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New 2010 homeowners’ association laws enacted
by: Rob Samouce
The Legislature passed a large bill this year affecting community associations that became effective July 1, 2010. Chapter 2010-174, also referred to as Senate Bills No. 1196, is the first big piece of legislation pertaining to laws concerning condominiums, cooperatives and homeowners’ associations (all being: community associations).

Last month we looked at some of the changes in the new laws affecting condominium associations. In this article we will review some of the new changes affecting homeowners’ associations.

- Closed board meetings. Meetings between the board, or a committee, and the association’s attorney held to discuss proposed or pending litigation or meetings of the board held to discuss personnel matters are not required to be open to the members of the association.

- Inspection and Copying of Records. An owner requesting to inspect association records must now be made by certified mail, return receipt requested. If an association does not have a copy machine available where the records are kept or if more than 25 pages are requested, the association can have the copies made by an outsider vendor or the management company and charge the actual cost of copying including any reasonable costs involving personnel fees or employee time to cover the administrative costs.

A new list of certain records has been added to those that are not accessible to members or parcel owners including personnel payroll records in addition to personnel disciplinary, health and insurance records. Also not accessible are personal identifying information of any person including social security numbers, driver’s license numbers, credit card numbers, electronic mailing addresses, telephone numbers, emergency contact information and any addresses for a parcel owner other than as provided for association notice requirements.

However, a person’s name, parcel designation, mailing address and property address is accessible. Not accessible is any electronic security measure that is used by the association to safeguard data, including passwords and the software and operating system used by the association, which allows the manipulation of data even if the owner owns a copy of the same software.

- Financial reporting. If an Association has not established reserve accounts initially by the Developer or by a vote of the membership then the financial report at year end for the preceding year has to have a disclaimer in conspicuous type that either the Association has no or limited reserves and explains the possible consequences thereof.

- Prohibited compensation of directors, officers or committee members. A director, officer or committee member may not directly receive any salary or compensation from the association for the performance of the duties a director, officer or committee member, and may not in any other way benefit financially from service to the association except as follows:

1) If the person participates in a financial benefiting to all or a significant number of members as a result of lawful action by the board or committee, such as routine maintenance, repair or replacement of community assets;

2) Reimbursement of out-of-pocket expenses incurred by such person on behalf of the association subject to approval in accordance with the procedures in the governing documents or as established by the board;

3) Recovery of association insurance proceeds for the benefits of the members;

4) Fee or compensation authorized in the governing documents;

5) Fee or compensation authorized in advance by a vote of a majority of the voting interests voting at a meeting of the members;

6) Developer or its representative from serving as a director, officer, or committee member of the association and benefitting financially from such service.

- Flag poles. Although a member can still install a flagpole and fly U.S. and military flags, the flagpole and display are now subject to all building codes, zoning setbacks, and other applicable governmental regulations, including, but not limited to, noise and lighting ordinances and all setback and locational criteria contained in the governing documents. Some associations may wish to consider adding locational criteria to their architectural review criteria.

- Suspension of use rights - delinquent owners. A member, delinquent more than 90 days in paying monetary obligations due to the association, may now have their common area and facilities rights suspended by the association against the member and any tenant, guest or invitee. However, access over the common areas to the member’s parcel or utility services provided to the parcel may not be suspended. Before the suspension can be imposed the member must be provided an opportunity for notice and a hearing before a committee.

- Election and board vacancies. A new provision provides that if the governing documents permit voting by secret ballot by members, who are not in attendance at a meeting of the members for the election of directors (absentee balloting), such balloting may be used and the procedures for doing so are set out. If so, besides an eligible member being able to nominate himself or herself from the floor of the meeting, they can nominate themselves in advance of the balloting. Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by a majority vote of the remaining directors or by a sole remaining director or alternatively the board may have an election to fill the vacancy. Also, unless otherwise provided in the bylaws, a board member appointed or elected under this section is appointed for the unexpired term of the seat being filled.

- Association can collect rent when owner is delinquent in assessments. The new provisions allow the associations to collect rent from units whose owners have not paid their assessments. Many owners, who get upside down in their mortgage, will quit paying their mortgage, quit paying association assessments, and put renters in their units in default and collect the rent free and clear of their other obligations. Many banks are slow to standing still in completing their foreclosures as they do not want to have to own the units until they can find buyers as they will have to pay insurance and association assessments until a buyer is found.

Every month goes by with the owners collecting more rent and the associations receive less and less assessments because of the deadbeat owners. The association’s bills are not reduced so this puts a hardship on the association to cover the bills resulting in higher assessments for the paying owners.

What the new laws says is that homeowners’ associations can now follow a procedure to collect the rent. It provides that:

“(8) If the parcel is occupied by a tenant and the parcel owner is delinquent in paying any monetary obligation due to the association, the association may demand that the tenant pay to the association the future monetary obligations related to the parcel. The demand is continuing in nature, and upon demand, the tenant must continue to pay the monetary obligations until the association releases the tenant or the tenant discontinues tenancy in the parcel. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the parcel owner.

(a) If the tenant prepaid rent to the parcel owner before receiving the demand from the association and provides written evidence of paying the rent to the association within 14 days after receiving the demand, the tenant shall receive credit for the prepaid rent for the applicable period and must make any subsequent rental payments to the association to be credited against the monetary obligations of the parcel owner to the association. The association shall, upon request, provide the tenant with written receipts for payments made. The association shall mail written notice to the parcel owner of the association’s demand that the tenant pay monetary obligations to the association.

(b) The tenant is not liable for increases in the amount of the monetary obligations due unless the tenant was notified in writing of the increase at least 10 days before the date on which the rent is due. The tenant shall be given a credit against rents due to the parcel owner in the amount of assessments paid to the association.

(c) The association may issue notices under s. 83.56 and may sue for eviction under ss. 83.59-83.625 as if the association were a landlord under part II of chapter 83 if the tenant fails to pay a monetary obligation. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no duties under s. 83.51.

(d) The tenant does not, by virtue of payment of monetary obligations, have any of the rights of a parcel owner to vote in any election or to examine the books and records of the association. (e) A court may supersede the effect of this subsection by appointing a receiver.”
Rob Samouce, a principal attorney in the Naples law firm of Samouce, Murrell, & Gal, P.A., concentrates his practice in the areas of community associations including condominium, cooperative and homeowners' associations, real estate transactions, closings and related mortgage law, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.