large bill that addresses both Condominium Associations and Homeowner Associations

·         Condominiums –

o   Establishes further definitions of official records, creates personal liability for destroying records

o   Restricts employee records, email/telephone information of members as official records

o   Increases financial amount threshold for financial reporting, establishes extension from 120 days to 180 days to provide financial report

o   Elected director to supply certificate of compliance 90 days after election

o   Director may be suspended if more than 90 days delinquent in payment of any amount to Association (i.e., assessment, late fee, or fine)

o   Information services / Internet expenses treated as common expense

o   Management may charge up to $75.00 for delinquency/collection letters; this amount may be secured in claim of lien

o   Association may demand payment of rent from tenant if owner delinquent in payment of assessments; Association has right to evict upon non-payment

o   Use of common elements, common facilities, and other association property if owner delinquent more than 90 days in payment of “monetary obligation” to association (presumably includes assessments, late fees, and fines).

o   Includes language from HB 327 and establishes Chapter 718, Part VII, “Distressed Condominium Relief Act” pertaining to developer status and bulk assignee/purchaser.

·         Homeowner Associations

o   Establishes further language regarding displaying of flag

o   Further expands Association ability to suspend use of common areas and facilities by stating such suspension shall last until monetary obligation is satisfied (as opposed to “reasonable period of time”). 

o   Vacant seats on Board may be filled upon appointment by Board or by called election; Appointed director shall serve remainder of term of previous member unless otherwise specified in bylaws.

o   Association may demand payment of rent from tenant occupying property if owner is delinquent in payment of assessments; Association has right to evict upon non-payment.

o   Further clarifies language regarding meeting between Board and attorney discussing proposed or potential litigation as not being open to membership.

o   Association/management able to charge for employee time in copying records upon official request or may pay vendor to do so.

o   Further expands records not subject to inspection, such as personal information of members other than that required for association notice; electronic security measures, software/operating system data.

o   Additional language clarifying budgeting provisions.

o   Additional language allowing voting by absentee ballot, with additional provisions.

o   Developer-controlled Board may not pass special assessment unless majority of parcel owners other than developer approve such assessment by majority vote at duly called special meeting of membership at which a quorum is present.

·         Note – this bill contains many controversial provisions.  Full analysis is required should the bill be passed in its present form to determine its applicability to each association.

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s1196c1.pdf

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h131700.pdf

HB 561/SB 1222:

·         Requires that coverage under a unit owner's policy for certain assessments include at least a minimum amount of loss assessment coverage.

·         Provides an exemption for certain condominiums from installing a manual fire alarm system as required in the Life Safety Code if certain conditions are met.

·         Revises the definition of the term "developer" to exclude a bulk assignee or bulk buyer, etc. 

http://www.flsenate.gov/data/session/2010/House/bills/billtext/pdf/h056101c1.pdf

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s1222.pdf

SB 1270:

·         Provides an exemption, if certain conditions are met, from the requirement that certain condominiums install a manual fire alarm system as required in the Life Safety Code.

·         Prohibits an authority having jurisdiction from requiring the completion of retrofitting of common areas with a sprinkler system before a specified date. 

·         Creates Section 720.314: as with other bills, establishes that condominium or homeowner association may suspend use of common areas and facilities if owner delinquent more than 90 days in payment of assessments.

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s1270.pdf

SB 1272:

·         Condominiums:

o   Provides that a person acquiring title to a condominium by foreclosure or recorded deed in lieu of foreclosure is liable for certain additional unpaid expenses and assessments –specifically, pushing statutory cap from 6 months to 12 months.  Such cap only available to first mortgagee or assignee who takes the mortgage prior to initiation of complaint to foreclose.

o   Creates obligation on first mortgagee to preserve property while foreclosure action is pending.  Association may take actions to preserve and/or maintain unit, the costs of which may be deemed an individual assessment against unit subject to lien and foreclosure rights of Association.

o   First mortgagee liable for any special assessments levied during pendency of foreclosure as relating to damage to common elements, roof, structural components of building, and utilities elements.

·         Homeowners Associations:

o   Incorporates language above as to property preservation requirements, special assessments, and ability of Association to undertake action to maintain property to keep in safe condition.

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s1272.pdf

SB 2458:

·         As with other proposed bills, authorizes a condominium association to demand payment from tenants of future rents to the association in lieu of payment to the unit owner.

·         Association may restrict use of common areas and recreational facilities by owner or tenant; may suspend voting rights of owners if assessment payments delinquent 90 days or more.

·         Requires that coverage under a unit owner's policy for certain assessments include at least a minimum amount of loss assessment coverage.

·         Requires that adequate property insurance be based upon the replacement cost of the property to be insured as determined by an independent appraisal or update of a prior appraisal, etc. 

·         This bill applies to condominiums only.

http://www.flsenate.gov/data/session/2010/Senate/bills/billtext/pdf/s2458.pdf

CONCLUSION

As previously stated, there are numerous bills proposed during the 2010 legislative session affecting community associations.  Many of the bills aim to ease the financial burden existing as a result of the sheer volume of mortgage foreclosures currently pending across the state.  Specifically, the problems sought to be remedied are (1) statutory cap on first mortgagees for payment of past due assessments; (2) pre-payment of assessments; and (3) units rented by unit owners who are failing to pay condominium assessments.

The Florida legislature is in session through April 30, 2010.  Bills may be passed before this time and thereafter subject to approval by Gov. Christ.  Any bills which are not moved upon or passed by the end of the session are terminated and subject to re-filing for the next legislative session.  

Please find below the contact information for your local legislator.  The Association is encouraged to contact your local legislator by way of the prepared correspondence attached to this correspondence.  Please contact Lea Stokes or your local community association manager for further assistance in this regard. 

ST. JOHNS COUNTY

Representatives

District 18                                                                   District 19

Rep. Ronald “Doc” Renuart                                          Rep. Michael B. Weinstein

50 A1A North                                                              155 Blanding Blvd.

Suite 105                                                                      Suite 10

Ponte Vedra Beach, FL  32082                                    Orange Park, FL  32073

ronald.renuart@myfloridahouse.gov                                Ph #  904-270-2550

District 20

Rep. William Proctor

900 SR 16

Suite 2

St. Augustine, FL  32084

Senators

District 1                                                                     District 5

Sen. Anthony C. Hill, Sr.                                              Sen. Stephen R. Wise

5600 New Kings Road                                                1460 Cassat Avenue

Suite 5                                                                         Suite B

Jacksonville, FL  32209                                               Jacksonville, FL  32205

Ph #  904-924-1646     FAX 904-924-1648                     Ph #  904-381-6000     Fax 904-381-6040

hill.tony.web@flsenate.gov                                            wise.stephen.web@flsenate.gov

District 8

Sen. John Thrasher

9485 Regency Square Boulevard

Suite 108

Jacksonville, FL  32225

FLAGER COUNTY

Representatives

District 20                                                                   District 26

Rep. William Proctor                                                    Rep. Pat Patterson

900 SR 16                                                                   DeLand City Hall

Suite 2                                                                         120 S. Florida Avenue

St. Augustine, FL  32084                                             Room 206

                                                                                   DeLand, FL  32720

                                                                                   Ph #  386-736-5100

                                                                                   pat.patterson@myfloridahouse.gov

 Senators

District 1                                                                     District 8

Sen. Anthony C. Hill, Sr.                                              Sen. John Thrasher

5600 New Kings Road                                                9485 Regency Square Boulevard

Suite 5                                                                         Suite 108

Jacksonville, FL  32209                                               Jacksonville, FL  32225

VOLUSIA COUNTY

Representatives

District 21                                                                   District 25

Rep. Charles Van Zant                                                 Rep. D. Alan Hays

3841 Reid Street                                                          871 South Central Avenue

Suite 5                                                                          Suite C

Palatka, FL  32177                                                      Umatilla, FL  32784

Ph #  386-312-2272                                                                        Ph # 352-742-6441

charles.vanzant@myfloridahouse.gov                            alan.hays@myfloridahouse.gov

District 26                                                                   District 27

Rep. Pat Patterson                                                      Rep. Dwayne Taylor

DeLand City Hall                                                        732 Orange Avenue

120 S. Florida Avenue                                                Daytona Beach, FL  32114

 Room 206                                                                  DeLand, FL  32720

 Ph #  386-736-5100                                                     Ph #  386-239-6202

                                                                                   dwayne.taylor@myfloridahouse.gov

District 28                                                                   District 33

Rep. Dorothy Hukill                                                   Rep. Sandra Adams

1402 Dunlawton Avenue                                            2074 Winter Springs Boulevard

Suite 1-A                                                                    Oviedo, FL  32765

Port Orange, FL  32127

Ph #  386-322-5111

dorothy.hukill@myfloridahouse.gov

Senators

District 1                                                                     District 7

Sen. Anthony C. Hill, Sr.                                             Sen. Evelyn J. Lynn

5600 New Kings Road                                               536 North Halifax Avenue

Suite 5                                                                        Suite 101

Jacksonville, FL  32209                                              Daytona Beach, FL  32118

                                                                                   Ph # 386-238-3180      Fax 386-238-3179

                                                                                    lynn.evelyn.web@flsenate.gov

District 8                                                                     District 20

Sen. John Thrasher                                                       Sen. Carey Baker

9485 Regency Square Boulevard                                 301 West Ward Avenue

Suite 108                                                                     Eustis, FL  32726

Jacksonville, FL  32225                                               Ph # 352-742-6490      Fax 352-742-6492              

                                                                                    baker.carey.web@flsenate.gov