By TAMELA EADY WISEMAN, Special to the Daily News
Sunday, July 16, 2000
Florida legislation affecting community associations is a mixed bag this year.
On June 15, the Governor signed into law a 180-page sweeping timeshare bill that became effective upon his signature.
Interestingly enough, the timeshare industry drafted the law, with the blessing of the state, by which law the
industry will now be regulated. This goes to show how much clout the industry has now that the "big boys"
(virtually every major hotel chain) have entered the business.
Provisions impacting condominium and homeowner associations were tacked onto the timeshare bill at the last minute
and also became effective June 15.
The issue of the ability of owners in private communities to display a United States flag has reared its head again.
Several years ago, the Condominium Act was amended to provide that a unit owner had the right to display one "portable,
removable" United States flag in a "respectful way" regardless of any association rules that would
otherwise prohibit it.
The issue had not been previously addressed for homeowners' associations.
The provision, tentatively numbered Section 617.3075, Florida Statutes, is a classic example of bad drafting. The
provision reads that homeowners' association documents cannot "preclude the display of one United States flag
by property owners." Although clearly not intended, this could be interpreted that one, and only one homeowner
could be designated as the "flag flyer" and everyone else precluded from doing so.
In addition, the provision gives associations the right to set broad standards for size, placement and safety of
flag displays. For instance, an association could preclude an owner from placing a flag on common property.
An association could also decide how high the flag pole could be or perhaps allow only a small mast on the side
of a residence. As recent disputes in an Estero community and elsewhere indicate, size and placement issues are
controversial, and this statute will do little to resolve them.
Also on the homeowners' association front, the legislature has given an entire new Chapter (720) to their regulation.
Previously, homeowners' association statutes were housed in Chapter 617, the law relating to non-profit corporations.
Even though nothing substantive has been changed, the move has developer interests, including the state builders
association, concerned that the shift signals future additional regulation. Also, curiously, the same section numbering
(Sections .301-.312) was retained, begging the question of what is intended to go before it in the numbering sequence.
The change also means that the flag provision will most likely receive a new reference in Chapter 720.
Chapter 718, the condominium statute, has also been amended, as it is virtually every year (just call it the annual
Lawyers' Relief Act). Most significantly, provisions have been added to address multi-condominium associations.
A multi-condominium association is a development containing two or more condominiums operated by a single association.
This language was drafted and refined over a peri od of years and, on balance, it is quite good. Draftsmen have
also cleaned up several provisions in Chapter 718 and improved their clarity. However, intertwined with these goodies
are some real humdingers of bad law.
One change guaranteed to give condominium developers some sleepless nights is Section 718.103 (14), which defines
"conspicuous type." Conspicuous type is that in which certain legal disclosures in sales materials must
be printed. The change now requires all such disclosures to appear in bold type, in addition to previous requirements
regarding the use of capital letters and size of type.
Although the state has informally stated that it will not require previously approved developer filings to be amended,
the law does not exclude existing filings from its application. This means that any purchaser after June 15 could
argue that unless the developer has changed its materials to comply with the new requirement, the contract is voidable.
Thinking of the expense that could be incurred to change sales materials, maybe this law is a Printers' Relief
Act as well.
The law affecting parking space transfers has also been radically changed.
As a recent high profile appellate court confirmed, prior to June 15 condominium unit owners could not permanently
transfer limited common elements, including parking spaces, between units without unanimous owner consent (and
the consent of affected mortgagees) unless the right to do so was reserved in the original declaration of condominium.
Now, Section 718.106(2), Florida Statutes, has been amended, in direct response to that court case, to provide
that declarations can be amended to authorize such transfers through the regular amendment process. Unanimous consent
is not required. The new language will cause a great deal of uncertainty in its interpretation. In fact, its intent
is inconsistent with a developing trend in Florida cases holding that any amendment affecting unit owners' "substantial"
interests (as subjective as that is) must be approved unanimously by all owners.
Section 718.111(13), Florida Statutes, which deals with association annual financial reporting requirements has
also been revised. The deadlines for preparing and delivering financial reports to members have been lengthened.
Due to poor drafting, an asso ciation can wait as long as 90 days from the end of the fiscal year to even authorize
the reporting to be prepared.
Previously, an association was required to prepare and submit the information to owners either 60 or 90 days from
the end of the fiscal year (or other date provided in the bylaws), depending on the standard of reporting required.
The revised Section 718.111(13) tracks and clarifies provisions already found in state administrative rules. In
addition, the state Division of Florida Land Sales, Condominiums and Mobile Homes is granted the authority to adopt
additional rules setting forth uniform accounting principles and standards to be used by all associations. Because
this legislation was driven by east coast legislators representing constituents residing in large condominium complexes,
the concern is that these rules will unfairly burden smaller associations (like the average association in the
Southwest Florida area) with increased financial reporting requirements.
On a positive note, associations, in lieu of mailing or hand delivering financial reports to owners, can notify
owners that reports are available and will be provided without charge upon written request. This tracks current
homeowners' association law and recognizes that many owners do not have an interest in reviewing those materials
and never read them anyway.
Other changes include an amendment to Section 718.112(2)(d), Florida Statutes, to delete a provision which stated
that board of director candidates must meet eligibility requirements set forth in the declaration.
The intent of the deletion is to prevent associations from imposing residency requirements for director candidates.
The same section is also amended to allow associations to hand deliver annual meeting notices without the previous
requirement to obtain a written waiver from owners of notice by mail.
The provision that permits associations to enter into bulk cable or master antenna television service contracts
and to treat the cost as a common expense has been tinkered with again.
Section 718.115 already provided that a hearing impaired or legally blind owner who does not occupy a unit with
a non-hearing impaired or sighted person could discontinue service and opt out of paying contract charges and related
expenses.
Now, any owner receiving supplemental security income under Title XVI of the Social Security Act (need based benefits)
or food stamps can do the same. The change does not reflect that those individuals receiving such assistance may
reside with others who do not, and the language could work a hardship on those who must bear the additional financial
burden. This amendment makes it imperative that associations negotiating such a contract (which typically provides
for a set amount per unit multiplied by the total number of units) has a provision that permits units which have
opted out from being counted in the contract price.
Because the law affecting community associations can be expected to change every year, associations should schedule
an annual review of their documents by their legal counsel around this time of year to ensure compliance and to
have any necessary amendments prepared for voting next season.
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Tamela Eady Wiseman is a shareholder in the law firm of DeBoest, Knudsen, Stockman, Wiseman, Decker & Dryden,
P.A. with offices in Naples and Fort Myers.
She is Board Certified by the Florida Bar as a specialist in Real Estate Law. She has practiced law in Naples for
more than twelve years and limits her practice to the law of community associations, real estate and title insurance,
representing sellers, purchasers, associations and developers.
Mrs. Wiseman is also a member of the Naples City Council.
This article is not intended as specific legal advice to anyone and is based upon principles subject to change
from time to time. Those persons interested in subjects discussed in this article should consult competent legal
counsel.
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