Florida Senate - 2022 CS for CS for SB 1702 By the Committees on Rules; and Regulated Industries; and Senators Bradley, Rodriguez, and Garcia 595-03329-22 20221702c2 1 A bill to be entitled 2 An act relating to building safety; creating s. 3 553.899, F.S.; providing legislative findings; 4 defining the term milestone inspection; specifying 5 that the purpose of a milestone inspection is not to 6 determine compliance with the Florida Building Code or 7 the firesafety code; requiring owners of certain 8 multifamily residential buildings to have milestone 9 inspections performed at specified times; requiring 10 condominium and cooperative associations to arrange 11 for milestone inspections of condominium buildings and 12 cooperative buildings, respectively; specifying that 13 such associations are responsible for costs relating 14 to milestone inspections; providing applicability; 15 requiring that initial milestone inspections for 16 certain buildings be performed before a specified 17 date; specifying that milestone inspections consist of 18 two phases; providing requirements for each phase of a 19 milestone inspection; requiring architects and 20 engineers performing a milestone inspection to submit 21 a sealed copy of the inspection report and a summary 22 that includes specified findings and recommendations 23 to certain entities; requiring condominium 24 associations and cooperative associations to 25 distribute and post a copy of each inspection report 26 and summary in a specified manner; authorizing local 27 enforcement agencies to prescribe timelines and 28 penalties relating to milestone inspections; requiring 29 the Florida Building Commission to develop certain 30 standards by a specified date and make such standards 31 available to local governments for adoption; amending 32 s. 718.103, F.S.; defining the term alternative 33 funding method; amending s. 718.111, F.S.; revising 34 the types of records that constitute the official 35 records of a condominium association; requiring 36 associations to maintain specified records for a 37 certain timeframe; specifying that renters of a unit 38 have the right to inspect and copy certain reports; 39 requiring associations to post a copy of certain 40 reports and reserve studies on the associations 41 website; revising rulemaking requirements for the 42 Division of Florida Condominiums, Timeshares, and 43 Mobile Homes of the Department of Business and 44 Professional Regulation; amending s. 718.112, F.S.; 45 revising certification and education requirements for 46 directors of association boards; revising requirements 47 for association budgets; revising applicability; 48 requiring certain associations to periodically have a 49 study conducted relating to required reserves after a 50 specified date; requiring boards to annually review 51 the results of such study to determine if reserves are 52 sufficient; requiring the division to adopt rules; 53 providing requirements for the reserve study; revising 54 requirements for approval of using reserve funds for a 55 purpose other than authorized reserve expenditures; 56 requiring that budgets include specified disclosures 57 relating to reserve funds under certain circumstances 58 on or after a specified date; restating requirements 59 for associations relating to milestone inspections; 60 amending s. 718.113, F.S.; requiring associations to 61 provide for the maintenance, repair, and replacement 62 of condominium property; providing an exception; 63 requiring associations to perform specified required 64 maintenance under certain circumstances; specifying 65 that necessary maintenance, repair, or replacement of 66 condominium property does not require unit owner 67 approval; specifying that associations are not liable 68 for certain expenses if a unit is vacated or access to 69 a common element is denied for specified reasons; 70 amending s. 718.115, F.S.; authorizing boards to adopt 71 a special assessment or borrow money for certain 72 reasons without unit owner approval; conforming cross 73 references; amending s. 718.1255, F.S.; revising the 74 definition of the term dispute; specifying that 75 certain disputes are not subject to certain nonbinding 76 arbitration and must be submitted to presuit 77 mediation; amending s. 718.301, F.S.; revising 78 reporting requirements relating to the transfer of 79 association control; amending s. 718.503, F.S.; 80 revising the documents that must be delivered to a 81 prospective buyer or lessee of a residential unit; 82 revising requirements for nondeveloper disclosures; 83 amending s. 718.504, F.S.; revising requirements for 84 prospectuses and offering circulars; amending s. 85 719.103, F.S.; defining the term alternative funding 86 method; amending s. 719.104, F.S.; revising the types 87 of records that constitute the official records of a 88 cooperative association; requiring associations to 89 maintain specified records for a certain timeframe; 90 specifying that renters of a unit have the right to 91 inspect and copy certain reports; revising rulemaking 92 requirements for the division; specifying that 93 maintenance of the cooperative property and common 94 areas is the responsibility of associations; providing 95 an exception; requiring associations to perform 96 specified required maintenance under certain 97 circumstances; specifying that necessary maintenance, 98 repair, or replacement of cooperative property does 99 not require unit owner approval; specifying that 100 associations are not liable for certain expenses if a 101 unit must be vacated or if access to a common area is 102 denied for specified reasons; amending s. 719.106, 103 F.S.; revising certification and education 104 requirements for directors of association boards; 105 revising requirements for association budgets; 106 revising applicability; revising requirements for the 107 use of reserve funds for a purpose other than 108 authorized reverse expenditures; requiring certain 109 associations to periodically have a study conducted 110 relating to required reserves after a specified date; 111 requiring boards to annually review the results of 112 such study to determine if reserves are sufficient; 113 requiring the division to adopt rules; providing 114 requirements for the reserve study; requiring that 115 budgets include specified disclosures relating to 116 reserve funds under certain circumstances on or after 117 a specified date; restating requirements for 118 associations relating to milestone inspections; 119 amending s. 719.107, F.S.; authorizing boards to adopt 120 a special assessment or borrow money for certain 121 reasons without unit owner approval; amending s. 122 719.301, F.S.; requiring developers to deliver a 123 turnover inspection report relating to cooperative 124 property under certain circumstances; requiring 125 developers to deliver a copy of certain reserve 126 studies and statements when relinquishing control of 127 an association; amending s. 719.503, F.S.; revising 128 the documents that must be delivered to a prospective 129 buyer or lessee of a residential unit; revising 130 nondeveloper disclosure requirements; amending s. 131 719.504, F.S.; revising requirements for prospectuses 132 and offering circulars; amending ss. 558.002, 718.116, 133 718.121, 718.706, and 720.3085, F.S.; conforming 134 cross-references; reenacting s. 719.1255, F.S., 135 relating to alternative resolution of disputes, to 136 incorporate the amendment made to s. 718.1255, F.S., 137 in a reference thereto; providing an effective date. 138 139 Be It Enacted by the Legislature of the State of Florida: 140 141 Section 1.Section 553.899, Florida Statutes, is created to 142 read: 143 553.899Mandatory structural inspections for multifamily 144 residential buildings. 145 (1)The Legislature finds that maintaining the structural 146 integrity of a building throughout its service life is of 147 paramount importance in order to ensure that buildings are 148 structurally sound so as to not pose a threat to the public 149 health, safety, or welfare. As such, the Legislature finds that 150 the imposition of a statewide structural inspection program for 151 aging multifamily residential buildings in this state is 152 necessary to ensure that such buildings are safe for continued 153 use. 154 (2)As used in this section, the term milestone 155 inspection means a structural inspection of a building, 156 including an inspection of load-bearing walls and the primary 157 structural members and primary structural systems as those terms 158 are defined in s. 627.706, by a licensed architect or engineer 159 authorized to practice in this state for the purposes of 160 attesting to the life safety and adequacy of the structural 161 components of the building and, to the extent reasonably 162 possible, determining the general structural condition of the 163 building as it affects the safety of such building, including a 164 determination of any necessary maintenance, repair, or 165 replacement of any structural component of the building. The 166 purpose of such inspection is not to determine if the condition 167 of an existing building is in compliance with the Florida 168 Building Code or the firesafety code. 169 (3)The owner of a multifamily residential building that is 170 three stories or more in height must have a milestone inspection 171 performed by December 31 of the year in which the building 172 reaches 30 years of age, based on the date the certificate of 173 occupancy for the building was issued, and every 10 years 174 thereafter. The owner of a multifamily residential building that 175 is three stories or more in height and is located within 3 miles 176 of a coastline as defined in s. 376.031 must have a milestone 177 inspection performed by December 31 of the year in which the 178 building reaches 20 years of age, based on the date the 179 certificate of occupancy for the building was issued, and every 180 7 years thereafter. If a condominium building or cooperative 181 building is required to have a milestone inspection performed 182 pursuant to this section, the condominium association or 183 cooperative association must arrange for the milestone 184 inspection to be performed and is responsible for ensuring 185 compliance with the requirements of this section. The building 186 owner or condominium association or cooperative association is 187 responsible for all costs associated with the inspection. This 188 subsection does not apply to a two-family or three-family 189 dwelling with three or fewer habitable stories above ground. 190 (4)If a milestone inspection is required under this 191 section and the buildings certificate of occupancy was issued 192 on or before July 1, 1992, the buildings initial milestone 193 inspection must be performed before December 31, 2024. 194 (5)A milestone inspection consists of two phases: 195 (a)For phase one of the milestone inspection, a licensed 196 architect or engineer authorized to practice in this state shall 197 perform a visual examination of habitable and nonhabitable areas 198 of a building, including the major structural components of a 199 building, and provide a qualitative assessment of the structural 200 conditions of the building. Surface imperfections such as 201 cracks, distortion, sagging, deflections, misalignment, signs of 202 leakage, or peeling of finishes are not considered signs of 203 structural distress unless the architect or engineer performing 204 the inspection determines that such surface imperfections are a 205 sign of structural distress. If the architect or engineer finds 206 no signs of structural distress to any building components under 207 visual examination, phase two of the inspection, as provided in 208 paragraph (b), is not required. An architect or engineer who 209 completes a phase one milestone inspection shall prepare and 210 submit an inspection report pursuant to subsection (6). 211 (b)A phase two of the milestone inspection must be 212 performed if any structural distress is identified during phase 213 one. The inspector in charge of a phase two inspection must be a 214 licensed engineer or licensed architect who has a minimum of 5 215 years of experience designing the primary structural components 216 of buildings and a minimum of 5 years of experience inspecting 217 structural components of existing buildings of a similar size, 218 scope, and type of construction. A phase two inspection may 219 involve destructive or nondestructive testing at the inspectors 220 direction. The inspection may be as extensive or as limited as 221 necessary to fully assess areas of structural distress in order 222 to confirm that the building is structurally sound and safe for 223 its intended use and to recommend a program for fully assessing 224 and repairing distressed and damaged portions of the building. 225 When determining testing locations, the inspector must give 226 preference to locations that are the least disruptive and most 227 easily repairable while still being representative of the 228 structure. An inspector who completes a phase two milestone 229 inspection shall prepare and submit an inspection report 230 pursuant to subsection (6). 231 (6)Upon completion of a phase one or phase two milestone 232 inspection, the architect or engineer who performed the 233 inspection must submit a sealed copy of the inspection report 234 with a separate summary of, at minimum, the material findings 235 and recommendations in the inspection report to the building 236 owner or, if the building is a condominium or cooperative, to 237 the condominium association or cooperative association, and to 238 the building official of the local government which has 239 jurisdiction. For a milestone inspection of a building that is a 240 condominium or cooperative, the association must distribute a 241 copy of the inspector-prepared summary of the inspection report 242 to each condominium unit owner or cooperative unit owner, 243 regardless of the findings or recommendations in the report, by 244 United States mail or personal delivery; must post a copy of the 245 inspector-prepared summary in a conspicuous place on the 246 condominium or cooperative property; and must publish the full 247 report and inspector-prepared summary on the associations 248 website, if the association is required to have a website. 249 (7)A local enforcement agency may prescribe timelines and 250 penalties with respect to compliance with this section. 251 (8)The commission shall develop comprehensive structural 252 and life safety standards for maintaining and inspecting 253 buildings and structures in this state that are three stories or 254 more in height by December 31, 2022. The standards are in 255 addition to those provided in this section and must be made 256 available for local governments to adopt at their discretion. 257 Section 2.Present subsections (1) through (30) of section 258 718.103, Florida Statutes, are redesignated as subsections (2) 259 through (31), respectively, and a new subsection (1) is added to 260 that section, to read: 261 718.103Definitions.As used in this chapter, the term: 262 (1)Alternative funding method means a method for the 263 funding of a reserve account by other than an assessment or 264 special assessment which may reasonably be expected to fully 265 satisfy the associations reserve funding obligations, 266 including, but not limited to, payments into the reserve account 267 by a developer who is offering units or any other method 268 approved by the division. 269 Section 3.Paragraphs (a), (c), and (g) of subsection (12) 270 and subsection (13) of section 718.111, Florida Statutes, are 271 amended to read: 272 718.111The association. 273 (12)OFFICIAL RECORDS. 274 (a)From the inception of the association, the association 275 shall maintain each of the following items, if applicable, which 276 constitutes the official records of the association: 277 1.A copy of the plans, permits, warranties, and other 278 items provided by the developer under s. 718.301(4). 279 2.A photocopy of the recorded declaration of condominium 280 of each condominium operated by the association and each 281 amendment to each declaration. 282 3.A photocopy of the recorded bylaws of the association 283 and each amendment to the bylaws. 284 4.A certified copy of the articles of incorporation of the 285 association, or other documents creating the association, and 286 each amendment thereto. 287 5.A copy of the current rules of the association. 288 6.A book or books that contain the minutes of all meetings 289 of the association, the board of administration, and the unit 290 owners. 291 7.A current roster of all unit owners and their mailing 292 addresses, unit identifications, voting certifications, and, if 293 known, telephone numbers. The association shall also maintain 294 the e-mail addresses and facsimile numbers of unit owners 295 consenting to receive notice by electronic transmission. The e 296 mail addresses and facsimile numbers are not accessible to unit 297 owners if consent to receive notice by electronic transmission 298 is not provided in accordance with sub-subparagraph (c)3.e. 299 However, the association is not liable for an inadvertent 300 disclosure of the e-mail address or facsimile number for 301 receiving electronic transmission of notices. 302 8.All current insurance policies of the association and 303 condominiums operated by the association. 304 9.A current copy of any management agreement, lease, or 305 other contract to which the association is a party or under 306 which the association or the unit owners have an obligation or 307 responsibility. 308 10.Bills of sale or transfer for all property owned by the 309 association. 310 11.Accounting records for the association and separate 311 accounting records for each condominium that the association 312 operates. Any person who knowingly or intentionally defaces or 313 destroys such records, or who knowingly or intentionally fails 314 to create or maintain such records, with the intent of causing 315 harm to the association or one or more of its members, is 316 personally subject to a civil penalty pursuant to s. 317 718.501(1)(d). The accounting records must include, but are not 318 limited to: 319 a.Accurate, itemized, and detailed records of all receipts 320 and expenditures. 321 b.A current account and a monthly, bimonthly, or quarterly 322 statement of the account for each unit designating the name of 323 the unit owner, the due date and amount of each assessment, the 324 amount paid on the account, and the balance due. 325 c.All audits, reviews, accounting statements, reserve 326 studies and reserve funding plans, and financial reports of the 327 association or condominium. 328 d.All contracts for work to be performed. Bids for work to 329 be performed are also considered official records and must be 330 maintained by the association for at least 1 year after receipt 331 of the bid. 332 12.Ballots, sign-in sheets, voting proxies, and all other 333 papers and electronic records relating to voting by unit owners, 334 which must be maintained for 1 year from the date of the 335 election, vote, or meeting to which the document relates, 336 notwithstanding paragraph (b). 337 13.All rental records if the association is acting as 338 agent for the rental of condominium units. 339 14.A copy of the current question and answer sheet as 340 described in s. 718.504. 341 15.A copy of the inspection reports report as described in 342 ss. 553.899 and 718.301(4)(p) and any other inspection report 343 relating to a structural or life safety inspection of 344 condominium property. Such record must be maintained by the 345 association for 15 years after receipt of the report s. 346 718.301(4)(p). 347 16.Bids for materials, equipment, or services. 348 17.All affirmative acknowledgments made pursuant to s. 349 718.121(4)(c). 350 18.All other written records of the association not 351 specifically included in the foregoing which are related to the 352 operation of the association. 353 (c)1.The official records of the association are open to 354 inspection by any association member or the authorized 355 representative of such member at all reasonable times. The right 356 to inspect the records includes the right to make or obtain 357 copies, at the reasonable expense, if any, of the member or 358 authorized representative of such member. A renter of a unit has 359 a right to inspect and copy only the declaration of condominium, 360 and the associations bylaws and rules, and the inspection 361 reports described in ss. 553.899 and 718.301(4)(p). The 362 association may adopt reasonable rules regarding the frequency, 363 time, location, notice, and manner of record inspections and 364 copying but may not require a member to demonstrate any purpose 365 or state any reason for the inspection. The failure of an 366 association to provide the records within 10 working days after 367 receipt of a written request creates a rebuttable presumption 368 that the association willfully failed to comply with this 369 paragraph. A unit owner who is denied access to official records 370 is entitled to the actual damages or minimum damages for the 371 associations willful failure to comply. Minimum damages are $50 372 per calendar day for up to 10 days, beginning on the 11th 373 working day after receipt of the written request. The failure to 374 permit inspection entitles any person prevailing in an 375 enforcement action to recover reasonable attorney fees from the 376 person in control of the records who, directly or indirectly, 377 knowingly denied access to the records. 378 2.Any person who knowingly or intentionally defaces or 379 destroys accounting records that are required by this chapter to 380 be maintained during the period for which such records are 381 required to be maintained, or who knowingly or intentionally 382 fails to create or maintain accounting records that are required 383 to be created or maintained, with the intent of causing harm to 384 the association or one or more of its members, is personally 385 subject to a civil penalty pursuant to s. 718.501(1)(d). 386 3.The association shall maintain an adequate number of 387 copies of the declaration, articles of incorporation, bylaws, 388 and rules, and all amendments to each of the foregoing, as well 389 as the question and answer sheet as described in s. 718.504 and 390 year-end financial information required under this section, on 391 the condominium property to ensure their availability to unit 392 owners and prospective purchasers, and may charge its actual 393 costs for preparing and furnishing these documents to those 394 requesting the documents. An association shall allow a member or 395 his or her authorized representative to use a portable device, 396 including a smartphone, tablet, portable scanner, or any other 397 technology capable of scanning or taking photographs, to make an 398 electronic copy of the official records in lieu of the 399 associations providing the member or his or her authorized 400 representative with a copy of such records. The association may 401 not charge a member or his or her authorized representative for 402 the use of a portable device. Notwithstanding this paragraph, 403 the following records are not accessible to unit owners: 404 a.Any record protected by the lawyer-client privilege as 405 described in s. 90.502 and any record protected by the work 406 product privilege, including a record prepared by an association 407 attorney or prepared at the attorneys express direction, which 408 reflects a mental impression, conclusion, litigation strategy, 409 or legal theory of the attorney or the association, and which 410 was prepared exclusively for civil or criminal litigation or for 411 adversarial administrative proceedings, or which was prepared in 412 anticipation of such litigation or proceedings until the 413 conclusion of the litigation or proceedings. 414 b.Information obtained by an association in connection 415 with the approval of the lease, sale, or other transfer of a 416 unit. 417 c.Personnel records of association or management company 418 employees, including, but not limited to, disciplinary, payroll, 419 health, and insurance records. For purposes of this sub 420 subparagraph, the term personnel records does not include 421 written employment agreements with an association employee or 422 management company, or budgetary or financial records that 423 indicate the compensation paid to an association employee. 424 d.Medical records of unit owners. 425 e.Social security numbers, driver license numbers, credit 426 card numbers, e-mail addresses, telephone numbers, facsimile 427 numbers, emergency contact information, addresses of a unit 428 owner other than as provided to fulfill the associations notice 429 requirements, and other personal identifying information of any 430 person, excluding the persons name, unit designation, mailing 431 address, property address, and any address, e-mail address, or 432 facsimile number provided to the association to fulfill the 433 associations notice requirements. Notwithstanding the 434 restrictions in this sub-subparagraph, an association may print 435 and distribute to unit owners a directory containing the name, 436 unit address, and all telephone numbers of each unit owner. 437 However, an owner may exclude his or her telephone numbers from 438 the directory by so requesting in writing to the association. An 439 owner may consent in writing to the disclosure of other contact 440 information described in this sub-subparagraph. The association 441 is not liable for the inadvertent disclosure of information that 442 is protected under this sub-subparagraph if the information is 443 included in an official record of the association and is 444 voluntarily provided by an owner and not requested by the 445 association. 446 f.Electronic security measures that are used by the 447 association to safeguard data, including passwords. 448 g.The software and operating system used by the 449 association which allow the manipulation of data, even if the 450 owner owns a copy of the same software used by the association. 451 The data is part of the official records of the association. 452 h.All affirmative acknowledgments made pursuant to s. 453 718.121(4)(c). 454 (g)1.By January 1, 2019, an association managing a 455 condominium with 150 or more units which does not contain 456 timeshare units shall post digital copies of the documents 457 specified in subparagraph 2. on its website or make such 458 documents available through an application that can be 459 downloaded on a mobile device. 460 a.The associations website or application must be: 461 (I)An independent website, application, or web portal 462 wholly owned and operated by the association; or 463 (II)A website, application, or web portal operated by a 464 third-party provider with whom the association owns, leases, 465 rents, or otherwise obtains the right to operate a web page, 466 subpage, web portal, collection of subpages or web portals, or 467 an application which is dedicated to the associations 468 activities and on which required notices, records, and documents 469 may be posted or made available by the association. 470 b.The associations website or application must be 471 accessible through the Internet and must contain a subpage, web 472 portal, or other protected electronic location that is 473 inaccessible to the general public and accessible only to unit 474 owners and employees of the association. 475 c.Upon a unit owners written request, the association 476 must provide the unit owner with a username and password and 477 access to the protected sections of the associations website or 478 application which contain any notices, records, or documents 479 that must be electronically provided. 480 2.A current copy of the following documents must be posted 481 in digital format on the associations website or application: 482 a.The recorded declaration of condominium of each 483 condominium operated by the association and each amendment to 484 each declaration. 485 b.The recorded bylaws of the association and each 486 amendment to the bylaws. 487 c.The articles of incorporation of the association, or 488 other documents creating the association, and each amendment to 489 the articles of incorporation or other documents. The copy 490 posted pursuant to this sub-subparagraph must be a copy of the 491 articles of incorporation filed with the Department of State. 492 d.The rules of the association. 493 e.A list of all executory contracts or documents to which 494 the association is a party or under which the association or the 495 unit owners have an obligation or responsibility and, after 496 bidding for the related materials, equipment, or services has 497 closed, a list of bids received by the association within the 498 past year. Summaries of bids for materials, equipment, or 499 services which exceed $500 must be maintained on the website or 500 application for 1 year. In lieu of summaries, complete copies of 501 the bids may be posted. 502 f.The annual budget required by s. 718.112(2)(f) and any 503 proposed budget to be considered at the annual meeting. 504 g.The financial report required by subsection (13) and any 505 monthly income or expense statement to be considered at a 506 meeting. 507 h.The certification of each director required by s. 508 718.112(2)(d)4.b. 509 i.All contracts or transactions between the association 510 and any director, officer, corporation, firm, or association 511 that is not an affiliated condominium association or any other 512 entity in which an association director is also a director or 513 officer and financially interested. 514 j.Any contract or document regarding a conflict of 515 interest or possible conflict of interest as provided in ss. 516 468.436(2)(b)6. and 718.3027(3). 517 k.The notice of any unit owner meeting and the agenda for 518 the meeting, as required by s. 718.112(2)(d)3., no later than 14 519 days before the meeting. The notice must be posted in plain view 520 on the front page of the website or application, or on a 521 separate subpage of the website or application labeled Notices 522 which is conspicuously visible and linked from the front page. 523 The association must also post on its website or application any 524 document to be considered and voted on by the owners during the 525 meeting or any document listed on the agenda at least 7 days 526 before the meeting at which the document or the information 527 within the document will be considered. 528 l.Notice of any board meeting, the agenda, and any other 529 document required for the meeting as required by s. 530 718.112(2)(c), which must be posted no later than the date 531 required for notice under s. 718.112(2)(c). 532 m.The inspection reports described in ss. 553.899 and 533 718.301(4)(p) and any other inspection report relating to a 534 structural or life safety inspection of condominium property. 535 n.The reserve study required under s. 718.112(2). 536 3.The association shall ensure that the information and 537 records described in paragraph (c), which are not allowed to be 538 accessible to unit owners, are not posted on the associations 539 website or application. If protected information or information 540 restricted from being accessible to unit owners is included in 541 documents that are required to be posted on the associations 542 website or application, the association shall ensure the 543 information is redacted before posting the documents. 544 Notwithstanding the foregoing, the association or its agent is 545 not liable for disclosing information that is protected or 546 restricted under this paragraph unless such disclosure was made 547 with a knowing or intentional disregard of the protected or 548 restricted nature of such information. 549 4.The failure of the association to post information 550 required under subparagraph 2. is not in and of itself 551 sufficient to invalidate any action or decision of the 552 associations board or its committees. 553 (13)FINANCIAL REPORTING.Within 90 days after the end of 554 the fiscal year, or annually on a date provided in the bylaws, 555 the association shall prepare and complete, or contract for the 556 preparation and completion of, a financial report for the 557 preceding fiscal year. Within 21 days after the final financial 558 report is completed by the association or received from the 559 third party, but not later than 120 days after the end of the 560 fiscal year or other date as provided in the bylaws, the 561 association shall mail to each unit owner at the address last 562 furnished to the association by the unit owner, or hand deliver 563 to each unit owner, a copy of the most recent financial report 564 or a notice that a copy of the most recent financial report will 565 be mailed or hand delivered to the unit owner, without charge, 566 within 5 business days after receipt of a written request from 567 the unit owner. The division shall adopt rules setting forth 568 uniform accounting principles and standards to be used by all 569 associations and addressing the financial reporting requirements 570 for multicondominium associations. The rules must include, but 571 not be limited to, standards for presenting a summary of 572 association reserves, including a good faith estimate disclosing 573 the annual amount of reserve funds that would be necessary for 574 the association to fully fund reserves for each reserve item 575 based on the straight-line accounting method or to fully fund 576 reserves based on the pooling method. This disclosure is not 577 applicable to reserves funded via the pooling method. In 578 adopting such rules, the division shall consider the number of 579 members and annual revenues of an association. Financial reports 580 shall be prepared as follows: 581 (a)An association that meets the criteria of this 582 paragraph shall prepare a complete set of financial statements 583 in accordance with generally accepted accounting principles. The 584 financial statements must be based upon the associations total 585 annual revenues, as follows: 586 1.An association with total annual revenues of $150,000 or 587 more, but less than $300,000, shall prepare compiled financial 588 statements. 589 2.An association with total annual revenues of at least 590 $300,000, but less than $500,000, shall prepare reviewed 591 financial statements. 592 3.An association with total annual revenues of $500,000 or 593 more shall prepare audited financial statements. 594 (b)1.An association with total annual revenues of less 595 than $150,000 shall prepare a report of cash receipts and 596 expenditures. 597 2.A report of cash receipts and disbursements must 598 disclose the amount of receipts by accounts and receipt 599 classifications and the amount of expenses by accounts and 600 expense classifications, including, but not limited to, the 601 following, as applicable: costs for security, professional and 602 management fees and expenses, taxes, costs for recreation 603 facilities, expenses for refuse collection and utility services, 604 expenses for lawn care, costs for building maintenance and 605 repair, insurance costs, administration and salary expenses, and 606 reserves accumulated and expended for capital expenditures, 607 deferred maintenance, and any other category for which the 608 association maintains reserves. 609 (c)An association may prepare, without a meeting of or 610 approval by the unit owners: 611 1.Compiled, reviewed, or audited financial statements, if 612 the association is required to prepare a report of cash receipts 613 and expenditures; 614 2.Reviewed or audited financial statements, if the 615 association is required to prepare compiled financial 616 statements; or 617 3.Audited financial statements if the association is 618 required to prepare reviewed financial statements. 619 (d)If approved by a majority of the voting interests 620 present at a properly called meeting of the association, an 621 association may prepare: 622 1.A report of cash receipts and expenditures in lieu of a 623 compiled, reviewed, or audited financial statement; 624 2.A report of cash receipts and expenditures or a compiled 625 financial statement in lieu of a reviewed or audited financial 626 statement; or 627 3.A report of cash receipts and expenditures, a compiled 628 financial statement, or a reviewed financial statement in lieu 629 of an audited financial statement. 630 631 Such meeting and approval must occur before the end of the 632 fiscal year and is effective only for the fiscal year in which 633 the vote is taken, except that the approval may also be 634 effective for the following fiscal year. If the developer has 635 not turned over control of the association, all unit owners, 636 including the developer, may vote on issues related to the 637 preparation of the associations financial reports, from the 638 date of incorporation of the association through the end of the 639 second fiscal year after the fiscal year in which the 640 certificate of a surveyor and mapper is recorded pursuant to s. 641 718.104(4)(e) or an instrument that transfers title to a unit in 642 the condominium which is not accompanied by a recorded 643 assignment of developer rights in favor of the grantee of such 644 unit is recorded, whichever occurs first. Thereafter, all unit 645 owners except the developer may vote on such issues until 646 control is turned over to the association by the developer. Any 647 audit or review prepared under this section shall be paid for by 648 the developer if done before turnover of control of the 649 association. 650 (e)A unit owner may provide written notice to the division 651 of the associations failure to mail or hand deliver him or her 652 a copy of the most recent financial report within 5 business 653 days after he or she submitted a written request to the 654 association for a copy of such report. If the division 655 determines that the association failed to mail or hand deliver a 656 copy of the most recent financial report to the unit owner, the 657 division shall provide written notice to the association that 658 the association must mail or hand deliver a copy of the most 659 recent financial report to the unit owner and the division 660 within 5 business days after it receives such notice from the 661 division. An association that fails to comply with the 662 divisions request may not waive the financial reporting 663 requirement provided in paragraph (d) for the fiscal year in 664 which the unit owners request was made and the following fiscal 665 year. A financial report received by the division pursuant to 666 this paragraph shall be maintained, and the division shall 667 provide a copy of such report to an association member upon his 668 or her request. 669 Section 4.Paragraphs (d) and (f) of subsection (2) of 670 section 718.112, Florida Statutes, are amended, and paragraph 671 (p) is added to that subsection, to read: 672 718.112Bylaws. 673 (2)REQUIRED PROVISIONS.The bylaws shall provide for the 674 following and, if they do not do so, shall be deemed to include 675 the following: 676 (d)Unit owner meetings. 677 1.An annual meeting of the unit owners must be held at the 678 location provided in the association bylaws and, if the bylaws 679 are silent as to the location, the meeting must be held within 680 45 miles of the condominium property. However, such distance 681 requirement does not apply to an association governing a 682 timeshare condominium. 683 2.Unless the bylaws provide otherwise, a vacancy on the 684 board caused by the expiration of a directors term must be 685 filled by electing a new board member, and the election must be 686 by secret ballot. An election is not required if the number of 687 vacancies equals or exceeds the number of candidates. For 688 purposes of this paragraph, the term candidate means an 689 eligible person who has timely submitted the written notice, as 690 described in sub-subparagraph 4.a., of his or her intention to 691 become a candidate. Except in a timeshare or nonresidential 692 condominium, or if the staggered term of a board member does not 693 expire until a later annual meeting, or if all members terms 694 would otherwise expire but there are no candidates, the terms of 695 all board members expire at the annual meeting, and such members 696 may stand for reelection unless prohibited by the bylaws. Board 697 members may serve terms longer than 1 year if permitted by the 698 bylaws or articles of incorporation. A board member may not 699 serve more than 8 consecutive years unless approved by an 700 affirmative vote of unit owners representing two-thirds of all 701 votes cast in the election or unless there are not enough 702 eligible candidates to fill the vacancies on the board at the 703 time of the vacancy. Only board service that occurs on or after 704 July 1, 2018, may be used when calculating a board members term 705 limit. If the number of board members whose terms expire at the 706 annual meeting equals or exceeds the number of candidates, the 707 candidates become members of the board effective upon the 708 adjournment of the annual meeting. Unless the bylaws provide 709 otherwise, any remaining vacancies shall be filled by the 710 affirmative vote of the majority of the directors making up the 711 newly constituted board even if the directors constitute less 712 than a quorum or there is only one director. In a residential 713 condominium association of more than 10 units or in a 714 residential condominium association that does not include 715 timeshare units or timeshare interests, co-owners of a unit may 716 not serve as members of the board of directors at the same time 717 unless they own more than one unit or unless there are not 718 enough eligible candidates to fill the vacancies on the board at 719 the time of the vacancy. A unit owner in a residential 720 condominium desiring to be a candidate for board membership must 721 comply with sub-subparagraph 4.a. and must be eligible to be a 722 candidate to serve on the board of directors at the time of the 723 deadline for submitting a notice of intent to run in order to 724 have his or her name listed as a proper candidate on the ballot 725 or to serve on the board. A person who has been suspended or 726 removed by the division under this chapter, or who is delinquent 727 in the payment of any assessment due to the association, is not 728 eligible to be a candidate for board membership and may not be 729 listed on the ballot. For purposes of this paragraph, a person 730 is delinquent if a payment is not made by the due date as 731 specifically identified in the declaration of condominium, 732 bylaws, or articles of incorporation. If a due date is not 733 specifically identified in the declaration of condominium, 734 bylaws, or articles of incorporation, the due date is the first 735 day of the assessment period. A person who has been convicted of 736 any felony in this state or in a United States District or 737 Territorial Court, or who has been convicted of any offense in 738 another jurisdiction which would be considered a felony if 739 committed in this state, is not eligible for board membership 740 unless such felons civil rights have been restored for at least 741 5 years as of the date such person seeks election to the board. 742 The validity of an action by the board is not affected if it is 743 later determined that a board member is ineligible for board 744 membership due to having been convicted of a felony. This 745 subparagraph does not limit the term of a member of the board of 746 a nonresidential or timeshare condominium. 747 3.The bylaws must provide the method of calling meetings 748 of unit owners, including annual meetings. Written notice of an 749 annual meeting must include an agenda; be mailed, hand 750 delivered, or electronically transmitted to each unit owner at 751 least 14 days before the annual meeting; and be posted in a 752 conspicuous place on the condominium property or association 753 property at least 14 continuous days before the annual meeting. 754 Written notice of a meeting other than an annual meeting must 755 include an agenda; be mailed, hand delivered, or electronically 756 transmitted to each unit owner; and be posted in a conspicuous 757 place on the condominium property or association property within 758 the timeframe specified in the bylaws. If the bylaws do not 759 specify a timeframe for written notice of a meeting other than 760 an annual meeting, notice must be provided at least 14 761 continuous days before the meeting. Upon notice to the unit 762 owners, the board shall, by duly adopted rule, designate a 763 specific location on the condominium property or association 764 property where all notices of unit owner meetings must be 765 posted. This requirement does not apply if there is no 766 condominium property for posting notices. In lieu of, or in 767 addition to, the physical posting of meeting notices, the 768 association may, by reasonable rule, adopt a procedure for 769 conspicuously posting and repeatedly broadcasting the notice and 770 the agenda on a closed-circuit cable television system serving 771 the condominium association. However, if broadcast notice is 772 used in lieu of a notice posted physically on the condominium 773 property, the notice and agenda must be broadcast at least four 774 times every broadcast hour of each day that a posted notice is 775 otherwise required under this section. If broadcast notice is 776 provided, the notice and agenda must be broadcast in a manner 777 and for a sufficient continuous length of time so as to allow an 778 average reader to observe the notice and read and comprehend the 779 entire content of the notice and the agenda. In addition to any 780 of the authorized means of providing notice of a meeting of the 781 board, the association may, by rule, adopt a procedure for 782 conspicuously posting the meeting notice and the agenda on a 783 website serving the condominium association for at least the 784 minimum period of time for which a notice of a meeting is also 785 required to be physically posted on the condominium property. 786 Any rule adopted shall, in addition to other matters, include a 787 requirement that the association send an electronic notice in 788 the same manner as a notice for a meeting of the members, which 789 must include a hyperlink to the website where the notice is 790 posted, to unit owners whose e-mail addresses are included in 791 the associations official records. Unless a unit owner waives 792 in writing the right to receive notice of the annual meeting, 793 such notice must be hand delivered, mailed, or electronically 794 transmitted to each unit owner. Notice for meetings and notice 795 for all other purposes must be mailed to each unit owner at the 796 address last furnished to the association by the unit owner, or 797 hand delivered to each unit owner. However, if a unit is owned 798 by more than one person, the association must provide notice to 799 the address that the developer identifies for that purpose and 800 thereafter as one or more of the owners of the unit advise the 801 association in writing, or if no address is given or the owners 802 of the unit do not agree, to the address provided on the deed of 803 record. An officer of the association, or the manager or other 804 person providing notice of the association meeting, must provide 805 an affidavit or United States Postal Service certificate of 806 mailing, to be included in the official records of the 807 association affirming that the notice was mailed or hand 808 delivered in accordance with this provision. 809 4.The members of the board of a residential condominium 810 shall be elected by written ballot or voting machine. Proxies 811 may not be used in electing the board in general elections or 812 elections to fill vacancies caused by recall, resignation, or 813 otherwise, unless otherwise provided in this chapter. This 814 subparagraph does not apply to an association governing a 815 timeshare condominium. 816 a.At least 60 days before a scheduled election, the 817 association shall mail, deliver, or electronically transmit, by 818 separate association mailing or included in another association 819 mailing, delivery, or transmission, including regularly 820 published newsletters, to each unit owner entitled to a vote, a 821 first notice of the date of the election. A unit owner or other 822 eligible person desiring to be a candidate for the board must 823 give written notice of his or her intent to be a candidate to 824 the association at least 40 days before a scheduled election. 825 Together with the written notice and agenda as set forth in 826 subparagraph 3., the association shall mail, deliver, or 827 electronically transmit a second notice of the election to all 828 unit owners entitled to vote, together with a ballot that lists 829 all candidates not less than 14 days or more than 34 days before 830 the date of the election. Upon request of a candidate, an 831 information sheet, no larger than 8 1/2 inches by 11 inches, 832 which must be furnished by the candidate at least 35 days before 833 the election, must be included with the mailing, delivery, or 834 transmission of the ballot, with the costs of mailing, delivery, 835 or electronic transmission and copying to be borne by the 836 association. The association is not liable for the contents of 837 the information sheets prepared by the candidates. In order to 838 reduce costs, the association may print or duplicate the 839 information sheets on both sides of the paper. The division 840 shall by rule establish voting procedures consistent with this 841 sub-subparagraph, including rules establishing procedures for 842 giving notice by electronic transmission and rules providing for 843 the secrecy of ballots. Elections shall be decided by a 844 plurality of ballots cast. There is no quorum requirement; 845 however, at least 20 percent of the eligible voters must cast a 846 ballot in order to have a valid election. A unit owner may not 847 authorize any other person to vote his or her ballot, and any 848 ballots improperly cast are invalid. A unit owner who violates 849 this provision may be fined by the association in accordance 850 with s. 718.303. A unit owner who needs assistance in casting 851 the ballot for the reasons stated in s. 101.051 may obtain such 852 assistance. The regular election must occur on the date of the 853 annual meeting. Notwithstanding this sub-subparagraph, an 854 election is not required unless more candidates file notices of 855 intent to run or are nominated than board vacancies exist. 856 b.Within 90 days after being elected or appointed to the 857 board of an association of a residential condominium, each newly 858 elected or appointed director shall do both of the following: 859 (I)Certify by affidavit in writing to the secretary of the 860 association that he or she has read the associations 861 declaration of condominium, articles of incorporation, bylaws, 862 and current written policies; that he or she will work to uphold 863 such documents and policies to the best of his or her ability; 864 and that he or she will faithfully discharge his or her 865 fiduciary responsibility to the associations members. In lieu 866 of this written certification, within 90 days after being 867 elected or appointed to the board, the newly elected or 868 appointed director may 869 (II)Submit a certificate of having satisfactorily 870 completed the educational curriculum administered by a division 871 approved condominium education provider within 1 year before or 872 90 days after the date of election or appointment. The affidavit 873 and written certification or educational certificate is valid 874 and does not have to be resubmitted as long as the director 875 serves on the board without interruption. 876 877 A director of an association of a residential condominium who 878 fails to timely file the affidavit and written certification or 879 educational certificate is suspended from service on the board 880 until he or she complies with this sub-subparagraph. The board 881 may temporarily fill the vacancy during the period of 882 suspension. The secretary shall require cause the association to 883 retain a directors affidavit and written certification or 884 educational certificate for inspection by the members for 5 885 years after a directors election or the duration of the 886 directors uninterrupted tenure, whichever is longer. Failure to 887 have such affidavit and written certification or educational 888 certificate on file does not affect the validity of any board 889 action. 890 c.Any challenge to the election process must be commenced 891 within 60 days after the election results are announced. 892 5.Any approval by unit owners called for by this chapter 893 or the applicable declaration or bylaws, including, but not 894 limited to, the approval requirement in s. 718.111(8), must be 895 made at a duly noticed meeting of unit owners and is subject to 896 all requirements of this chapter or the applicable condominium 897 documents relating to unit owner decisionmaking, except that 898 unit owners may take action by written agreement, without 899 meetings, on matters for which action by written agreement 900 without meetings is expressly allowed by the applicable bylaws 901 or declaration or any law that provides for such action. 902 6.Unit owners may waive notice of specific meetings if 903 allowed by the applicable bylaws or declaration or any law. 904 Notice of meetings of the board of administration, unit owner 905 meetings, except unit owner meetings called to recall board 906 members under paragraph (j), and committee meetings may be given 907 by electronic transmission to unit owners who consent to receive 908 notice by electronic transmission. A unit owner who consents to 909 receiving notices by electronic transmission is solely 910 responsible for removing or bypassing filters that block receipt 911 of mass e-mails sent to members on behalf of the association in 912 the course of giving electronic notices. 913 7.Unit owners have the right to participate in meetings of 914 unit owners with reference to all designated agenda items. 915 However, the association may adopt reasonable rules governing 916 the frequency, duration, and manner of unit owner participation. 917 8.A unit owner may tape record or videotape a meeting of 918 the unit owners subject to reasonable rules adopted by the 919 division. 920 9.Unless otherwise provided in the bylaws, any vacancy 921 occurring on the board before the expiration of a term may be 922 filled by the affirmative vote of the majority of the remaining 923 directors, even if the remaining directors constitute less than 924 a quorum, or by the sole remaining director. In the alternative, 925 a board may hold an election to fill the vacancy, in which case 926 the election procedures must conform to sub-subparagraph 4.a. 927 unless the association governs 10 units or fewer and has opted 928 out of the statutory election process, in which case the bylaws 929 of the association control. Unless otherwise provided in the 930 bylaws, a board member appointed or elected under this section 931 shall fill the vacancy for the unexpired term of the seat being 932 filled. Filling vacancies created by recall is governed by 933 paragraph (j) and rules adopted by the division. 934 10.This chapter does not limit the use of general or 935 limited proxies, require the use of general or limited proxies, 936 or require the use of a written ballot or voting machine for any 937 agenda item or election at any meeting of a timeshare 938 condominium association or nonresidential condominium 939 association. 940 941 Notwithstanding subparagraph (b)2. and sub-subparagraph 4.a., an 942 association of 10 or fewer units may, by affirmative vote of a 943 majority of the total voting interests, provide for different 944 voting and election procedures in its bylaws, which may be by a 945 proxy specifically delineating the different voting and election 946 procedures. The different voting and election procedures may 947 provide for elections to be conducted by limited or general 948 proxy. 949 (f)Annual budget. 950 1.The proposed annual budget of estimated revenues and 951 expenses must be detailed and must show the amounts budgeted by 952 accounts and expense classifications, including, at a minimum, 953 any applicable expenses listed in s. 718.504(21). The board 954 shall adopt the annual budget at least 14 days prior to the 955 start of the associations fiscal year. In the event that the 956 board fails to timely adopt the annual budget a second time, it 957 shall be deemed a minor violation and the prior years budget 958 shall continue in effect until a new budget is adopted. A 959 multicondominium association shall adopt a separate budget of 960 common expenses for each condominium the association operates 961 and shall adopt a separate budget of common expenses for the 962 association. In addition, if the association maintains limited 963 common elements with the cost to be shared only by those 964 entitled to use the limited common elements as provided for in 965 s. 718.113(1), the budget or a schedule attached to it must show 966 the amount budgeted for this maintenance. If, after turnover of 967 control of the association to the unit owners, any of the 968 expenses listed in s. 718.504(21) are not applicable, they need 969 not be listed. 970 2.a.In addition to annual operating expenses, the budget 971 must include reserve accounts for capital expenditures and 972 deferred maintenance. These accounts must include, but are not 973 limited to, the maintenance and replacement of the condominium 974 property identified in s. 718.301(4)(p) roof replacement, 975 building painting, and pavement resurfacing, regardless of the 976 amount of deferred maintenance expense or replacement cost, and 977 any other item that has a deferred maintenance expense or 978 replacement cost that exceeds $10,000. The amount to be reserved 979 must be computed using a formula based upon estimated remaining 980 useful life and estimated replacement cost or deferred 981 maintenance expense of each reserve item. The association may 982 adjust replacement reserve assessments annually to take into 983 account any changes in estimates or extension of the useful life 984 of a reserve item caused by deferred maintenance. This 985 subsection does not apply to an adopted budget in which the 986 members of an association have determined, by a majority vote of 987 all the voting interests, voting in person or by proxy at a duly 988 called meeting of the association, to provide no reserves or 989 less reserves than required by this subsection. 990 b.Before turnover of control of an association by a 991 developer to unit owners other than a developer pursuant to s. 992 718.301, the developer may vote the voting interests allocated 993 to its units to waive the reserves or reduce the funding of 994 reserves through the period expiring at the end of the second 995 fiscal year after the fiscal year in which the certificate of a 996 surveyor and mapper is recorded pursuant to s. 718.104(4)(e) or 997 an instrument that transfers title to a unit in the condominium 998 which is not accompanied by a recorded assignment of developer 999 rights in favor of the grantee of such unit is recorded, 1000 whichever occurs first, after which time reserves may be waived 1001 or reduced only upon the vote of a majority of all nondeveloper 1002 voting interests voting in person or by limited proxy at a duly 1003 called meeting of the association. If an association is required 1004 to perform a reserve study under subparagraph 3., the developer 1005 may vote to waive reserve contributions or reduce reserve 1006 funding only if the associations reserve obligations are funded 1007 consistent with the reserve study currently in effect or if the 1008 association provides an alternative funding method for the 1009 associations reserve obligations. If a meeting of the unit 1010 owners has been called to determine whether to waive or reduce 1011 the funding of reserves and no such result is achieved or a 1012 quorum is not attained, the reserves included in the budget 1013 shall go into effect. After the turnover, the developer may vote 1014 its voting interest to waive or reduce the funding of reserves. 1015 3. Effective January 1, 2024, unless the declaration of 1016 condominium, articles of incorporation, or bylaws provide for a 1017 more frequent reserve study, an association with a residential 1018 condominium building that is three stories or more in height and 1019 subject to the milestone inspection requirements in s. 553.899 1020 must have a study conducted of the reserves required to 1021 maintain, repair, replace, and restore the condominium property 1022 identified in s. 718.301(4)(p) at least every 3 years. The board 1023 shall review the results of such study at least annually to 1024 determine if reserves are sufficient to meet the associations 1025 reserve obligations and to make any adjustments the board deems 1026 necessary to maintain reserves, as appropriate. The division 1027 shall adopt rules setting forth uniform financial standards and 1028 forms for reserve studies. The reserve study must include, 1029 without limitation: 1030 a.A summary of any inspection of the major components of 1031 the condominium property identified in s. 718.301(4)(p) and any 1032 other portion of the condominium property that the association 1033 is obligated to maintain, repair, replace, or restore; 1034 b.If applicable, a summary of the findings and 1035 recommendations of the milestone inspection report required 1036 under s. 553.899 and any other structural or life safety 1037 inspection of the condominium property considered in the reserve 1038 study; 1039 c. An identification of the structural components of the 1040 building for which necessary reserves may be reasonably 1041 projected and an identification of the structural components of 1042 the building with an indefinite useful life for which a 1043 reasonable determination of necessary reserves may not be 1044 estimated; 1045 d. An estimate of the useful life of the structural 1046 components of the building identified in s. 718.301(4)(p) for 1047 which an estimate of useful life may be determined as attested 1048 to by a licensed architect or engineer in the turnover 1049 inspection required under s. 718.301(4)(p), a milestone 1050 inspection, or any other structural or life safety inspection of 1051 the condominium property; 1052 e.An estimate of the remaining useful life of any other 1053 portion of the condominium property that the association is 1054 obligated to maintain, repair, replace, or restore; 1055 f.An estimate of the cost of maintenance, repair, 1056 replacement, or restoration of each major component of the 1057 condominium property identified in s. 718.301(4)(p) and any 1058 other portion of the condominium property identified pursuant to 1059 sub-subparagraph c.; 1060 g.An estimate of the total annual assessment that may be 1061 necessary to cover the cost of maintaining, repairing, 1062 replacing, or restoring the major components of the condominium 1063 property identified in s. 718.301(4)(p) and any other portion of 1064 the condominium property identified pursuant to sub-subparagraph 1065 c., and an estimate of the funding plan, including any 1066 alternative funding method, which may be necessary to provide 1067 adequate funding for the required reserves; and 1068 h.A schedule for the full funding of reserves. A reserve 1069 account is fully funded when the actual or projected reserve 1070 balance in the reserve account is equal in direct proportion to 1071 the fraction of useful life for a given component or components 1072 multiplied by the current replacement costs for the component or 1073 components. 1074 4.The annual budget must, at minimum: 1075 a. Identify all items for which reserves are or will be 1076 established; 1077 b. Provide an estimate of the maintenance, repair, and 1078 replacement costs for the structural components for which an 1079 estimate of useful life may be determined; 1080 c. Identify any structural component for which a reserve 1081 account is not established or reserves are not funded, because 1082 the useful life of the component cannot be determined; 1083 d. As of the beginning of the fiscal year for which the 1084 budget is prepared, identify the current amount of accumulated 1085 funds for each reserve component or, if the pooling method is 1086 used, the amount of the accumulated pooled funds; 1087 e.Provide a description of the funding plan for the 1088 reserve funding obligations of the association, including the 1089 use of regular assessments, special assessments, and any other 1090 alternative funding method; and 1091 f. Provide a description of the procedures used for the 1092 estimation and accumulation of reserves pursuant to this 1093 paragraph, the identity of any independent third party who 1094 conducted the reserve study on behalf of the association, and 1095 the extent to which the association is funding its reserve 1096 obligations consistent with the reserve study currently in 1097 effect. 1098 5.3.Reserve funds and any interest accruing thereon shall 1099 remain in the reserve account or accounts, and may be used only 1100 for authorized reserve expenditures unless their use for other 1101 purposes is approved in advance by a majority vote of all voting 1102 interests, voting in person or by limited proxy at a duly called 1103 meeting of the association; provided that the use of reserve 1104 funds for a purpose other than authorized reserve expenditures 1105 is authorized in the exercise of the associations emergency 1106 powers under s. 718.1265. Before turnover of control of an 1107 association by a developer to unit owners other than the 1108 developer pursuant to s. 718.301, the developer-controlled 1109 association may not vote to use reserves for purposes other than 1110 those for which they were intended without the approval of a 1111 majority of all nondeveloper voting interests, voting in person 1112 or by limited proxy at a duly called meeting of the association. 1113 6.a.4.The only voting interests that are eligible to vote 1114 on questions that involve waiving or reducing the funding of 1115 reserves, or using existing reserve funds for purposes other 1116 than purposes for which the reserves were intended, are the 1117 voting interests of the units subject to assessment to fund the 1118 reserves in question. Proxy questions relating to waiving or 1119 reducing the funding of reserves or using existing reserve funds 1120 for purposes other than purposes for which the reserves were 1121 intended must contain the following statement in capitalized, 1122 bold letters in a font size larger than any other used on the 1123 face of the proxy ballot: WAIVING OF RESERVES, IN WHOLE OR IN 1124 PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY 1125 RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED 1126 SPECIAL ASSESSMENTS REGARDING THOSE ITEMS. 1127 b. If the association has voted to waive reserves or to use 1128 existing reserve funds for purposes other than the purposes for 1129 which the reserves were intended, the budget must contain the 1130 following statement in conspicuous type: THE OWNERS HAVE ELECTED 1131 TO WAIVE RESERVES, IN WHOLE OR IN PART, OR ALLOWED ALTERNATIVE 1132 USES OF EXISTING RESERVES UNDER SECTION 718.112(2)(f), FLORIDA 1133 STATUTES. THE WAIVING OR ALTERNATIVE USE OF RESERVE FUNDS MAY 1134 RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED 1135 SPECIAL ASSESSMENTS REGARDING THOSE ITEMS. 1136 c. On or after January 1, 2026, if the association is 1137 required to perform a reserve study under this paragraph and the 1138 budget of the association does not fund the associations 1139 reserve obligations consistent with the reserve study currently 1140 in effect, the budget must also contain the following statement 1141 in conspicuous type: THE ASSOCIATIONS LAST RESERVE STUDY IS 1142 DATED ..... THE RESERVE AMOUNT BUDGETED AND/OR COLLECTED IS LESS 1143 THAN REQUIRED BY THE RESERVE STUDY SCHEDULE. FAILURE TO FUND 1144 RESERVES CONSISTENT WITH THE ASSOCIATIONS RESERVE STUDY MAY 1145 RESULT IN UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE 1146 ITEMS. 1147 (p)Mandatory milestone inspections.If an association is 1148 required to have a milestone inspection performed pursuant to s. 1149 553.899, the association must arrange for the milestone 1150 inspection to be performed and is responsible for ensuring 1151 compliance with the requirements of s. 553.899. The association 1152 is responsible for all costs associated with the inspection. 1153 Upon completion of a phase one or phase two milestone inspection 1154 and receipt of the inspector-prepared summary of the inspection 1155 report from the architect or engineer who performed the 1156 inspection, the association must distribute a copy of the 1157 inspector-prepared summary of the inspection report to each unit 1158 owner, regardless of the findings or recommendations in the 1159 report, by United States mail or personal delivery; must post a 1160 copy of the inspector-prepared summary in a conspicuous place on 1161 the condominium property; and must publish the full report and 1162 inspector-prepared summary on the associations website, if the 1163 association is required to have a website. 1164 Section 5.Present subsections (4) through (9) of section 1165 718.113, Florida Statutes, are redesignated as subsections (5) 1166 through (10), respectively, a new subsection (4) is added to 1167 that section, and subsections (1) and (2) of that section are 1168 amended, to read: 1169 718.113Maintenance; limitation upon improvement; display 1170 of flag; hurricane shutters and protection; display of religious 1171 decorations. 1172 (1)Maintenance of the common elements is the 1173 responsibility of the association, except for any maintenance 1174 responsibility for limited common elements assigned to the unit 1175 owner by the declaration. The association shall provide for the 1176 maintenance, repair, and replacement of the condominium property 1177 for which it bears responsibility. After turnover of control of 1178 the association to the unit owners, the association must perform 1179 any required maintenance identified by the developer pursuant to 1180 s. 718.301(4)(p) until the association obtains new maintenance 1181 protocols from a licensed professional engineer or architect. 1182 The declaration may provide that certain limited common elements 1183 shall be maintained by those entitled to use the limited common 1184 elements or that the association shall provide the maintenance, 1185 either as a common expense or with the cost shared only by those 1186 entitled to use the limited common elements. If the maintenance 1187 is to be by the association at the expense of only those 1188 entitled to use the limited common elements, the declaration 1189 shall describe in detail the method of apportioning such costs 1190 among those entitled to use the limited common elements, and the 1191 association may use the provisions of s. 718.116 to enforce 1192 payment of the shares of such costs by the unit owners entitled 1193 to use the limited common elements. 1194 (2)(a)Except as otherwise provided in this section, there 1195 shall be no material alteration or substantial additions to the 1196 common elements or to real property which is association 1197 property, except in a manner provided in the declaration as 1198 originally recorded or as amended under the procedures provided 1199 therein. If the declaration as originally recorded or as amended 1200 under the procedures provided therein does not specify the 1201 procedure for approval of material alterations or substantial 1202 additions, 75 percent of the total voting interests of the 1203 association must approve the alterations or additions before the 1204 material alterations or substantial additions are commenced. 1205 This paragraph is intended to clarify existing law and applies 1206 to associations existing on July 1, 2018. 1207 (b)There shall not be any material alteration of, or 1208 substantial addition to, the common elements of any condominium 1209 operated by a multicondominium association unless approved in 1210 the manner provided in the declaration of the affected 1211 condominium or condominiums as originally recorded or as amended 1212 under the procedures provided therein. If a declaration as 1213 originally recorded or as amended under the procedures provided 1214 therein does not specify a procedure for approving such an 1215 alteration or addition, the approval of 75 percent of the total 1216 voting interests of each affected condominium is required before 1217 the material alterations or substantial additions are commenced. 1218 This subsection does not prohibit a provision in any 1219 declaration, articles of incorporation, or bylaws as originally 1220 recorded or as amended under the procedures provided therein 1221 requiring the approval of unit owners in any condominium 1222 operated by the same association or requiring board approval 1223 before a material alteration or substantial addition to the 1224 common elements is permitted. This paragraph is intended to 1225 clarify existing law and applies to associations existing on 1226 July 1, 2018. 1227 (c)There shall not be any material alteration or 1228 substantial addition made to association real property operated 1229 by a multicondominium association, except as provided in the 1230 declaration, articles of incorporation, or bylaws as originally 1231 recorded or as amended under the procedures provided therein. If 1232 the declaration, articles of incorporation, or bylaws as 1233 originally recorded or as amended under the procedures provided 1234 therein do not specify the procedure for approving an alteration 1235 or addition to association real property, the approval of 75 1236 percent of the total voting interests of the association is 1237 required before the material alterations or substantial 1238 additions are commenced. This paragraph is intended to clarify 1239 existing law and applies to associations existing on July 1, 1240 2018. 1241 (d) The necessary maintenance, repair, or replacement of 1242 condominium property is not a material alteration or substantial 1243 addition requiring unit owner approval. 1244 (4) The association is not liable for alternative housing 1245 costs, lost rent, or other expenses if a unit must be vacated in 1246 whole or in part or if access to a common element is denied for 1247 necessary maintenance, repair, or replacement of condominium 1248 property. 1249 Section 6.Paragraphs (a) and (e) of subsection (1) of 1250 section 718.115, Florida Statutes, are amended to read: 1251 718.115Common expenses and common surplus. 1252 (1)(a)Common expenses include the expenses of the 1253 operation, maintenance, repair, replacement, or protection of 1254 the common elements and association property, costs of carrying 1255 out the powers and duties of the association, and any other 1256 expense, whether or not included in the foregoing, designated as 1257 common expense by this chapter, the declaration, the documents 1258 creating the association, or the bylaws. Common expenses also 1259 include reasonable transportation services, insurance for 1260 directors and officers, road maintenance and operation expenses, 1261 in-house communications, and security services, which are 1262 reasonably related to the general benefit of the unit owners 1263 even if such expenses do not attach to the common elements or 1264 property of the condominium. However, such common expenses must 1265 either have been services or items provided on or after the date 1266 control of the association is transferred from the developer to 1267 the unit owners or must be services or items provided for in the 1268 condominium documents or bylaws. Unless the manner of payment or 1269 allocation of expenses is otherwise addressed in the declaration 1270 of condominium, the expenses of any items or services required 1271 by any federal, state, or local governmental entity to be 1272 installed, maintained, or supplied to the condominium property 1273 by the association, including, but not limited to, firesafety 1274 equipment or water and sewer service where a master meter serves 1275 the condominium, shall be common expenses whether or not such 1276 items or services are specifically identified as common expenses 1277 in the declaration of condominium, articles of incorporation, or 1278 bylaws of the association. Notwithstanding any provision in a 1279 declaration, the articles of incorporation, or the bylaws 1280 requiring, prohibiting, or limiting a board of administrations 1281 authority to adopt a special assessment or to borrow money on 1282 behalf of the association, including any provision in a 1283 declaration, the articles of incorporation, or the bylaws 1284 requiring unit owner voting or approval, the board may adopt a 1285 special assessment or borrow money for the necessary 1286 maintenance, repair, or replacement of condominium property. 1287 (e)The expense of installation, replacement, operation, 1288 repair, and maintenance of hurricane shutters, impact glass, 1289 code-compliant windows or doors, or other types of code 1290 compliant hurricane protection by the board pursuant to s. 1291 718.113(6) s. 718.113(5) constitutes a common expense and shall 1292 be collected as provided in this section if the association is 1293 responsible for the maintenance, repair, and replacement of the 1294 hurricane shutters, impact glass, code-compliant windows or 1295 doors, or other types of code-compliant hurricane protection 1296 pursuant to the declaration of condominium. However, if the 1297 maintenance, repair, and replacement of the hurricane shutters, 1298 impact glass, code-compliant windows or doors, or other types of 1299 code-compliant hurricane protection are the responsibility of 1300 the unit owners pursuant to the declaration of condominium, the 1301 cost of the installation of the hurricane shutters, impact 1302 glass, code-compliant windows or doors, or other types of code 1303 compliant hurricane protection is not a common expense and shall 1304 be charged individually to the unit owners based on the cost of 1305 installation of the hurricane shutters, impact glass, code 1306 compliant windows or doors, or other types of code-compliant 1307 hurricane protection appurtenant to the unit. Notwithstanding s. 1308 718.116(9), and regardless of whether or not the declaration 1309 requires the association or unit owners to maintain, repair, or 1310 replace hurricane shutters, impact glass, code-compliant windows 1311 or doors, or other types of code-compliant hurricane protection, 1312 a unit owner who has previously installed hurricane shutters in 1313 accordance with s. 718.113(6) s. 718.113(5) that comply with the 1314 current applicable building code shall receive a credit when the 1315 shutters are installed; a unit owner who has previously 1316 installed impact glass or code-compliant windows or doors that 1317 comply with the current applicable building code shall receive a 1318 credit when the impact glass or code-compliant windows or doors 1319 are installed; and a unit owner who has installed other types of 1320 code-compliant hurricane protection that comply with the current 1321 applicable building code shall receive a credit when the same 1322 type of other code-compliant hurricane protection is installed, 1323 and the credit shall be equal to the pro rata portion of the 1324 assessed installation cost assigned to each unit. However, such 1325 unit owner remains responsible for the pro rata share of 1326 expenses for hurricane shutters, impact glass, code-compliant 1327 windows or doors, or other types of code-compliant hurricane 1328 protection installed on common elements and association property 1329 by the board pursuant to s. 718.113(6) s. 718.113(5) and remains 1330 responsible for a pro rata share of the expense of the 1331 replacement, operation, repair, and maintenance of such 1332 shutters, impact glass, code-compliant windows or doors, or 1333 other types of code-compliant hurricane protection. 1334 Section 7.Subsections (1) and (5) of section 718.1255, 1335 Florida Statutes, are amended to read: 1336 718.1255Alternative dispute resolution; mediation; 1337 nonbinding arbitration; applicability. 1338 (1)DEFINITIONS.As used in this section, the term 1339 dispute means any disagreement between two or more parties 1340 that involves: 1341 (a)The authority of the board of directors, under this 1342 chapter or association document, to: 1343 1.Require any owner to take any action, or not to take any 1344 action, involving that owners unit or the appurtenances 1345 thereto. 1346 2.Alter or add to a common area or element. 1347 (b)The failure of a governing body, when required by this 1348 chapter or an association document, to: 1349 1.Properly conduct elections. 1350 2.Give adequate notice of meetings or other actions. 1351 3.Properly conduct meetings. 1352 4.Allow inspection of books and records. 1353 (c)A plan of termination pursuant to s. 718.117. 1354 (d) The failure of a governing body, when required by this 1355 chapter or an association document, to: 1356 1. Perform a structural or life safety inspection, 1357 including the milestone inspection required under s. 553.899. 1358 2. Perform a reserve study as required by law or the 1359 declaration, articles of incorporation, or bylaws. 1360 3. Fund reserves as required by law or the declaration, 1361 articles of incorporation, or bylaws. 1362 4. Make or provide necessary maintenance or repairs of 1363 condominium property. 1364 1365 Dispute does not include any disagreement that primarily 1366 involves: title to any unit or common element; the 1367 interpretation or enforcement of any warranty; the levy of a fee 1368 or assessment, or the collection of an assessment levied against 1369 a party; the eviction or other removal of a tenant from a unit; 1370 alleged breaches of fiduciary duty by one or more directors; or 1371 claims for damages to a unit based upon the alleged failure of 1372 the association to maintain the common elements or condominium 1373 property. 1374 (5)PRESUIT MEDIATION.In lieu of the initiation of 1375 nonbinding arbitration as provided in subsections (1)-(4), a 1376 party may submit a dispute to presuit mediation in accordance 1377 with s. 720.311; however, election and recall disputes are not 1378 eligible for mediation and such disputes must be arbitrated by 1379 the division or filed in a court of competent jurisdiction. 1380 Disputes identified in paragraph (1)(d) are not subject to 1381 nonbinding arbitration under subsections (1)-(4) and must be 1382 submitted to presuit mediation in accordance with s. 720.311. 1383 Section 8.Paragraph (p) of subsection (4) of section 1384 718.301, Florida Statutes, is amended, and paragraph (r) is 1385 added to that subsection, to read: 1386 718.301Transfer of association control; claims of defect 1387 by association. 1388 (4)At the time that unit owners other than the developer 1389 elect a majority of the members of the board of administration 1390 of an association, the developer shall relinquish control of the 1391 association, and the unit owners shall accept control. 1392 Simultaneously, or for the purposes of paragraph (c) not more 1393 than 90 days thereafter, the developer shall deliver to the 1394 association, at the developers expense, all property of the 1395 unit owners and of the association which is held or controlled 1396 by the developer, including, but not limited to, the following 1397 items, if applicable, as to each condominium operated by the 1398 association: 1399 (p)Notwithstanding when the certificate of occupancy was 1400 issued or the height of the building, a milestone inspection 1401 report in compliance with s. 553.899 included in the official 1402 records, under seal of an architect or engineer authorized to 1403 practice in this state, and attesting to required maintenance, 1404 condition, useful life, and replacement costs of the following 1405 applicable condominium property common elements comprising a 1406 turnover inspection report: 1407 1.Roof. 1408 2.Structure, including load-bearing walls and primary 1409 structural members and primary structural systems as those terms 1410 are defined in s. 627.706. 1411 3.Fireproofing and fire protection systems. 1412 4.Elevators. 1413 5.Heating and cooling systems. 1414 6.Plumbing. 1415 7.Electrical systems. 1416 8.Swimming pool or spa and equipment. 1417 9.Seawalls. 1418 10.Pavement and parking areas. 1419 11.Drainage systems. 1420 12.Painting. 1421 13.Irrigation systems. 1422 14. Waterproofing. 1423 (r)A copy of the most recent reserve study required under 1424 s. 718.112(2)(f)3., along with the statements indicating the 1425 status of the reserves required under s. 718.112(2)(f)6., if 1426 applicable, or a statement in conspicuous type indicating that 1427 the association has not completed the required reserve study or 1428 that the association is not required to perform a reserve study, 1429 as applicable. 1430 Section 9.Present paragraphs (b) and (c) of subsection (2) 1431 of section 718.503, Florida Statutes, are redesignated as 1432 paragraphs (c) and (d), respectively, a new paragraph (b) is 1433 added to that subsection, and paragraph (b) of subsection (1) 1434 and paragraph (a) of subsection (2) of that section are amended, 1435 to read: 1436 718.503Developer disclosure prior to sale; nondeveloper 1437 unit owner disclosure prior to sale; voidability. 1438 (1)DEVELOPER DISCLOSURE. 1439 (b)Copies of documents to be furnished to prospective 1440 buyer or lessee.Until such time as the developer has furnished 1441 the documents listed below to a person who has entered into a 1442 contract to purchase a residential unit or lease it for more 1443 than 5 years, the contract may be voided by that person, 1444 entitling the person to a refund of any deposit together with 1445 interest thereon as provided in s. 718.202. The contract may be 1446 terminated by written notice from the proposed buyer or lessee 1447 delivered to the developer within 15 days after the buyer or 1448 lessee receives all of the documents required by this section. 1449 The developer may not close for 15 days after following the 1450 execution of the agreement and delivery of the documents to the 1451 buyer as evidenced by a signed receipt for documents unless the 1452 buyer is informed in the 15-day voidability period and agrees to 1453 close before prior to the expiration of the 15 days. The 1454 developer shall retain in his or her records a separate 1455 agreement signed by the buyer as proof of the buyers agreement 1456 to close before prior to the expiration of the said voidability 1457 period. The developer must retain such Said proof shall be 1458 retained for a period of 5 years after the date of the closing 1459 of the transaction. The documents to be delivered to the 1460 prospective buyer are the prospectus or disclosure statement 1461 with all exhibits, if the development is subject to the 1462 provisions of s. 718.504, or, if not, then copies of the 1463 following which are applicable: 1464 1.The question and answer sheet described in s. 718.504, 1465 and declaration of condominium, or the proposed declaration if 1466 the declaration has not been recorded, which shall include the 1467 certificate of a surveyor approximately representing the 1468 locations required by s. 718.104. 1469 2.The documents creating the association. 1470 3.The bylaws. 1471 4.The ground lease or other underlying lease of the 1472 condominium. 1473 5.The management contract, maintenance contract, and other 1474 contracts for management of the association and operation of the 1475 condominium and facilities used by the unit owners having a 1476 service term in excess of 1 year, and any management contracts 1477 that are renewable. 1478 6.The estimated operating budget for the condominium and a 1479 schedule of expenses for each type of unit, including fees 1480 assessed pursuant to s. 718.113(1) for the maintenance of 1481 limited common elements where such costs are shared only by 1482 those entitled to use the limited common elements. 1483 7.The lease of recreational and other facilities that will 1484 be used only by unit owners of the subject condominium. 1485 8.The lease of recreational and other common facilities 1486 that will be used by unit owners in common with unit owners of 1487 other condominiums. 1488 9.The form of unit lease if the offer is of a leasehold. 1489 10.Any declaration of servitude of properties serving the 1490 condominium but not owned by unit owners or leased to them or 1491 the association. 1492 11.If the development is to be built in phases or if the 1493 association is to manage more than one condominium, a 1494 description of the plan of phase development or the arrangements 1495 for the association to manage two or more condominiums. 1496 12.If the condominium is a conversion of existing 1497 improvements, the statements and disclosure required by s. 1498 718.616. 1499 13.The form of agreement for sale or lease of units. 1500 14.A copy of the floor plan of the unit and the plot plan 1501 showing the location of the residential buildings and the 1502 recreation and other common areas. 1503 15.A copy of all covenants and restrictions that which 1504 will affect the use of the property and which are not contained 1505 in the foregoing. 1506 16.If the developer is required by state or local 1507 authorities to obtain acceptance or approval of any dock or 1508 marina facilities intended to serve the condominium, a copy of 1509 any such acceptance or approval acquired by the time of filing 1510 with the division under s. 718.502(1), or a statement that such 1511 acceptance or approval has not been acquired or received. 1512 17.Evidence demonstrating that the developer has an 1513 ownership, leasehold, or contractual interest in the land upon 1514 which the condominium is to be developed. 1515 18.A copy of the most recent reserve study required under 1516 s. 718.112(2)(f)3., along with the statements in the budget 1517 indicating the status of the reserves required under s. 1518 718.112(2)(f)6., if applicable, or a statement in conspicuous 1519 type indicating that the association has not completed the 1520 required reserve study or that the association is not required 1521 to perform a reserve study, as applicable. 1522 19. A copy of the inspector-prepared summary of the 1523 milestone inspection report as described in ss. 553.899 and 1524 718.301(4)(p). 1525 (2)NONDEVELOPER DISCLOSURE. 1526 (a)Each unit owner who is not a developer as defined by 1527 this chapter must shall comply with the provisions of this 1528 subsection before prior to the sale of his or her unit. Each 1529 prospective purchaser who has entered into a contract for the 1530 purchase of a condominium unit is entitled, at the sellers 1531 expense, to a current copy of all of the following: 1532 1.The declaration of condominium., 1533 2.Articles of incorporation of the association., 1534 3.Bylaws and rules of the association., 1535 4.Financial information required by s. 718.111., 1536 5.A copy of the most recent reserve study required under 1537 s. 718.112(2)(f)3., along with the statements in the budget 1538 indicating the status of the reserves required under s. 1539 718.112(2)(f)6., if applicable, or a statement in conspicuous 1540 type indicating that the association has not completed the 1541 required reserve study or that the association is not required 1542 to perform a reserve study, as applicable. 1543 6. A copy of the inspector-prepared summary of the 1544 milestone inspection report as described in ss. 553.899 and 1545 718.301(4)(p). 1546 7.and The document entitled Frequently Asked Questions 1547 and Answers required by s. 718.504. 1548 (b)On and after January 1, 2009, The prospective purchaser 1549 is shall also be entitled to receive from the seller a copy of a 1550 governance form. Such form shall be provided by the division 1551 summarizing governance of condominium associations. In addition 1552 to such other information as the division considers helpful to a 1553 prospective purchaser in understanding association governance, 1554 the governance form shall address the following subjects: 1555 1.The role of the board in conducting the day-to-day 1556 affairs of the association on behalf of, and in the best 1557 interests of, the owners. 1558 2.The boards responsibility to provide advance notice of 1559 board and membership meetings. 1560 3.The rights of owners to attend and speak at board and 1561 membership meetings. 1562 4.The responsibility of the board and of owners with 1563 respect to maintenance of the condominium property. 1564 5.The responsibility of the board and owners to abide by 1565 the condominium documents, this chapter, rules adopted by the 1566 division, and reasonable rules adopted by the board. 1567 6.Owners rights to inspect and copy association records 1568 and the limitations on such rights. 1569 7.Remedies available to owners with respect to actions by 1570 the board which may be abusive or beyond the boards power and 1571 authority. 1572 8.The right of the board to hire a property management 1573 firm, subject to its own primary responsibility for such 1574 management. 1575 9.The responsibility of owners with regard to payment of 1576 regular or special assessments necessary for the operation of 1577 the property and the potential consequences of failure to pay 1578 such assessments. 1579 10.The voting rights of owners. 1580 11.Rights and obligations of the board in enforcement of 1581 rules in the condominium documents and rules adopted by the 1582 board. 1583 1584 The governance form shall also include the following statement 1585 in conspicuous type: This publication is intended as an 1586 informal educational overview of condominium governance. In the 1587 event of a conflict, the provisions of chapter 718, Florida 1588 Statutes, rules adopted by the Division of Florida Condominiums, 1589 Timeshares, and Mobile Homes of the Department of Business and 1590 Professional Regulation, the provisions of the condominium 1591 documents, and reasonable rules adopted by the condominium 1592 associations board of administration prevail over the contents 1593 of this publication. 1594 Section 10.Paragraph (f) of subsection (24) of section 1595 718.504, Florida Statutes, is amended, and paragraph (q) is 1596 added to that subsection, to read: 1597 718.504Prospectus or offering circular.Every developer of 1598 a residential condominium which contains more than 20 1599 residential units, or which is part of a group of residential 1600 condominiums which will be served by property to be used in 1601 common by unit owners of more than 20 residential units, shall 1602 prepare a prospectus or offering circular and file it with the 1603 Division of Florida Condominiums, Timeshares, and Mobile Homes 1604 prior to entering into an enforceable contract of purchase and 1605 sale of any unit or lease of a unit for more than 5 years and 1606 shall furnish a copy of the prospectus or offering circular to 1607 each buyer. In addition to the prospectus or offering circular, 1608 each buyer shall be furnished a separate page entitled 1609 Frequently Asked Questions and Answers, which shall be in 1610 accordance with a format approved by the division and a copy of 1611 the financial information required by s. 718.111. This page 1612 shall, in readable language, inform prospective purchasers 1613 regarding their voting rights and unit use restrictions, 1614 including restrictions on the leasing of a unit; shall indicate 1615 whether and in what amount the unit owners or the association is 1616 obligated to pay rent or land use fees for recreational or other 1617 commonly used facilities; shall contain a statement identifying 1618 that amount of assessment which, pursuant to the budget, would 1619 be levied upon each unit type, exclusive of any special 1620 assessments, and which shall further identify the basis upon 1621 which assessments are levied, whether monthly, quarterly, or 1622 otherwise; shall state and identify any court cases in which the 1623 association is currently a party of record in which the 1624 association may face liability in excess of $100,000; and which 1625 shall further state whether membership in a recreational 1626 facilities association is mandatory, and if so, shall identify 1627 the fees currently charged per unit type. The division shall by 1628 rule require such other disclosure as in its judgment will 1629 assist prospective purchasers. The prospectus or offering 1630 circular may include more than one condominium, although not all 1631 such units are being offered for sale as of the date of the 1632 prospectus or offering circular. The prospectus or offering 1633 circular must contain the following information: 1634 (24)Copies of the following, to the extent they are 1635 applicable, shall be included as exhibits: 1636 (f)The estimated operating budget for the condominium and 1637 the required schedule of unit owners expenses, and the most 1638 recent reserve study required under s. 718.112(2)(f)3., along 1639 with the statements in the budget indicating the status of the 1640 reserves required under s. 718.112(2)(f)6., if applicable, or a 1641 statement in conspicuous type indicating that the association 1642 has not completed the required reserve study or that the 1643 association is not required to perform a reserve study, as 1644 applicable. 1645 (q) A copy of the inspector-prepared summary of the 1646 milestone inspection report as described in ss. 553.899 and 1647 718.301(4)(p). 1648 Section 11.Present subsections (1) through (28) of section 1649 719.103, Florida Statutes, are redesignated as subsections (2) 1650 through (29), respectively, and a new subsection (1) is added to 1651 that section, to read: 1652 719.103Definitions.As used in this chapter: 1653 (1)Alternative funding method means a method for the 1654 funding of a reserve account by other than an assessment or 1655 special assessment which may reasonably be expected to fully 1656 satisfy the associations reserve funding obligations, 1657 including, but not limited to, payments into the reserve account 1658 by a developer who is offering units, or any other method 1659 approved by the division. 1660 Section 12.Present subsections (5) through (11) of section 1661 719.104, Florida Statutes, are redesignated as subsections (6) 1662 through (12), respectively, a new subsection (5) is added to 1663 that section, and paragraphs (a) and (c) of subsection (2) and 1664 paragraph (a) of subsection (4) of that section are amended, to 1665 read: 1666 719.104Cooperatives; access to units; records; financial 1667 reports; assessments; purchase of leases. 1668 (2)OFFICIAL RECORDS. 1669 (a)From the inception of the association, the association 1670 shall maintain a copy of each of the following, where 1671 applicable, which shall constitute the official records of the 1672 association: 1673 1.The plans, permits, warranties, and other items provided 1674 by the developer pursuant to s. 719.301(4). 1675 2.A photocopy of the cooperative documents. 1676 3.A copy of the current rules of the association. 1677 4.A book or books containing the minutes of all meetings 1678 of the association, of the board of directors, and of the unit 1679 owners. 1680 5.A current roster of all unit owners and their mailing 1681 addresses, unit identifications, voting certifications, and, if 1682 known, telephone numbers. The association shall also maintain 1683 the e-mail addresses and the numbers designated by unit owners 1684 for receiving notice sent by electronic transmission of those 1685 unit owners consenting to receive notice by electronic 1686 transmission. The e-mail addresses and numbers provided by unit 1687 owners to receive notice by electronic transmission shall be 1688 removed from association records when consent to receive notice 1689 by electronic transmission is revoked. However, the association 1690 is not liable for an erroneous disclosure of the e-mail address 1691 or the number for receiving electronic transmission of notices. 1692 6.All current insurance policies of the association. 1693 7.A current copy of any management agreement, lease, or 1694 other contract to which the association is a party or under 1695 which the association or the unit owners have an obligation or 1696 responsibility. 1697 8.Bills of sale or transfer for all property owned by the 1698 association. 1699 9.Accounting records for the association and separate 1700 accounting records for each unit it operates, according to good 1701 accounting practices. The accounting records shall include, but 1702 not be limited to: 1703 a.Accurate, itemized, and detailed records of all receipts 1704 and expenditures. 1705 b.A current account and a monthly, bimonthly, or quarterly 1706 statement of the account for each unit designating the name of 1707 the unit owner, the due date and amount of each assessment, the 1708 amount paid upon the account, and the balance due. 1709 c. All audits, reviews, accounting statements, reserve 1710 studies and reserve funding plans, and financial reports of the 1711 association. 1712 d.All contracts for work to be performed. Bids for work to 1713 be performed shall also be considered official records and shall 1714 be maintained for a period of 1 year. 1715 10.Ballots, sign-in sheets, voting proxies, and all other 1716 papers and electronic records relating to voting by unit owners, 1717 which shall be maintained for a period of 1 year after the date 1718 of the election, vote, or meeting to which the document relates. 1719 11.All rental records where the association is acting as 1720 agent for the rental of units. 1721 12.A copy of the current question and answer sheet as 1722 described in s. 719.504. 1723 13.All affirmative acknowledgments made pursuant to s. 1724 719.108(3)(b)3. 1725 14.A copy of the inspection reports as described in ss. 1726 553.899 and 719.301(4)(p) and any other inspection report 1727 relating to a structural or life safety inspection of the 1728 cooperative property. Such record must be maintained by the 1729 association for 15 years after receipt of the report. 1730 15.All other written records of the association not 1731 specifically included in the foregoing which are related to the 1732 operation of the association. 1733 (c)The official records of the association are open to 1734 inspection by any association member or the authorized 1735 representative of such member at all reasonable times. The right 1736 to inspect the records includes the right to make or obtain 1737 copies, at the reasonable expense, if any, of the association 1738 member. A renter of a unit has a right to inspect and copy only 1739 the associations bylaws and rules and the inspection reports 1740 described in ss. 553.899 and 719.301(4)(p). The association may 1741 adopt reasonable rules regarding the frequency, time, location, 1742 notice, and manner of record inspections and copying, but may 1743 not require a member to demonstrate any purpose or state any 1744 reason for the inspection. The failure of an association to 1745 provide the records within 10 working days after receipt of a 1746 written request creates a rebuttable presumption that the 1747 association willfully failed to comply with this paragraph. A 1748 member who is denied access to official records is entitled to 1749 the actual damages or minimum damages for the associations 1750 willful failure to comply. The minimum damages are $50 per 1751 calendar day for up to 10 days, beginning on the 11th working 1752 day after receipt of the written request. The failure to permit 1753 inspection entitles any person prevailing in an enforcement 1754 action to recover reasonable attorney fees from the person in 1755 control of the records who, directly or indirectly, knowingly 1756 denied access to the records. Any person who knowingly or 1757 intentionally defaces or destroys accounting records that are 1758 required by this chapter to be maintained during the period for 1759 which such records are required to be maintained, or who 1760 knowingly or intentionally fails to create or maintain 1761 accounting records that are required to be created or 1762 maintained, with the intent of causing harm to the association 1763 or one or more of its members, is personally subject to a civil 1764 penalty under s. 719.501(1)(d). The association shall maintain 1765 an adequate number of copies of the declaration, articles of 1766 incorporation, bylaws, and rules, and all amendments to each of 1767 the foregoing, as well as the question and answer sheet as 1768 described in s. 719.504 and year-end financial information 1769 required by the department, on the cooperative property to 1770 ensure their availability to members and prospective purchasers, 1771 and may charge its actual costs for preparing and furnishing 1772 these documents to those requesting the same. An association 1773 shall allow a member or his or her authorized representative to 1774 use a portable device, including a smartphone, tablet, portable 1775 scanner, or any other technology capable of scanning or taking 1776 photographs, to make an electronic copy of the official records 1777 in lieu of the association providing the member or his or her 1778 authorized representative with a copy of such records. The 1779 association may not charge a member or his or her authorized 1780 representative for the use of a portable device. Notwithstanding 1781 this paragraph, the following records shall not be accessible to 1782 members: 1783 1.Any record protected by the lawyer-client privilege as 1784 described in s. 90.502 and any record protected by the work 1785 product privilege, including any record prepared by an 1786 association attorney or prepared at the attorneys express 1787 direction which reflects a mental impression, conclusion, 1788 litigation strategy, or legal theory of the attorney or the 1789 association, and which was prepared exclusively for civil or 1790 criminal litigation or for adversarial administrative 1791 proceedings, or which was prepared in anticipation of such 1792 litigation or proceedings until the conclusion of the litigation 1793 or proceedings. 1794 2.Information obtained by an association in connection 1795 with the approval of the lease, sale, or other transfer of a 1796 unit. 1797 3.Personnel records of association or management company 1798 employees, including, but not limited to, disciplinary, payroll, 1799 health, and insurance records. For purposes of this 1800 subparagraph, the term personnel records does not include 1801 written employment agreements with an association employee or 1802 management company, or budgetary or financial records that 1803 indicate the compensation paid to an association employee. 1804 4.Medical records of unit owners. 1805 5.Social security numbers, driver license numbers, credit 1806 card numbers, e-mail addresses, telephone numbers, facsimile 1807 numbers, emergency contact information, addresses of a unit 1808 owner other than as provided to fulfill the associations notice 1809 requirements, and other personal identifying information of any 1810 person, excluding the persons name, unit designation, mailing 1811 address, property address, and any address, e-mail address, or 1812 facsimile number provided to the association to fulfill the 1813 associations notice requirements. Notwithstanding the 1814 restrictions in this subparagraph, an association may print and 1815 distribute to unit owners a directory containing the name, unit 1816 address, and all telephone numbers of each unit owner. However, 1817 an owner may exclude his or her telephone numbers from the 1818 directory by so requesting in writing to the association. An 1819 owner may consent in writing to the disclosure of other contact 1820 information described in this subparagraph. The association is 1821 not liable for the inadvertent disclosure of information that is 1822 protected under this subparagraph if the information is included 1823 in an official record of the association and is voluntarily 1824 provided by an owner and not requested by the association. 1825 6.Electronic security measures that are used by the 1826 association to safeguard data, including passwords. 1827 7.The software and operating system used by the 1828 association which allow the manipulation of data, even if the 1829 owner owns a copy of the same software used by the association. 1830 The data is part of the official records of the association. 1831 8.All affirmative acknowledgments made pursuant to s. 1832 719.108(3)(b)3. 1833 (4)FINANCIAL REPORT. 1834 (a)Within 90 days following the end of the fiscal or 1835 calendar year or annually on such date as provided in the bylaws 1836 of the association, the board of administration shall prepare 1837 and complete, or contract with a third party to prepare and 1838 complete, a financial report covering the preceding fiscal or 1839 calendar year. Within 21 days after the financial report is 1840 completed by the association or received from the third party, 1841 but no later than 120 days after the end of the fiscal year, 1842 calendar year, or other date provided in the bylaws, the 1843 association shall provide each member with a copy of the annual 1844 financial report or a written notice that a copy of the 1845 financial report is available upon request at no charge to the 1846 member. The division shall adopt rules setting forth uniform 1847 accounting principles, standards, and reporting requirements. 1848 The rules must include, but not be limited to, standards for 1849 presenting a summary of association reserves, including a good 1850 faith estimate disclosing the annual amount of reserve funds 1851 that would be necessary for the association to fully fund 1852 reserves for each reserve item based on the straight-line method 1853 or to fully fund reserves based on the pooling method. In 1854 adopting such rules, the division shall consider the number of 1855 members and annual revenues of an association. 1856 (5) MAINTENANCE. 1857 (a) Maintenance of the common areas is the responsibility 1858 of the association, except for any maintenance responsibility 1859 for limited common areas assigned to the unit owner by the 1860 cooperative documents. The association shall provide for the 1861 maintenance, repair, and replacement of the cooperative property 1862 for which it bears responsibility. After turnover of control of 1863 the association to the unit owners, the association must perform 1864 any required maintenance identified by the developer pursuant to 1865 s. 719.301(4)(p) until the association obtains new maintenance 1866 protocols from a licensed professional engineer or architect. 1867 (b) The necessary maintenance, repair, or replacement of 1868 cooperative property is not a material alteration or substantial 1869 addition requiring unit owner approval. 1870 (c) The association is not liable for alternative housing 1871 costs, lost rent, or other expenses if a unit must be vacated in 1872 whole or in part or if access is denied to a common area for 1873 necessary maintenance, repair, or replacement of cooperative 1874 property. 1875 Section 13.Paragraphs (d) and (j) of subsection (1) of 1876 section 719.106, Florida Statutes, are amended, and paragraph 1877 (n) is added to that subsection, to read: 1878 719.106Bylaws; cooperative ownership. 1879 (1)MANDATORY PROVISIONS.The bylaws or other cooperative 1880 documents shall provide for the following, and if they do not, 1881 they shall be deemed to include the following: 1882 (d)Shareholder meetings.There shall be an annual meeting 1883 of the shareholders. All members of the board of administration 1884 shall be elected at the annual meeting unless the bylaws provide 1885 for staggered election terms or for their election at another 1886 meeting. Any unit owner desiring to be a candidate for board 1887 membership must comply with subparagraph 1. The bylaws must 1888 provide the method for calling meetings, including annual 1889 meetings. Written notice, which must incorporate an 1890 identification of agenda items, shall be given to each unit 1891 owner at least 14 days before the annual meeting and posted in a 1892 conspicuous place on the cooperative property at least 14 1893 continuous days preceding the annual meeting. Upon notice to the 1894 unit owners, the board must by duly adopted rule designate a 1895 specific location on the cooperative property upon which all 1896 notice of unit owner meetings are posted. In lieu of or in 1897 addition to the physical posting of the meeting notice, the 1898 association may, by reasonable rule, adopt a procedure for 1899 conspicuously posting and repeatedly broadcasting the notice and 1900 the agenda on a closed-circuit cable television system serving 1901 the cooperative association. However, if broadcast notice is 1902 used in lieu of a posted notice, the notice and agenda must be 1903 broadcast at least four times every broadcast hour of each day 1904 that a posted notice is otherwise required under this section. 1905 If broadcast notice is provided, the notice and agenda must be 1906 broadcast in a manner and for a sufficient continuous length of 1907 time to allow an average reader to observe the notice and read 1908 and comprehend the entire content of the notice and the agenda. 1909 In addition to any of the authorized means of providing notice 1910 of a meeting of the shareholders, the association may, by rule, 1911 adopt a procedure for conspicuously posting the meeting notice 1912 and the agenda on a website serving the cooperative association 1913 for at least the minimum period of time for which a notice of a 1914 meeting is also required to be physically posted on the 1915 cooperative property. Any rule adopted shall, in addition to 1916 other matters, include a requirement that the association send 1917 an electronic notice in the same manner as a notice for a 1918 meeting of the members, which must include a hyperlink to the 1919 website where the notice is posted, to unit owners whose e-mail 1920 addresses are included in the associations official records. 1921 Unless a unit owner waives in writing the right to receive 1922 notice of the annual meeting, the notice of the annual meeting 1923 must be sent by mail, hand delivered, or electronically 1924 transmitted to each unit owner. An officer of the association 1925 must provide an affidavit or United States Postal Service 1926 certificate of mailing, to be included in the official records 1927 of the association, affirming that notices of the association 1928 meeting were mailed, hand delivered, or electronically 1929 transmitted, in accordance with this provision, to each unit 1930 owner at the address last furnished to the association. 1931 1.The board of administration shall be elected by written 1932 ballot or voting machine. A proxy may not be used in electing 1933 the board of administration in general elections or elections to 1934 fill vacancies caused by recall, resignation, or otherwise 1935 unless otherwise provided in this chapter. 1936 a.At least 60 days before a scheduled election, the 1937 association shall mail, deliver, or transmit, whether by 1938 separate association mailing, delivery, or electronic 1939 transmission or included in another association mailing, 1940 delivery, or electronic transmission, including regularly 1941 published newsletters, to each unit owner entitled to vote, a 1942 first notice of the date of the election. Any unit owner or 1943 other eligible person desiring to be a candidate for the board 1944 of administration must give written notice to the association at 1945 least 40 days before a scheduled election. Together with the 1946 written notice and agenda as set forth in this section, the 1947 association shall mail, deliver, or electronically transmit a 1948 second notice of election to all unit owners entitled to vote, 1949 together with a ballot that lists all candidates. Upon request 1950 of a candidate, the association shall include an information 1951 sheet, no larger than 8 1/2 inches by 11 inches, which must be 1952 furnished by the candidate at least 35 days before the election, 1953 to be included with the mailing, delivery, or electronic 1954 transmission of the ballot, with the costs of mailing, delivery, 1955 or transmission and copying to be borne by the association. The 1956 association is not liable for the contents of the information 1957 sheets provided by the candidates. In order to reduce costs, the 1958 association may print or duplicate the information sheets on 1959 both sides of the paper. The division shall by rule establish 1960 voting procedures consistent with this subparagraph, including 1961 rules establishing procedures for giving notice by electronic 1962 transmission and rules providing for the secrecy of ballots. 1963 Elections shall be decided by a plurality of those ballots cast. 1964 There is no quorum requirement. However, at least 20 percent of 1965 the eligible voters must cast a ballot in order to have a valid 1966 election. A unit owner may not permit any other person to vote 1967 his or her ballot, and any such ballots improperly cast are 1968 invalid. A unit owner who needs assistance in casting the ballot 1969 for the reasons stated in s. 101.051 may obtain assistance in 1970 casting the ballot. Any unit owner violating this provision may 1971 be fined by the association in accordance with s. 719.303. The 1972 regular election must occur on the date of the annual meeting. 1973 This subparagraph does not apply to timeshare cooperatives. 1974 Notwithstanding this subparagraph, an election and balloting are 1975 not required unless more candidates file a notice of intent to 1976 run or are nominated than vacancies exist on the board. Any 1977 challenge to the election process must be commenced within 60 1978 days after the election results are announced. 1979 b.Within 90 days after being elected or appointed to the 1980 board, each new director shall do both of the following: 1981 (I)Certify by affidavit in writing to the secretary of the 1982 association that he or she has read the associations bylaws, 1983 articles of incorporation, proprietary lease, and current 1984 written policies; that he or she will work to uphold such 1985 documents and policies to the best of his or her ability; and 1986 that he or she will faithfully discharge his or her fiduciary 1987 responsibility to the associations members. Within 90 days 1988 after being elected or appointed to the board, in lieu of this 1989 written certification, the newly elected or appointed director 1990 may 1991 (II)Submit a certificate of having satisfactorily 1992 completed the educational curriculum administered by an 1993 education provider as approved by the division pursuant to the 1994 requirements established in chapter 718 within 1 year before or 1995 90 days after the date of election or appointment. The 1996 educational certificate is valid and does not have to be 1997 resubmitted as long as the director serves on the board without 1998 interruption. 1999 2000 A director who fails to timely file the affidavit and written 2001 certification or educational certificate is suspended from 2002 service on the board until he or she complies with this sub 2003 subparagraph. The board may temporarily fill the vacancy during 2004 the period of suspension. The secretary of the association shall 2005 require cause the association to retain a directors affidavit 2006 and written certification or educational certificate for 2007 inspection by the members for 5 years after a directors 2008 election or the duration of the directors uninterrupted tenure, 2009 whichever is longer. Failure to have such affidavit and written 2010 certification or educational certificate on file does not affect 2011 the validity of any board action. 2012 2.Any approval by unit owners called for by this chapter, 2013 or the applicable cooperative documents, must be made at a duly 2014 noticed meeting of unit owners and is subject to this chapter or 2015 the applicable cooperative documents relating to unit owner 2016 decisionmaking, except that unit owners may take action by 2017 written agreement, without meetings, on matters for which action 2018 by written agreement without meetings is expressly allowed by 2019 the applicable cooperative documents or law which provides for 2020 the unit owner action. 2021 3.Unit owners may waive notice of specific meetings if 2022 allowed by the applicable cooperative documents or law. Notice 2023 of meetings of the board of administration, shareholder 2024 meetings, except shareholder meetings called to recall board 2025 members under paragraph (f), and committee meetings may be given 2026 by electronic transmission to unit owners who consent to receive 2027 notice by electronic transmission. A unit owner who consents to 2028 receiving notices by electronic transmission is solely 2029 responsible for removing or bypassing filters that may block 2030 receipt of mass emails sent to members on behalf of the 2031 association in the course of giving electronic notices. 2032 4.Unit owners have the right to participate in meetings of 2033 unit owners with reference to all designated agenda items. 2034 However, the association may adopt reasonable rules governing 2035 the frequency, duration, and manner of unit owner participation. 2036 5.Any unit owner may tape record or videotape meetings of 2037 the unit owners subject to reasonable rules adopted by the 2038 division. 2039 6.Unless otherwise provided in the bylaws, a vacancy 2040 occurring on the board before the expiration of a term may be 2041 filled by the affirmative vote of the majority of the remaining 2042 directors, even if the remaining directors constitute less than 2043 a quorum, or by the sole remaining director. In the alternative, 2044 a board may hold an election to fill the vacancy, in which case 2045 the election procedures must conform to the requirements of 2046 subparagraph 1. unless the association has opted out of the 2047 statutory election process, in which case the bylaws of the 2048 association control. Unless otherwise provided in the bylaws, a 2049 board member appointed or elected under this subparagraph shall 2050 fill the vacancy for the unexpired term of the seat being 2051 filled. Filling vacancies created by recall is governed by 2052 paragraph (f) and rules adopted by the division. 2053 2054 Notwithstanding subparagraphs (b)2. and (d)1., an association 2055 may, by the affirmative vote of a majority of the total voting 2056 interests, provide for a different voting and election procedure 2057 in its bylaws, which vote may be by a proxy specifically 2058 delineating the different voting and election procedures. The 2059 different voting and election procedures may provide for 2060 elections to be conducted by limited or general proxy. 2061 (j)Annual budget. 2062 1.The proposed annual budget of common expenses shall be 2063 detailed and shall show the amounts budgeted by accounts and 2064 expense classifications, including, if applicable, but not 2065 limited to, those expenses listed in s. 719.504(20). The board 2066 of administration shall adopt the annual budget at least 14 days 2067 prior to the start of the associations fiscal year. In the 2068 event that the board fails to timely adopt the annual budget a 2069 second time, it shall be deemed a minor violation and the prior 2070 years budget shall continue in effect until a new budget is 2071 adopted. 2072 2.In addition to annual operating expenses, the budget 2073 shall include reserve accounts for capital expenditures and 2074 deferred maintenance. These accounts shall include, but not be 2075 limited to, the maintenance and replacement of the cooperative 2076 property identified in s. 719.301(4)(p) roof replacement, 2077 building painting, and pavement resurfacing, regardless of the 2078 amount of deferred maintenance expense or replacement cost, and 2079 for any other items for which the deferred maintenance expense 2080 or replacement cost exceeds $10,000. The amount to be reserved 2081 shall be computed by means of a formula which is based upon 2082 estimated remaining useful life and estimated replacement cost 2083 or deferred maintenance expense of each reserve item. The 2084 association may adjust replacement reserve assessments annually 2085 to take into account any changes in estimates or extension of 2086 the useful life of a reserve item caused by deferred 2087 maintenance. This paragraph shall not apply to any budget in 2088 which the members of an association have, at a duly called 2089 meeting of the association and by a majority vote of all the 2090 voting interests, voting in person or by proxy, determined for a 2091 fiscal year to provide no reserves or reserves less adequate 2092 than required by this subsection. 2093 3. However, Prior to turnover of control of an association 2094 by a developer to unit owners other than a developer pursuant to 2095 s. 719.301, the developer may vote to waive the reserves or 2096 reduce the funding of reserves for the first 2 years of the 2097 operation of the association after which time reserves may only 2098 be waived or reduced upon the vote of a majority of all 2099 nondeveloper voting interests voting in person or by limited 2100 proxy at a duly called meeting of the association. If a meeting 2101 of the unit owners has been called to determine to provide no 2102 reserves, or reserves less adequate than required, and such 2103 result is not attained or a quorum is not attained, the reserves 2104 as included in the budget shall go into effect. For an 2105 association that is required to perform a reserve study under 2106 this paragraph, the developer may only vote to waive reserve 2107 contributions or reduce reserve funding if the associations 2108 reserve obligations are funded consistent with the reserve study 2109 currently in effect or if the association provides an 2110 alternative funding method for the associations reserve 2111 obligations. 2112 4.3.Reserve funds and any interest accruing thereon shall 2113 remain in the reserve account or accounts, and shall be used 2114 only for authorized reserve expenditures unless their use for 2115 other purposes is approved in advance by a vote of the majority 2116 of all the voting interests, voting in person or by limited 2117 proxy at a duly called meeting of the association; provided that 2118 the use of reserve funds for a purpose other than authorized 2119 reserve expenditures is authorized in the exercise of the 2120 associations emergency powers under s. 719.128. Prior to 2121 turnover of control of an association by a developer to unit 2122 owners other than the developer under s. 719.301, the developer 2123 may not vote to use reserves for purposes other than that for 2124 which they were intended without the approval of a majority of 2125 all nondeveloper voting interests, voting in person or by 2126 limited proxy at a duly called meeting of the association. 2127 5. Effective January 1, 2024, unless the cooperative 2128 documents provide for a more frequent reserve study, an 2129 association with a residential cooperative building that is 2130 three stories or more in height and subject to the milestone 2131 inspection requirements in s. 553.899 must have a study 2132 conducted of the reserves required to repair, replace, and 2133 restore the cooperative property identified in s. 719.301(4)(p) 2134 at least every 3 years. The board shall review the results of 2135 such study at least annually to determine if reserves are 2136 sufficient to meet the associations reserve obligations and to 2137 make any adjustments the board deems necessary to maintain 2138 reserves, as appropriate. The division shall adopt rules setting 2139 forth uniform financial standards and forms for reserve studies. 2140 The reserve study must include, without limitation: 2141 a.A summary of any inspection of the major components of 2142 the cooperative property identified in s. 719.301(4)(p) and any 2143 other portion of the cooperative property that the association 2144 is obligated to maintain, repair, replace, or restore; 2145 b.If applicable, a summary of the findings and 2146 recommendations of the milestone inspection report required 2147 under s. 553.899 and any other structural or life safety 2148 inspection of the cooperative property considered in the reserve 2149 study; 2150 c. An identification of the structural components of the 2151 building for which necessary reserves may be reasonably 2152 projected and an identification of the structural components of 2153 the building with an indefinite useful life for which a 2154 reasonable determination of necessary reserves may not be 2155 estimated; 2156 d. An estimate of the useful life of the structural 2157 components of the building identified in s. 719.301(4)(p) for 2158 which an estimate of useful life may be determined as attested 2159 to by a licensed architect or engineer in the turnover 2160 inspection required under s. 719.301(4)(p), a milestone 2161 inspection, or any other structural or life safety inspection of 2162 the cooperative property; 2163 e.An estimate of the remaining useful life of any other 2164 portion of the cooperative property that the association is 2165 obligated to maintain, repair, replace, or restore; 2166 f.An estimate of the cost of maintenance, repair, 2167 replacement, or restoration of each major component of the 2168 cooperative property identified in s. 719.301(4)(p) and any 2169 other portion of the cooperative property identified pursuant to 2170 sub-subparagraph c.; 2171 g.An estimate of the total annual assessment that may be 2172 necessary to cover the cost of maintaining, repairing, 2173 replacing, or restoring the major components of the cooperative 2174 property identified in s. 719.301(4)(p) and any other portion of 2175 the cooperative property identified pursuant to sub-subparagraph 2176 c., and an estimate of the funding plan, including any 2177 alternative funding method, which may be necessary to provide 2178 adequate funding for the required reserves; and 2179 h.A schedule for the full funding of reserves. A reserve 2180 account is fully funded when the actual or projected reserve 2181 balance in the reserve account is equal in direct proportion to 2182 the fraction of useful life for a given component or components 2183 multiplied by the current replacement costs for the component or 2184 components. 2185 6.The annual budget must, at minimum: 2186 a. Identify all items for which reserves are or will be 2187 established; 2188 b. Provide an estimate of the maintenance, repair, and 2189 replacement costs for the structural components for which an 2190 estimate of useful life may be determined; 2191 c. Identify any structural component for which a reserve 2192 account is not established or reserves are not funded, because 2193 the useful life of the component cannot be determined; 2194 d. As of the beginning of the fiscal year for which the 2195 budget is prepared, identify the current amount of accumulated 2196 funds for each reserve component or, if the pooling method is 2197 used, the amount of the accumulated pooled funds; 2198 e.Provide a description of the funding plan for the 2199 reserve funding obligations of the association, including the 2200 use of regular assessments, special assessments, and any other 2201 alternative funding method; and 2202 f. Provide a description of the procedures used for the 2203 estimation and accumulation of reserves pursuant to this 2204 paragraph, the identity of any independent third party who 2205 conducted the reserve study on behalf of the association, and 2206 the extent to which the association is funding its reserve 2207 obligations consistent with the reserve study currently in 2208 effect. 2209 7. If the association has voted to waive reserves or to use 2210 existing reserve funds for purposes other than the purposes for 2211 which the reserves were intended, the budget must contain the 2212 following statement in conspicuous type: THE OWNERS HAVE ELECTED 2213 TO WAIVE RESERVES, IN WHOLE OR IN PART, OR ALLOWED ALTERNATIVE 2214 USES OF EXISTING RESERVES UNDER SECTION 719.106(1)(j), FLORIDA 2215 STATUTES. THE WAIVING OR ALTERNATIVE USE OF RESERVE FUNDS MAY 2216 RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED 2217 SPECIAL ASSESSMENTS REGARDING THOSE ITEMS. 2218 8. On or after January 1, 2026, if the association is 2219 required to perform a reserve study under this paragraph and the 2220 budget of the association does not fund the associations 2221 reserve obligations consistent with the reserve study currently 2222 in effect, the budget must also contain the following statement 2223 in conspicuous type: THE ASSOCIATIONS LAST RESERVE STUDY IS 2224 DATED ..... THE RESERVE AMOUNT BUDGETED AND/OR COLLECTED IS LESS 2225 THAN REQUIRED BY THE RESERVE STUDY SCHEDULE. THE BUDGET OF THE 2226 ASSOCIATION DOES NOT PROVIDE FOR FULLY FUNDED RESERVE ACCOUNTS 2227 FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE CONSISTENT 2228 WITH THE ASSOCIATIONS RESERVE STUDY. FAILURE TO FUND RESERVES 2229 CONSISTENT WITH THE ASSOCIATIONS RESERVE STUDY MAY RESULT IN 2230 UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS. 2231 (n)Mandatory milestone inspections.If an association is 2232 required to have a milestone inspection performed pursuant to s. 2233 553.899, the association must arrange for the milestone 2234 inspection to be performed and is responsible for ensuring 2235 compliance with the requirements of s. 553.899. The association 2236 is responsible for all costs associated with the inspection. 2237 Upon completion of a phase one or phase two milestone inspection 2238 and receipt of the inspector-prepared summary of the inspection 2239 report from the architect or engineer who performed the 2240 inspection, the association must distribute a copy of the 2241 inspector-prepared summary of the inspection report to each unit 2242 owner, regardless of the findings or recommendations in the 2243 report, by United States mail or personal delivery; must post a 2244 copy of the inspector-prepared summary in a conspicuous place on 2245 the cooperative property; and must publish the full report and 2246 inspector-prepared summary on the associations website, if the 2247 association is required to have a website. 2248 Section 14.Paragraph (f) is added to subsection (1) of 2249 section 719.107, Florida Statutes, to read: 2250 719.107Common expenses; assessment. 2251 (1) 2252 (f)Notwithstanding any provision in the cooperative 2253 documents requiring, prohibiting, or limiting a board of 2254 administrations authority to adopt a special assessment or to 2255 borrow money on behalf of the association, including any 2256 provision in the cooperative documents requiring unit owner 2257 voting or approval, the board may adopt a special assessment or 2258 borrow money for the necessary maintenance, repair, or 2259 replacement of the cooperative property. 2260 Section 15.Paragraphs (p) and (q) are added to subsection 2261 (4) of section 719.301, Florida Statutes, to read: 2262 719.301Transfer of association control. 2263 (4)When unit owners other than the developer elect a 2264 majority of the members of the board of administration of an 2265 association, the developer shall relinquish control of the 2266 association, and the unit owners shall accept control. 2267 Simultaneously, or for the purpose of paragraph (c) not more 2268 than 90 days thereafter, the developer shall deliver to the 2269 association, at the developers expense, all property of the 2270 unit owners and of the association held or controlled by the 2271 developer, including, but not limited to, the following items, 2272 if applicable, as to each cooperative operated by the 2273 association: 2274 (p)Notwithstanding when the certificate of occupancy was 2275 issued or the height of the building, a milestone inspection 2276 report in compliance with s. 553.899 included in the official 2277 records, under seal of an architect or engineer authorized to 2278 practice in this state, attesting to required maintenance, 2279 condition, useful life, and replacement costs of the following 2280 applicable cooperative property comprising a turnover inspection 2281 report: 2282 1.Roof. 2283 2.Structure, including load-bearing walls and primary 2284 structural members and primary structural systems as those terms 2285 are defined in s. 627.706. 2286 3.Fireproofing and fire protection systems. 2287 4.Elevators. 2288 5.Heating and cooling systems. 2289 6.Plumbing. 2290 7.Electrical systems. 2291 8.Swimming pool or spa and equipment. 2292 9.Seawalls. 2293 10.Pavement and parking areas. 2294 11.Drainage systems. 2295 12.Painting. 2296 13.Irrigation systems. 2297 14.Waterproofing. 2298 (q) A copy of the most recent reserve study required under 2299 s. 719.106(1)(j), along with the statements indicating the 2300 status of the reserves required under s. 719.106(1)(j)7. and 8., 2301 if applicable, or a statement in conspicuous type indicating 2302 that the association has not completed the required reserve 2303 study or that the association is not required to perform a 2304 reserve study, as applicable. 2305 Section 16.Paragraph (b) of subsection (1) and paragraph 2306 (a) of subsection (2) of section 719.503, Florida Statutes, are 2307 amended to read: 2308 719.503Disclosure prior to sale. 2309 (1)DEVELOPER DISCLOSURE. 2310 (b)Copies of documents to be furnished to prospective 2311 buyer or lessee.Until such time as the developer has furnished 2312 the documents listed below to a person who has entered into a 2313 contract to purchase a unit or lease it for more than 5 years, 2314 the contract may be voided by that person, entitling the person 2315 to a refund of any deposit together with interest thereon as 2316 provided in s. 719.202. The contract may be terminated by 2317 written notice from the proposed buyer or lessee delivered to 2318 the developer within 15 days after the buyer or lessee receives 2319 all of the documents required by this section. The developer may 2320 shall not close for 15 days after following the execution of the 2321 agreement and delivery of the documents to the buyer as 2322 evidenced by a receipt for documents signed by the buyer unless 2323 the buyer is informed in the 15-day voidability period and 2324 agrees to close before prior to the expiration of the 15 days. 2325 The developer shall retain in his or her records a separate 2326 signed agreement as proof of the buyers agreement to close 2327 before prior to the expiration of the said voidability period. 2328 The developer must retain such Said proof shall be retained for 2329 a period of 5 years after the date of the closing transaction. 2330 The documents to be delivered to the prospective buyer are the 2331 prospectus or disclosure statement with all exhibits, if the 2332 development is subject to the provisions of s. 719.504, or, if 2333 not, then copies of the following which are applicable: 2334 1.The question and answer sheet described in s. 719.504, 2335 and cooperative documents, or the proposed cooperative documents 2336 if the documents have not been recorded, which shall include the 2337 certificate of a surveyor approximately representing the 2338 locations required by s. 719.104. 2339 2.The documents creating the association. 2340 3.The bylaws. 2341 4.The ground lease or other underlying lease of the 2342 cooperative. 2343 5.The management contract, maintenance contract, and other 2344 contracts for management of the association and operation of the 2345 cooperative and facilities used by the unit owners having a 2346 service term in excess of 1 year, and any management contracts 2347 that are renewable. 2348 6.The estimated operating budget for the cooperative and a 2349 schedule of expenses for each type of unit, including fees 2350 assessed to a shareholder who has exclusive use of limited 2351 common areas, where such costs are shared only by those entitled 2352 to use such limited common areas. 2353 7.The lease of recreational and other facilities that will 2354 be used only by unit owners of the subject cooperative. 2355 8.The lease of recreational and other common areas that 2356 will be used by unit owners in common with unit owners of other 2357 cooperatives. 2358 9.The form of unit lease if the offer is of a leasehold. 2359 10.Any declaration of servitude of properties serving the 2360 cooperative but not owned by unit owners or leased to them or 2361 the association. 2362 11.If the development is to be built in phases or if the 2363 association is to manage more than one cooperative, a 2364 description of the plan of phase development or the arrangements 2365 for the association to manage two or more cooperatives. 2366 12.If the cooperative is a conversion of existing 2367 improvements, the statements and disclosure required by s. 2368 719.616. 2369 13.The form of agreement for sale or lease of units. 2370 14.A copy of the floor plan of the unit and the plot plan 2371 showing the location of the residential buildings and the 2372 recreation and other common areas. 2373 15.A copy of all covenants and restrictions that which 2374 will affect the use of the property and which are not contained 2375 in the foregoing. 2376 16.If the developer is required by state or local 2377 authorities to obtain acceptance or approval of any dock or 2378 marina facilities intended to serve the cooperative, a copy of 2379 any such acceptance or approval acquired by the time of filing 2380 with the division pursuant to s. 719.502(1) or a statement that 2381 such acceptance or approval has not been acquired or received. 2382 17.Evidence demonstrating that the developer has an 2383 ownership, leasehold, or contractual interest in the land upon 2384 which the cooperative is to be developed. 2385 18.A copy of the most recent reserve study required under 2386 s. 719.106(1)(j), along with the statements indicating the 2387 status of the reserves required under s. 719.106(1)(j)7. and 8., 2388 if applicable, or a statement in conspicuous type indicating 2389 that the association has not completed the required reserve 2390 study or that the association is not required to perform a 2391 reserve study, as applicable. 2392 19. A copy of the inspector-prepared summary of the 2393 milestone inspection report as described in ss. 553.899 and 2394 719.301(4)(p). 2395 (2)NONDEVELOPER DISCLOSURE. 2396 (a)Each unit owner who is not a developer as defined by 2397 this chapter must comply with the provisions of this subsection 2398 before prior to the sale of his or her interest in the 2399 association. Each prospective purchaser who has entered into a 2400 contract for the purchase of an interest in a cooperative is 2401 entitled, at the sellers expense, to a current copy of all of 2402 the following: 2403 1.The articles of incorporation of the association., 2404 2.The bylaws, and rules of the association. 2405 3.,as well as A copy of the question and answer sheet as 2406 provided in s. 719.504. 2407 4.A copy of the most recent reserve study required under 2408 s. 719.106(1)(j), along with the statements in the budget 2409 indicating the status of the reserves required under s. 719.106 2410 (1)(j)7. and 8., if applicable, or a statement in conspicuous 2411 type indicating that the association has not completed the 2412 required reserve study or that the association is not required 2413 to perform a reserve study, as applicable. 2414 5. A copy of the inspector-prepared summary of the 2415 milestone inspection report as described in ss. 553.899 and 2416 719.301(4)(p). 2417 Section 17.Paragraph (f) of subsection (23) of section 2418 719.504, Florida Statutes, is amended, and paragraph (q) is 2419 added to that subsection, to read: 2420 719.504Prospectus or offering circular.Every developer of 2421 a residential cooperative which contains more than 20 2422 residential units, or which is part of a group of residential 2423 cooperatives which will be served by property to be used in 2424 common by unit owners of more than 20 residential units, shall 2425 prepare a prospectus or offering circular and file it with the 2426 Division of Florida Condominiums, Timeshares, and Mobile Homes 2427 prior to entering into an enforceable contract of purchase and 2428 sale of any unit or lease of a unit for more than 5 years and 2429 shall furnish a copy of the prospectus or offering circular to 2430 each buyer. In addition to the prospectus or offering circular, 2431 each buyer shall be furnished a separate page entitled 2432 Frequently Asked Questions and Answers, which must be in 2433 accordance with a format approved by the division. This page 2434 must, in readable language: inform prospective purchasers 2435 regarding their voting rights and unit use restrictions, 2436 including restrictions on the leasing of a unit; indicate 2437 whether and in what amount the unit owners or the association is 2438 obligated to pay rent or land use fees for recreational or other 2439 commonly used facilities; contain a statement identifying that 2440 amount of assessment which, pursuant to the budget, would be 2441 levied upon each unit type, exclusive of any special 2442 assessments, and which identifies the basis upon which 2443 assessments are levied, whether monthly, quarterly, or 2444 otherwise; state and identify any court cases in which the 2445 association is currently a party of record in which the 2446 association may face liability in excess of $100,000; and state 2447 whether membership in a recreational facilities association is 2448 mandatory and, if so, identify the fees currently charged per 2449 unit type. The division shall by rule require such other 2450 disclosure as in its judgment will assist prospective 2451 purchasers. The prospectus or offering circular may include more 2452 than one cooperative, although not all such units are being 2453 offered for sale as of the date of the prospectus or offering 2454 circular. The prospectus or offering circular must contain the 2455 following information: 2456 (23)Copies of the following, to the extent they are 2457 applicable, shall be included as exhibits: 2458 (f)The estimated operating budget for the cooperative and 2459 the required schedule of unit owners expenses, and the most 2460 recent reserve study required under s. 719.106(1)(j), along with 2461 the statements in the budget indicating the status of the 2462 reserves required under s. 719.106(1)(j)7. and 8., if 2463 applicable, or a statement in conspicuous type indicating that 2464 the association has not completed the required reserve study or 2465 that the association is not required to perform a reserve study, 2466 as applicable. 2467 (q) A copy of the inspector-prepared summary of the 2468 milestone inspection report as described in ss. 553.899 and 2469 719.301(4)(p). 2470 Section 18.Subsection (2) of section 558.002, Florida 2471 Statutes, is amended to read: 2472 558.002Definitions.As used in this chapter, the term: 2473 (2)Association has the same meaning as in s. 718.103(3) 2474 s. 718.103(2), s. 719.103(3) s. 719.103(2), s. 720.301(9), or s. 2475 723.075. 2476 Section 19.Paragraph (b) of subsection (1) of section 2477 718.116, Florida Statutes, is amended to read: 2478 718.116Assessments; liability; lien and priority; 2479 interest; collection. 2480 (1) 2481 (b)1.The liability of a first mortgagee or its successor 2482 or assignees who acquire title to a unit by foreclosure or by 2483 deed in lieu of foreclosure for the unpaid assessments that 2484 became due before the mortgagees acquisition of title is 2485 limited to the lesser of: 2486 a.The units unpaid common expenses and regular periodic 2487 assessments which accrued or came due during the 12 months 2488 immediately preceding the acquisition of title and for which 2489 payment in full has not been received by the association; or 2490 b.One percent of the original mortgage debt. The 2491 provisions of this paragraph apply only if the first mortgagee 2492 joined the association as a defendant in the foreclosure action. 2493 Joinder of the association is not required if, on the date the 2494 complaint is filed, the association was dissolved or did not 2495 maintain an office or agent for service of process at a location 2496 which was known to or reasonably discoverable by the mortgagee. 2497 2.An association, or its successor or assignee, that 2498 acquires title to a unit through the foreclosure of its lien for 2499 assessments is not liable for any unpaid assessments, late fees, 2500 interest, or reasonable attorneys fees and costs that came due 2501 before the associations acquisition of title in favor of any 2502 other association, as defined in s. 718.103(3) s. 718.103(2) or 2503 s. 720.301(9), which holds a superior lien interest on the unit. 2504 This subparagraph is intended to clarify existing law. 2505 Section 20.Subsection (2) of section 718.121, Florida 2506 Statutes, is amended to read: 2507 718.121Liens. 2508 (2)Labor performed on or materials furnished to a unit may 2509 not be the basis for the filing of a lien under part I of 2510 chapter 713, the Construction Lien Law, against the unit or 2511 condominium parcel of any unit owner not expressly consenting to 2512 or requesting the labor or materials. Labor performed on or 2513 materials furnished for the installation of a natural gas fuel 2514 station or an electric vehicle charging station under s. 2515 718.113(9) s. 718.113(8) may not be the basis for filing a lien 2516 under part I of chapter 713 against the association, but such a 2517 lien may be filed against the unit owner. Labor performed on or 2518 materials furnished to the common elements are not the basis for 2519 a lien on the common elements, but if authorized by the 2520 association, the labor or materials are deemed to be performed 2521 or furnished with the express consent of each unit owner and may 2522 be the basis for the filing of a lien against all condominium 2523 parcels in the proportions for which the owners are liable for 2524 common expenses. 2525 Section 21.Subsection (3) of section 718.706, Florida 2526 Statutes, is amended to read: 2527 718.706Specific provisions pertaining to offering of units 2528 by a bulk assignee or bulk buyer. 2529 (3)A bulk assignee, while in control of the board of 2530 administration of the association, may not authorize, on behalf 2531 of the association: 2532 (a)The waiver of reserves or the reduction of funding of 2533 the reserves pursuant to s. 718.112(2)(f)2., unless approved by 2534 a majority of the voting interests not controlled by the 2535 developer, bulk assignee, and bulk buyer; or 2536 (b)The use of reserve expenditures for other purposes 2537 pursuant to s. 718.112(2)(f)5. s. 718.112(2)(f)3., unless 2538 approved by a majority of the voting interests not controlled by 2539 the developer, bulk assignee, and bulk buyer. 2540 Section 22.Paragraph (d) of subsection (2) of section 2541 720.3085, Florida Statutes, is amended to read: 2542 720.3085Payment for assessments; lien claims. 2543 (2) 2544 (d)An association, or its successor or assignee, that 2545 acquires title to a parcel through the foreclosure of its lien 2546 for assessments is not liable for any unpaid assessments, late 2547 fees, interest, or reasonable attorneys fees and costs that 2548 came due before the associations acquisition of title in favor 2549 of any other association, as defined in s. 718.103(3) s. 2550 718.103(2) or s. 720.301(9), which holds a superior lien 2551 interest on the parcel. This paragraph is intended to clarify 2552 existing law. 2553 Section 23.For the purpose of incorporating the amendment 2554 made by this act to section 718.1255, Florida Statutes, in a 2555 reference thereto, section 719.1255, Florida Statutes, is 2556 reenacted to read: 2557 719.1255Alternative resolution of disputes.The Division 2558 of Florida Condominiums, Timeshares, and Mobile Homes of the 2559 Department of Business and Professional Regulation shall provide 2560 for alternative dispute resolution in accordance with s. 2561 718.1255. 2562 Section 24.This act shall take effect July 1, 2022.