2008 Legislative Session

THIRD DISTRICT COURT OF APPEAL

July 7, 2008 - On Wednesday, July 2, 2008, the Third District Court of Appeal filed a decision that could overturn existing Association insurance policy for items and/or elements located outside association units. The Division of Florida Land Sales, Condominiums and Mobile Homes (now called the Division of Florida Condominiums, Timeshares, and Mobile Homes) issued a declaratory statement contending that Associations must insure property that doesn’t belong to the Association. Known as the Costa Del Sol Declaratory Statement (DS 2006-024), authoritative characterizations of the Division’s controversial policy have ranged from “contradictory” to “a self-reinforcing delusion” since its 2006 inception. A local Association Attorney exclaimed, “At least I will no longer have to explain an inexplicable ruling!”

Declaratory statements are formal written positions taken by the Division of Florida Condominiums, Timeshares, and Mobile Homes (division). Although these statements are binding upon the parties who join in a particular proceeding, since they deal only with a specific set of circumstances, declaratory statements may or may not be applicable to other condominiums or cooperatives, depending on the circumstances involved. In essence, they bear philosophical, not legal, similarities to guidelines and precedents.

On May 23, 2006, the Costa del Sol Association, Inc. petitioned the Division of Florida Land Sales, Condominiums and Mobile Homes for an opinion about whether the association had to insure elaborate screen enclosures, jacuzzis and trellises located on the patios and balconies of unit owners. In 42 pages of the most convoluted logic conceivable, the Division talks itself into requiring the association to assume responsibility for insuring elements which were purchased and installed by individual unit owners for their exclusive use. The ruling magically transforms these elements into “condominium property” and therefore, must be insured by the association as a common expense under Section 718.111(11) of the Condominium Act “merely because they are located on the patio outside, rather than inside, the individual unit.” As an unfortunate consequence of this monument to illogic, hundreds of associations forced thousands of unit owners to subsidize the insurance costs of their neighbors’ personal outdoor furnishings. The 3-Judge Appeals bench rolled out a common afterthought, “Of course, we reverse.”

JUDGE ALAN R SCHWARTZ

In the Third District’s decision, Senior Judge Alan R. Schwartz wrote “In the total absence of any cognizable legal basis for the inside-and-outside distinction drawn by the Division, which would as well apply to a barbeque or even a lounge chair placed on the patio, it is self-evident that this ruling cannot stand.” In a judicial version of “What were they thinking,” the Judge states, “What is more, it cannot survive any of the conceivable standards of review which may apply to our consideration of the case. It is both a clearly erroneous assessment of the facts, and entirely contrary to any acceptable interpretation of the statutory language the administrative agency in question is charged with enforcing.”

Apparently amused by how the Division had to misconstrue the Statute, misinterpret the association’s documents, and contradict their own previous rulings to arrive at their decision, Judge Schwartz evaluated the effects of their triple whammy by examining the ramifications of the resulting policy “In addition, by way of gilding the lily, we may add that the consequence of the decision below is the utterly unfair one of making members of the association responsible for insuring property which they do not and cannot use, and from which they derive no benefit – indeed, in which they apparently have no insurable interest which would even permit their maintenance of valid insurance.”

The Senior Judge wraps up what he considers a Comedy of Errors by pointing out that “the ruling is contrary to previous rulings of the Division itself.” As such, he cites the Four Sea Suns Condominium Ass’n, Inc. v. Pariseau, Salamone v. Golden Horn Condominium Ass’n, Inc., The Plaza East Trilogy: “Not a Nursery Rhyme, But Scary Warfare,” all of which assert that items which were purchased, installed, may be removed, and are usable only by individual unit owners clearly belong to and are the responsibility of those unit owners. He states, “Those cases, and not the one before us, were correctly decided.”

Joined by Judges Frank A. Shepherd and Richard J. Suarez on the Appeals panel, Schwartz finally waxes poetic, exclaiming “In sum, it is bad enough to compare apples and oranges; it is much worse to find that apples are oranges. The ruling below is reversed.” Another one bites the dust.

REPRESENTATIVE ELLYN BOGDANOFF

June 17, 2008 - Last December, an article posted on the GMCA web site and reprinted in the January Galt Mile News about an obscure project with the typically tropical designation of “Calypso” was met with a combination of concern and disbelief. As Galt Mile residents learned that a $79 billion French Energy conglomerate called SUEZ, through its United States subsidiary Suez Energy North America (SENA), intended to build a Deepwater Port across from the Galt Mile Beach for the offloading of liquefied natural gas (LNG), they sent hundreds of emails to the Galt Mile Community Association requesting more information. Along with a Florida energy perspective by the Florida Public Service Commission and an overview of the project rationale by Calypso LNG LLC, information was presented summarizing the concerns exhibited by several other communities that faced the construction of similar installations. Projects with exotic and maritime names like Cabrillo, Pelican, Neptune, Broadwater and Dolphin drew staunch local opposition in locations from New England to California. When the residents of these sites learned about the dangers undisclosed by the project operators, they suffered the same shock and disbelief experienced here.

Shortly after confirming that a breach in the project’s delivery system would release an ignitable vapor cloud capable of a 2000 BTU conflagration, far beyond the suppression capabilities of any local Fire Department, and that the cloud could span the distance from the installation to their homes, residents wondered why their public officials would expose them to this danger. Further investigation revealed that many Security organs of the Federal Government, including the Government Accountability Office, the Department of Homeland Security, the Congressional Research Service and the Pentagon, identified LNG facilities and transport tankers as extremely high value targets for terrorist strikes. Surprise quickly turned to anger when they learned that local communities and their governments were cut out of the approval process by the Energy Policy Act of 2005, a $33 billion gift to the energy industry that placed sole authority for facility licensing approval into the hands of a federal bureaucracy staffed by current and former energy industry executives, spokespersons and stakeholders - the Federal Energy Regulatory Commission (FERC). However, Title 33, Chapter 29 (Deepwater Ports) of the United States Code § 1508 (b)(1) states “The Secretary shall not issue a license without the approval of the Governor of each adjacent coastal State. If the Governor fails to transmit his approval or disapproval to the Secretary not later than 45 days after the last public hearing on applications for a particular application area, such approval shall be conclusively presumed.” An “adjacent coastal State” is defined in Title 33, U.S. Code § 1508 (a)(1) as “any coastal State which (A) would be directly connected by pipeline to a deepwater port as proposed in an application, or (B) would be located within 15 miles of any such proposed deepwater port.” That means Governor Charlie Crist is the only human being in the State of Florida empowered to stop Calypso.

COMMISSIONERS KEECHL & TEEL

Although every public official, civic organization and local government has expressed opposition to the project or is in process of doing so, they have no direct input into the approval process. Letters from City Commissioner Christine Teel, Broward Commissioner Ken Keechl, and Senator Jeffrey Atwater as well as Resolutions by The City of Fort Lauderdale and the Town of Lauderdale-by-the-Sea expressing unconditional opposition to the placement of Calypso adjacent to the heavily populated Galt Mile beach were sent to the Governor. Petitions distributed to the twenty six member associations of the Galt Mile Community Association are being filled out, retrieved and replaced with new ones on a regular rotation. Thousands of individual letters, emails, phone calls and faxes have been sent to the Governor since April, asking that he reject Calypso’s license. While this is a testament to the residents’ universal apolitical position on this issue, it is only useful to the extent that the Governor is willing to support that position.

REP. ELLYN BOGDANOFF AND SEN. JEFFREY ATWATER

The Galt Mile neighborhood is fortunate in that regard. Our State Senator, Jeffrey Atwater, is the President-elect of the Florida Senate. Our State Representative, Ellyn Bogdanoff, is the “Majority Whip” in the Florida Statehouse. The Governor is therefore predisposed to heed our concerns as voiced by these legislative leaders. Supporting their constituents, they both expressed opposition to the project at the "bait and switch" Calypso meeting in Dania Beach. They’ve also met with concerned Galt Mile residents at several venues to organize a coherent strategy to engage the Governor.

CRIST, RUBIO & ELLYN MAKE POLICY

In her Spring Newsletter to constituents, Representative Ellyn Bogdanoff briefly describes the project and the regulatory licensing process. She also confirms a statement she made at the Dania meeting; she has engaged the Governor - as promised. Following her discussion with the Governor, GMCA officials were contacted by his office staff, requesting information enumerating and supporting local concerns. The Majority Whip also advises constituents to contact the Governor directly, supporting her contention that neighborhood opposition is apolitical and overwhelming.

While a healthy percentage of the declared opposition is rooted in the direct threat it poses to life and property, the regulatory framework that incorporates local resources (funded by local taxpayers) into the project’s security plan and the operator’s regulatory immunity to catastrophic damages restitution (the victims pay the tab), Representative Bogdanoff also focuses on an underlying reason for skyrocketing energy costs - continued energy dependence on foreign fossil fuels.

Whether motivated by the preference to save money and/or the environment, Representative Bogdanoff intimates that supporting additional infrastructure designed to increase energy dependence guarantees unsustainable energy costs. She recognizes that the health of our economy and environment will in large part depend on whether we increase “the production and use of alternative energy” or continue to send “billions of dollars in oil profits overseas.” Interpreting this crossroads as an opportunity that can be realized over the next decade, she redefines the issue as deciding between expensive dirty fuels that help finance threats to national security or clean abundant cheap energy - a classic no-brainer! Read On! - [editor]

“Dear Neighbor:

Until next time,”

SENATOR JEFFREY ATWATER

May 21, 2008 - Jeffrey Atwater’s Senate career has been exemplary. As a rule, when legislators successfully network their way through the political minefield to leadership positions, their constituents suffer neglect. Meetings with homeowners, business owners, neighborhood groups and other constituents become limited to invitational fundraisers or media events. As those political commitments required for continued advancement grow, the folks back home must settle for sound bytes. District 25 residents don’t have this problem. While annually grinding out record amounts of productive legislation and performing a demanding host of leadership functions, Atwater manages to remain a phone call away from anyone in his district.

Exhibiting the enthusiasm of a rookie Senator, instead of simply inviting input, he aggressively demands constituents’ thoughts and opinions. His aides aren’t constrained to answering letters and returning emails and phone calls, they patrol the District, aggressively seeking local issues that would benefit from his participation. During the legislative session, the Senator worked with the Galt Mile Community Association on Beach Renourishment, windstorm insurance and property taxes. Legislative Aide Melissa Francisco acted as a conduit to Atwater while in Tallahassee, attending Advisory Board meetings and Presidents Council events. Enigmatically, Atwater simultaneously devotes this level of attention to every neighborhood in District 25.

INSURANCE COMMISSIONER KEVIN McCARTY

His post-session update reviews some of this year’s major legislative accomplishments. A highly publicized series of Senate hearings revealed that insurance carriers were illegally engineering artificial substantiation for undeserved rate hikes. Turmoil in the State insurance market fostered a policy of pandering to carriers, breeding an arrogant refusal to comply with regulations their own representatives helped negotiate. Atwater teamed with State Insurance Commissioner Kevin McCarty to stiffen penalties for rate rape. Using the Senate Select Committee on Property Insurance Accountability to locate policy loopholes exploited by carriers, Atwater filed Senate Bill 2860 to discourage future abuse. Senator Atwater’s Homeowner’s Bill of Rights permanently bans the industry practice of charging higher rates before the state approves them. It does away with an arbitration panel currently used by insurers to plead for higher rates and prohibits the use of unauthorized risk models to rationalize rate increases. Violation fines are increased and the Citizens Insurance rate freeze is extended for 1.3 million policyholders. After being signed by the Officers on May 20^th, Atwater's bill (Senate Bill 2860) was presented to the Governor. After vetoing specific Line items, Governor Crist signed it into law (Chapter 2008-66) on May 28, 2008. Click Here for text of new law.

REP BILL SNYDER MIRRORS ATWATER'S GANG BILL

A staunch proponent of “life means life” sentencing guidelines, “10-20-life” for criminals using firearms and “three strikes” for violent recidivists, Atwater drafted new anti-gang legislation. Senator Jeff Atwater’s Senate Bill 76 and Representative William Snyder’s complimentary House Bill 43 enact recommendations made by the 18^th Statewide Grand Jury, giving prosecutors RICO-style flexibility and a Kingpin Statute, making it a first-degree felony punishable by life imprisonment for directing criminal gang-related activity. It encourages maintenance of a statewide gang database for coordinating enforcement strategy, allows civil injunctions to be issued against gangs and gang members, mandates a registration requirement for gang members and creates a Coordinating Council on Criminal Gang Reduction Strategies, chaired by the Attorney General, which will marshall state and local agency resources under a statewide strategy to reduce gangs. Applauded by Florida Attorney General Bill McCollum, it flew through the legislature without a single dissenting vote.

SEN DENNIS JONES FILES BEACH FIX WITH ATWATER

Committed to Everglades Restoration and Beach Renourishment, Atwater helped pave the way for Florida’s opportunistic acquisition of land threatened by pollution or inappropriate development, guaranteeing its preservation in a natural state. This year, he co-sponsored Senate Bill 1672 with Senators Dennis Jones and Don Gaetz, addressing Beach Management and issues surrounding Beach Renourishment like sand quality and availability. Its Statehouse sister bill, House Bill 1427, passed both houses without a single Nay vote after being substituted for its Senate counterpart.

GREAT-GRANDFATHER GOV NAPOLEON BROWARD

Equipped with sterling academic and experiential fiscal credentials, Atwater diagnosed Florida’s crippled economy as a victim of runaway taxes and a dysfunctional insurance market before the condition deteriorated into a transparent recession. His fiscal expertise tagged Atwater with negotiating responsibilities for virtually every budget controversy faced by the Governor and the legislative leadership. His fingerprints cover almost every major fiscal bill considered during the past few years, including the insurance rescue package, rescinding the intangibles retirement tax and declaring statewide Sales Tax Holidays for huricane preparedness equipment and school supplies. Already named as the next Senate President, if Senator Atwater continues on his present course, he has an excellent chance of following Great Grandfather Napoleon Bonaparte Broward into the Governor’s mansion. Read on: - [Editor]

Dear Neighbors,

We recently wrapped-up a challenging 2008 Legislative Session in Tallahassee. We worked very diligently in creating meaningful reform on homeowner’s insurance. We also addressed a number of issues of importance to the people of Florida, including public safety and the protection of our environment particularly our precious Everglades and beautiful beaches. I am pleased to report we balanced the budget without raising taxes.

To contact Senator Atwater, call his office in Broward County at (954) 847-3518 or in Palm Beach at (561) 625-5101. You can also contact him using his Senate email address at atwater.jeff.s25@flsenate.gov or the jeff@senatorjeff.com email address posted on his web site. Click Here to access all of Senator Jeff Atwater’s contact info on the GMCA Report Card page. Our Senator has two informative web pages. Click Here to his Florida Senate web page or peruse his strategy for overcoming Florida's problems on his web site at www.senatorjeff.com.

TALLAHASSEE GENERATES OMNIBUS CONDOMINIUM BILL

May 8, 2008 - As the session entered its final weeks, the numerous community association bills were consolidated into three separate offerings: a condominium bill, a homeowners association bill and a regulation bill (filed on behalf of the Department of Business and Professional Regulations). The three bills selected for this purpose were reconfigured to house condominium issues in HB 995 and SB 2084. HB 679 and SB 2504 were chosen to hold provisions governing Homeowners Associations. The bills containing regulatory refinements impacting the Department of Business and Professional Regulation were SB 2086 (SB 2498) and HB 601 as well as HB 1249. The provisions in bills that addressed several association categories were redistributed accordingly. For instance, provisions in HB 1349 and SB 2470 that affected condominiums were folded into HB 995 and SB 2084 while those related to Homeowner Associations were merged with HB 679 and SB 2504. Since Galt Mile Community Association members are primarily affected by the regulations in the condo bill, Association officials joined with condo owners and their respective condominium, civic and neighborhood associations from all over Florida to analyze hundreds of changes to the legislation as it progressed through the Statehouse and the Senate.

HB 995 and SB 2084 were double-edged swords, combining useful elements with provisions that were pointless, expensive, contradictory and destructive. The bill sponsors and their supporters presented Florida condo owners with two unacceptable options. To salvage the bills’ useful provisions by supporting its passage as drafted, condo owners would have to undergo an adulteration of their right to govern themselves. To alternatively retain the right of self-governance, they would have to oppose the bill, throwing out the baby with the bathwater. Instead, a comprehensive effort was initiated to strip the most egregious provisions from the bill, reshaping it into legislation worthy of broad support. On March 12^th and April 9^th, the reviewing committees responded to corrective testimony by adopting strike-all amendments to the bill, wholly abandoning the text and replacing it with a Committee substitute. Since the bill was constantly changing through March and April, with virtually every section partially or fully substituted several times, many of the legislation’s details weren’t revealed until the end of the session. Condo owners inundated their legislators with specific criteria they expected to be met before agreeing to support the bill. Lawmakers were drafted to help convince the bill sponsors to embrace scores of corrective measures in exchange for support sufficient to enact the legislation. From April 14^th through April 18^th, Representative Robaina accepted several dozen amendments that addressed the bill’s serious deficiencies.

REP ELLYN BOGDANOFF WORKS TO CORRECT PROBLEMS WITH BILL

During that last week before the final vote in the Statehouse, officials of the Galt Mile Community Association remained in constant contact with lawmakers, assorted State officials and association activists from all parts of Florida to help negotiate the scores of eleventh hour improvements needed to make the bills acceptable. A team headed by Representative Ellyn Bogdanoff worked incessantly with association experts such as Peter Dunbar and a statewide aggregation of civic leaders and association officials to excise the most regressive elements from the omnibus condominium bill.

PETER DUNBAR ADVISES SPONSORS

Major impediments had to be revised, such as the bill’s removal of the right of unit owners to structure the terms served on their own governing boards. The provision that stated, “The terms of all members of the board shall expire at the annual meeting” elicited thousands of angry letters, phone calls, emails and faxes from ordinarily passive unit owners to Statehouse Representatives, Senators and the Governor – bringing focus to this issue. The original version of the bill would have eliminated staggered terms of more than one year for every association in the State, despite the dictates of their by-laws. The bill was finally amended to permit a majority of the voting interests to affirm staggered terms of no more than 2 years if permitted by an association’s bylaws. For associations whose bylaws required staggering two-year terms for board members, a one-time favorable vote by the members will confirm its validity. However, in mostly larger associations with commensurately larger representative boards of 9 or 11 members, any majority decision by unit owners or provision in the bylaws adopting staggered three-year terms will be arbitrarily overturned by the legislation, limiting their future options to one or two year terms. If the two-year terms are selected, underlying provisions must be installed into the association’s bylaws by a favorable vote of all the members accompanied simultaneously by a redundant confirmation vote of all the members.

REP. JULIO ROBAINA

The section requiring buildings greater than 3 stories to sponsor a report by an architect or engineer every 5 years attesting to its required maintenance, useful life, and replacement costs was also amended with an “opt-out” provision. Enigmatically, other than mandating an expensive report every 5 years to redundantly investigate the same three data points, the bill is silent as to the reason for this mysterious expenditure. There is no subsequent requirement to address threats to safety or reconsider the reserve assessments expected to ultimately fund an item’s replacement cost. Associations that simply pay tens of thousands of dollars for the investigation and file the report away will have fully complied with this poorly drafted exercise in misdirecting resources. The corrective amendment will allow Associations to “opt-out” by a vote of a majority of the owners present in person or by proxy. Such meeting and approval must take place prior to the end of the 5 year period and is only effective for that 5 year period. To further waive this requirement, the approval procedure must be repeated for each 5-year cycle. While Galt Mile Associations 40 years or older must still conduct the safety inspections that were reasonably ordained by the City, they will not have to undergo expensive redundant inspections every 5 years for no ostensible reason.

SENATOR ALEX VILLALOBOS

Provisions in HB 1349 and SB 2470 that addressed reconstruction after casualty and imbued boards with emergency powers to fast-track post-storm repairs to condominiums were grafted into the bill, equipping condo boards with heretofore unavailable tools to mitigate incremental damage arising from catastrophic structural deficits. It also helps clarify a long-standing grey area in the material alteration provisions of the condominium statute, defining the funding responsibility for repairing improvements added by unit owners to their homes.

Following the whirlwind week of intensive corrective surgery to the Statehouse condominium bill HB 995, legislators and concerned condo owners turned their attention to its sister bill in the Senate, Senate Bill 2084. The new provisions in the overhauled House Bill were officially received by the Senate on April 22^nd at about 4:20 PM and immediately scheduled for consideration by Senate Committees on Regulated Industries, Community Affairs and the Judiciary Committee. By mid-afternoon of the following day, the unamended Senate bill was withdrawn from Committee review and replaced with a mirror image of the reworked House bill. The balance of April 23^rd was devoted to insuring that Senator Villalobos’ companion bill accurately reflected the changes made to HB 995. After being carefully reviewed for consistency, Senate Bill 2084 was “laid on the table”. Replaced by the now identical Statehouse counterpart HB 995, it was passed unanimously (40 yeas vs. 0 nays) by the late morning of April 24^th.

REP. ELLYN BOGDANOFF AND SEN. JEFFREY ATWATER

Having been notified by Galt Mile officials about expected changes to the Senate bill, Senator Jeffrey Atwater was prepared to oppose the bill if its supporters attempted to pass the unamended version. Once informed that SB 2084 was improved as promised, Atwater participated in the passage of SB 2084. On Friday, April 25^th, the legislation was enrolled in preparation for submission to the Governor.

By finally opening their bills to corrective input, Representative Robaina and Senator Villalobos elicited unanimous passage in the Statehouse (110 yeas vs. 0 nays) and the Senate (40 yeas vs. 0 nays). While the 87 pages of bill text is understandably afflicted with some drawbacks, the omnibus condo bill equips associations with critically needed emergency procedures for responding to catastrophic hurricane damage, gives unit owners increased access to meeting agendas, adds protection against identity theft, clarifies responsibility for casualty repair costs, defines record-keeping guidelines and expands on minimum financial reporting requirements. A comprehensive review of the bill’s full impact is enumerated in the following bulleted summary.

• As altered in Chapter 468 of the Florida Statutes, the bill will require community association management firms to be licensed if the firm manages more than 10 units or a budget of $100,000 or more. Empowers Regulatory Council of Community Association Managers (RCCAM) to recruit input and advise Division about improving rules and educational output.

License applicants practicing CAM functions prior to being licensed will be denied. It is a violation for a licensee to engage in a contract with an entity in which the licensee holds an undisclosed financial interest. Defines grounds for licensee disciplinary action and provides for normalization of status once compliance is confirmed.

• 718.111(1)(b): Provides that a director who abstains from voting shall be presumed to have taken no position with regard to the action taken.

Ordinarily, an abstention inures to an issue’s endorsement. Since abstentions will hence exert zero impact, decisions can no longer be made by passive affirmation.

• 718.111(1)(d): This section includes a standard of care for directors similar to the standard of care imposed on directors of a not-for-profit corporation pursuant to Section 617.0830, Florida Statutes, (governing not-for-profit corporations). It requires that directors act in good faith and in a manner that he or she reasonably believes is in the best interest of the association. It also provides that directors will be liable for money damages if the director commits a crime, if the director derived an improper personal benefit, either directly or indirectly, or if the act constitutes recklessness, bad faith, with a malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety or property.

This liability provision is similar to the provision in the not-for-profit statute, 617.0834.

• 718.111(12)(a)11.: and 718.112(12)(c): States that anyone who knowingly and intentionally defaces or destroys accounting records required to be maintained by the statute, or knowingly or intentionally fails to create or maintain accounting records required by statute, is personally subject to a civil penalty.

The words “knowingly or intentionally” were added to the original bill to clarify a motive for triggering a civil penalty. Otherwise, the questionable language in the original bill could have penalized everyone for documents lost or misplaced by anyone.

• 718.111(12)(b): Requires that all official records must be maintained for at least 7 years and within 45 miles of the condominium or within the county where the condominium is located. It gives the association an option to maintain and provide the records to the owners in an electronic format.
• 718.111(2)(c): Provides that social security numbers, drivers’ license numbers, credit card numbers and other personal identifying information are not accessible to unit owners. This is one of the most important protections built into the bill, creating a basis for establishing a class of information unavailable for harvesting by “identity thieves”.
• 718.111(13): Requires the Division (Division of Florida Land Sales, Condominiums and Mobile Homes) to adopt additional rules regarding information to be included in financial report such as a summary of the reserves including information as to whether such reserves are being funded at a level sufficient to prevent the need for a special assessment and, if not, the amount of the assessments necessary to bring the reserves up to the level necessary to avoid a special assessment.
• 718.111(13): Permits the vote to waive the financial report to be taken before the start of the fiscal year.
• 718.111(13): Cannot waive financial reports for more than 3 consecutive years.

REP ANDY GARDINER HOA BILL HB 679 SPONSOR

Consistent with ethical business practices, most medium and large associations annually create a financial report for the benefit of the membership. In the original bill, unit owners in small associations had to budget funds for annual financial reports, even if every unit owner voted against its necessity. This was amended with a provision taken from HB 679 which prohibits an association from waiving the required financial statements for three consecutive years. In other words, small associations could waive for three consecutive years but must create a report on the fourth year.

• 718.112(2)(b)2.: Units owned by Association cannot be counted for any purpose. This provision is intended to prevent a board from functionally disenfranchising unit owners in an association that owns most of the units.
• 718.112(2)(c): Provides that if 20 percent of the voting interests petition the board to address and item of business, it must be considered by the board and its next regular meeting or at a special meeting, but not more than 60 days after receipt of the petition. This provides unit owners with a vehicle for directly inserting an item into the meeting agenda.
• 718.112(2)(c): States that notice of any meetings at which regular or special assessments will be considered shall specifically state the nature, estimated cost, and description of the reasons for assessment.

The current law requires that the notice of meetings at which “regular” assessments will be considered contain a statement that assessments will be considered and the nature of the assessment. The proposed change requires this information also for “special” assessments and would also require that the notice include the estimated cost and description of the reasons for the assessment. Elsewhere in the bill, a contradictory provision declares that certain special assessments DO NOT REQUIRE this data, imbuing boards with emergency powers to effect mitigating repairs financed by special assessment. Again, this provision demonstrates the advantage of allowing unit owners to decide notice procedures based on the nature and immediacy of the assessment’s necessity.

• 718.112(2)(d)1.: Require that the annual meeting be held at the location provided in the bylaws, and if the bylaws are silent, must be held within 45 miles of condominium.
• 718.112(2)(d)1.: All board members must stand for election at annual meeting. However, if the bylaws permit staggered terms of no more than 2 years and if a majority of the total voting interests approve, the directors can serve for 2 year staggered terms. Also states that if no one is interested in or demonstrates an intention to run, such person whose term has expired is automatically reappointed and does not have to stand for election. (This compromise language was inserted following widespread objections by condo owners to the original requirement of one-year terms for every condo board member in the State.)
• 718.112(2)(d)1.: Co-owners in condos with more than 10 units cannot serve on the board at the same time.

As with most anecdotally-driven legislation, this provision creates new inequities while resolving nothing. It presupposes that all unit co-owners elected to a board will conspire to vote for issues that somehow benefit their shared unit. If the association’s unit owners want to elect co-owners to their board that are members in good standing, how are they benefited by some Tallahassee bureaucrat overruling the majority wishes of the association electorate? By creating another “one-size-fits-all” regulation, Robaina arbitrarily disenfranchises thousands of condo co-owners throughout the State by inhibiting their right to serve on the association board – as contractually guaranteed by their association documents. If the association’s unit owners envision some threat from allowing board participation to unit co-owners, pet owners, members of the same family or people whose favorite color is blue, they can reflect that in their own documents without imposing their prejudices on other associations. Statewide regulations that expropriate these decisions from the homeowners living in an association senselessly infringe on the right of condominium owners to govern themselves.

• 718.112(2)(d)1.: Provides that a person who has been suspended or removed by Division, or is delinquent in the payment of assessment as provided in s. 718.112(2)(n) is not eligible for board membership. It also provides that a person who has been convicted of any felony is not eligible to serve on the board until 5 years after his or her civil rights have been restored.

Most associations already require that board candidates be members in good standing, disallowing participation by unit owners that fail to fulfill their obligation to pay their share of the association’s expenses. Determining eligibility criteria for members convicted of a crime can be more effectively performed by the association’s unit owners than by legislators assigning arbitrary requirements for 22,000 different associations.

• 718.112(2)(d)3.: Requires candidates to certify, on a form provided by the Division, that they have read and understand “to the best of their ability” the condominium documents, statute, and applicable rules. The form must be submitted along with the notice of intent to run for the board.
• 718.112(2)(d)8.: Provides that in order to “opt-out” of voting and election procedures in the statute, the condominium must consist of only 10 units or less.
• 718.112(2)(f)1.: The current law states that the budget shall show “common expenses.” The proposed change states that the budget shall show “estimated revenues and expenses.”
• 718.112(2)(f)4.: Requires that proxy questions to waive or reduce reserves or to use reserves for other than the purposes for which they were intended must contain the following statement in capitalized, bold letters, in a font larger than used on the face of the proxy: WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.
• 718.112(2)(n): Provides that directors who are 90 days delinquent in the payment of regular assessments shall be deemed to have abandoned the office, creating a vacancy in the office to be filled according to law.
• 718.112(2)(o): Provides that a board member who is charged with felony theft or embezzlement involving the association’s funds shall be removed from office, creating a vacancy in the office to be filled according to law. If the charges are resolved without a finding of guilt, the director shall be reinstated for the remainder of the term, if any.
• 718.1124, 718.117(7)(a), and 718.127: Revises procedures for the appointment of a receiver. If the association is unable to enlist unit owner participation adequate to seat enough board members to form a quorum, any member can engage in a process that ultimately transfers authority from the board to a receiver appointed by Tallahassee - at the unit owners’ expense.
• 718.113(2)(a): Includes the language: “This provision is intended to clarify existing law and applies to associations existing on the effective date of the act.”

This is a “clean-up” amendment to include language that was inadvertently left out when amendments to this section were previously adopted.

• 718.113(5) and 718.115(1)(e): Provides that Board can install hurricane protection that complies with or exceeds applicable building codes (i.e. code compliant hurricane shutters, impact glass, etc). A vote of the owners is not required if the hurricane protection to be installed is the maintenance, repair, and replacement responsibility of the association. The cost to install the hurricane protection is a common expense if the hurricane protection to be installed is the maintenance, repair, or replacement responsibility of the association. In such case, owners who have previously installed code compliant hurricane protection will receive a credit on the assessment.

This section was altered to provide for associations wherein the mitigation is considered the responsibility of the unit owner. Originally, the regulation required the association to pay for all repairs and replacement, unfairly forcing a double assessment for some members.

• 718.113(6): Requires an inspection report by architect or engineer every 5 years for buildings more than 3 stories attesting to required maintenance, useful life, and replacement costs. Also provides for an “opt-out” vote by a majority of the owners present in person or by proxy. Such meeting and approval must take place prior to the end of the 5 year period and is only effective for that 5 year period.

Since the only requirement for the inspector was to attest to required maintenance, useful life, and replacement costs, this expensive exercise did nothing to increase safety. Once the report was filed, the association would be considered in compliance. Enigmatically, the regulation failed to require attendant repairs or rehabilitation. The “opt-out” provision was inserted to address the broad statewide objection to paying tens of thousands of dollars every five years for an update of information ordinarily available for free when a structural element is replaced!

• 718.113(7): Provides that an association cannot refuse an owner a reasonable accommodation for the attachment on the mantle or frame of the unit door a religious object not to exceed 3 inches wide, 6 inches high, and 1.5 inches deep.
• 718.121(4): Requires 30-day notice before filing a lien and requires service by certified mail and regular first-class mail. However, if the address of the owner is outside the United States, the notice must be sent by first-class mail to the unit address and to the last known address by regular mail with international postage. Alternatively, the notice can be served as authorized by Chapter 48 and the rules of civil procedures.
• 718.1224: Prohibition against “SLAPP” suits (an acronym for "strategic lawsuits against public participation.") This provision is nearly identical to the “SLAPP” suit provision in the Homeowners’ Association Act (720.304). It precludes utilization of certain legal tactics to silence legitimate whistleblowers.
• 718.1255: Removes language from “arbitration” section of statute stating that courts are becoming overcrowded with condominium and other disputes. Why? - because it’s not true!
• 718.1265: Provides for emergency powers for Boards.
• 718.301(1): Will require turnover to occur if the developer files for bankruptcy or if a receiver for the developer has been appointed and has not been discharged within 30 days after such appointment.
• 718.301(4)(p): Will require the developer to prepare and turn over to the association a report, under seal of an architect or engineer, attesting to the maintenance, useful life, and replacement costs of a number of items including roof, elevator, heating and cooling systems, seawalls, etc.
• 718.3025(1)(f): States that no written contract providing for maintenance or management services shall be enforceable unless the contract discloses any financial or ownership interest a board member or any party providing maintenance or management services to the association holds with the contracting party.
• 718.3026: Changes the ability of associations to “opt-out” of this section. Would permit only associations with 10 units or less to opt-out.
• 718.3026(2)(a)2.: Currently, this section states that contracts executed before January 1, 1992, and any renewal thereof, is not subject to competitive bidding requirements. The bill removes this language. Therefore, even if contract was entered into before January 1, 1992, the renewal must be subject to competitive bidding.
• 718.3026(3): This is a new provision addressing contracts between the association and one or more of its directors of any corporation, firm, or entity in which one or more of its directors are financially interested. Will require certain disclosures to be made and the contract must be approved by two-thirds of the directors present at the meeting. It also permits the contract to be cancelled at the next regular or special meeting of the members. Upon motion of any member, the contract shall be brought up for vote and may be cancelled by a majority vote of the members present. Should the members cancel the contract, the association shall only be liable for the reasonable value of goods and services provided up to the time of cancellation.
• 718.303(3): States that members of a fining committee cannot be board members or persons residing in a board member’s household.
• 718.501(1): Changes jurisdiction of Division. If turnover has occurred, Division only has jurisdiction over financial issues, elections and access to records.

Note that there has been another bill filed (HB 7101) which will reduce the fees paid by unit owners to the Division from $4 per unit to $2 per unit. Presumably, the reduction in fees is related to the change in jurisdiction. The Division is primarily responsible for the uneventful transition of an association from a developer to the unit owners.

• 718.501(1)(a)2.: Permits the Division to issue orders against additional persons including developer-designated members of the board or officers, developer-designated agents or assignees, community association managers, and community association management firms.

• REP MATT HUDSON REGULATIONS BILL HB 601

  718.501(1)(a)3.: Permits the Division to bring an action in circuit court against a developer who fails to pay any restitution determined by Division to be owed to association. Also permits Division to temporarily revoke its acceptance of developer’s filing to which the restitution relates until payment of the restitution.
• 718.501(1)(a)4.: Permits the Division to order the removal of an individual as an officer or from the board and may prohibit such person from serving as an officer or board member for a period of time.
• 718.501(1)(a)5.: States that if a unit owner presents the Division with proof that the unit owner has twice requested to review association documents and the association has failed or refused to provide access, the Division shall issue a subpoena requiring document production where the records are kept if the unit owner follows the defined procedure.
• 718.501(1)(j): Requires the Division to provide educational programs (in addition to training programs), which may include web-based, electronic media and live training and seminars. Also provides that the Division shall have the authority to review and approve education and training programs offered by providers and to maintain a current list of such approved programs and providers.
• 718.501(1)(n): Requires board members, employees, developers, managers and management firms to reasonably cooperate with the Division in its investigation. Further, the Division shall refer to local law enforcement authorities any person who the Division believes has altered, destroyed, concealed, or removed any record, document or thing required to be kept or maintained by this chapter with the purpose to impair its verity or availability in the department's investigation.
• 718.5012(9): Gives the Ombudsman’s office the power to assist with resolution of disputes between unit owners and the association or between unit owners when the dispute is not within the jurisdiction of the Division to resolve.
• 718.50151(1): Changes Advisory Council to “Community Association Living Study Council.” It is appointed every 5 years for 6 months starting on July 1, 2008.
• 718.503: Requires sellers to provide prospective purchasers a “governance form” adopted by Division which explains the basic tenets of the condominium system.

GOV CRIST SIGNS CONDO BILL

Ultimately, the surviving Association bills in both legislative bodies were further consolidated in preparation for being engrossed and presented to the Governor for consideration. On April 30^th, HB 995 was signed by the officers and presented to the Governor. On May 1^st, it was signed into law (Chapter 2008-28). The effective date for the new law’s implementation is October 1, 2008. Click Here to read the text of the new law.

The Homeowners’ Association bill, HB 679, after being passed in the House on April 23^rd (115 yeas vs. 1 nay), was sent to the Senate. On May 2^nd, after replacing its Senate counterpart SB 2504, it was amended and passed (38 yeas vs. 0 nays). The amended bill was sent back to the House, where HB 679 was again voted favorably (117 yeas vs. 0 nays). However, after being signed by the Officers on June 18^th and presented to the Governor, he vetoed the bill on June 30, 2008.

The regulations bill, HB 601, passed the House on April 25^th by 110 yeas vs. 0 nays and sent to the Senate. On May 2^nd, it was substituted for its Senate counterparts SB 2086 and SB 2498, amended and passed (40 yeas vs. 0 nays). The amended bill was sent back to the House where HB 601 was again passed (117 yeas vs. 0 nays) and ordered enrolled. After being signed by the Officers on June 18^th, it was presented to the Governor, who signed it into law (Chapter 2008-240) on June 30, 2008. Click Here for the text of the new law, which became effective on July 1, 2008 - one day after being signed.

SENATOR JEFFREY ATWATER

An insurance accountability bill entitled the “homeowners’ bill of rights” co-sponsored by Senator Jeff Atwater (Senate Bill 2860), survived a dogfight in the Senate by a 33 yeas vs. 5 nays vote on May 1^st. After flying through the Statehouse by a 117 yeas vs. 0 nays on April 30^th, the compromise bill encountered withering opposition by insurance lobbyists. The Bill evolved from hearings conducted earlier this year by the Office of Insurance Regulation and the Senate Select Committee on Property Insurance Accountability examining property insurers’ pricing practices and Statehouse hearings scrutinizing the state’s insurance programs. After being signed by the Officers on May 20^th, it was presented to the Governor. After vetoing specific Line items, Governor Crist signed it into law (Chapter 2008-66) on May 28, 2008. Click Here for text of new law.

The compromise insurance bill beefs up penalties for insurers who violate state law and extends a freeze on Citizens Property Insurance Corp.’s rates for one year, to January 2010. It requires insurers to notify policyholders 180 days before dropping them and to pay undisputed claims within 90 days of deciding the amount of the payment. Plugging an elephantine loophole in the current regulatory process, the bill prohibits insurers from using arbitration panels to approve rate hikes after state insurance regulators reject them. This practice became so prevalent that carriers would bill the increased rates to customers before they were even considered by regulators. The bill also stops insurers from basing rate hikes on Hurricane Models actually designed for that purpose. Carriers used the skewed models despite the legal requirement that insurers use state-approved methods to predict the risk of hurricanes, cynically claiming that the law didn’t preclude them from also using the models engineered to justify rate increases. The bill would form a task force charged with helping shrink Citizens and it would require the state Office of Insurance Regulation to provide more information about its rate-making procedures. The bill takes $250 million from Citizens to fund loans to private insurers that agree to help depopulate their client list by assuming some of their policies.

Another bill designed to lower the state’s insurance risk exposure, SB 2156, aspired to shrink the $28 billion Florida Hurricane Catastrophe Fund by 3 billion. Despite receiving support from Florida Chief Financial Officer Alex Sink, it died because of concerns that it would increase the cost of property insurance.

REPRESENTATIVE ELLYN BOGDANOFF

April 29, 2008 - As the legislative session winds down, the office housing the “Majority Whip” prepares to spend three weeks in a political blender. Our District 91 Statehouse Representative, Ellyn Bogdanoff, annually morphs into the State’s busiest official. As legislative work product rises toward fruition, it's supporters visit the Majority Whip, hoping to elicit her support. In the frenetic environment that overwhelms Tallahassee during the final weeks of the session, her bill summaries become critical currency to every legislator hoping to squeek one through. Since she is the policy educator for her peers in the Florida House of Representatives, every lawmaker’s laptop has Ellyn's URL squarely on top of their bookmarks menu.

As a key cog in the House leadership, legislators nursing bills through the committee sausage maker require either her input or approval if they plan on lowering their xanax intake. During her relatively short tenure, she has become a crucial component of the operational machinery that fuels progress in the Statehouse. Networked everywhere in the State Capitol, she has untangled legislative roadblocks and policy train wrecks (no-fault insurance) generally considered terminal. She allows Speaker Marco Rubio to be many places at once.

Despite these Herculean demands on her time, Bogdanoff remains in close and constant touch with constituents. For her Galt Mile neighbors with a passive interest in the legislative session, she composes news updates packaged as informal letters. Constituents with aspirations for direct involvement in the legislative process can communicate with Ellyn during a vote on the House floor if they so choose. With the 2008 session coming to a close, Representative Bogdanoff sent constituents a summary of some issues occupying center stage.

This year, dozens of bills affecting associations were filed, ranging in importance from critical to insipid. The serious legislation was consolidated into three bills, one for condominiums (HB 995/SB 2084), one for Homeowners Associations (HB 679/SB 2504) and one containing regulatory changes applicable to the Department of Business and Professional Regulations (DBPR) (HB 601/SB 2086). The condominium bill (which will impact most Galt Mile residents) contains long-needed emergency vehicles for casualty recovery, protections from identity theft, greater unit owner access to meeting agendas, whistleblower protection and other important statutory improvements. Since the bill was a consolidation vehicle