BLG Newsletter: Proposed Legislation

by Candice J. Gundel, Esq.

On January 12, 2016 the Florida Legislative Session for 2016 opened.  This year the session began much earlier and we already have several bills filed that propose significant changes to Florida condominium, homeowner, and co-operative associations. 

One of the topics is a return from 2015 and continues to deal with estoppels.  In my March 2015 newsletter we aggressively advocated against the estoppel proposals and continue to do so this year.  The current version of SB 0722 and HB 0203 work a disservice on associations and their management companies in limiting the preparation, collectability, and financial recovery for estoppels. 

Some of the bills seek to further protect associations and enhance the operation of associations throughout Florida.  SB 1532 and HB 0667 include comprehensive changes for condominium, homeowner, and cooperative associations which are too numerous to list here.  I will spend the next several months discussing particular sections of these companion bills and as they move their way through the Legislature I will keep you apprised of their progress and amendments.   I strongly encourage you to contact your Legislator and the Committee members considering these bills to express your support. 

Currently Florida Statutes governs condominium associations under Chapter 718, cooperative associations under Chapter 719 and homeowners associations under Chapter 720.  There has been a move in recent years to unify the terms of these three Chapters.  SB 1532 and HB 0667 propose to delete Chapters 719 and 720 of Florida Statutes and incorporate all community associations under Chapter 718.  This will provide uniformity and clarity for community associations throughout Florida.  This is an important point as all of the proposed amendments under SB 1532 and HB 0667 will reference only Chapter 718, but if passed, will apply to ALL community associations.

Community associations live and die by their ability to collect assessments from each of the owners within the community.  Since the Great Recession associations throughout Florida and the nation have struggled with delinquent owners and recovery from foreclosing banks.  Recovery from banks was particularly challenging because of the Florida Statutes limiting the bank’s liability for assessments to “safe harbor” (i.e. 12 months of assessments or 1% of the mortgage).  SB 1532 and HB 0667 propose to ELIMINATE “safe harbor” completely. 

The proposed amended provisions of Florida Statute would make every owner jointly and severally liable with the prior owners for the past due assessments.  There would no longer be an exception for banks and when a bank acquires title to a property in a community association it would be required to pay the entire past due assessment balance.  To say the financial benefit to associations is significant is a gross understatement.  After years of trial and appellate court fights against the banks, as well as efforts to lobby the Legislature, this is the most significant proposal to benefit community associations since 1992 and I strongly encourage you to contact your Legislator to support SB 1532 and HB 0667.