2024 Statutory Update – HOAs
Florida’s legislature has passed, and Governor DeSantis has signed, three new laws affecting Florida homeowners’ association. Another bill has been approved by the Florida Legislature and is expected to be transmitted to Governor DeSantis, and signed, in the coming days. What follows is a summary of each new law.
CHAPTER 2024-221 (House Bill 1203): Effective Date – July 1, 2024
- Creates disclosure requirements for licensed community association managers.
- Creates educational requirements for directors who are now required to complete a certification course within 90 days of being elected/appointed (rather than signing a certificate) and must also complete, annually, 4 hours of continuing education.
- Clarifies that officers and directors are subject to the standards listed in § 617.0830 of the Florida Not For Profit Corporation Act.
- Mandates that by January 1, 2025, HOAs with more than 100 parcels must maintain a website on which it has posted certain official records.
- Requires that HOAs adopt a specific written rules for the retention of official records.
- Provides that a willful refusal to allow homeowners to inspect official records may, depending on intent, be a felony.
- Requires that HOAs with at least 1,000 parcels have annual audited financial statements regardless of their total annual revenue.
- Prohibits officers and directors from using debit cards issued in the name of the association
- Empowers homeowners to demand accountings of any amounts owed to the association within 15 business days. The failure to timely provide the accounting may be a waiver of certain debts.
- Prohibits officers, directors and CAMs from accepting “kickbacks”, which are statutorily defined.
- Limits architectural control over interior improvements and HVAC-related improvements.
- Restricts fining authority and lengthens the period for which fines must be paid from 5 days to 30 days after the hearing committee has upheld the fine.
- Limits what associations can require from vendors/contractors hired by homeowners (e.g., proof of insurance and the requisite licenses).
- Requires that HOAs allow vehicles to be parked in driveways if they are also the “personal vehicle” of the homeowner, a tenant or a guest (even if they have commercial lettering).
CHAPTER 2024-202 (House Bill 59): Effective Date – July 1, 2024
- Requires all HOAs to provide a physical or digital copy of their rules and covenants to every homeowner by October 1, 2024 and, thereafter, to every new member of the association.
- Requires all HOAs to provide a physical or digital copy of each rule or covenant amendment to every owner after each amendment.
- These requirements can be met by posting the rules and covenants on the association’s website and sending owners a notice with the website address by electronic mail and first-class mail.
CHAPTER 2024-205 (House Bill 293): Effective Date – May 28, 2024
- Defines “hurricane protection” defined to include roof systems, roll-down track shutters, impact-resistant windows and doors, reinforced garage doors, erosion controls, exterior generators, fuel storage tanks and polycarbonate panels.
- Requires HOAs to adopt written hurricane protection specifications for each structure or other improvements governed by the association.
- Prohibits all associations from denying an architectural application to install, enhance or replace “hurricane protection” provided that the same conforms to the association’s previously-adopted specifications.
House Bill 1021: Effective Date – July 1, 2024 (Passed by the Florida Senate and House of Representatives; Awaiting transmittal to Governor DeSantis)
- Requires management company/CAMs to return official records within 20 business days after special written notice or termination of their contract.
- Requires management companies/CAMs to disclose to their community association any activity that may reasonably be construed to be a conflict-of-interest transaction (e.g. if the CAM or its owners has a financial interest in a vendor bidding to provide other services to the community association)
- Requires community associations to solicit additional third-party bids for proposed transaction exceeding $2,500 and for which its management company has submitted a bid.
- Requires special notice and express board approval of all transactions in which a community association manager has conflict-of-interest.
- Allows community associations to cancel management contracts if the CAM/management company has engaged in an undisclosed conflict of interest transaction.
Chilton to Host Lakeland HOA Seminar
On January 24, 2020, Robert Chilton will host a free HOA seminar at the Lakeland Public Library on Lake Morton. The event, which begins at 3:00 p.m., will focus on legal issues facing Florida homeowners’ associations and include topics such as meeting procedures, estoppel requests, covenant enforcement and statutory updates. Mr. Chilton has been certified to provide HOA board member education courses by Florida’s Department of Business and Professional Regulation.
All are welcome. However, as space is limited, please contact the firm by January 20, 2020 to reserve your place.
HOAs! Beware The Marketable Record Title Act (MRTA)
For unwary homeowners’ associations, a danger is lurking beneath the water’s surface. If one is not careful, it will strike, swallowing whole a community’s restrictive covenants.
I speak, of course, of MRTA, which was enacted to simply real estate transactions. Before MRTA, a Florida parcel’s title history would theoretically need to be researched back to the initial Spanish land grants. MRTA streamlines that process, providing that certain interests in land are extinguished after 30 years, with limited exceptions, unless those interests are preserved in the manner provided by law. In essence, MRTA eliminates stale claims against property. These can include an HOA’s recorded Declaration of Covenants, Conditions and Restrictions (“CCRs”).
The yardstick for MRTA is the “root of title”. The term “root of title” means “any title transaction purporting to create or transfer the estate claimed by any person which is the last title transaction to have been recorded at least 30 years before the time when marketability is being determined.” § 712.01(6), Fla. Stat. Under MRTA, “when a record owner, alone or with its predecessors in title, has been vested with an estate in land of record for 30 years or more, such owner has marketable title free and clear of all claims [and restrictions] except matters preserved by section 712.03.” Martin v. Town of Palm Beach, 643 So. 2d 112, 114 (Fla 4th DCA 1994).
If MRTA has not already extinguished a community’s CCRs, the HOA has several options to preserve them, including:
- Formal Notice – By recording a formal notice preserving the CCRs, following written notice to each affected owner, pursuant to §§ 712.05(2)(a) and 712.06.
- Summary Notice – By recording a summary notice of preservation approved by the board of directors pursuant to §§ 712.05(2)(b) and 720.3032(2); or
- Valid Amendment – By recording an amendment to the CCRs that is indexed under the association’s legal name and that references the recording information of the CCRs to be preserved pursuant to § 712.05(2)(b).
If MRTA has extinguished the CCRs in a neighborhood, covenant revitalization is possible. §§ 720.403-720.407.
Officers and directors must be wary. They may not turn a blind eye to MRTA. The Homeowners’ Association Act now requires that each year, at its first board meeting (excluding an organizational meeting to select officers) following the homeowners’ annual meeting, the board of directors “shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act[.]” § 720.303(2)(e). Failure to do so could, in certain circumstances, be construed as a breach of the duties each association, director and officer owes homeowners.
In short, beware of MRTA. Ask your attorney to conduct a MRTA analysis. If steps have not been taken to preserve your community’s CCRs, action may be needed.