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       Florida Senate - 2010                              CS for SB 840
       
       
       
       By the Committee on Regulated Industries; and Senators Sobel and
       Gelber
       
       
       
       580-02169-10                                           2010840c1
    1                        A bill to be entitled                      
    2         An act relating to community associations; amending s.
    3         718.103, F.S.; revising the definition of the term
    4         “developer” to exclude a bulk assignee or bulk buyer;
    5         amending s. 718.501, F.S.; revising the jurisdiction
    6         of the Florida Division of Condominiums, Timeshares,
    7         and Mobile Homes to include bulk assignees and bulk
    8         buyers; creating part VII of ch. 718, F.S., relating
    9         to distressed condominium relief; providing a short
   10         title; providing legislative findings and intent;
   11         defining the terms “bulk assignee” and “bulk buyer”;
   12         providing for the assignment of developer rights to
   13         and the assumption of developer rights by a bulk
   14         assignee; specifying liabilities of bulk assignees and
   15         bulk buyers; providing exceptions; providing
   16         additional responsibilities of bulk assignees and bulk
   17         buyers; authorizing certain entities to assign
   18         developer rights to a bulk assignee; limiting the
   19         number of bulk assignees at any given time; providing
   20         for the transfer of control of a board of
   21         administration; providing effects of such transfer on
   22         units acquired by a bulk assignee; providing
   23         obligations of a bulk assignee upon the transfer of
   24         control of a board of administration; requiring that a
   25         bulk assignee certify certain information in writing;
   26         providing for the resolution of a conflict between
   27         specified provisions of state law; providing that the
   28         failure of a bulk assignee or bulk buyer to comply
   29         with specified provisions of state law results in the
   30         loss of certain protections and exemptions; requiring
   31         that a bulk assignee or bulk buyer file certain
   32         information with the Division of Florida Condominiums,
   33         Timeshares, and Mobile Homes of the Department of
   34         Business and Professional Regulation before offering
   35         any units for sale or lease in excess of a specified
   36         term; requiring that a copy of such information be
   37         provided to a prospective purchaser; requiring that
   38         certain contracts and disclosure statements contain
   39         specified statements; requiring that a bulk assignee
   40         or bulk buyer comply with certain disclosure
   41         requirements; prohibiting a bulk assignee from taking
   42         certain actions on behalf of an association while the
   43         bulk assignee is in control of the board of
   44         administration of the association and requiring that
   45         such bulk assignee comply with certain requirements;
   46         requiring that a bulk assignee or bulk buyer comply
   47         with certain requirements regarding certain contracts;
   48         providing unit owners with specified protections
   49         regarding certain contracts; requiring that a bulk
   50         buyer comply with certain requirements regarding the
   51         transfer of a unit; prohibiting a person from being
   52         classified as a bulk assignee or bulk buyer unless
   53         condominium units were acquired before a specified
   54         date; providing for the determination of the date of
   55         acquisition of a unit; providing that the assignment
   56         of developer rights to a bulk assignee or bulk buyer
   57         does not release a developer from certain liabilities;
   58         preserving certain liabilities for certain parties;
   59         providing an effective date.
   60  
   61  Be It Enacted by the Legislature of the State of Florida:
   62  
   63         Section 1. Subsection (16) of section 718.103, Florida
   64  Statutes, is amended to read:
   65         718.103 Definitions.—As used in this chapter, the term:
   66         (16) “Developer” means a person who creates a condominium
   67  or offers condominium units parcels for sale or lease in the
   68  ordinary course of business, but does not include:
   69         (a) An owner or lessee of a condominium or cooperative unit
   70  who has acquired the unit for his or her own occupancy;, nor
   71  does it include
   72         (b) A cooperative association that which creates a
   73  condominium by conversion of an existing residential cooperative
   74  after control of the association has been transferred to the
   75  unit owners if, following the conversion, the unit owners will
   76  be the same persons who were unit owners of the cooperative and
   77  no units are offered for sale or lease to the public as part of
   78  the plan of conversion;.
   79         (c) A bulk assignee or bulk buyer as defined in s. 718.703;
   80  or
   81         (d) A state, county, or municipal entity is not a developer
   82  for any purposes under this act when it is acting as a lessor
   83  and not otherwise named as a developer in the declaration of
   84  condominium association.
   85         Section 2. Subsection (1) of section 718.501, Florida
   86  Statutes, is amended to read:
   87         718.501 Authority, responsibility, and duties of Division
   88  of Florida Condominiums, Timeshares, and Mobile Homes.—
   89         (1) The Division of Florida Condominiums, Timeshares, and
   90  Mobile Homes of the Department of Business and Professional
   91  Regulation, referred to as the “division” in this part, has the
   92  power to enforce and ensure compliance with the provisions of
   93  this chapter and rules relating to the development,
   94  construction, sale, lease, ownership, operation, and management
   95  of residential condominium units. In performing its duties, the
   96  division has complete jurisdiction to investigate complaints and
   97  enforce compliance with the provisions of this chapter with
   98  respect to associations that are still under developer control
   99  or the control of a bulk assignee or bulk buyer pursuant to part
  100  VII of this chapter and complaints against developers, bulk
  101  assignees, or bulk buyers involving improper turnover or failure
  102  to turnover, pursuant to s. 718.301. However, after turnover has
  103  occurred, the division shall only have jurisdiction to
  104  investigate complaints related to financial issues, elections,
  105  and unit owner access to association records pursuant to s.
  106  718.111(12).
  107         (a)1. The division may make necessary public or private
  108  investigations within or outside this state to determine whether
  109  any person has violated this chapter or any rule or order
  110  hereunder, to aid in the enforcement of this chapter, or to aid
  111  in the adoption of rules or forms hereunder.
  112         2. The division may submit any official written report,
  113  worksheet, or other related paper, or a duly certified copy
  114  thereof, compiled, prepared, drafted, or otherwise made by and
  115  duly authenticated by a financial examiner or analyst to be
  116  admitted as competent evidence in any hearing in which the
  117  financial examiner or analyst is available for cross-examination
  118  and attests under oath that such documents were prepared as a
  119  result of an examination or inspection conducted pursuant to
  120  this chapter.
  121         (b) The division may require or permit any person to file a
  122  statement in writing, under oath or otherwise, as the division
  123  determines, as to the facts and circumstances concerning a
  124  matter to be investigated.
  125         (c) For the purpose of any investigation under this
  126  chapter, the division director or any officer or employee
  127  designated by the division director may administer oaths or
  128  affirmations, subpoena witnesses and compel their attendance,
  129  take evidence, and require the production of any matter which is
  130  relevant to the investigation, including the existence,
  131  description, nature, custody, condition, and location of any
  132  books, documents, or other tangible things and the identity and
  133  location of persons having knowledge of relevant facts or any
  134  other matter reasonably calculated to lead to the discovery of
  135  material evidence. Upon the failure by a person to obey a
  136  subpoena or to answer questions propounded by the investigating
  137  officer and upon reasonable notice to all persons affected
  138  thereby, the division may apply to the circuit court for an
  139  order compelling compliance.
  140         (d) Notwithstanding any remedies available to unit owners
  141  and associations, if the division has reasonable cause to
  142  believe that a violation of any provision of this chapter or
  143  related rule has occurred, the division may institute
  144  enforcement proceedings in its own name against any developer,
  145  bulk assignee, bulk buyer, association, officer, or member of
  146  the board of administration, or its assignees or agents, as
  147  follows:
  148         1. The division may permit a person whose conduct or
  149  actions may be under investigation to waive formal proceedings
  150  and enter into a consent proceeding whereby orders, rules, or
  151  letters of censure or warning, whether formal or informal, may
  152  be entered against the person.
  153         2. The division may issue an order requiring the developer,
  154  bulk assignee, bulk buyer, association, developer-designated
  155  officer, or developer-designated member of the board of
  156  administration, developer-designated assignees or agents, bulk
  157  assignee-designated assignees or agents, bulk buyer-designated
  158  assignees or agents, community association manager, or community
  159  association management firm to cease and desist from the
  160  unlawful practice and take such affirmative action as in the
  161  judgment of the division will carry out the purposes of this
  162  chapter. If the division finds that a developer, bulk assignee,
  163  bulk buyer, association, officer, or member of the board of
  164  administration, or its assignees or agents, is violating or is
  165  about to violate any provision of this chapter, any rule adopted
  166  or order issued by the division, or any written agreement
  167  entered into with the division, and presents an immediate danger
  168  to the public requiring an immediate final order, it may issue
  169  an emergency cease and desist order reciting with particularity
  170  the facts underlying such findings. The emergency cease and
  171  desist order is effective for 90 days. If the division begins
  172  nonemergency cease and desist proceedings, the emergency cease
  173  and desist order remains effective until the conclusion of the
  174  proceedings under ss. 120.569 and 120.57.
  175         3. If a developer, bulk assignee, or bulk buyer fails to
  176  pay any restitution determined by the division to be owed, plus
  177  any accrued interest at the highest rate permitted by law,
  178  within 30 days after expiration of any appellate time period of
  179  a final order requiring payment of restitution or the conclusion
  180  of any appeal thereof, whichever is later, the division shall
  181  bring an action in circuit or county court on behalf of any
  182  association, class of unit owners, lessees, or purchasers for
  183  restitution, declaratory relief, injunctive relief, or any other
  184  available remedy. The division may also temporarily revoke its
  185  acceptance of the filing for the developer to which the
  186  restitution relates until payment of restitution is made.
  187         4. The division may petition the court for the appointment
  188  of a receiver or conservator. If appointed, the receiver or
  189  conservator may take action to implement the court order to
  190  ensure the performance of the order and to remedy any breach
  191  thereof. In addition to all other means provided by law for the
  192  enforcement of an injunction or temporary restraining order, the
  193  circuit court may impound or sequester the property of a party
  194  defendant, including books, papers, documents, and related
  195  records, and allow the examination and use of the property by
  196  the division and a court-appointed receiver or conservator.
  197         5. The division may apply to the circuit court for an order
  198  of restitution whereby the defendant in an action brought
  199  pursuant to subparagraph 4. shall be ordered to make restitution
  200  of those sums shown by the division to have been obtained by the
  201  defendant in violation of this chapter. Such restitution shall,
  202  at the option of the court, be payable to the conservator or
  203  receiver appointed pursuant to subparagraph 4. or directly to
  204  the persons whose funds or assets were obtained in violation of
  205  this chapter.
  206         6. The division may impose a civil penalty against a
  207  developer, bulk assignee, bulk buyer, or association, or its
  208  assignee or agent, for any violation of this chapter or a rule
  209  adopted under this chapter. The division may impose a civil
  210  penalty individually against any officer or board member who
  211  willfully and knowingly violates a provision of this chapter,
  212  adopted rule, or a final order of the division; may order the
  213  removal of such individual as an officer or from the board of
  214  administration or as an officer of the association; and may
  215  prohibit such individual from serving as an officer or on the
  216  board of a community association for a period of time. The term
  217  “willfully and knowingly” means that the division informed the
  218  officer or board member that his or her action or intended
  219  action violates this chapter, a rule adopted under this chapter,
  220  or a final order of the division and that the officer or board
  221  member refused to comply with the requirements of this chapter,
  222  a rule adopted under this chapter, or a final order of the
  223  division. The division, prior to initiating formal agency action
  224  under chapter 120, shall afford the officer or board member an
  225  opportunity to voluntarily comply with this chapter, a rule
  226  adopted under this chapter, or a final order of the division. An
  227  officer or board member who complies within 10 days is not
  228  subject to a civil penalty. A penalty may be imposed on the
  229  basis of each day of continuing violation, but in no event shall
  230  the penalty for any offense exceed $5,000. By January 1, 1998,
  231  the division shall adopt, by rule, penalty guidelines applicable
  232  to possible violations or to categories of violations of this
  233  chapter or rules adopted by the division. The guidelines must
  234  specify a meaningful range of civil penalties for each such
  235  violation of the statute and rules and must be based upon the
  236  harm caused by the violation, the repetition of the violation,
  237  and upon such other factors deemed relevant by the division. For
  238  example, the division may consider whether the violations were
  239  committed by a developer, bulk assignee, bulk buyer, or owner
  240  controlled association, the size of the association, and other
  241  factors. The guidelines must designate the possible mitigating
  242  or aggravating circumstances that justify a departure from the
  243  range of penalties provided by the rules. It is the legislative
  244  intent that minor violations be distinguished from those which
  245  endanger the health, safety, or welfare of the condominium
  246  residents or other persons and that such guidelines provide
  247  reasonable and meaningful notice to the public of likely
  248  penalties that may be imposed for proscribed conduct. This
  249  subsection does not limit the ability of the division to
  250  informally dispose of administrative actions or complaints by
  251  stipulation, agreed settlement, or consent order. All amounts
  252  collected shall be deposited with the Chief Financial Officer to
  253  the credit of the Division of Florida Condominiums, Timeshares,
  254  and Mobile Homes Trust Fund. If a developer, bulk assignee, or
  255  bulk buyer fails to pay the civil penalty and the amount deemed
  256  to be owed to the association, the division shall issue an order
  257  directing that such developer, bulk assignee, or bulk buyer
  258  cease and desist from further operation until such time as the
  259  civil penalty is paid or may pursue enforcement of the penalty
  260  in a court of competent jurisdiction. If an association fails to
  261  pay the civil penalty, the division shall pursue enforcement in
  262  a court of competent jurisdiction, and the order imposing the
  263  civil penalty or the cease and desist order will not become
  264  effective until 20 days after the date of such order. Any action
  265  commenced by the division shall be brought in the county in
  266  which the division has its executive offices or in the county
  267  where the violation occurred.
  268         7. If a unit owner presents the division with proof that
  269  the unit owner has requested access to official records in
  270  writing by certified mail, and that after 10 days the unit owner
  271  again made the same request for access to official records in
  272  writing by certified mail, and that more than 10 days has
  273  elapsed since the second request and the association has still
  274  failed or refused to provide access to official records as
  275  required by this chapter, the division shall issue a subpoena
  276  requiring production of the requested records where the records
  277  are kept pursuant to s. 718.112.
  278         8. In addition to subparagraph 6., the division may seek
  279  the imposition of a civil penalty through the circuit court for
  280  any violation for which the division may issue a notice to show
  281  cause under paragraph (r). The civil penalty shall be at least
  282  $500 but no more than $5,000 for each violation. The court may
  283  also award to the prevailing party court costs and reasonable
  284  attorney’s fees and, if the division prevails, may also award
  285  reasonable costs of investigation.
  286         (e) The division may prepare and disseminate a prospectus
  287  and other information to assist prospective owners, purchasers,
  288  lessees, and developers of residential condominiums in assessing
  289  the rights, privileges, and duties pertaining thereto.
  290         (f) The division has authority to adopt rules pursuant to
  291  ss. 120.536(1) and 120.54 to implement and enforce the
  292  provisions of this chapter.
  293         (g) The division shall establish procedures for providing
  294  notice to an association and the developer during the period
  295  where the developer controls the association when the division
  296  is considering the issuance of a declaratory statement with
  297  respect to the declaration of condominium or any related
  298  document governing in such condominium community.
  299         (h) The division shall furnish each association which pays
  300  the fees required by paragraph (2)(a) a copy of this act,
  301  subsequent changes to this act on an annual basis, an amended
  302  version of this act as it becomes available from the Secretary
  303  of State’s office on a biennial basis, and the rules adopted
  304  thereto on an annual basis.
  305         (i) The division shall annually provide each association
  306  with a summary of declaratory statements and formal legal
  307  opinions relating to the operations of condominiums which were
  308  rendered by the division during the previous year.
  309         (j) The division shall provide training and educational
  310  programs for condominium association board members and unit
  311  owners. The training may, in the division’s discretion, include
  312  web-based electronic media, and live training and seminars in
  313  various locations throughout the state. The division shall have
  314  the authority to review and approve education and training
  315  programs for board members and unit owners offered by providers
  316  and shall maintain a current list of approved programs and
  317  providers and shall make such list available to board members
  318  and unit owners in a reasonable and cost-effective manner.
  319         (k) The division shall maintain a toll-free telephone
  320  number accessible to condominium unit owners.
  321         (l) The division shall develop a program to certify both
  322  volunteer and paid mediators to provide mediation of condominium
  323  disputes. The division shall provide, upon request, a list of
  324  such mediators to any association, unit owner, or other
  325  participant in arbitration proceedings under s. 718.1255
  326  requesting a copy of the list. The division shall include on the
  327  list of volunteer mediators only the names of persons who have
  328  received at least 20 hours of training in mediation techniques
  329  or who have mediated at least 20 disputes. In order to become
  330  initially certified by the division, paid mediators must be
  331  certified by the Supreme Court to mediate court cases in county
  332  or circuit courts. However, the division may adopt, by rule,
  333  additional factors for the certification of paid mediators,
  334  which factors must be related to experience, education, or
  335  background. Any person initially certified as a paid mediator by
  336  the division must, in order to continue to be certified, comply
  337  with the factors or requirements imposed by rules adopted by the
  338  division.
  339         (m) When a complaint is made, the division shall conduct
  340  its inquiry with due regard to the interests of the affected
  341  parties. Within 30 days after receipt of a complaint, the
  342  division shall acknowledge the complaint in writing and notify
  343  the complainant whether the complaint is within the jurisdiction
  344  of the division and whether additional information is needed by
  345  the division from the complainant. The division shall conduct
  346  its investigation and shall, within 90 days after receipt of the
  347  original complaint or of timely requested additional
  348  information, take action upon the complaint. However, the
  349  failure to complete the investigation within 90 days does not
  350  prevent the division from continuing the investigation,
  351  accepting or considering evidence obtained or received after 90
  352  days, or taking administrative action if reasonable cause exists
  353  to believe that a violation of this chapter or a rule of the
  354  division has occurred. If an investigation is not completed
  355  within the time limits established in this paragraph, the
  356  division shall, on a monthly basis, notify the complainant in
  357  writing of the status of the investigation. When reporting its
  358  action to the complainant, the division shall inform the
  359  complainant of any right to a hearing pursuant to ss. 120.569
  360  and 120.57.
  361         (n) Condominium association directors, officers, and
  362  employees; condominium developers; condominium bulk assignees
  363  and bulk buyers; community association managers; and community
  364  association management firms have an ongoing duty to reasonably
  365  cooperate with the division in any investigation pursuant to
  366  this section. The division shall refer to local law enforcement
  367  authorities any person whom the division believes has altered,
  368  destroyed, concealed, or removed any record, document, or thing
  369  required to be kept or maintained by this chapter with the
  370  purpose to impair its verity or availability in the department’s
  371  investigation.
  372         (o) The division may:
  373         1. Contract with agencies in this state or other
  374  jurisdictions to perform investigative functions; or
  375         2. Accept grants-in-aid from any source.
  376         (p) The division shall cooperate with similar agencies in
  377  other jurisdictions to establish uniform filing procedures and
  378  forms, public offering statements, advertising standards, and
  379  rules and common administrative practices.
  380         (q) The division shall consider notice to a developer, bulk
  381  assignee, and bulk buyer to be complete when it is delivered to
  382  the developer’s address of the developer, bulk assignee, or bulk
  383  buyer currently on file with the division.
  384         (r) In addition to its enforcement authority, the division
  385  may issue a notice to show cause, which shall provide for a
  386  hearing, upon written request, in accordance with chapter 120.
  387         (s) The division shall submit to the Governor, the
  388  President of the Senate, the Speaker of the House of
  389  Representatives, and the chairs of the legislative
  390  appropriations committees an annual report that includes, but
  391  need not be limited to, the number of training programs provided
  392  for condominium association board members and unit owners, the
  393  number of complaints received by type, the number and percent of
  394  complaints acknowledged in writing within 30 days and the number
  395  and percent of investigations acted upon within 90 days in
  396  accordance with paragraph (m), and the number of investigations
  397  exceeding the 90-day requirement. The annual report shall also
  398  include an evaluation of the division’s core business processes
  399  and make recommendations for improvements, including statutory
  400  changes. The report shall be submitted by September 30 following
  401  the end of the fiscal year.
  402         Section 3. Part VII of chapter 718, Florida Statutes,
  403  consisting of sections 718.701, 718.702, 718.703, 718.704,
  404  718.705, 718.706, 718.707, and 718.708, is created to read:
  405                              PART VII                             
  406                    DISTRESSED CONDOMINIUM RELIEF                  
  407         718.701 Short title.—This part may be cited as the
  408  “Distressed Condominium Relief Act.”
  409         718.702 Legislative intent.—
  410         (1) The Legislature acknowledges the massive downturn in
  411  the condominium market which has transpired throughout the state
  412  and the impact of such downturn on developers, lenders, unit
  413  owners, and condominium associations. Numerous condominium
  414  projects have either failed or are in the process of failing,
  415  whereby the condominium has a small percentage of third-party
  416  unit owners as compared to the unsold inventory of units. As a
  417  result of the inability to find purchasers for this inventory of
  418  units, which results in part from the devaluing of real estate
  419  in this state, developers are unable to satisfy the requirements
  420  of their lenders, leading to defaults on mortgages.
  421  Consequently, lenders are faced with the task of finding a
  422  solution to the problem in order to be paid for their
  423  investments.
  424         (2) The Legislature recognizes that all of the factors
  425  listed in this section lead to condominiums becoming distressed,
  426  resulting in detriment to the unit owners and the condominium
  427  association on account of the resulting shortage of assessment
  428  moneys available to support the financial requirements for
  429  proper maintenance of the condominium. Such shortage and the
  430  resulting lack of proper maintenance further erode property
  431  values. The Legislature finds that individuals and entities
  432  within Florida and in other states have expressed interest in
  433  purchasing unsold inventory in one or more condominium projects,
  434  but are reticent to do so because of the potential of
  435  accompanying liabilities inherited from the original developer,
  436  which are potentially by definition imputed to the successor
  437  purchaser, including a foreclosing mortgagee. This results in
  438  the potential purchaser having unknown and unquantifiable risks,
  439  and potential successor purchasers are unwilling to accept such
  440  risks. The result is that condominium projects stagnate, leaving
  441  all parties involved at an impasse without the ability to find a
  442  solution.
  443         (3) The Legislature finds and declares that it is the
  444  public policy of this state to protect the interests of
  445  developers, lenders, unit owners, and condominium associations
  446  with regard to distressed condominiums, and that there is a need
  447  for relief from certain provisions of the Florida Condominium
  448  Act geared toward enabling economic opportunities within these
  449  condominiums for successor purchasers, including foreclosing
  450  mortgagees, while at the same time clarifying the ambiguity in
  451  the law. Such relief would benefit existing unit owners and
  452  condominium associations. The Legislature further finds and
  453  declares that this situation cannot be open-ended without
  454  potentially prejudicing the rights of unit owners and
  455  condominium associations, and thereby declares that the
  456  provisions of this part shall be used by purchasers of
  457  condominium inventory for a specific and defined period.
  458         718.703 Definitions.—As used in this part, the term:
  459         (1) “Bulk assignee” means a person who:
  460         (a) Acquires more than seven condominium units in a single
  461  condominium as set forth in s. 718.707; and
  462         (b) Receives an assignment of all or substantially all of
  463  the rights of the developer as are set forth in the declaration
  464  of condominium or in this chapter by a written instrument
  465  recorded as an exhibit to the deed or as a separate instrument
  466  in the public records of the county in which the condominium is
  467  located.
  468         (2) “Bulk buyer” means a person who acquires more than
  469  seven condominium units in a single condominium as set forth in
  470  s. 718.707 but who does not receive an assignment of any
  471  developer rights other than, at the bulk buyer’s option, the
  472  right to conduct sales, leasing, and marketing activities within
  473  the condominium; the right to be exempt from the payment of
  474  working capital contributions to the condominium association
  475  arising out of or in connection with the bulk buyer’s
  476  acquisition of a bulk number of units; and the right to be
  477  exempt from any rights of first refusal which may be held by the
  478  condominium association and would otherwise be applicable to
  479  subsequent transfers of title from the bulk buyer to any third
  480  party purchaser concerning one or more units.
  481         718.704 Assignment of developer rights to and assumption of
  482  developer rights by bulk assignee; bulk buyer.—
  483         (1) A bulk assignee shall be deemed to have assumed and is
  484  liable for all duties and responsibilities of a developer under
  485  the declaration and this chapter, except:
  486         (a) Warranties of a developer under s. 718.203(1) or s.
  487  718.618, except for design, construction, development, or repair
  488  work performed by or on behalf of such bulk assignee.
  489         (b) The obligation to:
  490         1. Fund converter reserves under s. 718.618 for a unit that
  491  was not acquired by the bulk assignee; or
  492         2. Provide converter warranties on any portion of the
  493  condominium property except as may be expressly provided by the
  494  bulk assignee in the contract for purchase and sale executed
  495  with a purchaser and pertaining to any design, construction,
  496  development, or repair work performed by or on behalf of the
  497  bulk assignee.
  498         (c) The requirement to provide the association with a
  499  cumulative audit of the association’s finances from the date of
  500  formation of the condominium association as required by s.
  501  718.301. However, the bulk assignee shall provide an audit for
  502  the period for which the bulk assignee elects a majority of the
  503  members of the board of administration.
  504         (d) Any liability arising out of or in connection with
  505  actions taken by the board of administration or the developer
  506  appointed directors before the bulk assignee elects a majority
  507  of the members of the board of administration.
  508         (e) Any liability for or arising out of the developer’s
  509  failure to fund previous assessments or to resolve budgetary
  510  deficits in relation to a developer’s right to guarantee
  511  assessments, except as otherwise provided in subsection (2).
  512  
  513  Further, the bulk assignee is responsible for delivering
  514  documents and materials in accordance with s. 718.705(3). A bulk
  515  assignee may expressly assume some or all of the obligations of
  516  the developer described in paragraphs (a)-(e).
  517         (2) A bulk assignee receiving the assignment of the rights
  518  of the developer to guarantee the level of assessments and fund
  519  budgetary deficits pursuant to s. 718.116 shall be deemed to
  520  have assumed and is liable for all obligations of the developer
  521  with respect to such guarantee, including any applicable funding
  522  of reserves to the extent required by law, for as long as the
  523  guarantee remains in effect. A bulk assignee not receiving an
  524  assignment of the right of the developer to guarantee the level
  525  of assessments and fund budgetary deficits pursuant to s.
  526  718.116 or a bulk buyer is not deemed to have assumed and is not
  527  liable for the obligations of the developer with respect to such
  528  guarantee, but is responsible for payment of assessments in the
  529  same manner as all other owners of condominium units.
  530         (3) A bulk buyer is liable for the duties and
  531  responsibilities of the developer under the declaration and this
  532  chapter only to the extent provided in this part, together with
  533  any other duties or responsibilities of the developer expressly
  534  assumed in writing by the bulk buyer.
  535         (4) An acquirer of condominium units is not considered a
  536  bulk assignee or a bulk buyer if the transfer to such acquirer
  537  was made prior to the effective date of this Distressed
  538  Condominium Relief Act or was made with the intent to hinder,
  539  delay, or defraud any purchaser, unit owner, or the association,
  540  or if the acquirer is a person who would constitute an insider
  541  under s. 726.102(7).
  542         (5) An assignment of developer rights to a bulk assignee
  543  may be made by the developer, a previous bulk assignee, or a
  544  court of competent jurisdiction acting on behalf of the
  545  developer or the previous bulk assignee. At any particular time,
  546  there may be no more than one bulk assignee within a
  547  condominium, but there may be more than one bulk buyer. If more
  548  than one acquirer of condominium units in the same condominium
  549  receives an assignment of developer rights from the same person,
  550  the bulk assignee is the acquirer whose instrument of assignment
  551  is recorded first in applicable public records.
  552         718.705 Board of administration; transfer of control.—
  553         (1) For purposes of determining the timing for transfer of
  554  control of the board of administration of the association to
  555  unit owners other than the developer under s. 718.301(1)(a) and
  556  (b), if a bulk assignee is entitled to elect a majority of the
  557  members of the board, any condominium unit acquired by the bulk
  558  assignee shall not be deemed to be conveyed to a purchaser, or
  559  to be owned by an owner other than the developer, until such
  560  condominium unit is conveyed to an owner who is not a bulk
  561  assignee.
  562         (2) Unless control of the board of administration of the
  563  association has already been relinquished pursuant to s.
  564  718.301(1), the bulk assignee is obligated to relinquish control
  565  of the association in accordance with s. 718.301(1) or (2) and
  566  this part as if the bulk assignee were the developer.
  567         (3) When a bulk assignee relinquishes control of the board
  568  of administration, the bulk assignee shall deliver all of those
  569  items required by s. 718.301(4). However, the bulk assignee is
  570  not required to deliver items and documents not in the
  571  possession of the bulk assignee during the period during which
  572  the bulk assignee was entitled to elect not less than a majority
  573  of the members of the board of administration. In conjunction
  574  with the acquisition of condominium units, a bulk assignee shall
  575  undertake a good faith effort to obtain the documents and
  576  materials required to be provided to the association pursuant to
  577  s. 718.301(4). To the extent the bulk assignee is not able to
  578  obtain all of such documents and materials, the bulk assignee
  579  shall certify in writing to the association the names or
  580  descriptions of the documents and materials that were not
  581  obtainable by the bulk assignee. Delivery of the certificate
  582  relieves the bulk assignee of responsibility for the delivery of
  583  the documents and materials referenced in the certificate as
  584  otherwise required under ss. 718.112 and 718.301 and this part.
  585  The responsibility of the bulk assignee for the audit required
  586  by s. 718.301(4) shall commence as of the date on which the bulk
  587  assignee elected a majority of the members of the board of
  588  administration.
  589         (4) If a conflict arises between the provisions or
  590  application of this section and s. 718.301, this section shall
  591  prevail.
  592         (5) Failure of a bulk assignee or bulk buyer to
  593  substantially comply with all the requirements contained in this
  594  part shall result in the loss of all protections or exemptions
  595  provided under this part.
  596         718.706 Specific provisions pertaining to offering of units
  597  by a bulk assignee or bulk buyer.—
  598         (1) Before offering any units for sale or for lease for a
  599  term exceeding 5 years, a bulk assignee or a bulk buyer shall
  600  file the following documents with the division and provide such
  601  documents to a prospective purchaser or lessee:
  602         (a) An updated prospectus or offering circular, or a
  603  supplement to the prospectus or offering circular, filed by the
  604  creating developer prepared in accordance with s. 718.504, which
  605  shall include the form of contract for sale and for lease in
  606  compliance with s. 718.503(1)(a);
  607         (b) An updated Frequently Asked Questions and Answers
  608  sheet;
  609         (c) The executed escrow agreement if required under s.
  610  718.202; and
  611         (d) The financial information required by s. 718.111(13).
  612  However, if a financial information report does not exist for
  613  the fiscal year before acquisition of title by the bulk assignee
  614  or bulk buyer, or accounting records cannot be obtained in good
  615  faith by the bulk assignee or the bulk buyer which would permit
  616  preparation of the required financial information report, the
  617  bulk assignee or bulk buyer is excused from the requirement of
  618  this paragraph. However, the bulk assignee or bulk buyer must
  619  include in the purchase contract the following statement in
  620  conspicuous type:
  621  
  622  THE FINANCIAL INFORMATION REPORT REQUIRED UNDER SECTION
  623  718.111(13), FLORIDA STATUTES, FOR THE IMMEDIATELY PRECEDING
  624  FISCAL YEAR OF THE ASSOCIATION IS NOT AVAILABLE OR CANNOT BE
  625  CREATED BY THE SELLER AS A RESULT OF INSUFFICIENT ACCOUNTING
  626  RECORDS OF THE ASSOCIATION.
  627  
  628         (2) Before offering any units for sale or for lease for a
  629  term exceeding 5 years, a bulk assignee shall file with the
  630  division and provide to a prospective purchaser a disclosure
  631  statement that must include, but is not limited to:
  632         (a) A description of any rights of the developer which have
  633  been assigned to the bulk assignee;
  634         (b) The following statement in conspicuous type:
  635  
  636  THE SELLER IS NOT OBLIGATED FOR ANY WARRANTIES OF THE DEVELOPER
  637  UNDER SECTION 718.203(1) OR SECTION 718.618, FLORIDA STATUTES,
  638  AS APPLICABLE, EXCEPT FOR DESIGN, CONSTRUCTION, DEVELOPMENT, OR
  639  REPAIR WORK PERFORMED BY OR ON BEHALF OF SELLER.
  640  
  641         (c) If the condominium is a conversion subject to part VI,
  642  the following statement in conspicuous type:
  643  
  644  THE SELLER HAS NO OBLIGATION TO FUND CONVERTER RESERVES OR TO
  645  PROVIDE CONVERTER WARRANTIES UNDER SECTION 718.618, FLORIDA
  646  STATUTES, ON ANY PORTION OF THE CONDOMINIUM PROPERTY EXCEPT AS
  647  MAY BE EXPRESSLY REQUIRED OF THE SELLER IN THE CONTRACT FOR
  648  PURCHASE AND SALE EXECUTED BY THE SELLER AND THE DEVELOPER AND
  649  PERTAINING TO ANY DESIGN, CONSTRUCTION, DEVELOPMENT, OR REPAIR
  650  WORK PERFORMED BY OR ON BEHALF OF THE SELLER.
  651  
  652         (3) While in control of the board of administration of the
  653  association, a bulk assignee may not authorize, on behalf of the
  654  association:
  655         (a) The waiver of reserves or the reduction of funding of
  656  the reserves in accordance with s. 718.112(2)(f)2., unless
  657  approved by a majority of the voting interests not controlled by
  658  the developer, bulk assignee, and bulk buyer; or
  659         (b) The use of reserve expenditures for other purposes in
  660  accordance with s. 718.112(2)(f)3., unless approved by a
  661  majority of the voting interests not controlled by the
  662  developer, bulk assignee, and bulk buyer.
  663         (4) A bulk assignee or bulk buyer shall comply with all the
  664  requirements of s. 718.302 regarding any contracts entered into
  665  by the association during the period the bulk assignee or bulk
  666  buyer maintains control of the board of administration. Unit
  667  owners shall be afforded all the protections contained in s.
  668  718.302 regarding agreements entered into by the association
  669  before unit owners other than the developer, bulk assignee, or
  670  bulk buyer elected a majority of the board of administration.
  671         (5) A bulk buyer shall comply with the requirements
  672  contained in the declaration regarding any transfer of a unit,
  673  including sales, leases, and subleases. A bulk buyer is not
  674  entitled to any exemptions afforded a developer or successor
  675  developer under this chapter regarding any transfer of a unit,
  676  including sales, leases, or subleases.
  677         718.707 Time limitation for classification as bulk assignee
  678  or bulk buyer.—A person acquiring condominium units may not be
  679  classified as a bulk assignee or bulk buyer unless the
  680  condominium units were acquired before July 1, 2012. The date of
  681  such acquisition shall be determined by the date of recording of
  682  a deed or other instrument of conveyance for such units in the
  683  public records of the county in which the condominium is located
  684  or by the date of issuance of a certificate of title in a
  685  foreclosure proceeding with respect to such condominium units.
  686         718.708 Liability of developers and others.—An assignment
  687  of developer rights to a bulk assignee or bulk buyer does not
  688  release the creating developer from any liabilities under the
  689  declaration or this chapter. This part does not limit the
  690  liability of the creating developer for claims brought by unit
  691  owners, bulk assignees, or bulk buyers for violations of this
  692  chapter by the creating developer, unless specifically excluded
  693  in this part. Nothing contained within this part waives,
  694  releases, compromises, or limits the liability of contractors,
  695  subcontractors, materialmen, manufacturers, architects,
  696  engineers, or any participant in the design or construction of a
  697  condominium for any claim brought by an association, unit
  698  owners, bulk assignees, or bulk buyers arising from the design
  699  of the condominium, construction defects, misrepresentations
  700  associated with condominium property, or violations of this
  701  chapter, unless specifically excluded in this part.
  702         Section 4. This act shall take effect upon becoming a law.

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