Chapter 718 Changes
The Florida legislature just passed SB1196 and Governor Crist just signed the bill into law. There were quite a few changes and SB 1196 provides for some relief for associations concerning the mandatory Fire Sprinkler and Elevator retrofit. Overall, these changes will affect most condominium and cooperative associations, regardless of size. The following is a review of the changes and additions to the law, which will become effective on July 1, 2010.
Fire Sprinkler Retrofit – Amending s. 718.112 and s. 719.1055(5), F.S
One every three years at a special meeting, an association can “opt-out” with affirmative vote of two-thirds (2/3rds) of the entire membership. It also extends deadlines for associations that don’t opt out to the end of 2019.
Elevators – Amending s. 553.509(2) and s. 399.02, F.S.
The change allows for a five (5) year delay to retrofit with a special access key for elevators in condominiums and cooperatives unless the elevator is replaced or requires major modification. It also allows associations to “opt-out” of elevator operation by alternative power source with affirmative vote of majority of owners of condominium.
Designation of Limited Common Elements by Amendment – s. 718.110(14), F.S.
An association may designate limited common elements by amendment, so long as the building component is designed for use by specific owners.
Official Records – s. 718.111(12), F.S.
Limits individual director liability for failure to maintain or destruction of official records to cases where there is intent to harm the association or one or more of its members.
Indemnifies association for unit owner misuse of information obtained from official records.
Personnel records (disciplinary, payroll, health and insurance records) are exempt from unit owner access.
Exempts email addresses, telephone numbers, emergency contact information, and any unit owner contact information other than the addresses to send notices from unit owner access.
Exempts association’s electronic or computer security data, including passwords, software and operating systems from unit owner access.
Common Expenses – Amending s. 718.115(1)(d)1, F.S.
A communication services, information services, and internet services obtained pursuant to a bulk contract are common expenses.
Board Eligibility – Amending s. 718.112(2)(d), F.S.
Co-owners in condominiums with more than 10 units cannot serve together unless they own more than one unit or there are not enough volunteers to fill all slots.
The bill would require directors to supply association with new certification form or take a state-approved education class.
Collections and Foreclosures – Amending s. 718.116 and s. 719.109(3), F.S
Changes mortgagee liability cap from 6 months to 12 months after acquisition of title by foreclosure (or deed in lieu) but retains 1% cap.
The association may demand a tenant pay rent to the association to satisfy delinquency for that condominium unit with written notice to the unit owner. Landlord/owner must provide tenant with credit for any amounts paid to association. An association may evict tenant that fails to comply.
Enforcement Mechanism – Amending s. 718.303, F.S.
Creates suspension of use rights if owner is more than 90 days past due. An association cannot suspend use of limited common elements, utility service, parking spaces, elevators or impede access to/from unit.
Suspension requires board to vote on suspension/fine at dulynoticed board meeting and advance notification to the unit owner.
The association may suspend voting rights after 90 days of non-payment.
Filling Vacancies on Board – Creating s. 719.106 (1)6, F.S.
An association may fill vacancies on a board for remainder of the term by vote of majority of remaining directors, even if less than a quorum or only one director. In the alternative, the board may hold an election to fill the vacancy.
Insurance – Creates 627.714, F.S; Amends s. 718.111(11), F.S.
All HO-6 policies issued or renewed after July 1, 2010, are to include at least $2,000 in property loss assessment coverage with deductible of $250 per property loss.
Changes references to “hazard” insurance and “casualty” insurance to “property” insurance.
The master insurance policy must be based on the “replacement cost” of the property to be insured, which must be determined at least once every 36 months.
The bill changes requirements for notice of board meeting to set deductible (still requires 14 days notice).
The bill removes language regarding insurance of “improvements” that benefit fewer than all the owners
The requirement for owners to provide proof of hazard and liability insurance to the association and the association’s right to “force place” insurance is eliminated.
The requirement that Association must be an additional named insured and loss payee on all HO-6 casualty insurance policies issued to unit owners in the condominium is eliminated.
Financial Reporting Requirements – s. 718.111(13), F.S.
Associations that operate fewer than 75 units, regardless of the association’s annual revenues, shall prepare a report of cash receipts and expenditures instead of financial statements (currently applicable to associations of fewer than 50 units).
The DBPR shall adopt rules including standards for presenting a summary of association reserves & a good faith estimate of the annual amount of money required for the association to fully fund reserves for each reserve item based on a straight-line accounting method. This disclosure is not applicable to reserves funded via the pooling method.
Rental Amendments – Amends s. 718.110(13), F.S.
The bill clarifies that any amendment prohibiting unit owners from renting their units or altering permitted lease terms or the number of rentals during a specified period applies only to unit owners who consent to amendment and unit owners who acquire title to their units after effective date of amendment.
These changes are summary in nature and it is suggested that you review all law changes with your association’s attorney for clarification.
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