Given the relatively slower pace of community association governance, when it came to myriad legal and operations issues suddenly created by the COVID-19 crisis throughout the past year, many Florida community associations have strained to pivot in response.
Now, signed into law by Florida Governor Ron DeSantis and effective as of July 1, 2021, SB 630 by Senator Dennis Baxley will streamline community associations’ powers in future pandemic-like situations.
With the ongoing COVID issue having given impetus to filing the legislation and general lobbying substantially curtailed because of the Capitol concurrently having been closed to the public for 14 months, a host of other longtime community association management wish-list items ultimately converged in SB 630. The resulting bill substantially revises provisions in Chapters s. 718, 719 and 720, F.S., along with making a significant change to 627.714, F.S. relating to residential condominium insurance coverage and subrogation.
To access the bill text as passed, click here.
“The byproduct of so many questions brought on by COVID revealed an immediate need for Florida’s community associations to be more streamlined, modernized and responsive,” Eisinger Law Partner Alessandra Stivelman explained. “SB 630 presented a unique opportunity to advance its varied facets.”
Whereas current Florida statutes already allowed for emergency powers of condominium, cooperative, and homeowners’ association boards in certain situations, respectively, SB 630 amends those powers to also apply in situations involving not just damage, but also injury and contagions, caused by or anticipated to be caused by a declared state of emergency. See revised ss. 718.1265, 719.128, and 720.316, F.S.
With a nod to the pandemic proliferation of video conferencing, SB 630 also authorizes association boards to conduct their business (including elections) by telephone, real-time videoconferencing, or similar real-time electronic or video communication.
“However, an impartial committee must still be present together somewhere in order to tally votes at a condo election,” Stivelman noted.
Notwithstanding homeowners’ varying degrees of ire over their social polarization, COVID-era safety precautions and public health mandates caused many associations to briefly shut down their common areas such as pools and gyms to prevent spreading the Coronavirus and prohibiting visitor and/or guest access to units. In response, SB 630 creates new law by revising ss. 718.1265(3), 719.128(3), and 720.316(3), F.S. to provide that condominium, cooperative, or homeowners’ associations may not prohibit certain access, during a declared state of emergency, to an association’s common areas or limited common areas, or to units, when such access is necessary regarding selling, leasing, or transferring title to property or for habitability, health, and safety. However, that access now may be subject to reasonable restrictions adopted by the association and access for habitability, health, and safety can be restricted by government order or public health and CDC directives.
SB 630 also provides that associations may consult with public health officials when determining whether any portions of the condominium property are unavailable for entry or occupancy.
Decidedly omnibus in nature, SB 630 creates a gamut of other new laws. According to reports, the bill was a longtime priority of Florida’s Chief Executive Officers of Management Companies, which represents over 18,000 licensed, professional community association managers who manage more than 14,000 community associations statewide.
The Florida Senate Committee on Rules provided an extensive summary of the bill’s final iteration as passed. Major highlights are provided below:
Homeowner Associations Can Prohibit Short-Term Rentals: Among other substantive changes affecting rental rights, one of possible significant impact for the vacation rental industry is the creation of s. 720.306(1)(h)2., F.S. to permit a homeowners’ association to adopt an amendment prohibiting or regulating rentals for less than six months or prohibiting rentals more than three times in a calendar year, which is applicable to all parcel owners, regardless of when the parcel owners acquired title to their parcels or whether they consented to the amendment. The bill exempts homeowners’ associations with 15 or fewer parcel owners. This amendment does not apply to condominiums.
Individual Unit Owners’ Insurance Policies’ Subrogation: The bill amends s. 627.714(4), F.S. to provide that a condominium unit owner’s insurance policy may not provide subrogation rights against their association if the association’s insurance policy does not provide a subrogation right against the unit owner(s).
Condominium term limits revised: The bill seeks to clarify the term limit dilemma by providing that only service on the board of a condominium association that exists on or after July 1, 2018 may now be used when calculating a board member’s term limit.
“Whether this provision still applies to any association without the so-called ‘Kaufman language’ remains to be seen,” Eisinger Law Partner Carolina Sznajderman Sheir said. “It may be 2026 before that becomes an issue, inasmuch as no Board member can accrue eight consecutive years on a Board until that time.”
Extinguishment of Discriminatory Restrictions Authorized: Some older associations in Florida have governing documents containing unenforceable provisions (some not allowing unmarried people, or persons of a certain age, for example). SB 630 authorizes those associations to extinguish discriminatory restrictions in the existing manner prescribed under s. 712.065, F.S.
Meeting Notices: SB 630 clarifies that an agenda must be included with all notices of meetings involving condominium unit owners, including the annual meeting. It also specifies that meeting notices must be distributed in the same manner as the annual meeting. SB 630 also provides that written notice of a meeting, other than an annual meeting, must be mailed, hand delivered, or electronically transmitted to each unit owner and be posted in a conspicuous place on condominium or association property within the timeframe for written notice specified in the bylaws. If such timeframe is not specified in the bylaws, then the notice must be provided at least 14 continuous days before the meeting.
Significant Changes in How Governing Document Amendments Handled: Among other revisions, SB 630 provides that notice of governing document amendments can now be mailed to another address besides the one on the county property appraiser’s website.
Multi-condominium definition, intent changed: The bill amends the definition of “multicondominium” in s. 718.103(20), F.S. to provide that such a property is “real property” instead of “a real estate development.” Further, multicondominium associations in existence as of SB 630’s July 1, 2021 effective date may adopt a consolidated or combined declaration of condominium under certain circumstances.
Recordkeeping requirements further amended: Requirements for digital recordkeeping have been substantially updated in recent years. SB 630 furthers that modernization trend, notably permitting condominium associations with 150 or more units to post some documents for download onto a mobile device, for example.
In a related provision, condominium and cooperative unit owners will no longer have to demonstrate a purpose or state a reason for inspecting official association records.
Condominium Voting Process: A second notice of an election is now allowed to be sent to all unit owners up to 34 days before an election but may still not be sent less than 14 days before the date of the election. The requirement that a first notice be sent at least 60 days before the date of an election is still in effect.
Condominium Transfer Fee Increased: Condominium associations may charge unit owners costs or fees in connection with the sale, mortgage, lease, sublease, or other transfer of a unit. SB 630 increases the limit on the charge to $150 from the previous maximum permissible amount of $100. It also provides for a Consumer Price Index-adjusted fee review process every five years.
The new law consolidates families into a technical definition of one applicant for transfer purposes, so that the fee is essentially now consolidated into a once-per-transfer charge.
Condominium Board Financial Conflict of Interest Statute Repealed: The bill repeals s. 718.112(2)(p), F.S. relating to conflicts of interests among officers or directors of a condominium association and service providers. This revision does not prevent certain financial interests from being considered a conflict of interest under s. 718.3027, F.S.
Electric and Natural Gas Vehicle Charging Stations Now Allowed in Parking Areas: The bill amends s. 718.113(8), F.S. to include an “exclusively designated parking area” as a location where an association may not prohibit a unit owner from installing an electric vehicle charging station. Installation of a natural gas fuel station in the same area is now also permitted, provided the unit owner complies with all applicable federal, state, or local laws or regulations.
Mandatory Non-Binding Arbitration Eliminated: Among other related revisions, SB 630 amends ss. 718.112(2)(k) and 719.106(1)(l)., F.S. to require that a condominium association’s bylaws provide for mandatory dispute resolution and deletes the requirement for mandatory nonbinding arbitration.
The bill amends s. 718.1255(4)(a), F.S. to provide that, prior to court litigation, a party to a condominium dispute may either initiate pre-suit mediation as provided above or may petition the division for nonbinding arbitration. This provision also states that arbitration shall be binding on the parties if all parties agree in a writing filed in arbitration.
SB 630 also creates s. 718.1255(5), F.S. to require a party to a condominium dispute to initiate either arbitration or pre-suit mediation following the procedure for the mediation of homeowners’ association disputes in s. 720.311, F.S. before beginning court litigation. Parties in a condominium dispute may now use the mediation process to resolve a dispute without first initiating the arbitration process.
Under the bill, recall and election disputes in condominium, cooperative, and homeowners’ associations are not eligible for pre-suit mediation and must be arbitrated by the Florida Division of Business and Professional Regulation (DBPR) or filed directly with a court of competent jurisdiction.
Notably, the Senate Committee on Rules included this statement from the DBPR in its final analysis of SB 630: “Arbitration is an efficient and cost-effective option to mediation and court litigation. When the parties do not both elect arbitration, the first to file with either the [Division of Condominiums, Timeshares, and Mobile Homes] arbitration unit or with circuit court would determine the course of action for both parties. The proposal appears to contradict the legislative findings in s. 718.1255(3)(a), F.S., which provides that the Legislature finds that unit owners are frequently at a disadvantage when litigating against an association as the association is better able to bear the costs and expenses of litigation than a unit owner who must rely on their own financial resources.”
Pre-Closing Sales and Reservation Deposits: SB 630 amends s. 718.202(3), F.S. to provide that escrow funds may be used for the actual costs incurred by a developer in construction and development of the condominium property. It also defines the term “actual costs.” Heretofore, the developer could only withdraw 10 percent if the contract for sale of the condominium unit allowed for it.
Fine Due Date Changed: SB 630 bill amends ss. 718.303(3) and 720.305(2), F.S. to provide that an approved fine imposed by a condominium or homeowners’ association is due five days after its notice is sent to the unit or parcel owner (and if applicable, to any tenant, licensee, or invitee of the owner). Current law provides that payment of the fine is due five days after the committee meeting at which the fine is approved. Notably, SB 630 changes the word “occupant” to “tenant” in these sections.
DBPR Investigative Access Expanded: SB 630 adds “issues of maintenance of association records” to the list of complaints that the DBPR is authorized to investigate. Currently, the DBPR has jurisdiction to investigate complaints related to financial issues, elections, and unit owner access to association records (emphasis added).
Florida Condominium Ombudsman Office Can Now Be Located Elsewhere: The requirement that Florida’s appointed condominium ombudsman maintain his or her principal office in Leon County is now deleted, perhaps freeing the office to be located closer to condo-rich South Florida.
Cooperative Definitions, Voting Regulations Revised: The bill amends the definition of “unit” in s. 719.103(25), F.S. to provide that an interest in a cooperative unit is an interest in real property. It also makes technical changes to the definition of “governing documents.”
Further, it provides that a cooperative association board member or committee member who attends a meeting by telephone, real time video conferencing, or similar real-time electronic or video communication counts toward a quorum, so that member may vote as if he or she was physically present.
Meeting Notices Modernized With Hyperlinks: Homeowners’ associations with more than 100 members can now provide website or mobile device-hyperlinked electronic notices of meetings and agendas.
Homeowners’ Association Developers and Reserve Accounts: SB 630 clarifies the conditions in which a developer is obligated to fund the reserve accounts of a homeowners’ association. The provisions in this section are also applicable to all homeowners’ associations existing on or created after July 1, 2021,
Transition of Homeowners’ Association Control: The bill amends s. 720.307, F.S. to revise the conditions under which non-developer members of a homeowners’ association are entitled to elect the majority of the board by adding the term “other than the developer” in order to consistently distinguish between developer members and non-developer members.
Alessandra Stivelman, partner at Eisinger Law is a Board Certified Specialist in Condominium and Planned Development Law and AV Preeminent® rated. She focuses her practice on community association and real estate law and can be reached at (954) 894-8000 x 304 or firstname.lastname@example.org.
Carolina Sznajderman Sheir, partner at Eisinger Law, is AV Preeminent® rated and focuses her practice on real estate law, community association law, commercial litigation and developer representation. She can be reached at email@example.com or 954-894-8000 ext. 238.
Eisinger Law is a multi-practice Florida law firm focused on community association law, real estate law, developer representation, civil/commercial litigation, insurance law, estate planning and probate. For more information, visit eisingerlaw.com or call 954-894-8000.