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Senate Bill 2984

Senate Bill sb2984

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    Florida Senate - 2004                                  SB 2984

    By Senator Atwater





    25-1330A-04

  1                      A bill to be entitled

  2         An act relating to homeowners' associations;

  3         amending s. 720.301, F.S.; defining the term

  4         "division"; amending s. 720.302, F.S.;

  5         prescribing a legislative purpose of providing

  6         alternative dispute resolution procedures for

  7         disputes involving elections and recalls;

  8         amending s. 720.303, F.S.; prescribing rights

  9         of members and parcel owners to attend and

10         address association board meetings and to have

11         items placed on an agenda; prescribing

12         additional requirements for notice of meetings;

13         providing for additional materials to be

14         maintained as records; providing additional

15         requirements and limitations with respect to

16         inspecting and copying records; providing

17         requirements with respect to financial

18         statements; providing procedures for recall of

19         directors; amending s. 720.304, F.S.;

20         prescribing owners' rights with respect to flag

21         display; prohibiting certain lawsuits against

22         parcel owners; providing penalties; amending s.

23         720.305, F.S.; providing that a fine by an

24         association cannot become a lien against a

25         parcel; providing for attorney's fees in

26         actions to recover fines; creating s. 720.3055,

27         F.S.; prescribing requirements for contracts

28         for products and services; amending s. 720.306,

29         F.S.; providing for notice of and right to

30         speak at member meetings; requiring election

31         disputes between a member and an association to

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    Florida Senate - 2004                                  SB 2984
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 1         be submitted to mandatory binding arbitration;

 2         amending s. 720.311, F.S.; expanding

 3         requirements and guidelines with respect to

 4         alternative dispute resolution; providing

 5         requirements for mediation and arbitration;

 6         providing for training and education programs;

 7         transferring, renumbering, and amending s.

 8         689.26, F.S.; prescribing standards for a

 9         disclosure summary of association membership

10         requirements; creating s. 720.402, F.S.;

11         providing remedies for publication of false and

12         misleading information; creating s. 720.501,

13         F.S.; providing implied warranties relating to

14         real and personal property; amending s. 34.01,

15         F.S.; providing jurisdiction of disputes

16         involving homeowners' associations; amending

17         ss. 316.00825, 558.002, F.S.; conforming

18         cross-references; providing for internal

19         organization of ch. 720, F.S.; providing an

20         effective date.

21  

22  Be It Enacted by the Legislature of the State of Florida:

23  

24         Section 1.  Present subsections (6) through (11) of

25  section 720.301, Florida Statutes, are renumbered as

26  subsections (7) through (12), respectively, and a new

27  subsection (6) is added to that section, to read:

28         720.301  Definitions.--As used in ss. 720.301-720.312,

29  the term:

30  

31  

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    Florida Senate - 2004                                  SB 2984
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 1         (6)  "Division" means the Division of Florida Land

 2  Sales, Condominiums, and Mobile Homes in the Department of

 3  Business and Professional Regulation.

 4         Section 2.  Subsection (2) of section 720.302, Florida

 5  Statutes, is amended to read:

 6         720.302  Purposes, scope, and application.--

 7         (2)  The Legislature recognizes that it is not in the

 8  best interest of homeowners' associations or the individual

 9  association members thereof to create or impose a bureau or

10  other agency of state government to regulate the affairs of

11  homeowners' associations. However, in accordance with s.

12  720.311, the Legislature finds that homeowners' associations

13  and their individual members will benefit from an expedited

14  alternative process for resolution of election and recall

15  disputes and presuit mediation of other disputes involving

16  covenant enforcement and authorizes the division to hear,

17  administer, and determine these disputes as more fully set

18  forth in this chapter. Further, the Legislature recognizes

19  that certain contract rights have been created for the benefit

20  of homeowners' associations and members thereof before the

21  effective date of this act and that ss. 720.301-720.501 ss.

22  720.301-720.312 are not intended to impair such contract

23  rights, including, but not limited to, the rights of the

24  developer to complete the community as initially contemplated.

25         Section 3.  Section 720.303, Florida Statutes, is

26  amended to read:

27         720.303  Association powers and duties; meetings of

28  board; official records; budgets; financial reporting;

29  association funds; recalls.--

30         (1)  POWERS AND DUTIES.--An association which operates

31  a community as defined in s. 720.301, must be operated by an

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    Florida Senate - 2004                                  SB 2984
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 1  association that is a Florida corporation. After October 1,

 2  1995, the association must be incorporated and the initial

 3  governing documents must be recorded in the official records

 4  of the county in which the community is located. An

 5  association may operate more than one community. The officers

 6  and directors of an association have a fiduciary relationship

 7  to the members who are served by the association. It is the

 8  intent of the Legislature that nothing in this subsection be

 9  construed as providing for or removing a requirement of a

10  fiduciary relationship between any manager employed by the

11  association and the parcel owners. An officer, director, or

12  manager may not solicit, offer to accept, or accept any thing

13  or service of value for which consideration has not been

14  provided for his or her own benefit, or that of his or her

15  immediate family, from any person providing or proposing to

16  provide goods or services to the association. Any such

17  officer, director, or manager who knowingly so solicits,

18  offers to accept, or accepts any thing or service of value

19  commits a felony of the third degree, punishable as provided

20  in s. 775.082 or s. 775.084, and shall thereafter be

21  permanently disqualified from serving on the board of

22  directors of the association or serving as an officer of the

23  association. However, this subsection does not prohibit an

24  officer, director, or manager from accepting customary

25  amenities provided in business relationships, such as food and

26  drinks at meetings or conferences, business lunches not

27  exceeding $20 per person, or marketing trinkets, which

28  include, but are not limited to, pens, key chains, scribble

29  pads, and calendars, provided that the value of each item does

30  not exceed $20. The powers and duties of an association

31  include those set forth in this chapter and, except as

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 1  expressly limited or restricted in this chapter, those set

 2  forth in the governing documents. After control of the

 3  association is obtained by members unit owners other than the

 4  developer, the association may institute, maintain, settle, or

 5  appeal actions or hearings in its name on behalf of all

 6  members concerning matters of common interest to the members,

 7  including, but not limited to, the common areas; roof or

 8  structural components of a building, or other improvements for

 9  which the association is responsible; mechanical, electrical,

10  or plumbing elements serving an improvement or building for

11  which the association is responsible; representations of the

12  developer pertaining to any existing or proposed commonly used

13  facility; and protesting ad valorem taxes on commonly used

14  facilities. The association may defend actions in eminent

15  domain or bring inverse condemnation actions. Before

16  commencing litigation against any party in the name of the

17  association involving amounts in controversy in excess of

18  $100,000, the association must obtain the affirmative approval

19  of a majority of the voting interests at a meeting of the

20  membership at which a quorum has been attained. This

21  subsection does not limit any statutory or common-law right of

22  any individual member or class of members to bring any action

23  without participation by the association. A member does not

24  have authority to act for the association by virtue of being a

25  member. An association may have more than one class of members

26  and may issue membership certificates.

27         (2)  BOARD MEETINGS.--

28         (a)  A meeting of the board of directors of an

29  association occurs whenever a quorum of the board gathers to

30  conduct association business.  All meetings of the board must

31  be open to all members except for meetings between the board

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    Florida Senate - 2004                                  SB 2984
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 1  and its attorney with respect to proposed or pending

 2  litigation where the contents of the discussion would

 3  otherwise be governed by the attorney-client privilege.

 4         (b)  Parcel owners and members have the right to attend

 5  all meetings and to speak at any meeting with reference to all

 6  items opened for discussion or included on the agenda.

 7  Notwithstanding any provision to the contrary in the governing

 8  documents or any rules adopted by the board or by the

 9  membership, a parcel owner and member has the right to speak

10  for at least 3 minutes on any item, provided that the parcel

11  owner and member submits a request to speak prior to the

12  commencement of the meeting. The association may adopt written

13  reasonable rules governing the frequency, duration, and other

14  manner of parcel owner or member statements, which rules must

15  be consistent with this paragraph. Notwithstanding any other

16  law, the requirement that board meetings and committee

17  meetings be open to the parcel owners and members is

18  inapplicable to meetings between the board or a committee and

19  the association's attorney, with respect to proposed or

20  pending litigation, when the meeting is held for the purpose

21  of seeking or rendering legal advice, and to meetings of the

22  board held for the purpose of discussing personnel matters.

23         (c)  The bylaws shall provide for giving notice to

24  parcel owners and members of all board meetings and, if they

25  do not do so, shall be deemed to provide the following:

26         1.  Notices of all board meetings must be posted in a

27  conspicuous place in the community at least 48 hours in

28  advance of a meeting, except in an emergency.  In the

29  alternative, if notice is not posted in a conspicuous place in

30  the community, notice of each board meeting must be mailed or

31  delivered to each member at least 7 days before the meeting,

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 1  except in an emergency. Notwithstanding this general notice

 2  requirement, for communities with more than 100 members, the

 3  bylaws may provide for a reasonable alternative to posting or

 4  mailing of notice for each board meeting, including

 5  publication of notice, provision of a schedule of board

 6  meetings, or the conspicuous posting and repeated broadcasting

 7  of the notice on a closed-circuit cable television system

 8  serving the homeowners' association. However, if broadcast

 9  notice is used in lieu of a notice posted physically in the

10  community, the notice must be broadcast at least four times

11  every broadcast hour of each day that a posted notice is

12  otherwise required. When broadcast notice is provided, the

13  notice and agenda must be broadcast in a manner and for a

14  sufficient continuous length of time so as to allow an average

15  reader to observe the notice and read and comprehend the

16  entire content of the notice and the agenda. The bylaws or

17  amended bylaws may provide for giving notice by electronic

18  transmission in a manner authorized by law for meetings of the

19  board of directors, committee meetings requiring notice under

20  this section, and annual and special meetings of the members;

21  however, a member must consent in writing to receiving notice

22  by electronic transmission.

23         2.  An assessment may not be levied at a board meeting

24  unless the notice of the meeting includes a statement that

25  assessments will be considered and the nature of the

26  assessments. Written notice of any meeting at which special

27  assessments will be considered or at which amendments to rules

28  regarding parcel use will be considered must be mailed,

29  delivered, or electronically transmitted to the members and

30  parcel owners and posted conspicuously on the property or

31  

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    Florida Senate - 2004                                  SB 2984
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 1  broadcast on closed-circuit cable television not less than 14

 2  days before the meeting.

 3         3.  Directors may not vote by proxy or by secret ballot

 4  at board meetings, except that secret ballots may be used in

 5  the election of officers.  This subsection also applies to the

 6  meetings of any committee or other similar body, when a final

 7  decision will be made regarding the expenditure of association

 8  funds, and to any body vested with the power to approve or

 9  disapprove architectural decisions with respect to a specific

10  parcel of residential property owned by a member of the

11  community.

12         (d)  If 20 percent of the total voting interests

13  petition the board to address an item of business, the board

14  shall at its next board meeting or special meeting, but not

15  later than 60 days after the receipt of the petition, take the

16  petitioned item up on its agenda. The board shall give all

17  members notice of the meeting at which the petitioned item

18  shall be addressed in accordance with the 14-day notice

19  requirement pursuant to subsection (2). Other than addressing

20  the item at the meeting, the board is not obligated to take

21  any other action requested by the petition.

22         (3)  MINUTES.--Minutes of all meetings of the members

23  of an association and of the board of directors of an

24  association must be maintained in written form or in another

25  form that can be converted into written form within a

26  reasonable time.  A vote or abstention from voting on each

27  matter voted upon for each director present at a board meeting

28  must be recorded in the minutes.

29         (4)  OFFICIAL RECORDS.--The association shall maintain

30  each of the following items, when applicable, which constitute

31  the official records of the association:

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 1         (a)  Copies of any plans, specifications, permits, and

 2  warranties related to improvements constructed on the common

 3  areas or other property that the association is obligated to

 4  maintain, repair, or replace.

 5         (b)  A copy of the bylaws of the association and of

 6  each amendment to the bylaws.

 7         (c)  A copy of the articles of incorporation of the

 8  association and of each amendment thereto.

 9         (d)  A copy of the declaration of covenants and a copy

10  of each amendment thereto.

11         (e)  A copy of the current rules of the homeowners'

12  association.

13         (f)  The minutes of all meetings of the board of

14  directors and of the members, which minutes must be retained

15  for at least 7 years.

16         (g)  A current roster of all members and their mailing

17  addresses and parcel identifications. The association shall

18  also maintain the electronic mailing addresses and the numbers

19  designated by members for receiving notice sent by electronic

20  transmission of those members consenting to receive notice by

21  electronic transmission. The electronic mailing addresses and

22  numbers provided by unit owners to receive notice by

23  electronic transmission shall be removed from association

24  records when consent to receive notice by electronic

25  transmission is revoked. However, the association is not

26  liable for an erroneous disclosure of the electronic mail

27  address or the number for receiving electronic transmission of

28  notices.

29         (h)  All of the association's insurance policies or a

30  copy thereof, which policies must be retained for at least 7

31  years.

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 1         (i)  A current copy of all contracts to which the

 2  association is a party, including, without limitation, any

 3  management agreement, lease, or other contract under which the

 4  association has any obligation or responsibility.  Bids

 5  received by the association for work to be performed must also

 6  be considered official records and must be kept for a period

 7  of 1 year.

 8         (j)  The financial and accounting records of the

 9  association, kept according to good accounting practices.  All

10  financial and accounting records must be maintained for a

11  period of at least 7 years.  The financial and accounting

12  records must include:

13         1.  Accurate, itemized, and detailed records of all

14  receipts and expenditures.

15         2.  A current account and a periodic statement of the

16  account for each member, designating the name and current

17  address of each member who is obligated to pay assessments,

18  the due date and amount of each assessment or other charge

19  against the member, the date and amount of each payment on the

20  account, and the balance due.

21         3.  All tax returns, financial statements, and

22  financial reports of the association.

23         4.  Any other records that identify, measure, record,

24  or communicate financial information.

25         (k)  A copy of the disclosure summary described in s.

26  720.401(2).

27         (l)  All other written records of the association not

28  specifically included in the foregoing which are related to

29  the operation of the association.

30         (5)  INSPECTION AND COPYING OF RECORDS.--The official

31  records shall be maintained within the state and must be open

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 1  to inspection and available for photocopying by members or

 2  their authorized agents at reasonable times and places within

 3  10 business days after receipt of a written request for

 4  access. This subsection may be complied with by having a copy

 5  of the official records available for inspection or copying in

 6  the community. If the association has a photocopy machine

 7  available where the records are maintained, it must provide

 8  parcel owners with copies on request during the inspection if

 9  the entire request is limited to no more than 25 pages.

10         (a)  The failure of an association to provide access to

11  the records within 10 business days after receipt of a written

12  request creates a rebuttable presumption that the association

13  willfully failed to comply with this subsection.

14         (b)  A member who is denied access to official records

15  is entitled to the actual damages or minimum damages for the

16  association's willful failure to comply with this subsection.

17  The minimum damages are to be $50 per calendar day up to 10

18  days, the calculation to begin on the 11th business day after

19  receipt of the written request.

20         (c)  The association may adopt reasonable written rules

21  governing the frequency, time, location, notice, records to be

22  inspected, and manner of inspections, but may not impose a

23  requirement that a parcel owner demonstrate any proper purpose

24  for the inspection, state any reason for the inspection, or

25  limit a parcel owner's right to inspect records to less than

26  one 8-hour business day per month. The association and may

27  impose fees to cover the costs of providing copies of the

28  official records, including, without limitation, the costs of

29  copying. The association may charge up to 50 cents per page

30  for copies made on the association's photocopier. If the

31  association does not have a photocopy machine available where

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 1  the records are kept, or if the records requested to be copied

 2  exceed 25 pages in length, the association may have copies

 3  made by an outside vendor and may charge the actual cost of

 4  copying. The association shall maintain an adequate number of

 5  copies of the recorded governing documents, to ensure their

 6  availability to members and prospective members, and may

 7  charge only its actual costs for reproducing and furnishing

 8  these documents to those persons who are entitled to receive

 9  them. Notwithstanding the provisions of this paragraph, the

10  following records shall not be accessible to members or parcel

11  owners:

12         1.  Any record protected by the lawyer-client privilege

13  as described in s. 90.502 and any record protected by the

14  work-product privilege, including, but not limited to, any

15  record prepared by an association attorney or prepared at the

16  attorney's express direction which reflects a mental

17  impression, conclusion, litigation strategy, or legal theory

18  of the attorney or the association and was prepared

19  exclusively for civil or criminal litigation or for

20  adversarial administrative proceedings or which was prepared

21  in anticipation of imminent civil or criminal litigation or

22  imminent adversarial administrative proceedings until the

23  conclusion of the litigation or adversarial administrative

24  proceedings.

25         2.  Information obtained by an association in

26  connection with the approval of the lease, sale, or other

27  transfer of a parcel.

28         3.  Disciplinary, health, insurance, and personnel

29  records of the association's employees.

30         4.  Medical records of parcel owners or community

31  residents.

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 1         (6)  BUDGETS.--The association shall prepare an annual

 2  budget. The budget must reflect the estimated revenues and

 3  expenses for that year and the estimated surplus or deficit as

 4  of the end of the current year.  The budget must set out

 5  separately all fees or charges for recreational amenities,

 6  whether owned by the association, the developer, or another

 7  person.  The association shall provide each member with a copy

 8  of the annual budget or a written notice that a copy of the

 9  budget is available upon request at no charge to the member.

10  The copy must be provided to the member within the time limits

11  set forth in subsection (5).

12         (7)  FINANCIAL REPORTING.--The association shall

13  prepare an annual financial report within 60 days after the

14  close of the fiscal year. The association shall, within the

15  time limits set forth in subsection (5), provide each member

16  with a copy of the annual financial report or a written notice

17  that a copy of the financial report is available upon request

18  at no charge to the member. Financial reports shall be

19  prepared as follows The financial report must consist of

20  either:

21         (a)  An association that meets the criteria of this

22  paragraph shall prepare or cause to be prepared a complete set

23  of financial statements in accordance with generally accepted

24  accounting principles. The financial statements shall be based

25  upon the association's total annual revenues, as follows:

26         1.  An association with total annual revenues of

27  $100,000 or more, but less than $200,000, shall prepare

28  compiled financial statements.

29         2.  An association with total annual revenues of at

30  least $200,000, but less than $400,000, shall prepare reviewed

31  financial statements.

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 1         3.  An association with total annual revenues of

 2  $400,000 or more shall prepare audited financial statements.

 3  Financial statements presented in conformity with generally

 4  accepted accounting principles; or

 5         (b)  A financial report of actual receipts and

 6  expenditures, cash basis, which report must show:

 7         1.  An association with total annual revenues of less

 8  than $100,000 shall prepare a report of cash receipts and

 9  expenditures. The amount of receipts and expenditures by

10  classification; and

11         2.  An association in a community of fewer than 50

12  parcels, regardless of the association's annual revenues, may

13  prepare a report of cash receipts and expenditures in lieu of

14  financial statements required by paragraph (a) unless the

15  governing documents provide otherwise. The beginning and

16  ending cash balances of the association.

17         3.  A report of cash receipts and disbursement must

18  disclose the amount of receipts by accounts and receipt

19  classifications and the amount of expenses by accounts and

20  expense classifications, including, but not limited to, the

21  following, as applicable: costs for security, professional,

22  and management fees and expenses; taxes; costs for recreation

23  facilities; expenses for refuse collection and utility

24  services; expenses for lawn care; costs for building

25  maintenance and repair; insurance costs; administration and

26  salary expenses; and reserves if maintained by the

27  association.

28         (c)  If 20 percent of the parcel owners petition the

29  board for a level of financial reporting higher than that

30  required by this section, the association shall duly notice

31  and hold a meeting of members within 30 days of receipt of the

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 1  petition for the purpose of voting on raising the level of

 2  reporting for that fiscal year. Upon approval of a majority of

 3  the total voting interests of the parcel owners, the

 4  association shall prepare or cause to be prepared, shall amend

 5  the budget or adopt a special assessment to pay for the

 6  financial report regardless of any provision to the contrary

 7  in the governing documents, and shall provide within 90 days

 8  of the meeting or the end of the fiscal year, whichever occurs

 9  later:

10         1.  Compiled, reviewed, or audited financial

11  statements, if the association is otherwise required to

12  prepare a report of cash receipts and expenditures;

13         2.  Reviewed or audited financial statements, if the

14  association is otherwise required to prepare compiled

15  financial statements; or

16         3.  Audited financial statements if the association is

17  otherwise required to prepare reviewed financial statements.

18         (d)  If approved by a majority of the voting interests

19  present at a properly called meeting of the association, an

20  association may prepare or cause to be prepared:

21         1.  A report of cash receipts and expenditures in lieu

22  of a compiled, reviewed, or audited financial statement;

23         2.  A report of cash receipts and expenditures or a

24  compiled financial statement in lieu of a reviewed or audited

25  financial statement; or

26         3.  A report of cash receipts and expenditures, a

27  compiled financial statement, or a reviewed financial

28  statement in lieu of an audited financial statement.

29         (8)  ASSOCIATION FUNDS; COMMINGLING.--

30         (a)  All association funds held by a developer shall be

31  maintained separately in the association's name. Reserve and

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 1  operating funds of the association shall not be commingled

 2  prior to turnover except the association may jointly invest

 3  reserve funds; however, such jointly invested funds must be

 4  accounted for separately.

 5         (b)  No developer in control of a homeowners'

 6  association shall commingle any association funds with his or

 7  her funds or with the funds of any other homeowners'

 8  association or community association.

 9         (c)  Association funds may not be used by a developer

10  to defend a civil or criminal action, administrative

11  proceeding, or arbitration proceeding that has been filed

12  against the developer or directors appointed to the

13  association board by the developer, even when the subject of

14  the action or proceeding concerns the operation of the

15  developer-controlled association.

16         (9)  APPLICABILITY.--Sections 617.1601-617.1604 do not

17  apply to a homeowners' association in which the members have

18  the inspection and copying rights set forth in this section.

19         (10)  RECALL OF DIRECTORS.--

20         (a)1.  Regardless of any provision to the contrary

21  contained in the governing documents, subject to the

22  provisions of s. 720.307 regarding transition of association

23  control, any member of the board or directors may be recalled

24  and removed from office with or without cause by a majority of

25  the total voting interests.

26         2.  When the governing documents, including the

27  declaration, articles of incorporation, or bylaws, provide

28  that only a specific class of members is entitled to elect a

29  board director or directors, only that class of members may

30  vote to recall those board directors so elected.

31  

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 1         (b)1.  Board directors may be recalled by an agreement

 2  in writing or by written ballot without a membership meeting.

 3  The agreement in writing or the written ballots, or a copy

 4  thereof, shall be served on the association by certified mail

 5  or by personal service in the manner authorized by chapter 48

 6  and the Florida Rules of Civil Procedure.

 7         2.  The board shall duly notice and hold a meeting of

 8  the board within 5 full business days after receipt of the

 9  agreement in writing or written ballots. At the meeting, the

10  board shall either certify the written ballots or written

11  agreement to recall a director or directors of the board, in

12  which case such director or directors shall be recalled

13  effective immediately and shall turn over to the board within

14  5 full business days any and all records and property of the

15  association in their possession, or proceed as described in

16  paragraph (d).

17         3.  When it is determined by the division pursuant to

18  binding arbitration proceedings that an initial recall effort

19  was defective, written recall agreements or written ballots

20  used in the first recall effort and not found to be defective

21  may be reused in one subsequent recall effort. However, in no

22  event is a written agreement or written ballot valid for more

23  than 120 days after it has been signed by the member.

24         4.  Any rescission or revocation of a member's written

25  recall ballot or agreement must be in writing and, in order to

26  be effective, must be delivered to the association before the

27  association is served with the written recall agreements or

28  ballots.

29         5.  The agreement in writing or ballot shall list at

30  least as many possible replacement directors as there are

31  directors subject to the recall, when at least a majority of

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 1  the board is sought to be recalled; the person executing the

 2  recall instrument may vote for as many replacement candidates

 3  as there are directors subject to the recall.

 4         (c)1.  If the declaration, articles of incorporation,

 5  or bylaws specifically provide, the members may also recall

 6  and remove a board director or directors by a vote taken at a

 7  meeting. If so provided in the governing documents, a special

 8  meeting of the members to recall a director or directors of

 9  the board of administration may be called by 10 percent of the

10  voting interests giving notice of the meeting as required for

11  a meeting of members, and the notice shall state the purpose

12  of the meeting. Electronic transmission may not be used as a

13  method of giving notice of a meeting called in whole or in

14  part for this purpose.

15         2.  The board shall duly notice and hold a board

16  meeting within 5 full business days after the adjournment of

17  the member meeting to recall one or more directors. At the

18  meeting, the board shall certify the recall, in which case

19  such member or members shall be recalled effective immediately

20  and shall turn over to the board within 5 full business days

21  any and all records and property of the association in their

22  possession, or shall proceed as set forth in subparagraph (d).

23         (d)  If the board determines not to certify the written

24  agreement or written ballots to recall a director or directors

25  of the board or does not certify the recall by a vote at a

26  meeting, the board shall, within 5 full business days after

27  the meeting, file with the division a petition for binding

28  arbitration pursuant to the applicable procedures in ss.

29  718.1255 and 718.112(2)(j) and the rules adopted thereunder.

30  For the purposes of this section, the members who voted at the

31  meeting or who executed the agreement in writing shall

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 1  constitute one party under the petition for arbitration. If

 2  the arbitrator certifies the recall as to any director or

 3  directors of the board, the recall will be effective upon

 4  mailing of the final order of arbitration to the association.

 5  The director or directors so recalled shall deliver to the

 6  board any and all records of the association in their

 7  possession within 5 full business days after the effective

 8  date of the recall.

 9         (e)  If a vacancy occurs on the board as a result of a

10  recall and less than a majority of the board directors are

11  removed, the vacancy may be filled by the affirmative vote of

12  a majority of the remaining directors, notwithstanding any

13  provision to the contrary contained in this subsection or in

14  the association documents. If vacancies occur on the board as

15  a result of a recall and a majority or more of the board

16  directors are removed, the vacancies shall be filled by

17  members voting in favor of the recall; if removal is at a

18  meeting, any vacancies shall be filled by the members at the

19  meeting. If the recall occurred by agreement in writing or by

20  written ballot, members may vote for replacement directors in

21  the same instrument in accordance with procedural rules

22  adopted by the division, which rules need not be consistent

23  with this subsection.

24         (f)  If the board fails to duly notice and hold a board

25  meeting within 5 full business days after service of an

26  agreement in writing or within 5 full business days after the

27  adjournment of the member recall meeting, the recall shall be

28  deemed effective and the board directors so recalled shall

29  immediately turn over to the board all records and property of

30  the association.

31  

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 1         (g)  If a director who is removed fails to relinquish

 2  his or her office or turn over records as required under this

 3  section, the circuit court in the county where the association

 4  maintains its principal office may, upon the petition of the

 5  association, summarily order the director to relinquish his or

 6  her office and turn over all association records upon

 7  application of the association.

 8         (h)  The minutes of the board meeting at which the

 9  board decides whether to certify the recall are an official

10  association record. The minutes must record the date and time

11  of the meeting, the decision of the board, and the vote count

12  taken on each board member subject to the recall. In addition,

13  when the board decides not to certify the recall, as to each

14  vote rejected, the minutes must identify the parcel number and

15  the specific reason for each such rejection.

16         (i)  When the recall of more than one board director is

17  sought, the written agreement, ballot, or vote at a meeting

18  shall provide for a separate vote for each board director

19  sought to be recalled.

20         Section 4.  Section 720.304, Florida Statutes, is

21  amended to read:

22         720.304  Right of owners to peaceably assemble; display

23  of flag; SLAPP suits prohibited.--

24         (1)  All common areas and recreational facilities

25  serving any homeowners' association shall be available to

26  parcel owners in the homeowners' association served thereby

27  and their invited guests for the use intended for such common

28  areas and recreational facilities.  The entity or entities

29  responsible for the operation of the common areas and

30  recreational facilities may adopt reasonable rules and

31  regulations pertaining to the use of such common areas and

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 1  recreational facilities.  No entity or entities shall

 2  unreasonably restrict any parcel owner's right to peaceably

 3  assemble or right to invite public officers or candidates for

 4  public office to appear and speak in common areas and

 5  recreational facilities.

 6         (2)  Any homeowner may display one portable, removable

 7  United States flag or official flag of the State of Florida in

 8  a respectful manner, and on Armed Forces Day, Memorial Day,

 9  Flag Day, Independence Day, and Veterans Day may display in a

10  respectful manner portable, removable official flags, not

11  larger than 4 1/2 feet by 6 feet, which represents the United

12  States Army, Navy, Air Force, Marine Corps, or Coast Guard,

13  regardless of any declaration rules or requirements dealing

14  with flags or decorations.

15         (3)  Any owner prevented from exercising rights

16  guaranteed by subsection (1) or subsection (2) may bring an

17  action in the appropriate court of the county in which the

18  alleged infringement occurred, and, upon favorable

19  adjudication, the court shall enjoin the enforcement of any

20  provision contained in any homeowners' association document or

21  rule that operates to deprive the owner of such rights.

22         (4)  It is the intent of the Legislature to protect the

23  right of parcel owners to exercise their rights to instruct

24  their representatives and petition for redress of grievances

25  before the various governmental entities of this state as

26  protected by the First Amendment to the United States

27  Constitution and s. 5, Art. I of the State Constitution. The

28  Legislature recognizes that "Strategic Lawsuits Against Public

29  Participation" or "SLAPP" suits, as they are typically called,

30  have occurred when members are sued by individuals, business

31  entities, or governmental entities arising out of a parcel

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 1  owner's appearance and presentation before a governmental

 2  entity on matters related to the homeowners' association.

 3  However, it is the public policy of this state that government

 4  entities, business organizations, and individuals not engage

 5  in SLAPP suits because such actions are inconsistent with the

 6  right of parcel owner to participate in the state's

 7  institutions of government. Therefore, the Legislature finds

 8  and declares that prohibiting such lawsuits by governmental

 9  entities, business entities, and individuals against parcel

10  owners who address matters concerning their homeowners'

11  association will preserve this fundamental state policy,

12  preserve the constitutional rights of parcel owners, and

13  assure the continuation of representative government in this

14  state. It is the intent of the Legislature that such lawsuits

15  be expeditiously disposed of by the courts.

16         (a)  As used in this subsection, the term "governmental

17  entity" means the state, including the executive, legislative,

18  and judicial branches of government, the independent

19  establishments of the state, counties, municipalities,

20  districts, authorities, boards, or commissions, or any

21  agencies of these branches which are subject to chapter 286.

22         (b)  A governmental entity, business organization, or

23  individual in this state may not file or cause to be filed

24  through its employees or agents any lawsuit, cause of action,

25  claim, cross-claim, or counterclaim against a parcel owner

26  without merit and solely because such parcel owner has

27  exercised the right to instruct his or her representatives or

28  the right to petition for redress of grievances before the

29  various governmental entities of this state, as protected by

30  the First Amendment to the United States Constitution and s.

31  5, Art. I of the State Constitution.

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 1         (c)  A parcel owner sued by a governmental entity,

 2  business organization, or individual in violation of this

 3  section has a right to an expeditious resolution of a claim

 4  that the suit is in violation of this section. A parcel owner

 5  may petition the court for an order dismissing the action or

 6  granting final judgment in favor of that parcel owner. The

 7  petitioner may file a motion for summary judgment, together

 8  with supplemental affidavits, seeking a determination that the

 9  governmental entity's, business organization's, or

10  individual's lawsuit has been brought in violation of this

11  section. The governmental entity, business organization, or

12  individual shall thereafter file its response and any

13  supplemental affidavits. As soon as practicable, the court

14  shall set a hearing on the petitioner's motion, which shall be

15  held at the earliest possible time after the filing of the

16  governmental entity's, business organization's or individual's

17  response. The court may award the parcel owner sued by the

18  governmental entity, business organization, or individual

19  actual damages arising from the governmental entity's,

20  individual's, or business organization's violation of this

21  section. A court may treble the damages awarded to a

22  prevailing parcel owner and shall state the basis for the

23  treble damages award in its judgment. The court shall award

24  the prevailing party reasonable attorney's fees and costs

25  incurred in connection with a claim that an action was filed

26  in violation of this section.

27         (d)  Homeowners' associations may not expend

28  association funds in prosecuting a SLAPP suit against a parcel

29  owner.

30         Section 5.  Subsection (2) of section 720.305, Florida

31  Statutes, is amended to read:

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 1         720.305  Obligations of members; remedies at law or in

 2  equity; levy of fines and suspension of use rights; failure to

 3  fill sufficient number of vacancies on board of directors to

 4  constitute a quorum; appointment of receiver upon petition of

 5  any member.--

 6         (2)  If the governing documents so provide, an

 7  association may suspend, for a reasonable period of time, the

 8  rights of a member or a member's tenants, guests, or invitees,

 9  or both, to use common areas and facilities and may levy

10  reasonable fines, not to exceed $100 per violation, against

11  any member or any tenant, guest, or invitee. A fine may be

12  levied on the basis of each day of a continuing violation,

13  with a single notice and opportunity for hearing, except that

14  no such fine shall exceed $1,000 in the aggregate unless

15  otherwise provided in the governing documents. A fine shall

16  not become a lien against a parcel. In any action to recover a

17  fine, the prevailing party is entitled to collect its

18  reasonable attorney's fees and costs from the nonprevailing

19  party as determined by the court.

20         (a)  A fine or suspension may not be imposed without

21  notice of at least 14 days to the person sought to be fined or

22  suspended and an opportunity for a hearing before a committee

23  of at least three members appointed by the board who are not

24  officers, directors, or employees of the association, or the

25  spouse, parent, child, brother, or sister of an officer,

26  director, or employee.  If the committee, by majority vote,

27  does not approve a proposed fine or suspension, it may not be

28  imposed.

29         (b)  The requirements of this subsection do not apply

30  to the imposition of suspensions or fines upon any member

31  because of the failure of the member to pay assessments or

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 1  other charges when due if such action is authorized by the

 2  governing documents.

 3         (c)  Suspension of common-area-use rights shall not

 4  impair the right of an owner or tenant of a parcel to have

 5  vehicular and pedestrian ingress to and egress from the

 6  parcel, including, but not limited to, the right to park.

 7         Section 6.  Section 720.3055, Florida Statutes, is

 8  created to read:

 9         720.3055  Contracts for products and services; in

10  writing; bids; exceptions.--

11         (1)  All contracts as further described in this section

12  or any contract that is not to be fully performed within 1

13  year after the making thereof for the purchase, lease, or

14  renting of materials or equipment to be used by the

15  association in accomplishing its purposes under this chapter

16  or the governing documents, and all contracts for the

17  provision of services, shall be in writing. If a contract for

18  the purchase, lease, or renting of materials or equipment, or

19  for the provision of services, requires payment by the

20  association that exceeds 10 percent of the total annual budget

21  of the association, including reserves, the association must

22  obtain competitive bids for the materials, equipment, or

23  services. Nothing contained in this section shall be construed

24  to require the association to accept the lowest bid.

25         (2)(a)1.  Notwithstanding the foregoing, contracts with

26  employees of the association, and contracts for attorney,

27  accountant, architect, community association manager,

28  engineering, and landscape architect services are not subject

29  to the provisions of this section.

30         2.  A contract executed before July 1, 2004, and any

31  renewal thereof, is not subject to the competitive bid

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 1  requirements of this section. If a contract was awarded under

 2  the competitive bid procedures of this section, any renewal of

 3  that contract is not subject to such competitive bid

 4  requirements if the contract contains a provision that allows

 5  the board to cancel the contract on 30 days' notice.

 6  Materials, equipment, or services provided to an association

 7  under a local government franchise agreement by a franchise

 8  holder are not subject to the competitive bid requirements of

 9  this section. A contract with a manager, if made by a

10  competitive bid, may be made for up to 3 years. An association

11  whose declaration or bylaws provide for competitive biding for

12  services may operate under the provisions of that declaration

13  or bylaws in lieu of this section if those provisions are not

14  less stringent than the requirements of this section.

15         (b)  Nothing contained in this section is intended to

16  limit the ability of an association to obtain needed products

17  and services in an emergency.

18         (c)  This section does not apply if the business entity

19  with which the association desires to enter into a contract is

20  the only source of supply within the county serving the

21  association.

22         (d)  Nothing contained in this section shall excuse a

23  party contracting to provide maintenance or management

24  services from compliance with s. 720.309.

25         Section 7.  Present subsections (5) through (8) of

26  section 720.306, Florida Statutes, are renumbered as

27  subsections (7) through (10), respectively, present subsection

28  (7) is amended, and subsections (5) and (6) are added to that

29  section to read:

30         720.306  Meetings of members; voting and election

31  procedures; amendments.--

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 1         (5)  NOTICE OF MEETINGS.--The bylaws shall provide for

 2  giving notice to members of all member meetings, and if they

 3  do not do so shall be deemed to provide the following: The

 4  association shall give all parcel owners and members actual

 5  notice of all membership meetings, which shall be mailed,

 6  delivered, or electronically transmitted to the members not

 7  less than 14 days prior to the meeting. Evidence of compliance

 8  with this 14-day notice shall be made by an affidavit executed

 9  by the person providing the notice and filed upon execution

10  among the official records of the association. In addition to

11  mailing, delivering, or electronically transmitting the notice

12  of any meeting, the association may, by reasonable rule, adopt

13  a procedure for conspicuously posting and repeatedly

14  broadcasting the notice and the agenda on a closed-circuit

15  cable television system serving the association. When

16  broadcast notice is provided, the notice and agenda must be

17  broadcast in a manner and for a sufficient continuous length

18  of time so as to allow an average reader to observe the notice

19  and read and comprehend the entire content of the notice and

20  the agenda.

21         (6)  RIGHT TO SPEAK.--Members and parcel owners have

22  the right to attend all membership meetings and to speak at

23  any meeting with reference to all items opened for discussion

24  or included on the agenda. Notwithstanding any provision to

25  the contrary in the governing documents or any rules adopted

26  by the board or by the membership, a member and a parcel owner

27  have the right to speak for at least 3 minutes on any item,

28  provided that the member or parcel owner submits a request to

29  speak prior to the meeting. The association may adopt written

30  reasonable rules governing the frequency, duration, and other

31  

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 1  manner of member and parcel owner statements, which rules must

 2  be consistent with this paragraph.

 3         (9)(7)  ELECTIONS.--Elections of directors must be

 4  conducted in accordance with the procedures set forth in the

 5  governing documents of the association.  All members of the

 6  association shall be eligible to serve on the board of

 7  directors, and a member may nominate himself or herself as a

 8  candidate for the board at a meeting where the election is to

 9  be held.  Except as otherwise provided in the governing

10  documents, boards of directors must be elected by a plurality

11  of the votes cast by eligible voters. Any election dispute

12  between a member and an association must be submitted to

13  mandatory binding arbitration with the division. Such

14  proceedings shall be conducted in the manner provided by s.

15  718.1255 and the procedural rules adopted by the division.

16         Section 8.  Section 720.311, Florida Statutes, is

17  amended to read:

18         720.311  Dispute resolution.--

19         (1)  The Legislature finds that alternative dispute

20  resolution has made progress in reducing court dockets and

21  trials and in offering a more efficient, cost-effective option

22  to litigation. The filing of any petition for mediation or

23  arbitration provided for in this section shall toll the

24  applicable statute of limitations. Any recall dispute filed

25  with the division pursuant to s. 720.303(10) shall be

26  conducted by the division in accordance with the provisions of

27  ss. 718.1255 and 718.112(2)(j) and the rules adopted by the

28  division. In addition, the division shall conduct mandatory

29  binding arbitration of election disputes between a member and

30  an association pursuant to s. 718.1255 and rules adopted by

31  the division. Neither election disputes nor recall disputes

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 1  are eligible for mediation; these disputes shall be arbitrated

 2  by the division. At the conclusion of the proceeding, the

 3  division shall charge the parties a fee in an amount adequate

 4  to cover all costs and expenses incurred by the division in

 5  conducting the proceeding. Initially, the petitioner shall

 6  remit a filing fee of at least $200 to the division. The fees

 7  paid to the division shall become a recoverable cost in the

 8  arbitration proceeding and the prevailing party in an

 9  arbitration proceeding shall be paid its reasonable costs and

10  attorney's fees in an amount found reasonable by the

11  arbitrator. The division shall adopt rules to effectuate the

12  purposes of this section.

13         (2)(a)  Disputes between an association and a parcel

14  owner regarding use of or changes to the parcel or the common

15  areas and other covenant enforcement disputes, disputes

16  regarding amendments to the association documents, disputes

17  regarding meetings of the board and committees appointed by

18  the board, membership meetings not including election

19  meetings, and access to the official records of the

20  association shall be filed with the division for mandatory

21  mediation before the dispute is filed in court. Mediation

22  proceedings must be conducted in accordance with the

23  applicable Florida Rules of Civil Procedure, and these

24  proceedings are privileged and confidential to the same extent

25  as court-ordered mediation. An arbitrator or judge may not

26  consider any information or evidence arising from the

27  mediation proceeding except in a proceeding to impose

28  sanctions for failure to attend a mediation session. Persons

29  who are not parties to the dispute may not attend the

30  mediation conference without the consent of all parties,

31  except for counsel for the parties and a corporate

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 1  representative designated by the association. When mediation

 2  is attended by a quorum of the board, such mediation is not a

 3  board meeting for purposes of notice and participation set

 4  forth in s. 720.303. The division shall conduct the

 5  proceedings through the use of division mediators or refer the

 6  disputes to private mediators who have been duly certified by

 7  the division as provided in paragraph (c). The parties shall

 8  share the costs of mediation equally, including the fee

 9  charged by the mediator, if any, unless the parties agree

10  otherwise. If a division mediator is used, the division may

11  charge such fee as is necessary to pay expenses of the

12  mediation, including, but not limited to, the salary and

13  benefits of the mediator and any travel expenses incurred. The

14  petitioner shall initially file with the division upon filing

15  the disputes, a filing fee of $200, which shall be used to

16  defray the costs of the mediation. At the conclusion of the

17  mediation, the division shall charge to the parties, to be

18  shared equally unless otherwise agreed by the parties, such

19  further fees as are necessary to fully reimburse the division

20  for all expenses incurred in the mediation.

21         (b)  If mediation as described in paragraph (a) is not

22  successful in resolving all issues between the parties, the

23  parties may file the unresolved dispute in a court of

24  competent jurisdiction or elect to enter into binding or

25  nonbinding arbitration pursuant to the procedures set forth in

26  s. 718.1255 and rules adopted by the division, with the

27  arbitration proceeding to be conducted by a division

28  arbitrator or by a private arbitrator certified by the

29  division. If all parties do not agree to arbitration

30  proceedings following an unsuccessful mediation, any party may

31  file the dispute in court. A final order resulting from

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 1  nonbinding arbitration is final and enforceable in the courts

 2  if a complaint for trial de novo is not filed in a court of

 3  competent jurisdiction within 30 days after entry of the

 4  order.

 5         (c)  The division shall develop a certification and

 6  training program for private mediators and private arbitrators

 7  which shall emphasize experience and expertise in the area of

 8  the operation of community associations. A mediator or

 9  arbitrator shall be certified by the division only if he or

10  she has attended at least 20 hours of training in mediation or

11  arbitration, as appropriate, and only if the applicant has

12  mediated or arbitrated at least 10 disputes involving

13  community associations within 5 years prior to the date of the

14  application, or has mediated or arbitrated 10 disputes in any

15  area within 5 years prior to the date of application and has

16  completed 20 hours of training in community association

17  disputes. In order to be certified by the division, any

18  mediator must also be certified by the Florida Supreme Court.

19  The division may conduct the training and certification

20  program within the division or may contract with an outside

21  vendor to perform the training or certification. The expenses

22  of operating the training and certification and training

23  program shall be paid by the moneys and filing fees generated

24  by the arbitration of recall and election disputes and by the

25  mediation of those disputes referred to in this subsection and

26  by the training fees. Initially, the Department of Business

27  and Professional Regulation should seek sufficient funding to

28  cover the startup costs of establishing the certification and

29  training program.

30         (d)  The mediation procedures provided by this

31  subsection may be used by a Florida corporation responsible

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 1  for the operation of a community in which the voting members

 2  are parcel owners or their representatives, in which

 3  membership in the corporation is not a mandatory condition of

 4  parcel ownership, or which is not authorized to impose an

 5  assessment that may become a lien on the parcel.

 6         (3)  The division shall develop an education program to

 7  assist homeowners, associations, board members, and managers

 8  in understanding and increasing awareness of the operation of

 9  homeowners' associations pursuant to chapter 720 and in

10  understanding the use of alternative dispute resolution

11  techniques in resolving disputes between parcel owners and

12  associations or between owners. Such education program may

13  include the development of pamphlets and other written

14  instructional guides, the holding of classes and meetings by

15  division employees or outside vendors, as the division

16  determines, and the creation and maintenance of a website

17  containing instructional materials. The expenses of operating

18  the education program shall be initially paid by the moneys

19  and filing fees generated by the arbitration of recall and

20  election disputes and by the mediation of those disputes

21  referred to in this subsection. The Department of Business and

22  Professional Regulation shall seek funding to cover the

23  startup costs of the education, mediation, and arbitration

24  programs. At any time after the filing in a court of competent

25  jurisdiction of a complaint relating to a dispute under ss.

26  720.301-720.312, the court may order that the parties enter

27  mediation or arbitration procedures.

28         Section 9.  Section 689.26, Florida Statutes, is

29  transferred, renumbered as section 720.401, Florida Statutes,

30  and amended to read:

31         (Substantial rewording of section. See

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 1         s. 689.26, F.S., for present text.)

 2         720.401  Prospective purchasers subject to association

 3  membership requirement; disclosure required; covenants;

 4  assessments; contract violability.--

 5         (1)(a)  A prospective parcel owner in a community must

 6  be presented a disclosure summary before executing the

 7  contract for sale. The disclosure summary must be in a form

 8  substantially similar to the following form:

 9  

10           DISCLOSURE SUMMARY AND RECEIPT OF DOCUMENTS

11                                FOR

12                        (NAME OF COMMUNITY)

13  

14         1.  AS A PURCHASER OF PROPERTY IN THIS COMMUNITY YOU

15  ARE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS' ASSOCIATION.

16         2.  THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE

17  COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN

18  THIS COMMUNITY. THERE (ARE) (ARE NOT) UNRECORDED RULES AND

19  REGULATIONS AFFECTING THE PARCELS OR COMMON AREAS. ANY

20  COVENANTS THAT MAY EXIST ARE MATTERS OF PUBLIC RECORD AND CAN

21  BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE

22  PROPERTY IS LOCATED.

23         3.  THERE (IS) (IS NOT) A MUNICIPALITY, COUNTY, OR

24  SPECIAL TAXING DISTRICT, WHICH MAY IMPOSE CHARGES OR

25  ASSESSMENTS SEPARATE FROM THE HOMEOWNERS' ASSOCIATION'S

26  ASSESSMENTS AND WHICH ASSESSMENTS ARE SUBJECT TO PERIODIC

27  CHANGE.

28         4.  YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR

29  ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION

30  COULD RESULT IN A LIEN ON YOUR PROPERTY. LIENS MAY BE

31  FORECLOSED IN THE SAME MANNER AS A MORTGAGE.

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 1         5.  THE DEVELOPER (OR THE HOMEOWNERS OTHER THAN THE

 2  DEVELOPER) IS IN CONTROL OF THE HOMEOWNERS' ASSOCIATION.

 3         6.  THERE (IS) (IS NOT) AN OBLIGATION TO PAY RENT OR

 4  LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED

 5  FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNER'S

 6  ASSOCIATION. (If such obligation exists, then the amount of

 7  the current obligation shall be set forth.)

 8         7.  THE RESTRICTIVE COVENANTS (CAN) (CANNOT) BE AMENDED

 9  WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP.

10         8.  THE ASSOCIATION (IS) (IS NOT) INVOLVED IN

11  LITIGATION, WHICH MAY RESULT IN EXPOSURE TO THE ASSOCIATION IN

12  EXCESS OF $100.00.

13         9.  THE STATEMENTS CONTAINED IN THE DISCLOSURE FORM ARE

14  ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU

15  SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING

16  DOCUMENTS BEFORE PURCHASING PROPERTY.

17         10.  PURCHASER(S) ACKNOWLEDGE THAT THE SELLER HAS

18  PROVIDED THE PURCHASER WITH DOCUMENTS IDENTIFIED AS: (a)  THE

19  DISCLOSURE STATEMENT REQUIRED BY THIS SECTION; (b)  A COMPLETE

20  AND MOST RECENT SET OF GOVERNING DOCUMENTS WITH ALL

21  AMENDMENTS, WHICH INCLUDES ANY CURRENT RESTATEMENT; (c)  THE

22  MOST RECENT BUDGET; AND (d)  THE MOST RECENT YEAR-END

23  FINANCIAL STATEMENT.

24  

25  PURCHASER(S) SHOULD NOT EXECUTE THE CONTRACT OR AGREEMENT

26  UNTIL THEY HAVE RECEIVED AND READ THIS DISCLOSURE SUMMARY AND

27  DOCUMENTS FROM SELLER. YOU HAVE 3 DAYS FROM THE RECEIPT OF THE

28  DOCUMENTS IN #10 TO CANCEL THIS CONTRACT.

29  

30  DATE:                                               PURCHASER:

31                                                      PURCHASER:

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 1  

 2         (b)  At the time of signing a contract of purchase or

 3  agreement for sale, the developer or the parcel owner, if the

 4  owner is not the developer, must give to the prospective

 5  purchaser:

 6         1.  The disclosure statement required by this section;

 7         2.  A complete and most recent set of governing

 8  documents currently in effect, which includes any current

 9  restatement of the governing documents;

10         3.  The most recent adopted budget; and

11         4.  The most recent year-end financial statement.

12         (c)  Each contract entered into for the sale of

13  property governed by covenants subject to disclosure required

14  by this section must contain in conspicuous type a clause that

15  states:

16  

17  IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA

18  STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER

19  BEFORE EXECUTING THIS CONTRACT FOR SALE, PURCHASER MAY CANCEL

20  THIS CONTRACT BY DELIVERING TO SELLER OR SELLER'S AGENT

21  WRITTEN NOTICE OF THE PURCHASER'S INTENTION TO CANCEL WITHIN 3

22  DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY; GOVERNING

23  DOCUMENTS WITH AMENDMENTS; CURRENT BUDGET; AND COPY OF CURRENT

24  YEAR-END FINANCIAL STATEMENT OR PRIOR TO CLOSING, WHICHEVER

25  OCCURS FIRST. ANY PURPORTED WAIVER OF THIS RIGHT TO CANCEL HAS

26  NO EFFECT. PURCHASER'S RIGHT TO CANCEL THIS CONTRACT SHALL

27  TERMINATE AT CLOSING.

28  

29         (d)  A contract that does not conform to the

30  requirements of this subsection may be canceled at the option

31  of the purchaser prior to closing.

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 1         (e)  For purposes of this section, the association

 2  shall make available to a parcel owner or his or her agent

 3  within 10 calendar days from receipt of request at a cost of

 4  50 cents per page, not to exceed a total of $50, a copy of:

 5         1.  The disclosure statement required by this section;

 6         2.  A complete and most recent set of governing

 7  documents currently in effect, which may be satisfied by the

 8  most recent restatement of the governing documents;

 9         3.  The most recent adopted budget; and

10         4.  The most recent year-end financial statement.

11         (2)  The association shall prepare and update annually

12  the disclosure statement required by subsection (1).

13         (3)  This section does not apply to any association

14  regulated under chapter 718, chapter 719, chapter 721, or

15  chapter 723 and also does not apply if disclosure regarding

16  the association is otherwise made in connection with the

17  requirements of chapter 718, chapter 719, chapter 721, or

18  chapter 723.

19         Section 10.  Section 720.402, Florida Statutes, is

20  created to read:

21         720.402  Publication of false and misleading

22  information.--

23         (1)  Any person who, in reasonable reliance upon any

24  material statement or information that is false or misleading

25  and published by or under authority from the developer in

26  advertising and promotional materials, including, but not

27  limited to, a contract of purchaser, the declaration of

28  covenants, exhibits to a declaration of covenants, brochures,

29  and newspaper advertising, pays anything of value toward the

30  purchase of a parcel in a community located in this state has

31  a cause of action to rescind the contract or collect damages

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 1  from the developer for his or her loss before the closing of

 2  the transaction. After the closing of the transaction, the

 3  purchaser has a cause of action against the developer for

 4  damages under this section from the time of closing until 1

 5  year after the date upon which the last of the events

 6  described in paragraphs (a) through (d) occur:

 7         (a)  The closing of the transaction;

 8         (b)  The issuance by the applicable governmental

 9  authority of a certificate of occupancy or other evidence of

10  sufficient completion of construction of the purchaser's

11  residence to allow lawful occupancy of the residence by the

12  purchaser. In counties or municipalities in which certificates

13  of occupancy or other evidences of completion sufficient to

14  allow lawful occupancy are not customarily issued, for the

15  purpose of this section, evidence of lawful occupancy shall be

16  deemed to be given or issued upon the date that such lawful

17  occupancy of the residence may be allowed under prevailing

18  applicable laws, ordinances, or statutes;

19         (c)  The completion by the developer of the common

20  areas and such recreational facilities, whether or not the

21  same are common areas, which the developer is obligated to

22  complete or provide under the terms of the written contract,

23  governing documents, or written agreement for purchase or

24  lease of the parcel; or

25         (d)  In the event there is not a written contract or

26  agreement for sale or lease of the parcel, then the completion

27  by the developer of the common areas and such recreational

28  facilities, whether or not they are common areas, which the

29  developer would be obligated to complete under any rule of law

30  applicable to the developer's obligation.

31  

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 1  Under no circumstances may a cause of action created or

 2  recognized under this section survive for a period of more

 3  than 5 years after the closing of the transaction.

 4         (2)  In any action for relief under this section, the

 5  prevailing party may recover reasonable attorney's fees. A

 6  developer may not expend association funds in the defense of

 7  any suit under this section.

 8         Section 11.  Section 720.501, Florida Statutes, is

 9  created to read:

10         720.501  Warranties.--

11         (1)(a)  The developer shall be deemed to have granted

12  to the homeowners' association an implied warranty of fitness

13  and merchantability for the purposes or uses intended as

14  follows:

15         1.  As to the common areas and improvements thereon, a

16  warranty for 3 years commencing with the completion of the

17  building or improvement, or for 1 year after transfer of

18  control of the association from the developer to the members

19  other than the developer, in no event for more than 5 years

20  after completion of the building or improvement.

21         2.  As to the personal property that is transferred

22  with or appurtenant to the common areas, a warranty that is

23  for the same period as that provided by the manufacturer of

24  the personal property, commencing with the date of transfer of

25  the common areas to the association.

26         (b)  The statute of limitations for any actions in law

27  or equity which an association may have shall not begin to run

28  until the members other than the developer have elected a

29  majority of the members of the board.

30         (2)  The contractor, and all subcontractors and

31  suppliers, grant to the developer and to the homeowners'

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 1  association implied warranties of fitness as to the work

 2  performed or materials supplied by them as follows:

 3         (a)  For a period of 3 years from the date of

 4  completion of construction of a building or improvement, a

 5  warranty as to the roof and structural components of the

 6  building or improvement and mechanical and plumbing elements

 7  serving a building or an improvement located on the common

 8  areas or association property.

 9         (b)  For a period of 1 year after completion of all

10  construction, a warranty as to all other improvements and

11  materials.

12         (3)  The term "completion of a building or improvement"

13  means issuance of a certificate of occupancy for the entire

14  building or improvement, or the equivalent authorization

15  issued by the governmental body having jurisdiction, and in

16  jurisdictions where no certificate of occupancy or equivalent

17  authorization is issued it means substantial completion of

18  construction, finishing, and equipping of the building or

19  improvement according to the plans and specifications.

20         (4)  These warranties are conditioned upon routine

21  maintenance being performed, unless the maintenance is an

22  obligation of the developer or a developer-controlled

23  association.

24         (5)  The warranties provided by this section shall

25  inure to the benefit of each owner and his or her successor

26  owners and to the benefit of the developer.

27         (6)  This section does not affect a homeowners'

28  association as to which rights are established by transfer of

29  control and ownership rights of the common areas from the

30  developer to the homeowners' association prior to July 1,

31  2004.

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 1         (7)  Common areas may be covered by an insured warranty

 2  program underwritten by a licensed insurance company

 3  registered in this state, provided that such warranty program

 4  meets the minimum requirements of this chapter. To the degree

 5  that such warranty program does not meet the minimum

 6  requirements of this chapter, such requirements apply.

 7         Section 12.  Subsection (1) of section 34.01, Florida

 8  Statutes, is amended to read:

 9         34.01  Jurisdiction of county court.--

10         (1)  County courts shall have original jurisdiction:

11         (a)  In all misdemeanor cases not cognizable by the

12  circuit courts;

13         (b)  Of all violations of municipal and county

14  ordinances; and

15         (c)  Of all actions at law in which the matter in

16  controversy does not exceed the sum of $15,000, exclusive of

17  interest, costs, and attorney's fees, except those within the

18  exclusive jurisdiction of the circuit courts. The party

19  instituting any civil action, suit, or proceeding pursuant to

20  this paragraph where the amount in controversy is in excess of

21  $5,000 shall pay to the clerk of the county court the filing

22  fees and service charges in the same amounts and in the same

23  manner as provided in s. 28.241; and.

24         (d)  Of disputes occurring in the homeowners'

25  associations as described in s. 720.311(2)(a), which shall be

26  concurrent with jurisdiction of the circuit courts.

27         Section 13.  Paragraph (a) of subsection (1) of section

28  316.00825, Florida Statutes, is amended to read:

29         316.00825  Closing and abandonment of roads; optional

30  conveyance to homeowners' association; traffic control

31  jurisdiction.--

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 1         (1)(a)  In addition to the authority provided in s.

 2  336.12, the governing body of the county may abandon the roads

 3  and rights-of-way dedicated in a recorded residential

 4  subdivision plat and simultaneously convey the county's

 5  interest in such roads, rights-of-way, and appurtenant

 6  drainage facilities to a homeowners' association for the

 7  subdivision, if the following conditions have been met:

 8         1.  The homeowners' association has requested the

 9  abandonment and conveyance in writing for the purpose of

10  converting the subdivision to a gated neighborhood with

11  restricted public access.

12         2.  No fewer than four-fifths of the owners of record

13  of property located in the subdivision have consented in

14  writing to the abandonment and simultaneous conveyance to the

15  homeowners' association.

16         3.  The homeowners' association is both a corporation

17  not for profit organized and in good standing under chapter

18  617, and a "homeowners' association" as  defined in s.

19  720.301(8) s. 720.301(7) with the power to levy and collect

20  assessments for routine and periodic major maintenance and

21  operation of street lighting, drainage, sidewalks, and

22  pavement in the subdivision.

23         4.  The homeowners' association has entered into and

24  executed such agreements, covenants, warranties, and other

25  instruments; has provided, or has provided assurance of, such

26  funds, reserve funds, and funding sources; and has satisfied

27  such other requirements and conditions as may be established

28  or imposed by the county with respect to the ongoing

29  operation, maintenance, and repair and the periodic

30  reconstruction or replacement of the roads, drainage, street

31  

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 1  lighting, and sidewalks in the subdivision after the

 2  abandonment by the county.

 3         Section 14.  Subsection (2) of section 558.002, Florida

 4  Statutes, is amended to read:

 5         558.002  Definitions.--As used in this act, the term:

 6         (2)  "Association" has the same meaning as in s.

 7  718.103(2), s. 719.103(2), s. 720.301(8) s. 720.301(7), or s.

 8  723.025.

 9         Section 15.  The Division of Statutory Revision is

10  requested to designate sections 720.301-720.312, Florida

11  Statutes, as part I of chapter 720, Florida Statutes; to

12  designate sections 720.401 and 720.402, Florida Statutes, as

13  part II of chapter 720, Florida Statutes, and entitle that

14  part "DISCLOSURE PRIOR TO SALE OF RESIDENTIAL PARCELS"; and to

15  designate section 720.501, Florida Statutes, as part III of

16  chapter 720, Florida Statutes, and entitle that part "RIGHTS

17  AND OBLIGATIONS OF DEVELOPERS."

18         Section 16.  This act shall take effect July 1, 2004.

19  

20            *****************************************

21                          SENATE SUMMARY

22    Expands the alternative dispute resolution provisions
      relating to disputes involving homeowners' associations,
23    providing for both arbitration and mediation and
      providing for training programs and education programs.
24    Provides additional requirements with respect to members'
      or parcel owners' rights to appear and address meetings
25    of association boards and of members, to inspect and copy
      records, and to have items placed on an agenda for
26    consideration. Provides additional standards for
      procurement of materials and services and provides for
27    warranties with respect to common areas and to personal
      property. (See bill for details.)
28  

29  

30  

31  

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