Rob Samouce: New laws affecting homeowners' associations are in effect

On June 23, Gov. Jeb Bush signed into law Senate Bill 2984, which is a 77-page bill containing some major changes to the laws affecting homeowners' associations and condominium associations. While the new provisions affecting condominiums do not become effective until Oct. 1, many of the changes affecting homeowners' associations became effective immediately upon the governor's signature. Following are some of new laws homeowners' associations need to be aware of and start following right away when conducting their day-to-day business. Many of these laws are carryovers from what condominium associations must already follow. Next month we will review the laws that will become effective Oct. 1.

Fines: An association cannot lien a parcel for collection of fines levied for violation of an association's rules, regulations or covenants. However, in any action to recover the fine, the prevailing party is entitled to collect its reasonable attorney's fees and costs from the nonprevailing party.

Contracts: Contracts greater than one year for the purchase, lease or renting of materials or equipment and all contracts for the provision of services, shall be in writing. Except for contracts for professional services with attorneys, accountants, architects, community association managers, engineers and landscape architect services and contracts with employees, all contracts for services that exceed 10 percent of the total annual budget of the association, including reserves, must be let by competitive bids. The association does not have to take the lowest bid. Among various other items concerning contracts is an exception from bidding for emergencies and when there is only one supplier within the county serving the association.

Member meeting notices: The association must give all parcel owners and members actual notice of membership meetings, by mail, hand delivery or electronic transmission, not less than 14 days prior to the meeting. An affidavit of compliance must be executed by the person providing the notice. In addition, if the association wants, it can adopt a rule to also conspicuously post and repeatedly broadcast the notice and agenda on a closed-circuit cable television system.

Right to speak at a meeting: Members and parcel owners have the right to attend all members' meetings and speak at any of the meetings with reference to all items opened for discussion or included on the agenda. Provided that a member submits a written request to speak prior to the meeting, the member has the right to speak for at least three minutes on the item requested.

Election and recall disputes: Any homeowners' association's election dispute or recall disputes between a member and an association must be submitted to mandatory binding arbitration with the state Department of Business and Professional Regulations; Division of Florida Land Sales, Condominiums and Mobile Homes. The proceedings will be handled the same as currently being handled for condominium associations.

Association v. parcel owner disputes: Disputes between a homeowner's association and a parcel owner "regarding the use of or changes to the parcel or the common areas and other covenant enforcement disputes, disputes regarding amendments to the association documents, disputes regarding meetings of the board and committees appointed by the board, membership meetings not including election meetings, and access to the official records of the association shall be filed with the department for mandatory mediation before the dispute is filed in court." If the mediation is not successful, the parties can agree to then go to binding or nonbinding arbitration or if they do not agree any party may file the dispute in court.

Disclosure summary: There were a few changes to the disclosure summary that must be provided to a prospective parcel owner by the seller prior to executing a contract for sale. The most important was what happens if the disclosure summary is not provided. If not provided, the purchaser may void the contract by delivering written notice of cancellation within three days after receipt of the disclosure summary or prior to closing, whichever occurs first. This right terminates at closing.

False or misleading information published by developer: Purchasers in a homeowners' association now have one year from closing, certificate of occupancy or completion of the common areas and recreational facilities, whichever date is last, to bring a cause of action against the developer for damages caused by the person relying upon "any material statement or information that is false or misleading and published by or under authority from the developer in advertising and promotional materials."

These new laws are now in effect, so be aware and be good.

Rob Samouce, a principal in the Naples law firm of Samouce, Murrell, & Gal, P.A. concentrates his practice in the areas of community associations including condominium, cooperative and homeowners' associations, real estate transactions, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.

© 2004 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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