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Senate Bill 2984

Senate Bill sb2984c1

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    Florida Senate - 2004                           CS for SB 2984

    By the Committee on Regulated Industries; and Senator Atwater





    315-2475B-04

  1                      A bill to be entitled

  2         An act relating to homeowners' associations;

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

  4         "division" and "member"; amending s. 720.302,

  5         F.S.; prescribing a legislative purpose of

  6         providing alternative dispute resolution

  7         procedures for disputes involving elections and

  8         recalls; providing acts that constitute crimes;

  9         providing penalties; amending s. 720.303, F.S.;

10         prescribing the right of an association to

11         enforce deed restrictions; prescribing rights

12         of members and parcel owners to attend and

13         address association board meetings and to have

14         items placed on an agenda; prescribing

15         additional requirements for notice of meetings;

16         providing for additional materials to be

17         maintained as records; providing additional

18         requirements and limitations with respect to

19         inspecting and copying records; providing

20         requirements with respect to financial

21         statements; providing procedures for recall of

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

23         prescribing owners' rights with respect to flag

24         display; prohibiting certain lawsuits against

25         parcel owners; providing penalties; amending s.

26         720.305, F.S.; providing that a fine by an

27         association cannot become a lien against a

28         parcel; providing for attorney's fees in

29         actions to recover fines; creating s. 720.3055,

30         F.S.; prescribing requirements for contracts

31         for products and services; amending s. 720.306,

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    Florida Senate - 2004                           CS for SB 2984
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 1         F.S.; providing for notice of and right to

 2         speak at member meetings; requiring election

 3         disputes between a member and an association to

 4         be submitted to mandatory binding arbitration;

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

 6         requirements and guidelines with respect to

 7         alternative dispute resolution; providing

 8         requirements for mediation and arbitration;

 9         providing for training and education programs;

10         transferring, renumbering, and amending s.

11         689.26, F.S.; modifying the disclosure form

12         that a prospective purchaser must receive

13         before a contract for sale; providing that

14         certain contracts are voidable for a specified

15         period; requiring that a purchaser provide

16         written notice of cancellation; transferring

17         and renumbering s. 689.265, F.S., relating to

18         required financial reports of certain

19         residential subdivision developers; amending s.

20         498.025, F.S., relating to the disposition of

21         subdivided lands; conforming cross-references;

22         creating s. 720.402, F.S.; providing remedies

23         for publication of false and misleading

24         information; creating s. 720.501, F.S.;

25         providing implied warranties relating to real

26         and personal property; amending s. 34.01, F.S.;

27         providing jurisdiction of disputes involving

28         homeowners' associations; amending ss.

29         316.00825, 558.002, F.S.; conforming

30         cross-references; providing for internal

31  

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    Florida Senate - 2004                           CS for SB 2984
    315-2475B-04




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

 2         effective date.

 3  

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

 5  

 6         Section 1.  Section 720.301, Florida Statutes, is

 7  amended to read:

 8         720.301  Definitions.--As used in ss. 720.301-720.501

 9  ss. 720.301-720.312, the term:

10         (1)  "Assessment" or "amenity fee" means a sum or sums

11  of money payable to the association, to the developer or other

12  owner of common areas, or to recreational facilities and other

13  properties serving the parcels by the owners of one or more

14  parcels as authorized in the governing documents, which if not

15  paid by the owner of a parcel, can result in a lien against

16  the parcel.

17         (2)  "Common area" means all real property within a

18  community which is owned or leased by an association or

19  dedicated for use or maintenance by the association or its

20  members, including, regardless of whether title has been

21  conveyed to the association:

22         (a)  Real property the use of which is dedicated to the

23  association or its members by a recorded plat; or

24         (b)  Real property committed by a declaration of

25  covenants to be leased or conveyed to the association.

26         (3)  "Community" means the real property that is or

27  will be subject to a declaration of covenants which is

28  recorded in the county where the property is located.  The

29  term "community" includes all real property, including

30  undeveloped phases, that is or was the subject of a

31  

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    Florida Senate - 2004                           CS for SB 2984
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 1  development-of-regional-impact development order, together

 2  with any approved modification thereto.

 3         (4)  "Declaration of covenants," or "declaration,"

 4  means a recorded written instrument in the nature of covenants

 5  running with the land which subjects the land comprising the

 6  community to the jurisdiction and control of an association or

 7  associations in which the owners of the parcels, or their

 8  association representatives, must be members.

 9         (5)  "Developer" means a person or entity that:

10         (a)  Creates the community served by the association;

11  or

12         (b)  Succeeds to the rights and liabilities of the

13  person or entity that created the community served by the

14  association, provided that such is evidenced in writing.

15         (6)  "Division" means the Division of Florida Land

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

17  Business and Professional Regulation.

18         (7)(6)  "Governing documents" means:

19         (a)  The recorded declaration of covenants for a

20  community, and all duly adopted and recorded amendments,

21  supplements, and recorded exhibits thereto; and

22         (b)  The articles of incorporation and bylaws of the

23  homeowners' association, and any duly adopted amendments

24  thereto.

25         (8)(7)  "Homeowners' association" or "association"

26  means a Florida corporation responsible for the operation of a

27  community or a mobile home subdivision in which the voting

28  membership is made up of parcel owners or their agents, or a

29  combination thereof, and in which membership is a mandatory

30  condition of parcel ownership, and which is authorized to

31  impose assessments that, if unpaid, may become a lien on the

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    Florida Senate - 2004                           CS for SB 2984
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 1  parcel.  The term "homeowners' association" does not include a

 2  community development district or other similar special taxing

 3  district created pursuant to statute.

 4         (9)(8)  "Member" means a member of an association, and

 5  may include, but is not limited to, a parcel owner or an

 6  association representing parcel owners or a combination

 7  thereof, and shall include any person or entity obligated by

 8  the governing documents to pay an assessment or amenity fee.

 9         (10)(9)  "Parcel" means a platted or unplatted lot,

10  tract, unit, or other subdivision of real property within a

11  community, as described in the declaration:

12         (a)  Which is capable of separate conveyance; and

13         (b)  Of which the parcel owner, or an association in

14  which the parcel owner must be a member, is obligated:

15         1.  By the governing documents to be a member of an

16  association that serves the community; and

17         2.  To pay to the homeowners' association assessments

18  that, if not paid, may result in a lien.

19         (11)(10)  "Parcel owner" means the record owner of

20  legal title to a parcel.

21         (12)(11)  "Voting interest" means the voting rights

22  distributed to the members of the homeowners' association,

23  pursuant to the governing documents.

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

25  Statutes, is amended to read:

26         720.302  Purposes, scope, and application.--

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

28  best interest of homeowners' associations or the individual

29  association members thereof to create or impose a bureau or

30  other agency of state government to regulate the affairs of

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

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    Florida Senate - 2004                           CS for SB 2984
    315-2475B-04




 1  720.311, the Legislature finds that homeowners' associations

 2  and their individual members will benefit from an expedited

 3  alternative process for resolution of election and recall

 4  disputes and presuit mediation of other disputes involving

 5  covenant enforcement and authorizes the division to hear,

 6  administer, and determine these disputes as more fully set

 7  forth in this chapter. Further, the Legislature recognizes

 8  that certain contract rights have been created for the benefit

 9  of homeowners' associations and members thereof before the

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

11  720.301-720.312 are not intended to impair such contract

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

13  developer to complete the community as initially contemplated.

14         Section 3.  Section 720.303, Florida Statutes, is

15  amended to read:

16         720.303  Association powers and duties; meetings of

17  board; official records; budgets; financial reporting;

18  association funds; recalls.--

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

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

21  association that is a Florida corporation. After October 1,

22  1995, the association must be incorporated and the initial

23  governing documents must be recorded in the official records

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

25  association may operate more than one community. The officers

26  and directors of an association have a fiduciary relationship

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

28  intent of the Legislature that nothing in this subsection be

29  construed as providing for or removing a requirement of a

30  fiduciary relationship between any manager employed by the

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

                                  6

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    Florida Senate - 2004                           CS for SB 2984
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 1  manager may not solicit, offer to accept, or accept any thing

 2  or service of value for which consideration has not been

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

 4  immediate family, from any person providing or proposing to

 5  provide goods or services to the association. Any such

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

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

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

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

10  permanently disqualified from serving on the board of

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

12  association. However, this subsection does not prohibit an

13  officer, director, or manager from accepting customary

14  amenities provided in business relationships, such as food and

15  drinks at meetings or conferences, business lunches not

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

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

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

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

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

21  expressly limited or restricted in this chapter, those set

22  forth in the governing documents. After control of the

23  association is obtained by members unit owners other than the

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

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

26  members concerning matters of common interest to the members,

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

28  structural components of a building, or other improvements for

29  which the association is responsible; mechanical, electrical,

30  or plumbing elements serving an improvement or building for

31  which the association is responsible; representations of the

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    Florida Senate - 2004                           CS for SB 2984
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 1  developer pertaining to any existing or proposed commonly used

 2  facility; and protesting ad valorem taxes on commonly used

 3  facilities. The association may defend actions in eminent

 4  domain or bring inverse condemnation actions. Before

 5  commencing litigation against any party in the name of the

 6  association involving amounts in controversy in excess of

 7  $100,000, the association must obtain the affirmative approval

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

 9  membership at which a quorum has been attained. This

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

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

12  without participation by the association. A member does not

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

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

15  and may issue membership certificates. An association of 15 or

16  fewer parcel owners may enforce only the requirements of those

17  deed restrictions established prior to the purchase of each

18  parcel upon an affected parcel owner or owners.

19         (2)  BOARD MEETINGS.--

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

21  association occurs whenever a quorum of the board gathers to

22  conduct association business.  All meetings of the board must

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

24  and its attorney with respect to proposed or pending

25  litigation where the contents of the discussion would

26  otherwise be governed by the attorney-client privilege.

27         (b)  Members have the right to attend all meetings of

28  the board and to speak on any matter placed on the agenda by

29  petition of the voting interests for at least 3 minutes. The

30  association may adopt written reasonable rules expanding the

31  right of members to speak and governing the frequency,

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    Florida Senate - 2004                           CS for SB 2984
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 1  duration, and other manner of member statements, which rules

 2  must be consistent with this paragraph and may include a

 3  sign-up sheet for members wishing to speak. Notwithstanding

 4  any other law, the requirement that board meetings and

 5  committee meetings be open to the members is inapplicable to

 6  meetings between the board or a committee and the

 7  association's attorney, with respect to meetings of the board

 8  held for the purpose of discussing personnel matters.

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

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

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

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

13  conspicuous place in the community at least 48 hours in

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

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

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

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

18  except in an emergency. Notwithstanding this general notice

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

20  bylaws may provide for a reasonable alternative to posting or

21  mailing of notice for each board meeting, including

22  publication of notice, provision of a schedule of board

23  meetings, or the conspicuous posting and repeated broadcasting

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

25  serving the homeowners' association. However, if broadcast

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

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

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

29  otherwise required. When broadcast notice is provided, the

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

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

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    Florida Senate - 2004                           CS for SB 2984
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 1  reader to observe the notice and read and comprehend the

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

 3  amended bylaws may provide for giving notice by electronic

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

 5  board of directors, committee meetings requiring notice under

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

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

 8  by electronic transmission.

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

10  unless the notice of the meeting includes a statement that

11  assessments will be considered and the nature of the

12  assessments. Written notice of any meeting at which special

13  assessments will be considered or at which amendments to rules

14  regarding parcel use will be considered must be mailed,

15  delivered, or electronically transmitted to the members and

16  parcel owners and posted conspicuously on the property or

17  broadcast on closed-circuit cable television not less than 14

18  days before the meeting.

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

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

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

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

23  decision will be made regarding the expenditure of association

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

25  disapprove architectural decisions with respect to a specific

26  parcel of residential property owned by a member of the

27  community.

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

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

30  shall at its next regular board meeting or at a special

31  meeting of the board, but not later than 60 days after the

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    Florida Senate - 2004                           CS for SB 2984
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 1  receipt of the petition, take the petitioned item up on an

 2  agenda. The board shall give all members notice of the meeting

 3  at which the petitioned item shall be addressed in accordance

 4  with the 14-day notice requirement pursuant to subparagraph 2.

 5  Each member shall have the right to speak for at least 3

 6  minutes on each matter placed on the agenda by petition,

 7  provided that the member signs the sign-up sheet, if one is

 8  provided, or submits a written request to speak prior to the

 9  meeting. Other than addressing the petitioned item at the

10  meeting, the board is not obligated to take any other action

11  requested by the petition.

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

13  of an association and of the board of directors of an

14  association must be maintained in written form or in another

15  form that can be converted into written form within a

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

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

18  must be recorded in the minutes.

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

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

21  the official records of the association:

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

23  warranties related to improvements constructed on the common

24  areas or other property that the association is obligated to

25  maintain, repair, or replace.

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

27  each amendment to the bylaws.

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

29  association and of each amendment thereto.

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

31  of each amendment thereto.

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    Florida Senate - 2004                           CS for SB 2984
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 1         (e)  A copy of the current rules of the homeowners'

 2  association.

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

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

 5  for at least 7 years.

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

 7  addresses and parcel identifications. The association shall

 8  also maintain the electronic mailing addresses and the numbers

 9  designated by members for receiving notice sent by electronic

10  transmission of those members consenting to receive notice by

11  electronic transmission. The electronic mailing addresses and

12  numbers provided by unit owners to receive notice by

13  electronic transmission shall be removed from association

14  records when consent to receive notice by electronic

15  transmission is revoked. However, the association is not

16  liable for an erroneous disclosure of the electronic mail

17  address or the number for receiving electronic transmission of

18  notices.

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

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

21  years.

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

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

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

25  association has any obligation or responsibility.  Bids

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

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

28  of 1 year.

29         (j)  The financial and accounting records of the

30  association, kept according to good accounting practices.  All

31  financial and accounting records must be maintained for a

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    Florida Senate - 2004                           CS for SB 2984
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 1  period of at least 7 years.  The financial and accounting

 2  records must include:

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

 4  receipts and expenditures.

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

 6  account for each member, designating the name and current

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

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

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

10  account, and the balance due.

11         3.  All tax returns, financial statements, and

12  financial reports of the association.

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

14  or communicate financial information.

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

16  720.401(2).

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

18  specifically included in the foregoing which are related to

19  the operation of the association.

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

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

22  to inspection and available for photocopying by members or

23  their authorized agents at reasonable times and places within

24  10 business days after receipt of a written request for

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

26  of the official records available for inspection or copying in

27  the community. If the association has a photocopy machine

28  available where the records are maintained, it must provide

29  parcel owners with copies on request during the inspection if

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

31  

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

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

 3  request creates a rebuttable presumption that the association

 4  willfully failed to comply with this subsection.

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

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

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

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

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

10  receipt of the written request.

11         (c)  The association may adopt reasonable written rules

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

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

14  requirement that a parcel owner demonstrate any proper purpose

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

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

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

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

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

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

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

22  association does not have a photocopy machine available where

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

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

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

26  copying. The association shall maintain an adequate number of

27  copies of the recorded governing documents, to ensure their

28  availability to members and prospective members, and may

29  charge only its actual costs for reproducing and furnishing

30  these documents to those persons who are entitled to receive

31  them. Notwithstanding the provisions of this paragraph, the

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 1  following records shall not be accessible to members or parcel

 2  owners:

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

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

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

 6  record prepared by an association attorney or prepared at the

 7  attorney's express direction which reflects a mental

 8  impression, conclusion, litigation strategy, or legal theory

 9  of the attorney or the association and was prepared

10  exclusively for civil or criminal litigation or for

11  adversarial administrative proceedings or which was prepared

12  in anticipation of imminent civil or criminal litigation or

13  imminent adversarial administrative proceedings until the

14  conclusion of the litigation or adversarial administrative

15  proceedings.

16         2.  Information obtained by an association in

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

18  transfer of a parcel.

19         3.  Disciplinary, health, insurance, and personnel

20  records of the association's employees.

21         4.  Medical records of parcel owners or community

22  residents.

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

24  budget. The budget must reflect the estimated revenues and

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

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

27  separately all fees or charges for recreational amenities,

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

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

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

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

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

 2  set forth in subsection (5).

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

 4  prepare an annual financial report within 60 days after the

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

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

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

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

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

10  prepared as follows The financial report must consist of

11  either:

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

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

14  of financial statements in accordance with generally accepted

15  accounting principles. The financial statements shall be based

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

17         1.  An association with total annual revenues of

18  $100,000 or more, but less than $200,000, shall prepare

19  compiled financial statements.

20         2.  An association with total annual revenues of at

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

22  financial statements.

23         3.  An association with total annual revenues of

24  $400,000 or more shall prepare audited financial statements.

25  Financial statements presented in conformity with generally

26  accepted accounting principles; or

27         (b)  A financial report of actual receipts and

28  expenditures, cash basis, which report must show:

29         1.  An association with total annual revenues of less

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

31  

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 1  expenditures. The amount of receipts and expenditures by

 2  classification; and

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

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

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

 6  financial statements required by paragraph (a) unless the

 7  governing documents provide otherwise. The beginning and

 8  ending cash balances of the association.

 9         3.  A report of cash receipts and disbursement must

10  disclose the amount of receipts by accounts and receipt

11  classifications and the amount of expenses by accounts and

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

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

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

15  facilities; expenses for refuse collection and utility

16  services; expenses for lawn care; costs for building

17  maintenance and repair; insurance costs; administration and

18  salary expenses; and reserves if maintained by the

19  association.

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

21  board for a level of financial reporting higher than that

22  required by this section, the association shall duly notice

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

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

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

26  the total voting interests of the parcel owners, the

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

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

29  financial report regardless of any provision to the contrary

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

31  

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

 2  later:

 3         1.  Compiled, reviewed, or audited financial

 4  statements, if the association is otherwise required to

 5  prepare a report of cash receipts and expenditures;

 6         2.  Reviewed or audited financial statements, if the

 7  association is otherwise required to prepare compiled

 8  financial statements; or

 9         3.  Audited financial statements if the association is

10  otherwise required to prepare reviewed financial statements.

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

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

13  association may prepare or cause to be prepared:

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

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

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

17  compiled financial statement in lieu of a reviewed or audited

18  financial statement; or

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

20  compiled financial statement, or a reviewed financial

21  statement in lieu of an audited financial statement.

22         (8)  ASSOCIATION FUNDS; COMMINGLING.--

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

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

25  operating funds of the association shall not be commingled

26  prior to turnover except the association may jointly invest

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

28  accounted for separately.

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

30  association shall commingle any association funds with his or

31  

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

 2  association or community association.

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

 4  to defend a civil or criminal action, administrative

 5  proceeding, or arbitration proceeding that has been filed

 6  against the developer or directors appointed to the

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

 8  the action or proceeding concerns the operation of the

 9  developer-controlled association.

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

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

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

13         (10)  RECALL OF DIRECTORS.--

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

15  contained in the governing documents, subject to the

16  provisions of s. 720.307 regarding transition of association

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

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

19  the total voting interests.

20         2.  When the governing documents, including the

21  declaration, articles of incorporation, or bylaws, provide

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

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

24  vote to recall those board directors so elected.

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

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

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

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

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

30  and the Florida Rules of Civil Procedure.

31  

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

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

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

 4  board shall either certify the written ballots or written

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

 6  which case such director or directors shall be recalled

 7  effective immediately and shall turn over to the board within

 8  5 full business days any and all records and property of the

 9  association in their possession, or proceed as described in

10  paragraph (d).

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

12  binding arbitration proceedings that an initial recall effort

13  was defective, written recall agreements or written ballots

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

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

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

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

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

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

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

21  association is served with the written recall agreements or

22  ballots.

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

24  least as many possible replacement directors as there are

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

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

27  recall instrument may vote for as many replacement candidates

28  as there are directors subject to the recall.

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

30  or bylaws specifically provide, the members may also recall

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

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

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

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

 4  voting interests giving notice of the meeting as required for

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

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

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

 8  part for this purpose.

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

10  meeting within 5 full business days after the adjournment of

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

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

13  such member or members shall be recalled effective immediately

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

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

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

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

18  agreement or written ballots to recall a director or directors

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

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

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

22  arbitration pursuant to the applicable procedures in ss.

23  718.1255 and 718.112(2)(j) and the rules adopted thereunder.

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

25  meeting or who executed the agreement in writing shall

26  constitute one party under the petition for arbitration. If

27  the arbitrator certifies the recall as to any director or

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

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

30  The director or directors so recalled shall deliver to the

31  board any and all records of the association in their

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 1  possession within 5 full business days after the effective

 2  date of the recall.

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

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

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

 6  a majority of the remaining directors, notwithstanding any

 7  provision to the contrary contained in this subsection or in

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

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

10  directors are removed, the vacancies shall be filled by

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

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

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

14  written ballot, members may vote for replacement directors in

15  the same instrument in accordance with procedural rules

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

17  with this subsection.

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

19  meeting within 5 full business days after service of an

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

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

22  deemed effective and the board directors so recalled shall

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

24  the association.

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

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

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

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

29  association, summarily order the director to relinquish his or

30  her office and turn over all association records upon

31  application of the association.

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

 2  board decides whether to certify the recall are an official

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

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

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

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

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

 8  the specific reason for each such rejection.

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

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

11  shall provide for a separate vote for each board director

12  sought to be recalled.

13         Section 4.  Section 720.304, Florida Statutes, is

14  amended to read:

15         720.304  Right of owners to peaceably assemble; display

16  of flag; SLAPP suits prohibited.--

17         (1)  All common areas and recreational facilities

18  serving any homeowners' association shall be available to

19  parcel owners in the homeowners' association served thereby

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

21  areas and recreational facilities.  The entity or entities

22  responsible for the operation of the common areas and

23  recreational facilities may adopt reasonable rules and

24  regulations pertaining to the use of such common areas and

25  recreational facilities.  No entity or entities shall

26  unreasonably restrict any parcel owner's right to peaceably

27  assemble or right to invite public officers or candidates for

28  public office to appear and speak in common areas and

29  recreational facilities.

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

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

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

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

 3  respectful manner portable, removable official flags, not

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

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

 6  regardless of any declaration rules or requirements dealing

 7  with flags or decorations.

 8         (3)  Any owner prevented from exercising rights

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

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

11  alleged infringement occurred, and, upon favorable

12  adjudication, the court shall enjoin the enforcement of any

13  provision contained in any homeowners' association document or

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

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

16  right of parcel owners to exercise their rights to instruct

17  their representatives and petition for redress of grievances

18  before the various governmental entities of this state as

19  protected by the First Amendment to the United States

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

21  Legislature recognizes that "Strategic Lawsuits Against Public

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

23  have occurred when members are sued by individuals, business

24  entities, or governmental entities arising out of a parcel

25  owner's appearance and presentation before a governmental

26  entity on matters related to the homeowners' association.

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

28  entities, business organizations, and individuals not engage

29  in SLAPP suits because such actions are inconsistent with the

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

31  institutions of government. Therefore, the Legislature finds

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 1  and declares that prohibiting such lawsuits by governmental

 2  entities, business entities, and individuals against parcel

 3  owners who address matters concerning their homeowners'

 4  association will preserve this fundamental state policy,

 5  preserve the constitutional rights of parcel owners, and

 6  assure the continuation of representative government in this

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

 8  be expeditiously disposed of by the courts.

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

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

11  and judicial branches of government, the independent

12  establishments of the state, counties, municipalities,

13  districts, authorities, boards, or commissions, or any

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

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

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

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

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

19  without merit and solely because such parcel owner has

20  exercised the right to instruct his or her representatives or

21  the right to petition for redress of grievances before the

22  various governmental entities of this state, as protected by

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

24  5, Art. I of the State Constitution.

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

26  business organization, or individual in violation of this

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

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

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

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

31  petitioner may file a motion for summary judgment, together

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 1  with supplemental affidavits, seeking a determination that the

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

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

 4  section. The governmental entity, business organization, or

 5  individual shall thereafter file its response and any

 6  supplemental affidavits. As soon as practicable, the court

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

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

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

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

11  governmental entity, business organization, or individual

12  actual damages arising from the governmental entity's,

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

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

15  prevailing parcel owner and shall state the basis for the

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

17  the prevailing party reasonable attorney's fees and costs

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

19  in violation of this section.

20         (d)  Homeowners' associations may not expend

21  association funds in prosecuting a SLAPP suit against a parcel

22  owner.

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

24  Statutes, is amended to read:

25         720.305  Obligations of members; remedies at law or in

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

27  fill sufficient number of vacancies on board of directors to

28  constitute a quorum; appointment of receiver upon petition of

29  any member.--

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

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

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

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

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

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

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

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

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

 8  otherwise provided in the governing documents. A fine shall

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

10  fine, the prevailing party is entitled to collect its

11  reasonable attorney's fees and costs from the nonprevailing

12  party as determined by the court.

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

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

15  suspended and an opportunity for a hearing before a committee

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

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

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

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

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

21  imposed.

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

23  to the imposition of suspensions or fines upon any member

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

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

26  governing documents.

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

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

29  vehicular and pedestrian ingress to and egress from the

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

31  

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 1         Section 6.  Section 720.3055, Florida Statutes, is

 2  created to read:

 3         720.3055  Contracts for products and services; in

 4  writing; bids; exceptions.--

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

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

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

 8  renting of materials or equipment to be used by the

 9  association in accomplishing its purposes under this chapter

10  or the governing documents, and all contracts for the

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

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

13  for the provision of services, requires payment by the

14  association that exceeds 10 percent of the total annual budget

15  of the association, including reserves, the association must

16  obtain competitive bids for the materials, equipment, or

17  services. Nothing contained in this section shall be construed

18  to require the association to accept the lowest bid.

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

20  employees of the association, and contracts for attorney,

21  accountant, architect, community association manager,

22  engineering, and landscape architect services are not subject

23  to the provisions of this section.

24         2.  A contract executed before October 1, 2004, and any

25  renewal thereof, is not subject to the competitive bid

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

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

28  that contract is not subject to such competitive bid

29  requirements if the contract contains a provision that allows

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

31  Materials, equipment, or services provided to an association

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 1  under a local government franchise agreement by a franchise

 2  holder are not subject to the competitive bid requirements of

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

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

 5  whose declaration or bylaws provide for competitive bidding

 6  for services may operate under the provisions of that

 7  declaration or bylaws in lieu of this section if those

 8  provisions are not less stringent than the requirements of

 9  this section.

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

11  limit the ability of an association to obtain needed products

12  and services in an emergency.

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

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

15  the only source of supply within the county serving the

16  association.

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

18  party contracting to provide maintenance or management

19  services from compliance with s. 720.309.

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

21  section 720.306, Florida Statutes, are renumbered as

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

23  (7) is amended, and new subsections (5) and (6) are added to

24  that section to read:

25         720.306  Meetings of members; voting and election

26  procedures; amendments.--

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

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

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

30  association shall give all parcel owners and members actual

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

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 1  delivered, or electronically transmitted to the members not

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

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

 4  by the person providing the notice and filed upon execution

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

 6  mailing, delivering, or electronically transmitting the notice

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

 8  a procedure for conspicuously posting and repeatedly

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

10  cable television system serving the association. When

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

12  broadcast in a manner and for a sufficient continuous length

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

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

15  the agenda.

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

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

18  any meeting with reference to all items opened for discussion

19  or included on the agenda. Notwithstanding any provision to

20  the contrary in the governing documents or any rules adopted

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

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

23  provided that the member or parcel owner submits a written

24  request to speak prior to the meeting. The association may

25  adopt written reasonable rules governing the frequency,

26  duration, and other manner of member and parcel owner

27  statements, which rules must be consistent with this

28  paragraph.

29         (9)(7)  ELECTIONS.--Elections of directors must be

30  conducted in accordance with the procedures set forth in the

31  governing documents of the association.  All members of the

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 1  association shall be eligible to serve on the board of

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

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

 4  be held.  Except as otherwise provided in the governing

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

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

 7  between a member and an association must be submitted to

 8  mandatory binding arbitration with the division. Such

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

10  718.1255 and the procedural rules adopted by the division.

11         Section 8.  Section 720.311, Florida Statutes, is

12  amended to read:

13         720.311  Dispute resolution.--

14         (1)  The Legislature finds that alternative dispute

15  resolution has made progress in reducing court dockets and

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

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

18  arbitration provided for in this section shall toll the

19  applicable statute of limitations. Any recall dispute filed

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

21  conducted by the division in accordance with the provisions of

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

23  division. In addition, the division shall conduct mandatory

24  binding arbitration of election disputes between a member and

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

26  the division. Neither election disputes nor recall disputes

27  are eligible for mediation; these disputes shall be arbitrated

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

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

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

31  conducting the proceeding. Initially, the petitioner shall

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

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

 3  arbitration proceeding and the prevailing party in an

 4  arbitration proceeding shall be paid its reasonable costs and

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

 6  arbitrator. The division shall adopt rules to effectuate the

 7  purposes of this section.

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

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

10  areas and other covenant enforcement disputes, disputes

11  regarding amendments to the association documents, disputes

12  regarding meetings of the board and committees appointed by

13  the board, membership meetings not including election

14  meetings, and access to the official records of the

15  association shall be filed with the division for mandatory

16  mediation before the dispute is filed in court. Mediation

17  proceedings must be conducted in accordance with the

18  applicable Florida Rules of Civil Procedure, and these

19  proceedings are privileged and confidential to the same extent

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

21  consider any information or evidence arising from the

22  mediation proceeding except in a proceeding to impose

23  sanctions for failure to attend a mediation session. Persons

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

25  mediation conference without the consent of all parties,

26  except for counsel for the parties and a corporate

27  representative designated by the association. When mediation

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

29  board meeting for purposes of notice and participation set

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

31  proceedings through the use of division mediators or refer the

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 1  disputes to private mediators who have been duly certified by

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

 3  share the costs of mediation equally, including the fee

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

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

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

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

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

 9  petitioner shall initially file with the division upon filing

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

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

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

13  shared equally unless otherwise agreed by the parties, such

14  further fees as are necessary to fully reimburse the division

15  for all expenses incurred in the mediation.

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

17  successful in resolving all issues between the parties, the

18  parties may file the unresolved dispute in a court of

19  competent jurisdiction or elect to enter into binding or

20  nonbinding arbitration pursuant to the procedures set forth in

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

22  arbitration proceeding to be conducted by a division

23  arbitrator or by a private arbitrator certified by the

24  division. If all parties do not agree to arbitration

25  proceedings following an unsuccessful mediation, any party may

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

27  nonbinding arbitration is final and enforceable in the courts

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

29  competent jurisdiction within 30 days after entry of the

30  order.

31  

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 1         (c)  The division shall develop a certification and

 2  training program for private mediators and private arbitrators

 3  which shall emphasize experience and expertise in the area of

 4  the operation of community associations. A mediator or

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

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

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

 8  mediated or arbitrated at least 10 disputes involving

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

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

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

12  completed 20 hours of training in community association

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

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

15  The division may conduct the training and certification

16  program within the division or may contract with an outside

17  vendor to perform the training or certification. The expenses

18  of operating the training and certification and training

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

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

21  mediation of those disputes referred to in this subsection and

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

23  and Professional Regulation should seek sufficient funding to

24  cover the startup costs of establishing the certification and

25  training program.

26         (d)  The mediation procedures provided by this

27  subsection may be used by a Florida corporation responsible

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

29  are parcel owners or their representatives, in which

30  membership in the corporation is not a mandatory condition of

31  

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

 2  assessment that may become a lien on the parcel.

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

 4  assist homeowners, associations, board members, and managers

 5  in understanding and increasing awareness of the operation of

 6  homeowners' associations pursuant to chapter 720 and in

 7  understanding the use of alternative dispute resolution

 8  techniques in resolving disputes between parcel owners and

 9  associations or between owners. Such education program may

10  include the development of pamphlets and other written

11  instructional guides, the holding of classes and meetings by

12  division employees or outside vendors, as the division

13  determines, and the creation and maintenance of a website

14  containing instructional materials. The expenses of operating

15  the education program shall be initially paid by the moneys

16  and filing fees generated by the arbitration of recall and

17  election disputes and by the mediation of those disputes

18  referred to in this subsection. At any time after the filing

19  in a court of competent jurisdiction of a complaint relating

20  to a dispute under ss. 720.301-720.312, the court may order

21  that the parties enter mediation or arbitration procedures.

22         Section 9.  Section 689.26, Florida Statutes, is

23  transferred, renumbered as section 720.401, Florida Statutes,

24  and amended to read:

25         720.401 689.26  Prospective purchasers subject to

26  association membership requirement; disclosure required;

27  covenants; assessments; contract cancellation voidability.--

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

29  be presented a disclosure summary before executing the

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

31  substantially similar to the following form:

                                  35

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 1  

 2                        DISCLOSURE SUMMARY

 3                                FOR

 4                        (NAME OF COMMUNITY)

 5  

 6         1.  AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU

 7  WILL (WILL) (WILL NOT) BE OBLIGATED TO BE A MEMBER OF A

 8  HOMEOWNERS' ASSOCIATION.

 9         2.  THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE

10  COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN

11  THIS COMMUNITY.

12         3.  YOU WILL (WILL) (WILL NOT) BE OBLIGATED TO PAY

13  ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO

14  PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $______

15  PER ______. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL

16  ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL

17  ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE

18  CURRENT AMOUNT IS $______ PER ______.

19         4.  YOU MAY (WILL) (WILL NOT) BE OBLIGATED TO PAY

20  SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR

21  SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC

22  CHANGE.

23         5.4.  YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR

24  ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION

25  COULD RESULT IN A LIEN ON YOUR PROPERTY.

26         6.5.  THERE MAY BE (IS) (IS NOT) AN OBLIGATION TO PAY

27  RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED

28  FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS'

29  ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $______ PER

30  ______. (If such obligation exists, then the amount of the

31  current obligation shall be set forth.)

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 1         7.6.  THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE

 2  RESTRICTIVE COVENANTS (CAN) (CANNOT) BE AMENDED WITHOUT THE

 3  APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE,

 4  IF NO MANDATORY ASSOCIATION EXISTS, PARCEL OWNERS.

 5         8.7.  THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM

 6  ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER,

 7  YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION

 8  GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

 9         9.8.  THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC

10  RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE

11  COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND

12  CAN BE OBTAINED FROM THE DEVELOPER.

13  DATE:                                               PURCHASER:

14                                                      PURCHASER:

15  

16  The disclosure must be supplied by the developer, or by the

17  parcel owner if the sale is by an owner that is not the

18  developer.  Any contract or agreement for sale shall refer to

19  and incorporate the disclosure summary and shall include, in

20  prominent language, a statement that the potential buyer

21  should not execute the contract or agreement until they have

22  received and read the disclosure summary required by this

23  section.

24         (b)  Each contract entered into for the sale of

25  property governed by covenants subject to disclosure required

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

27  states:

28  

29         IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION

30         720.401 689.26, FLORIDA STATUTES, HAS NOT BEEN

31         PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE

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 1         EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT

 2         IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR

 3         SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE

 4         OF THE BUYER'S INTENTION TO CANCEL WITHIN 3

 5         DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR

 6         PRIOR TO CLOSING, WHICHEVER OCCURS FIRST. ANY

 7         PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS

 8         NO EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT

 9         SHALL TERMINATE AT CLOSING.

10  

11         (c)  If the disclosure summary is not provided to a

12  prospective purchaser before the purchaser executes a contract

13  for the sale of property governed by covenants that are

14  subject to disclosure pursuant to this section, the purchaser

15  may void the contract by delivering to the seller or the

16  seller's agent or representative written notice canceling the

17  contract within 3 days after receipt of the disclosure summary

18  or prior to closing, whichever occurs first. This right may

19  not be waived by the purchaser but terminates at closing. A

20  contract that does not conform to the requirements of this

21  subsection is voidable at the option of the purchaser prior to

22  closing.

23         (2)  This section does not apply to any association

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

25  chapter 723 or to a subdivider registered under chapter 498;

26  and also does not apply if disclosure regarding the

27  association is otherwise made in connection with the

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

29  chapter 723.

30  

31  

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 1         Section 10.  Section 689.265, Florida Statutes, is

 2  transferred and renumbered as section 720.3086, Florida

 3  Statutes, to read:

 4         720.3086 689.265  Financial report.--In a residential

 5  subdivision in which the owners of lots or parcels must pay

 6  mandatory maintenance or amenity fees to the subdivision

 7  developer or to the owners of the common areas, recreational

 8  facilities, and other properties serving the lots or parcels,

 9  the developer or owner of such areas, facilities, or

10  properties shall make public, within 60 days following the end

11  of each fiscal year, a complete financial report of the

12  actual, total receipts of mandatory maintenance or amenity

13  fees received by it, and an itemized listing of the

14  expenditures made by it from such fees, for that year.  Such

15  report shall be made public by mailing it to each lot or

16  parcel owner in the subdivision, by publishing it in a

17  publication regularly distributed within the subdivision, or

18  by posting it in prominent locations in the subdivision.  This

19  section does not apply to amounts paid to homeowner

20  associations pursuant to chapter 617, chapter 718, chapter

21  719, chapter 721, or chapter 723, or to amounts paid to local

22  governmental entities, including special districts.

23         Section 11.  Paragraphs (g) and (h) of subsection (2)

24  of section 498.025, Florida Statutes, are amended to read:

25         498.025  Exemptions.--

26         (2)  Except as provided in s. 498.022, the provisions

27  of this chapter do not apply to offers or dispositions of

28  interests in lots, parcels, or units contained in a recorded

29  subdivision plat, or resulting from the subdivision of land in

30  accordance with applicable local land development laws and

31  regulations pursuant to part II of chapter 163, including

                                  39

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 1  lots, parcels, units, or interest vested under such part, if

 2  all of the following conditions exist:

 3         (g)  The contract for purchase or lease contains, and

 4  the subdivider complies with, the following provisions:

 5         1.  The purchaser must inspect the subdivided land

 6  prior to the execution of the contract or lease.

 7         2.  The purchaser shall have an absolute right to

 8  cancel the contract or lease for any reason whatsoever for a

 9  period of 7 business days following the date on which the

10  contract or lease was executed by the purchaser.

11         3.  In the event the purchaser elects to cancel within

12  the period provided, all funds or other property paid by the

13  purchaser shall be refunded without penalty or obligation

14  within 20 days of the receipt of the notice of cancellation by

15  the developer.

16         4.  All funds or property paid by the purchaser shall

17  be put in escrow until closing has occurred and the lease or

18  deed has been recorded.

19         5.  Unless otherwise timely canceled, closing shall

20  occur within 180 days of the date of execution of the contract

21  by the purchaser.

22         6.  When title is conveyed, said title shall be

23  conveyed by statutory warranty deed unencumbered by any lien

24  or mortgage except for any first purchase money mortgage given

25  by the purchaser and restrictions, covenants, or easements of

26  record.

27         7.  The subdivider presents to the purchaser the

28  disclosure required by s. 720.401 s. 689.26 prior to the

29  execution of the contract or lease.

30         (h)  The agreement for deed contains, and the

31  subdivider complies with, the following provisions:

                                  40

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 1         1.  The purchaser must inspect the subdivided land

 2  prior to the execution of the agreement for deed.

 3         2.  The purchaser shall have an absolute right to

 4  cancel the agreement for deed for any reason whatsoever for a

 5  period of 7 business days following the date on which the

 6  agreement for deed was executed by the purchaser.

 7         3.  If the purchaser elects to cancel within the period

 8  provided, all funds or other property paid by the purchaser

 9  shall be refunded without penalty or obligation within 20 days

10  after the receipt of the notice of cancellation by the

11  developer.

12         4.  All funds or for property paid by the purchaser

13  shall be put in escrow until the agreement for deed has been

14  recorded in the county in which the subdivision is located.

15         5.  Unless otherwise timely canceled, the agreement for

16  deed shall be recorded within 180 days after its execution by

17  the purchaser.

18         6.  Sale of lots in the subdivision shall be restricted

19  solely to residents of the state.

20         7.  The underlying mortgage or other ancillary

21  documents shall contain release provisions for the individual

22  lot purchased.

23         8.  The subdivider presents to the purchaser the

24  disclosure required by s. 720.401 s. 689.26 prior to the

25  execution of the agreement for deed.

26         Section 12.  Section 720.402, Florida Statutes, is

27  created to read:

28         720.402  Publication of false and misleading

29  information.--

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

31  material statement or information that is false or misleading

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 1  and published by or under authority from the developer in

 2  advertising and promotional materials, including, but not

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

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

 5  and newspaper advertising, pays anything of value toward the

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

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

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

 9  the transaction. After the closing of the transaction, the

10  purchaser has a cause of action against the developer for

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

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

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

14         (a)  The closing of the transaction;

15         (b)  The issuance by the applicable governmental

16  authority of a certificate of occupancy or other evidence of

17  sufficient completion of construction of the purchaser's

18  residence to allow lawful occupancy of the residence by the

19  purchaser. In counties or municipalities in which certificates

20  of occupancy or other evidences of completion sufficient to

21  allow lawful occupancy are not customarily issued, for the

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

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

24  occupancy of the residence may be allowed under prevailing

25  applicable laws, ordinances, or statutes;

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

27  areas and such recreational facilities, whether or not the

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

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

30  governing documents, or written agreement for purchase or

31  lease of the parcel; or

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

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

 3  by the developer of the common areas and such recreational

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

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

 6  applicable to the developer's obligation.

 7  

 8  Under no circumstances may a cause of action created or

 9  recognized under this section survive for a period of more

10  than 5 years after the closing of the transaction.

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

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

13  developer may not expend association funds in the defense of

14  any suit under this section.

15         Section 13.  Section 720.501, Florida Statutes, is

16  created to read:

17         720.501  Warranties.--

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

19  to the homeowners' association an implied warranty of fitness

20  and merchantability for the purposes or uses intended as

21  follows:

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

23  warranty for 3 years commencing with the completion of the

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

25  control of the association from the developer to the members

26  other than the developer, but in no event for more than 5

27  years after completion of the building or improvement.

28         2.  As to the personal property that is transferred

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

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

31  

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

 2  the common areas to the association.

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

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

 5  until the members other than the developer have elected a

 6  majority of the members of the board.

 7         (2)  The term "completion of a building or improvement"

 8  means issuance of a certificate of occupancy for the entire

 9  building or improvement, or the equivalent authorization

10  issued by the governmental body having jurisdiction, and in

11  jurisdictions where no certificate of occupancy or equivalent

12  authorization is issued it means substantial completion of

13  construction, finishing, and equipping of the building or

14  improvement according to the plans and specifications.

15         (3)  These warranties are conditioned upon routine

16  maintenance being performed, unless the maintenance is an

17  obligation of the developer or a developer-controlled

18  association.

19         (4)  The warranties provided by this section shall

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

21  owners and to the benefit of the developer.

22         (5)  This section does not affect a homeowners'

23  association as to which rights are established by transfer of

24  control and ownership rights of the common areas from the

25  developer to the homeowners' association prior to October 1,

26  2004.

27         (6)  The warranties provided by this section may be

28  covered by an insured warranty program underwritten by a

29  licensed insurance company registered in this state, provided

30  that such warranty program meets the minimum requirements of

31  this chapter.

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 1         Section 14.  Subsection (1) of section 34.01, Florida

 2  Statutes, is amended to read:

 3         34.01  Jurisdiction of county court.--

 4         (1)  County courts shall have original jurisdiction:

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

 6  circuit courts;

 7         (b)  Of all violations of municipal and county

 8  ordinances; and

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

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

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

12  exclusive jurisdiction of the circuit courts. The party

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

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

15  $5,000 shall pay to the clerk of the county court the filing

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

17  manner as provided in s. 28.241; and.

18         (d)  Of disputes occurring in the homeowners'

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

20  concurrent with jurisdiction of the circuit courts.

21         Section 15.  Paragraph (a) of subsection (1) of section

22  316.00825, Florida Statutes, is amended to read:

23         316.00825  Closing and abandonment of roads; optional

24  conveyance to homeowners' association; traffic control

25  jurisdiction.--

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

27  336.12, the governing body of the county may abandon the roads

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

29  subdivision plat and simultaneously convey the county's

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

31  

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 1  drainage facilities to a homeowners' association for the

 2  subdivision, if the following conditions have been met:

 3         1.  The homeowners' association has requested the

 4  abandonment and conveyance in writing for the purpose of

 5  converting the subdivision to a gated neighborhood with

 6  restricted public access.

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

 8  of property located in the subdivision have consented in

 9  writing to the abandonment and simultaneous conveyance to the

10  homeowners' association.

11         3.  The homeowners' association is both a corporation

12  not for profit organized and in good standing under chapter

13  617, and a "homeowners' association" as  defined in s.

14  720.301(8) s. 720.301(7) with the power to levy and collect

15  assessments for routine and periodic major maintenance and

16  operation of street lighting, drainage, sidewalks, and

17  pavement in the subdivision.

18         4.  The homeowners' association has entered into and

19  executed such agreements, covenants, warranties, and other

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

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

22  such other requirements and conditions as may be established

23  or imposed by the county with respect to the ongoing

24  operation, maintenance, and repair and the periodic

25  reconstruction or replacement of the roads, drainage, street

26  lighting, and sidewalks in the subdivision after the

27  abandonment by the county.

28         Section 16.  Subsection (2) of section 558.002, Florida

29  Statutes, is amended to read:

30         558.002  Definitions.--As used in this act, the term:

31  

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

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

 3  723.025.

 4         Section 17.  The Division of Statutory Revision is

 5  requested to designate sections 720.301-720.312, Florida

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

 7  designate sections 720.401 and 720.402, Florida Statutes, as

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

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

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

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

12  AND OBLIGATIONS OF DEVELOPERS."

13         Section 18.  This act shall take effect October 1,

14  2004.

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 2984

 3                                 

 4  The committee substitute amends the definition of the term
    "member" in s. 720.301, F.S.  It provides a limitation for the
 5  enforcement of deed restrictions in homeowners' associations
    of 15 or fewer parcel owners.  It amends the parcel owner's
 6  right to speak and open meeting provisions of s.
    720.302(2)(b), F.S., for board meetings, and for association
 7  meetings under s. 720.302(2)(d), F.S.  It deletes the
    requirement in s. 720.311(3), F.S., that the Department of
 8  Business and Professional Regulation seek funding to cover the
    startup costs of the education, mediation, and arbitration
 9  programs.

10  The committee substitute amends s. 720.3055, F.S., to apply
    the competitive bidding requirements to contracts entered into
11  after October 1, 2004, instead of July 1, 2004.  It also
    amends s. 720.3055, F.S., to require a written request to
12  speak before a meeting.  It amends the disclosure requirements
    in s. 720.401, F.S., and makes conforming amendments to ss.
13  720.3086 and 498.025, F.S.

14  The committee substitute amends the provisions of s. 720.501,
    F.S., to delete the implied warranties relating to
15  contractors, all subcontractors, and suppliers.  It also
    amends the provision relating to insured warranty programs,
16  and provides that the provisions of this section do not apply
    to associations that are member-controlled  before October 1,
17  2004, instead of July 1, 2004.  The committee substitute
    extends the effective date of the bill from July 1, 2004, to
18  October 1, 2004.

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

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