Legislative updates effective July 1, 2018 to the Condominium Act and HOA Act

2018 Legislative Update – 

On July 1, 2018, the amendments to Chapter 718 (Condominium Act) and Chapter 7120 (HOA Act) signed into law by Governor Scott will be effective. Some of the changes are clarifications and modifications to the laws enacted in 2017, such as conflicts of interest, director term limits and website requirements for condominiums, and others are new additions.

CONDOMINIUMS:

Conflicts of Interest [§718.3026(3) and §718.3027]

There were significant additions to Chapter 718 in 2017 regarding director and manager conflict of interests, and associated penalties. The 2018 legislative session further amended the provisions to remove some confusion associated with the conflict provisions being in both 718.3026 (dealing with contracts), and 718.30127 (entitled “Conflicts of Interest”). Now they are contained only in 718.3027, with some further amendment. 

Official Records [§718.111]

• §718.111(12)(b): The deadline to respond to written official records requests is extended from 5 business days to 10 business days (now matches HOA statute timeline)
• Minutes of all meetings must be permanently maintained (7- years was previously required)
• Accounting records for the association and for each unit the association operates must be permanently maintained (7- years was previously required)
• Copies of Rules adopted for the association are also now to be kept permanently, even if amended in their entirety

Websites [§718.111(g)]

• As of January 1, 2019, all condominium associations “managing a condominium with 150 or more units” must maintain a website.
• The website or web portal must be owned and/or operated by the association or operated by a third-party provider with whom the association owns, leases, rents or otherwise obtains the right to operate.
• There must be a protected location on the site that is only accessible to unit owners and employees of the association and not to members of the public. On written request, unit owners are to be provided a user name and password.
• The following documents must be posted in digital form on the website:
  • Articles, Declaration, Bylaws and Rules (and amendments)
  • A list of all executory contracts or documents to which the association is a party
• i.e. management agreement, maintenance and landscaping contracts 
  • The 2017 version of the statute required copies of the actual contracts. With the 2018 amendment, only a list of these contracts is required. 
  • After bidding for projects is closed, a list of bids received by the association within the last year. 
  • If the bid exceeds $500, a summary of the bids must be maintained on the website for 1 year; in lieu of summaries, complete copies of the bids may be posted.
  • Annual budget and any proposed budget to be considered at the annual meeting.
  • Financial report required by subsection (13) of 718.112, and any monthly income or expense statement to be considered at a meeting. 
  • Director certifications.
  • All contracts or transactions between the association and any director, officer or entity in which the director has a financial interest.
  • Any contract or document regarding a conflict of interest or possible conflict of interest as provided in §468.436(2)(b)6 and §718.3027(3).
  • Notices of unit owner meetings and agendas – to be posted no later than 14 days before the meeting.
  • must be posted in plain view on front page of website or on a subpage labeled “Notices”
  • Must also post copies of any documents to be considered and voted on by owners at the meeting – at least 7 days before the meeting
  • Notices of any board meeting and agenda posted no later than date for posting notice of the meeting.

The association is not to post items not available for inspection by unit owners such as attorney-client privileged documents and communications or payroll records of employees, but the association will not be liable for doing so, unless the disclosure was made with a knowing or intentional disregard of the protected or restricted nature of the information. [§718.111(g)(3)]

The failure of the association to post the documents required under the statute does not, in and of itself, invalidate any action or decision of the board or its committees. [§718.111(g)(4)]

Meeting Notices [§718.112]

Special Assessment meetings: Replaced the prior requirement of stating in the notice the “nature, estimated cost, and description of the purpose of the assessment” with a requirement that the notice state “that assessments will be considered and provide the estimated cost and description of the purposes for such assessments.” 718.112(2)(c)(1)

Website posting of notices: In addition to posting meeting notices on the condominium property, Associations may adopt rules and procedures for noticing owner meetings and agendas on a website, so long as the time requirement for noticing such meetings is met. Any rule adopted must include a requirement that the electronic notice be sent in the same manner as a notice for a meeting of the members, and must include a hyperlink to the website where the notice is posted. This notice must be sent to all owners who have provided their e-mails as an official record. §718.112(2)(c)(1), § 718.112(2)(d)(3).

•  Associations are still required to physically post meeting notices on the property.
• Unit owners who consent to receiving notices electronically are responsible for removing or bypassing filters that may block receipt of mass e-mails sent to members on behalf of the association in the course of giving electronic notices. §718.112(2)(d)6

Board Member Terms [§718.112]

• Amendment to 718.112(2)(d) clarifies the 2017 2-year term limit imposed.
  • “Board members may serve 2-year terms longer than 1 year if permitted by the bylaws or articles of incorporation. A board member may not serve more than 8 consecutive years four consecutive 2-year terms, unless approved by an affirmative vote of unit owners representing two-thirds of all votes cast in the election the total voting interests of the association or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy….”

Recalls [§718.112]

• Board of Directors must hold a meeting within 5 business days after the adjournment of the recall meeting or service of a written recall agreement.

 If a recall is determined at the conclusion of that meeting to be “facially valid”, then the recall of the member, or members, is effective immediately upon the conclusion of the board meeting. §718.112(2)(j)

 A recalled board member may file a petition under 718.1255 challenging the validity of the recall

• If the arbitrator determines the recall was invalid, the board member is immediately reinstated and the board member is entitled to recover reasonable attorneys’ fees and costs incurred.

If the board determines at the conclusion of that meeting the recall is not facially valid, the recalling unit owner(s) representative may file a petition under 718.1255 challenging the board’s determination. §718.112(2)(j)4.

The arbitrator may award reasonable attorneys’ fees and costs to the respondents if they prevail, if the arbitrator makes a finding that the petitioner’s claim is frivolous. §718.112(2)(j)6.

Material Alterations and Substantial Additions [§718.113]

• Clarifies that approval of 75% of the voting interests of the unit owners must be obtained BEFORE commencing a material alteration or substantial addition to common elements or to real property that is association property, unless the condominium’s declaration provides otherwise. This restriction applies to condominium associations existing on July 1, 2018. §718.113(2).

Fines and Use Right Suspensions [§718.303(3)]

• Fine/suspension committee to be composed of at least 3 members appointed by the board; cannot be officers, directors, or employees of the association, or the spouse, parent, child, brother or sister of an officer, director, or employee.
• Clarifies that the fine/suspension committee decides to approve or disapprove the fine and/or suspension by majority vote.
• If approved by the committee, a fine is now due 5 days after the date of the committee meeting at which the fine is approved.
• Written notice of a fine and/or suspension of use rights must be provided to the unit owner, and if applicable to any tenant, licensee or invitee, by mail or hand-delivery.

Electric Vehicles [§ 718.113, § 718.121]

A condominium association may not prohibit a unit owner from installing an electric vehicle charging station within the boundaries of the unit owner’s limited common element parking area, however, the installation of an electric vehicle charging station is subject to a number of restrictions enumerated in the statute, such as safety, preservation of the condominium property, and the unit owner’s responsibility for associated costs. 718.113(8)

The installation of an electric vehicle charging station may not be the basis for filing a construction lien under Chapter 713, Florida Statutes, against the association, but a construction lien may be filed against the unit owner. 718.121(2), Fla. Stat.

HOMEOWNERS ASSOCIATIONS:

Governing Document Amendments

Amendments to governing documents must contain the full text of the provision to be amended; proposed language to be added is to be underlined and deleted language must be stricken. §720.306(1)(e)

If the changes are so extensive that underlines and strikethroughs would hinder, rather than assist the understanding of the proposed amendment, a notation must be inserted stating “Substantial rewording. See governing documents for current text.”

Amendments to governing documents are effective when recorded in the public records.

Immaterial error or omission in the amendment process doesn’t invalidate the amendment

*Notices for required for amendments must be mailed or delivered to the addresses of the owners on the property appraiser’s website, or electronically if the owner has consented in writing to receive electronic notices. 

 Fines and Suspensions

• “A fine or suspension levied by the board of administration may not be imposed unless the board first provides at least 14 days’ notice to the parcel owner and, if applicable, any occupant, licensee, or invitee of the parcel owner, sought to be fined or suspended and an opportunity for a hearing before…” the fine/suspension committee. §720.305(2)(b)
• The role of the committee is limited to determining whether to confirm or reject the fine or suspension levied by the board.

 Fines are due 5 days after the date of the committee meeting at which the fine is approved.

Elections

The following language was added to §720.306(9)(a): “If an election is not required because there are either an equal number or fewer qualified candidates than vacancies exist, and if nominations from the floor are not required pursuant to this section or the bylaws, write-in nominations are not permitted and such qualified candidates shall commence service on the board of directors, regardless of whether a quorum is attained at the annual meeting.”

Application of Payments

This amendment clarifies that regardless of whether a unit owner places a restrictive endorsement on or accompanying their payment to the association, such as “paid in full” or the like, it does not operate as accord and satisfaction as to a greater amount owing, and the association may apply the partial payment in the order of the statute, to interest, then to any late fees, costs and attorneys’ fees and then to assessments, and continue to seek collection of the remaining balance owing. §720.3085(3)(b)