Florida HOA, condo, & co-op legislation updates (April 2019)

By Deborah Goonan, Independent American Communities

The Florida Legislature is considering several HOA, condo, and co-op bills that may impact your property rights, as well as housing consumer protections.

Several bills would guarantee your Constitutional right to lease your property, for short- or long-term rentals

There’s a huge battle brewing in the Sunshine state between owner-occupants and owners — primarily investors — who rent their property.

Some full-time and seasonal residents complain about vacation rentals in their neighborhoods. They say that houses and condos have been turned into de facto hotels, encouraging loud parties, hogging up parking spots, and using the heavily using the common amenities — all of which disturbs the peaceful enjoyment of owner-occupants.

But tourism is one of Florida’s biggest industries. And many people buy a condo or home in the state with the intent of cashing in on short-term vacation rentals. If their local government or HOA restrict short-term rentals, they are deprived of a return on their investments.

It seems real estate investors have a lot of clout in Tallahassee, because they have introduced several bills that, combined, would do the following:

  • declare the right to rent one’s property for any duration as a Constitutional right
  • preempt local restrictions on renting one’s property, eliminating local control over the regulation of vacation or other rental property
  • create a state licensing and regulatory agency, which would require owners to register all rental properties and submit to inspections, and which would handle all public complaints against rental properties

Here’s the list of bills under consideration:

SB 824  and CS/HB 987 (Both bills are actively progressing)

SB 814 and HB 1129

SB 812 and HB 1196

HB 1383 goes one step further. Dubbed the “Bert J. Harris, Jr., Private Property Rights Protection Act,” the bill clarifies the property rights of owners, when a government entity devalues their property by way of use restrictions.

If enacted, a property owner would be able to sue the government for restriction of rentals, thereby making the property unprofitable. They owner could seek compensation from the government for the loss in property value.

Tinkering with homeowner rights — again

Two more crazy complicated bills, CS/CS/HB 1075  and CS/SB 1362 are gaining steam in the House and Senate.

And the changes are getting mixed reviews from homeowners. Mostly, these bills are causing heartburn for owners of association-governed property in Florida.

According to Michael T. Ross, Esq., Hollywood, Florida, both bills would substantially limit homeowner rights in condominium, cooperative, and homeowners’ associations. The bills would also make boards less accountable to homeowners.

Ross summarizes some of the damage that could be done by these bills, if enacted as law:

Synopsis of SB 1362 and HB 1075

Lowers default voting requirement for amendments
Expressly excludes records on board members computers as official records
Allows greater authority to charge fees for approval / transfer
A fine of $1,000.00 or more is now an assessment subject to foreclosure
Bids only need to be maintained 1 year;
Term limits are not retroactive;
Effectively eliminates right to vote in new board via recall – bylaws control
Creates potential liability for attorney’s fees for recall representative
Eliminates a conflict of interest provision
Requires mediation for failure to maintain and most other disputes

I have to agree that allowing a $1,000 fine to become an assessment subject to lien and foreclosure is particularly disturbing. It opens the door for an abusive HOA board to foreclose on a disliked homeowner over a petty dispute about the appearance of his property.

This particular provision has been added and deleted from the HOA Act before. Homeowner advocates lobby for its deletion. HOA industry lobbyists keep writing it back into legislative amendments.

One of the biggest proposed changes for condominium and cooperative associations: a mandatory mediation requirement is proposed to serve as a substitute for the arbitration of disputes by Florida’s Department of Business and Professional Regulation.

The DBPR has come under heavy criticism for its ineffective and expensive dispute resolution process. However, the finer details of how a mediation process would work are currently being discussed and debated in Legislature.

Election and recall disputes for all types of community associations would move to civil court, and out of DBPR’s authority. That could be a good thing in terms of competent legal analysis, but it could also increase the cost of resolving a dispute. The jury is out on that issue, pun intended.

While current statute disallows the association to contract with a company in which a board member has a financial interest, HB 1075 would do away with this conflict of interest provision.

HOA industry vendors are pushing for electronic voting and electronic posting of records, as a way to prevent disputes over access to records. So you’ll notice additional provisions to incorporate new information technology.

But, e-voting is vulnerable to security threats, which could undermine the integrity of the vote. And no matter what format records take — electronic or paper copies — there’s still no guarantee that your Association will maintain full and accurate records, and no assurance that those records will be authentic.

The official Legislative summary of HB 1075, as of April 3, 2019,  notes a plethora of proposed changes:

CS/CS/HB 1075:

  • Terminates DBPR’s arbitration program.
  • Requires mediation of certain disputes between unit owners and condo or co-op associations and deletes the requirement that DBPR certify private mediators.
  • Requires election and recall disputes, and condo termination disputes, to be heard in county court.
  • Exempts a pool within an HOA with 32 parcels or less from regulation as a public pool.
  • Requires associations to maintain bids for work or materials for one year instead of seven.
  • Requires an HOA to maintain ballots and all records relating to elections in the HOA’s official records.
  • Prohibits associations from requiring owners to state a reason for requesting to inspect official records.
  • Provides that a condo association required to make association documents available on a website may instead make them available on a mobile app.
  • Allows an HOA to give notice of a meeting on a website.
  • Declares that condo board term limits do not apply retroactively to service prior to 2018.
  • Prohibits condo owners’ insurance policies from providing rights of subrogation against the association.
  • Allows condos to charge a buyer or renter the actual cost of a background check.
  • Amends the due date for paying a fine levied by an association.
  • Declares that an interest in a co-op unit is an interest in real property.
  • Deletes a prohibition against an association contracting with a company in which a board member has a financial interest.

SB 1362, as of April 10, 2019, proposes even more changes to current statutes, with different amendments applying to different types of association-governed communities.

CS/SB 1362 revises the regulation and governance of condominium, cooperative, and homeowners’ associations under chs. 718, 719, and 720, F.S., respectively.
For condominium associations, the bill:

  • Prohibits a unit owner’s insurance policy from including rights of subrogation against the association;
  • Permits associations to make digital copies of specified documents available to members through an application that can be downloaded on a mobile device;
  • Permits the association to charge a potential buyer or renter the actual costs associated with a back ground check or screening;
  • Permits units owners to install an electric vehicle charging station on a parking area exclusively designated to the unit owner;
  • Repeals the requirement that the condominium ombudsman must maintain his or her office in Leon County; and
  • Expands the types of disputes that are subject to mandatory, non-binding arbitration by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

For cooperative associations, the bill:

  • Provides that an interest in a cooperative unit is an interest in real property;
  • Permits board or committee members to appear and vote by telephone, real time video conferencing, or by a similar real-time electronic or video communication; and
  • Revises the process for recall elections.

For homeowners’ associations, the bill:

  • Exempt pools serving an association that has no more than 32 parcels from permitting and inspection requirements;
  • Requires sign-in sheets, voting proxies, ballots and all other papers related to voting to be maintained as an official record;
  • Permits associations to use electronic methods to deliver meeting notices;
  • Revises the requirements for mandatory presuit mediation before an action may be filed in court involving a dispute between an association and an association member; and
  • Expands the types of disputes are and are not subject to mandatory presuit mediation.

For condominium and homeowners’ associations, the bill clarifies that payment of a fine is due five days after the fine is approved by the committee responsible for approving fines.

For condominium and cooperative associations, the bill prohibits associations from requiring an owner to state a reason for wanting to inspect official records.

Both of these bills are over 100 pages long, and cover many different topics, all of them still subject to amendment.

If you live in Florida, you should read the bills carefully, and contact your state Legislators with any questions and concerns.

 

Other active Florida bills:

SB 610, the #LockThemUp bill, which would impose criminal penalties for certain misconduct of condominium boards and managers, is making progress in the Senate. (See March 2019 post for details of the bill.)

HB 647 is another attempt to delay retrofitting of fire sprinkler and fire safety systems in condominiums, extending the deadline from 2020 to 2023. In 2017, a similar measure passed in the Legislature, but was vetoed by the Governor Rick Scott. (see Legislative summary and history.)

The issue remains highly controversial, because some homeowners don’t want to pay the steep costs of retrofitting, while others want better protection from a catastrophic fire.