17Jun
By: Sean Murrell On: June 17, 2013 In: Home Owners Association Legal Comments: 0

Both the House and the Senate have recently passed Bill 7119 which was signed by the Governor and put into effect on July 1.  This “reform bill” will amend and make substantial changes to Chapter 720, the chapter of the Florida Statutes regulating HOA’s.  A summary of some of the provisions…

  • All homeowner associations must register with the Department of Business and Professional Regulation (DBPR) by November 22, 2013.  There will be a means of updating this information as it changes as well.  The management company or CAM is required to submit this report or the Board of Directors (BOD) if there is no management entity.  This will finally bring HOA’s under the purview of the DBPR (as condos, time-shares and mobile homes have been) and provide a valuable source for oversight and some dispute resolution.
  • Providing for discipline by the Department of Business & Professional Regulation (“DBPR”) for community association managers (“CAM”) if the CAM commits violations of Florida Statutes 720, 718 and 719; enters the association into a contract where the CAM has a financial interest without disclosing such interest; obtaining a license or certification by fraud, misrepresentation or concealment; being convicted of or pleading no contest to a felony; violation of any DBPR order or rule, committing gross misconduct or gross negligence, or other violation of section 468.436 of the Florida Statutes.
  • Forcing both CAMs and Directors to disclose financial interests they have with potential vendors or entities they seek to contract the association with.  If a member objects to the contract bid, the contract must be put to a membership vote.
  • Prohibiting Directors or their families from receiving any goods or services of value stemming from a contract entered into by the association for services.
  • Allowing for the removal of a director or officer from the Board of Directors if the director or officer has been charged with a crime of theft or embezzlement involving the association funds or property; or preventing such an individual from running for a board position.
  • Requiring Directors to certify that they have read certain documents and will uphold certain duties to the association.
  • Regarding assessment collections, the bill will specifically address that the association is NOT part of the ‘joint and several liability’ chain of 720.3085; meaning, the HOA will be able to still collect past-due assessments from a subsequent owner after they have foreclosed their assessment lien and taken title (this includes the ability to collect safe harbor from a foreclosing bank).
  • Prohibiting members from serving as certain seats on the Board if facing certain criminal charges.
  • Directors and Officers will be required to provide written certification that they have read all of the governing docs, or alternatively, take a state-approved educational course.
  • Requiring associations to keep official records within 45 miles of the community or within the county; associations may also choose to have records accessed online.  The bill details certain restrictions on costs the association may charge for printed copies and means of access.
  • Requiring the association to directly distribute copies of amendments after they are recorded.
  • Developers will be required to specifically designate reserve funds, if they are provided.
  • Associations will be required to provide copies of an amendment to its members within 30 days of the amendment being recorded.
  • Allowing for the removal of floor-nominations at election meetings if there is a set protocol for nominating in advance.  In addition; the bill will authorize associations to bypass elections entirely if there are not more nominations than open positions.  THIS PROVISION HAS POTENTIAL FOR ABUSE.
  • Authorizing forced developer turnover if the developer:  fails to meet its responsibilities regarding promised amenities, files for Chapter 7 bankruptcy, or loses title to common areas.  In addition, the bill authorizes members to elect at least one board members once 50% of the properties are no longer developer-owned.
  • Finally, the bill addresses limitations to the developer’s ability to amend the governing docs.

 

The full text of the bill can be read at:

http://www.flsenate.gov/Session/Bill/2013/7119/BillText/er/PDF