The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Regulated Industries
BILL: SB 394
INTRODUCER: Senator Rodriguez
SUBJECT: Residential Associations
DATE: January 31, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Oxamendi Imhof RI Favorable
2. CA
3. RC
I. Summary:
SB 394 revises the post-election certification for condominium, cooperative, and homeowners’
association board members. The provisions of the bill apply to homeowners’ associations with at
least 10 units. Under the bill a board member for these associations must certify by affidavit that
he or she has read the declaration of condominium, articles of incorporation, cooperative
proprietary lease, homeowners’ association’s covenants, bylaws, and current written policies, as
applicable, and must complete an education curriculum administered by an education provider
approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes (division)
within the Department of Business the Professional Regulation (DBPR) within one year before,
or 90 days after, the election or appointment.
Under current law, a board member must certify in writing, as opposed to “by affidavit” as
required in the bill, that he or she has read the applicable documents of the association and
completed the approved education curriculum.
The bill has no fiscal impact on state government. See Section V.
The bill takes effect July 1, 2022.
II. Present Situation:
Chapters 718, 719, and 720, F.S.
Chapter 718, F.S., relating to condominiums, ch. 719, F.S., relating to cooperatives, and
ch. 720, F.S., relating to homeowners’ associations, provide for the governance of these
community associations. The chapters delineate requirements for notices of meetings,
1
1
See ss. 718.112(2), 719.106(2)(c), and 720.303(2), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
REVISED: BILL: SB 394 Page 2
recordkeeping requirements, including which records are accessible to the members of the
association,
2
and financial reporting.
3
Timeshare condominiums are generally governed by
ch. 721, F.S., the “Florida Vacation Plan and Timesharing Act.”
Condominium Associations
A condominium is a “form of ownership of real property created under ch. 718, F.S.”
4
Condominium unit owners are in a unique legal position because they are exclusive owners of
property within a community, joint owners of community common elements, and members of
the condominium association.
5
For unit owners, membership in the association is an unalienable
right and required condition of unit ownership.
6
A condominium is created by recording a
declaration of the condominium in the public records of the county where the condominium is
located.
7
A declaration is similar to a constitution in that it:
[S]trictly governs the relationships among condominium unit owners and
the condominium association. Under the declaration, the Board of the
condominium association has broad authority to enact rules for the benefit
of the community.
8
Condominium associations are creatures of statute and private contracts. Under the Florida
Condominium Act, associations must be incorporated as a Florida for-profit corporation or a
Florida not-for-profit corporation.
9
Although unit owners are considered shareholders of this
corporate entity, like other corporations, a unit owner's role as a shareholder does not implicitly
provide them any authority to act on behalf of the association.
A condominium association is administered by a board of directors referred to as a “board of
administration.”
10
The board of administration is comprised of individual unit owners elected by
the members of a community to manage community affairs and represent the interests of the
association. Association board members must enforce a community's governing documents and
are responsible for maintaining a condominium's common elements which are owned in
undivided shares by unit owners.
11
In litigation, an association's board of directors is in charge of
directing attorney actions.
12
The division has limited regulatory authority over condominiums.
13
2
See ss. 718.111(12), 719.104(2), and 720.303(4), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
3
See ss. 718.111(13), 719.104(4), and 720.303(7), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
4
Section 718.103(11), F.S.
5
See s. 718.103, F.S.
6
Id.
7
Section 718.104(2), F.S.
8
Neuman v. Grandview at Emerald Hills, 861 So. 2d 494, 496-97 (Fla. 4th DCA 2003) (internal citations omitted).
9
Section 718.303(3), F.S.
10
Section 718.103(4), F.S.
11
Section 718.103(2), F.S.
12
Section 718.103(30), F.S.
13
See s. 718.501, F.S. BILL: SB 394 Page 3
Cooperative Associations
Section 719.103(12), F.S., defines a “cooperative” to mean:
[T]hat form of ownership of real property wherein legal title is vested in a
corporation or other entity and the beneficial use is evidenced by an
ownership interest in the association and a lease or other muniment of title
or possession granted by the association as the owner of all the
cooperative property.
A cooperative differs from a condominium because, in a cooperative, no unit is individually
owned. Instead, a cooperative owner receives an exclusive right to occupy the unit based on their
ownership interest in the cooperative entity as a whole. A cooperative owner is either a
stockholder or member of a cooperative apartment corporation who is entitled, solely by reason
of ownership of stock or membership in the corporation, to occupy an apartment in a building
owned by the corporation.
14
The cooperative holds the legal title to the unit and all common
elements. The cooperative association may assess costs for the maintenance of common
expenses.
15
The division has limited regulatory authority over cooperatives, including the development,
construction, sale, lease, ownership, operation, and management of residential cooperative
units.
16
Homeowners’ Associations
Chapter 720, F.S., provides statutory recognition to corporations that operate residential
communities in Florida as well as procedures for operating homeowners’ associations. These
laws protect the rights of association members without unduly impairing the ability of such
associations to perform their functions.
17
A “homeowners’ association” is defined as a “Florida corporation responsible for the operation
of a community or a mobile home subdivision in which the voting membership is made up of
parcel owners or their agents, or a combination thereof, and in which membership is a mandatory
condition of parcel ownership, and which is authorized to impose assessments that, if unpaid,
may become a lien on the parcel.”
18
Unless specifically stated to the contrary in the articles of
incorporation, homeowners’ associations are also governed by ch. 607, F.S., relating to for-profit
corporations, or by ch. 617, F.S., relating to not-for-profit corporations.
19
14
See Walters v. Agency for Health Care Administration, 288 So.3d 1215 (Fla. 3rd DCA 2019), review denied 2020 WL
3442763 (Fla. 2020).
15
See ss. 719.106(1)(g) and 719.107, F.S.
16
Section 719.501(1), F.S.
17
See s. 720.302(1), F.S.
18
Section 720.301(9), F.S.
19
Section 720.302(5), F.S. BILL: SB 394 Page 4
Homeowners’ associations are administered by a board of directors whose members are
elected.
20
The powers and duties of homeowners’ associations include the powers and duties
provided in ch. 720, F.S., and in the governing documents of the association, which include a
recorded declaration of covenants, bylaws, articles of incorporation, and duly-adopted
amendments to these documents.
21
The officers and members of a homeowners’ association have
a fiduciary relationship to the members who are served by the association.
22
Homeowners’ associations mainly differ from condominiums, in the type of property
individually owned. Condominium unit owners essentially own airspace within a building,
whereas homeowner association members own a parcel of real property or land.
Unlike condominium and cooperative associations, homeowners’ associations are not regulated
by a state agency. Section 720.302(2), F.S., expresses the legislative intent regarding the
regulation of homeowners’ associations:
The Legislature recognizes that it is not in the best interest of
homeowners’ associations or the individual association members thereof
to create or impose a bureau or other agency of state government to
regulate the affairs of homeowners’ associations. However, in accordance
with s. 720.311, F.S., the Legislature finds that homeowners’ associations
and their individual members will benefit from an expedited alternative
process for resolution of election and recall disputes and presuit mediation
of other disputes involving covenant enforcement and authorizes the
department to hear, administer, and determine these disputes as more fully
set forth in this chapter. Further, the Legislature recognizes that certain
contract rights have been created for the benefit of homeowners’
associations and members thereof before the effective date of this act and
that ss. 720.301-720.407 F.S., are not intended to impair such contract
rights, including, but not limited to, the rights of the developer to complete
the community as initially contemplated.
For homeowners’ associations, the division’s authority is limited to the arbitration of recall
election disputes.
23
Division of Florida Condominiums, Timeshares, and Mobile Homes
The division administers the provisions of chs. 718 and 719, F.S., for condominium and
cooperative associations, respectively. The division may investigate complaints and enforce
compliance with chs. 718 and 719, F.S., for associations that are still under developer control.
24
The division also has the authority to investigate complaints against developers involving
improper turnover or failure to transfer control to the association.
25
After control of the
20
See ss. 720.303 and 720.307, F.S.
21
See ss. 720.301 and 720.303, F.S.
22
Section 720.303(1), F.S.
23
See s. 720.306(9)(c), F.S.
24
Sections 718.501(1) and 719.501(1), F.S.
25
Id. BILL: SB 394 Page 5
condominium is transferred from the developer to the unit owners, the division has jurisdiction to
investigate complaints related to financial issues, elections, and unit owner access to association
records.
26
For cooperatives, the division’s jurisdiction extends to the development, construction,
sale, lease, ownership, operation, and management of residential cooperative units.
27
As part of the division’s authority to investigate complaints, the division may subpoena
witnesses, take sworn statements from witnesses, issue cease and desist orders, and impose civil
penalties against developers, associations, and association board members.
28
If the division has reasonable cause to believe that a violation of any provision of ch. 718, F.S.,
ch. 719, F.S., or a related rule has occurred, the division may institute enforcement proceedings
in its name against any developer, bulk assignee, bulk buyer, association, officer, or member of
the board of administration, or its assignees or agents. The division may conduct an investigation
and issue an order to cease and desist from unlawful practices and to take affirmative action to
carry out the purpose of the applicable chapter. Also, Florida law authorizes the division to
petition a court to appoint a receiver or conservator to implement a court order or to enforce an
injunction or temporary restraining order. The division may also impose civil penalties.
29
For homeowners’ associations, the division’s authority is limited to the arbitration of recall
election disputes.
30
Post-Election Certification by Board Members
Within 90 days after being elected or appointed, a new board member for a condominium,
cooperative, or homeowners’ association must certify in writing to the secretary of the
association that he or she:
31
Has read the declaration of condominium for all condominiums operated by the association
and the declaration of condominium, articles of incorporation, cooperative proprietary
lease,
32
homeowners’ association’s covenants, bylaws, and current written policies, as
applicable;
Will work to uphold such documents and policies to the best of his or her ability; and
Will faithfully discharge his or her fiduciary responsibility to the association’s members.
As an alternative to a written certification, the newly elected or appointed director may submit a
certificate of satisfactory completion of the educational curriculum within one year before the
26
Section 718.501(1), F.S.
27
Section 719.501(1), F.S.
28
Sections 718.501(1) and 719.501(1), F.S.
29
Id.
30
See s. 720.306(9)(c), F.S.
31
Sections 718.112(2)(d)4.b., 719.106(1)(d)b., and 720.3033(1)(a), F.S., provide a post-election certification requirement for
newly elected condominium, cooperative, and homeowners’ association board members, respectively.
32
A newly elected member of the board of a cooperative association must also certify that they have read the “proprietary
lease,” which is an instrument that gives a shareholder in a cooperative association the right to occupy a particular dwelling
unit. See Bankrate, What is a Proprietary Lease?, available at: https://www.bankrate.com/glossary/p/proprietary-lease/ (last
visited Jan. 26, 2022). BILL: SB 394 Page 6
election or 90 days after the election or appointment.
33
The curriculum must be administered by a
condominium education provider approved by the division.
34
A certification is valid and does not
have to be resubmitted as long as the director continuously serves on the board.
A board member is suspended from service on the board until he or she files the written
certification or submits a certificate of completion of the educational curriculum.
35
If a
suspension occurs, the board may temporarily fill the vacancy during the period of suspension.
The secretary of the association must keep the written certification or educational certificate for
inspection by the members for five years after a board director’s election or the duration of the
director’s uninterrupted tenure, whichever is longer.
36
The validity of any action by the
condominium board is not affected by the association’s failure to have the certification on file.
37
III. Effect of Proposed Changes:
The bill amends ss. 718.112(2)(d)4.b., 719.106(1)(d)b., and 720.3033(1)(a), F.S., to revise the
post-election certification for condominium, cooperative, and homeowners’ association board
members; however, the provisions of the bill only apply to those homeowners’ associations with
at least 10 units. Under the bill, a board member for these associations must certify by affidavit
that he or she has read the declaration of condominium, articles of incorporation, cooperative
proprietary lease, homeowners’ association’s covenants, bylaws, and current written policies, as
applicable, and complete a division-approved education curriculum within one year before, or 90
days after, the election or appointment.
The bill takes effect July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
33
The division’s Internet site provides a listing of approved educational providers for the certification of board members. See
Department of Business and Professional Regulation, Condominium & Cooperatives – Education, at
http://www.myfloridalicense.com/dbpr/lsc/documents/ListofApprovedProviders.pdf (last visited Jan. 26, 2022). This listing
also includes training for Homeowners’ Associations and some Mobile Home training.
34
Sections 718.112(2)(d)4.b., 719.106(1)(d)b., and 720.3033(1)(a), F.S.
35
Id.
36
Id.
37
Id. BILL: SB 394 Page 7
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Newly elected or appointed members of the board for a condominium, cooperative, or
affected homeowners’ associations may incur costs to complete a division-approved
certification course. Many providers offer these courses for free.
38
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 718.112, 719.106,
and 720.3033.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
38
See supra, note 33. BILL: SB 394 Page 8
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.