In 2021, several amendments were enacted to the laws governing community associations (condominiums, homeowners’ associations and co-operatives). While most took effect on July 1, 2021, a couple came into force earlier in the year. What follows is a summary of the most significant statutory updates. I have also included links to each amendment.
Senate Bill 56 (Chapter 2021-91, Laws of Florida): This bill, which took effect on July 1, 2021, significantly alters the assessment collection process by:
- Requiring that assessment invoices be mailed or emailed (if the owner has agreed to electronic notice) to owners.
- Requiring a special 30-day notice, which must be acknowledged by an owner, before the association can alter the delivery method of assessment invoices.
- Requiring a new 30-day late notice to be mailed (but not emailed) to delinquent owners before a lien notice can be sent or attorney’s fees can be charged.
- Requiring that a copy of the late notice, lien notice and foreclosure notice also be mailed to the parcel or unit address if the owner’s mailing address is not the parcel or unit address.
Senate Bill 630 (Chapter 2021-99, Laws of Florida): The bill, which took effect on July 1, 2021, makes several changes to the manner in which community associations may (or must) be operated. Among other things, it does the following:
- For all types of community associations:
- Creates a means by which meetings may be noticed on the association’s website or via an application that can be downloaded on mobile devices.
- Broadens and clarifies the association’s emergency powers when an official state of emergency is declared.
- For condominium associations:
- Requires that bids for work to be performed be maintained for 1 year.
- Limits the rights of renters to inspect official records.
- Clarifies that membership meeting notices (other than for the annual meeting) can be furnished within the timeframe specified in the bylaws or, if no timeframe is listed, at least 14 days before the meeting.
- Regulates the installation of electric vehicle charging and natural gas fueling stations.
- Eliminates mandatory non-binding arbitration in favor of optional pre-suit mediation.
- For co-operative associations:
- Clarifies that directors and committee members may participate and vote at board and committee meetings via telephone and videoconference.
- Eliminates mandatory non-binding arbitration in favor of optional pre-suit mediation.
- For homeowners’ associations:
- Requires that ballots, proxies and other election-related records be maintained with the official records for at least 1 year.
- Modifies the warnings required to be included with year-end financial reports when the association does not maintain fully-funded reserve accounts.
- With some exceptions, limits the applicability of amendments regulating or prohibiting rentals to owners who agree to the amendment or those who become owners after the amendment is recorded.
Senate Bill 1966 (Chapter 2021-135, Laws of Florida): This legislation took effect on July 1, 2021. For cooperative associations and condominiums, it requires that the annual budget be adopted at least 14 days prior to the start of each fiscal year. For condominiums, it also clarifies what “delinquency” means for board eligibility.
Senate Bill 72 (Chapter 2021-1, Laws of Florida): Effective March 29, 2021, this legislation created a new statute, Section 768.38, Florida Statutes, which limits the liability of business entities, including community associations, from civil actions based upon COVID-19-related claims if, among other things, a good faith effort was made to substantially comply with controlling government-issued health guidelines.
Senate Bill 602 (Chapter 2021-13, Laws of Florida): Effective May 7, 2021, this legislation, among other things, clarifies the applicability of the Florida Not For Profit Corporation Act to community associations.
Participation by Proxy – An Option for Socially Distant HOAs, Condominiums and Cooperative Associations
In these precarious times, attending a meeting of your cooperative, condominium or homeowners’ association (HOA) may be the last thing on your “to do” list. However, your community is important to you, and on some issues, your vote needs to be heard. The most common method of participating at a meeting, without actually being there, is through a proxy.
“Proxy” is a fancy word for agent – someone who is authorized to act as a substitute for another. A proxy form is the document by which the agent (aka the “proxy holder”) is named and appointed. In the context of cooperative, condominium and homeowners’ association meetings, proxy forms come in two types: general and limited. A general proxy allows the proxy holder to vote however she sees fit on any matter that comes up at the meeting. A limited proxy lists the issues on which the proxy holder may vote and instructs her how to vote.
In Florida corporations not-for-profit, the use of proxies (whether limited or general) by members is generally authorized if not prohibited by the Bylaws or Articles of Incorporation. Section 617.0721(2), Florida Statutes. This rule holds true with homeowners’ associations. Section 720.306(8) states that members “have the right, unless otherwise provided…in the governing documents, to vote in person or by proxy.” In order to be valid, an HOA proxy form “must be dated, must state the date, time, and place of the meeting for which it was given, and must be signed by the authorized person who executed the proxy.” Id.
The use of proxies in condominiums and cooperatives is more limited. First, proxies may not, generally, be used to elect board members. Sections 718.112(2) and 719.106(1), Florida Statutes. This prohibition can be lifted by the affirmative vote of a majority of the total voting interest in a cooperative association, or in a condominium with ten or fewer units. Id. Second, general proxies may not be used except in limited circumstances, such as to establish a quorum. Id. Third, the proxy form must substantially conform to the form adopted by the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation (DBPR Form CO 6000-7). Id.
If you are interested in utilizing proxies for an upcoming meeting, bear in mind that a proxy form is not generally valid for a period longer than 90 days after the date of the first meeting for which it was given. Sections 718.112(2), 719.106(1) and 720.303(6), Florida Statutes. Also, you will need to check the Bylaws and Articles of Incorporation to ensure that any additional requirements are met, such as delivering a copy of the proxy form to the association’s Secretary in order to allow him to keep track of how many members will be attending by proxy. Finally, while association members may use proxies as outlined above, directors may not use them to vote at board meetings. Sections 718.111(1), 719.104(8) and 720.303(2).
These are indeed strange times for community associations. While large in-person meetings may be avoided for the time being, that does not mean that members lack the ability to participate or ensure their voice, and their vote, is heard.
It is a difficult time. Concerns about the coronavirus and COVID-19 are especially acute in the context of HOAs, condominiums and cooperative associations. For members, officers and directors contemplating upcoming meetings and events, guidance is needed. The statutes governing community associations generally require public meetings, open to all and noticed in advance, and broadly proscribe the wholesale closing of common areas and common elements. Community leaders and members do not know if the statutory requirements remain fixed in light of the present public health situation. What are their options?
The Florida legislature has provided a mechanism by which condominiums, cooperative associations and homeowners’ association can adapt their operations to present circumstances. These statutes (§ 718.1265 for condominiums, § 719.128 for cooperatives, § 720.316 for homeowners’ associations) all provide for reasonable flexibility in response to damage caused by an event for which a state of emergency is declared. Florida’s Governor declared the existence of that state of emergency on March 9, 2020 (Executive Order No. 20-52). The “damage” referenced in the foregoing statutes is not expressly limited to property or building damage.
In light of this statutory authority, community associations and the leaders should keep the following points in mind as they consider upcoming operations and meetings:
- Consider postponing upcoming meetings and social gatherings;
- Cancel meetings and events involving more than 50 people;
- Adopt enhanced cleaning procedures for common areas and common elements;
- Host board and committee meetings virtually, invite members to join remotely (phone, Skype, etc.) and immediately post and circulate recordings and minutes;
- Practice social distancing; and
- Following the guidance of public health authorities such as the Florida Department of Health and the Center for Disease Control and Prevention.
Even small steps can make a big difference in our communities and neighborhoods.