SB 1702 — Building Safety

718.115, F.S.;

authorizing boards to adopt a special assessment or borrow money for certain reasons without unit owner approval;

conforming cross- references;

amending s.

718.1255, F.S.;

revising the definition of the term “dispute”;

specifying that certain disputes are not subject to certain nonbinding arbitration and must be submitted to presuit mediation;

amending s.

718.301, F.S.;

revising reporting requirements relating to the transfer of association control;

amending s.

revising thenondeveloper documentsdisclosure thatrequirements mustrelating be delivered to aresales prospective buyer or lessee of a residential unit;condominium units;

revising requirements for nondeveloper disclosures;

718.504, F.S.;

revising requirements for prospectuses and offering circulars;

amending s.

719.103, F.S.;

defining the term “alternative funding method”;

amending s.

revising the types of records that constitute the official records of a Pagecooperative 3association; of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 cooperative association;

requiring associations to maintain specified records for a certain timeframe;

specifying that renters of a unit have the right to inspect and copy certain reports;

revising rulemaking requirements for the division;

specifying that maintenance of the cooperative property and common areas is the responsibility of associations;

providing an exception;

requiring associations to perform specified required maintenance under certain circumstances;

specifying that necessary maintenance, repair, or replacement of cooperative property does not require unit owner approval;

specifying that associations are not liable for certain expenses if a unit must be vacated or if access to a common area is denied for specified reasons;

719.106, F.S.;

revising certification and education requirements for directors of association boards;

revising requirements for association budgets;

revising applicability;

revising requirements for the use of reserve funds for a purpose other than authorized reverse expenditures;

requiring certain associations to periodically have a study conducted relating to required reserves after a specified date;

requiring boards to annually review the results of such study to determine if reserves are sufficient;

requiring the division to adopt rules;

providing requirements for the reserve study;

requiring that budgets include specified disclosures relating to reserve funds under certain circumstances on or after Page 4 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 a specified date;

restating requirements for associations relating to milestone inspections;

amending s.

719.107, F.S.;

authorizing boards to adopt a special assessment or borrow money for certain reasons without unit owner approval;

amending s.

719.301, F.S.;

requiring developers to deliver a turnover inspection report relating to cooperative property under certain circumstances;

requiring developers to deliver a copy of certain reserve studies and statements when relinquishing control of an association;

amending s.

revisingentitling theprospective documentspurchasers thatof mustan beinterest deliveredin to a prospectivecooperative buyerto ora lesseecopy of amilestone residentialinspection unit;reports;

revising nondeveloper disclosure requirements;

amending s.

719.504, F.S.;

revising requirements for prospectuses and offering circulars;

amending ss.

558.002, 718.116, 718.121, 718.706, and 720.3085, F.S.;

conforming cross-references;

reenacting s.

719.1255, F.S., relating to alternative resolution of disputes, to incorporate the amendment made to s.

718.1255, F.S., in a reference thereto;

553.899 Mandatory structural inspections for multifamily residential buildings.— (1) The Legislature finds that maintaining the structural Pageintegrity 5of a building throughout its service life is of 89paramount CODING:importance in order to ensure that buildings are structurally sound so as to not pose a threat to the public health, safety, or welfare.

As such, the Legislature finds that the imposition of a statewide structural inspection program for aging multifamily residential buildings in this state is Page 2 of 13 CODING:

Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 integritynecessary of a building throughout its service life is of paramount importance in order to ensure that such buildings are structurallysafe soundfor socontinued asuse. to not pose a threat to the public health, safety, or welfare.

(2) As such,used in this section, the Legislatureterm finds“milestone thatinspection” themeans impositiona structural inspection of a statewidebuilding structuralby inspectiona programlicensed forarchitect agingor multifamilyengineer residentialauthorized buildingsto practice in this state isfor necessarythe purposes of attesting to ensurethe thatlife suchsafety buildingsand areadequacy safeof forthe continuedstructural use.components of the building and, to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of such building.

(2)The Aspurpose usedof insuch thisinspection section,is thenot termto “milestonedetermine inspection”if meansthe acondition structural inspection of a building, including an inspectionexisting ofbuilding load-bearingis wallsin andcompliance with the primaryFlorida structuralBuilding membersCode. and primary structural systems as those terms are defined in s.

627.706,(3) byThe aowner licensedof architecta ormultifamily engineerresidential authorizedbuilding tothat practiceis ingreater thisthan statethree forstories thein purposesheight ofmust attestinghave toa themilestone lifeinspection safetyperformed andby adequacyDecember 31 of the structuralyear componentsin ofwhich the building and,reaches to30 theyears extentof reasonablyage, possible,based determiningon the generaldate structural condition of the buildingcertificate as it affects the safety of suchoccupancy building,was includingissued, aand determinationevery of10 anyyears necessarythereafter. maintenance, repair, or replacement of any structural component of the building.

The purposeowner of sucha inspectionmultifamily isresidential notbuilding tothat determineis ifgreater thethan conditionthree ofstories anin existingheight buildingand is inlocated compliancewithin with3 themiles Floridaof Buildinga Codecoastline oras thedefined firesafetyin code.s.

(3)376.031 The owner of a multifamily residential building that is three stories or more in height must have a milestone inspection performed by December 31 of the year in which the building reaches 3020 years of age, based on the date the certificate of occupancy for the building was issued, and every 107 years thereafter.

TheIf ownera ofcondominium abuilding multifamilyor residentialcooperative building thatis Pagerequired 6to have a milestone inspection performed pursuant to this section, the board of 89administration CODING:of the condominium association or cooperative association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with the requirements of this section.

The Page 3 of 13 CODING:

Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 isbuilding threeowner storiesor board of administration of a condominium association or morecooperative inassociation heightresponsible andfor isthe locatedmilestone withininspection 3is milesresponsible offor aall coastlinecosts asassociated definedwith inthe s.inspection.

376.031This mustsubsection havedoes anot milestoneapply inspectionto performedtwo- byfamily Decemberdwellings 31or ofto thebuildings yearless inthan which3,500 thesquare buildingfeet. reaches 20 years of age, based on the date the certificate of occupancy for the building was issued, and every 7 years thereafter.

If a condominium building or cooperative building is required to have a milestone inspection performed pursuant to this section, the condominium association or cooperative association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with the requirements of this section.

The building owner or condominium association or cooperative association is responsible for all costs associated with the inspection.

This subsection does not apply to a two-family or three-family dwelling with three or fewer habitable stories above ground.

(a) For phase one of the milestone inspection, a licensed architect or engineer authorized to practice in this state shall perform a visual examination of all habitable and nonhabitable areas of a building,building including the major structural components of a building, and provide a qualitative assessment of the structural conditions of the building.

Surface imperfections such as cracks, distortion, sagging, excessive deflections, significant misalignment, signs of leakage, or peeling of finishes areconstitute not considered signs of structural distressdistress. unless the architect or engineer performing Page 7 of 89 CODING:

If the architect or engineer finds no signs of structural distress to any building components under visual examination, phase two of the inspection, as provided in paragraph (b), is not required.

An architect or engineer who completes the first phase of a milestone inspection shall prepare and submit an inspection report pursuant to subsection (6).

(b) Phase two of the milestone inspection must be performed if any structural distress is identified during phase one.

The inspector in charge of a phase two inspection must be a licensed engineer or licensed architect who has a minimum of 5 years of experience designing the primary structural components of Page 4 of 13 CODING:

Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 thebuildings inspectionand determinesa thatminimum suchof surface5 imperfectionsyears areof aexperience signinspecting structural components of structuralexisting distress.buildings of a similar size, scope, and type of construction.

If the architect or engineer finds no signs of structural distress to any building components under visual examination, phase two of the inspection, as provided in paragraph (b), is not required.

An architect or engineer who completes a phase one milestone inspection shall prepare and submit an inspection report pursuant to subsection (6).

(b) A phase two of the milestone inspection must be performed if any structural distress is identified during phase one.

The inspector in charge of a phase two inspection must be a licensed engineer or licensed architect who has a minimum of 5 years of experience designing the primary structural components of buildings and a minimum of 5 years of experience inspecting structural components of existing buildings of a similar size, scope, and type of construction.

The inspection may be as extensive or as limited as necessary to fully assess damaged areas of structuralthe distressbuilding in order to confirm that the building is structurally sound and safe for its intended use andor to recommend a program for fully assessing and repairing distressed and damaged portions of the building.

An inspector who completes athe second phase twoof a milestone inspection shall prepare and submit an inspection report pursuant to subsection (6).

(6) Upon completion of a phase one or phase two milestone inspection, the architect or engineer who performed the Pageinspection 8must submit a sealed copy of 89the CODING:inspection report to the building owner or, if the building is a condominium or cooperative, to the board of administration of the condominium or cooperative, and to the building official of the local government which has jurisdiction.

For a milestone inspection of a condominium or cooperative, the board of administration must distribute a copy of each inspection report to each condominium unit owner or cooperative unit owner, regardless of whether there are deficiencies reported, and, if the association is required by law to have a website, must publish the report on the association’s website.

(7) A local enforcement agency may prescribe timelines and penalties with respect to compliance with this section.

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 inspection(8) mustThe submitcommission ashall sealeddevelop copycomprehensive ofstructural theand inspectionlife reportsafety withstandards afor separatemaintaining summary of, at minimum, the material findings and recommendationsinspecting inall the inspection report to the building ownertypes or, if the building is a condominium or cooperative, to the condominium association or cooperative association, and tostructures thein buildingthis officialstate ofby theDecember local31, government2022. which has jurisdiction.

For a milestone inspection of a building that is a condominium or cooperative, the association must distribute a copy of the inspector-prepared summary of the inspection report to each condominium unit owner or cooperative unit owner, regardless of the findings or recommendations in the report, by United States mail or personal delivery;

must post a copy of the inspector-prepared summary in a conspicuous place on the condominium or cooperative property;

and must publish the full report and inspector-prepared summary on the association’s website, if the association is required to have a website.

(7) A local enforcement agency may prescribe timelines and penalties with respect to compliance with this section.

(8) The commission shall develop comprehensive structural and life safety standards for maintaining and inspecting buildings and structures in this state that are three stories or more in height by December 31, 2022.

PresentParagraph subsections(a) (1)of throughsubsection (30)(12) of section 718.103,718.111, Florida Statutes, are redesignated as subsections (2) through (31), respectively, and a new subsection (1) is addedamended to that section, to read:

718.103 Definitions.—As used in this chapter, the term:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 (1) “Alternative funding method” means a method for the funding of a reserve account by other than an assessment or special assessment which may reasonably be expected to fully satisfy the association’s reserve funding obligations, including, but not limited to, payments into the reserve account by a developer who is offering units or any other method approved by the division.

Section 3.

Paragraphs (a), (c), and (g) of subsection (12) and subsection (13) of section 718.111, Florida Statutes, are amended to read:

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A current roster of all unit owners and their mailing addresses, unit identifications, voting certifications, and, if Page 6 of 13 CODING:

Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 7.known, telephone numbers.

A current roster of all unit owners and their mailing addresses, unit identifications, voting certifications, and, if known, telephone numbers.

Accurate, itemized, and detailed records of all receipts Pageand 11expenditures. of 89 CODING:

b.

A current account and a monthly, bimonthly, or quarterly Page 7 of 13 CODING:

Florida Senate - 2022 CS for CSSB 1702 580-02611-22 20221702c1 statement of the account for SBeach 1702unit 595-03329-22designating 20221702c2the name of the unit owner, the due date and expenditures.amount of each assessment, the amount paid on the account, and the balance due.

b.

A current account and a monthly, bimonthly, or quarterly statement of the account for each unit designating the name of the unit owner, the due date and amount of each assessment, the amount paid on the account, and the balance due.

All audits, reviews, accounting statements, reserve studies and reserve funding plans, and financial reports of the association or condominium.

A copy of the inspection reports report as described in ss.s.

553.899 and 718.301(4)(p) and any other inspection report relating to a structural or life safety inspection of condominium property.

Such record must be maintained by the association for 15 years after receipt of the report s.

BidsA forcopy materials,of equipment,all ormilestone services.inspection reports required by s.

553.899.

Bids for materials, equipment, or services.

18.17.

Page718.121(4)(c). 12 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 718.121(4)(c).

18.

(c)1.Section 3.

TheParagraph official(c) records of thesubsection association(2) areof opensection toPage inspection8 by any association member or the authorized representative of such13 memberCODING: at all reasonable times.

The right to inspect the records includes the right to make or obtain copies, at the reasonable expense, if any, of the member or authorized representative of such member.

A renter of a unit has a right to inspect and copy only the declaration of condominium, and the association’s bylaws and rules, and the inspection reports described in ss.

553.899 and 718.301(4)(p).

The association may adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying but may not require a member to demonstrate any purpose or state any reason for the inspection.

The failure of an association to provide the records within 10 working days after receipt of a written request creates a rebuttable presumption that the association willfully failed to comply with this paragraph.

A unit owner who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply.

Minimum damages are $50 per calendar day for up to 10 days, beginning on the 11th working day after receipt of the written request.

The failure to permit inspection entitles any person prevailing in an enforcement action to recover reasonable attorney fees from the person in control of the records who, directly or indirectly, knowingly denied access to the records.

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22580-02611-22 20221702c220221702c1 2.718.503, Florida Statutes, is amended to read:

Any person who knowingly or intentionally defaces or destroys accounting records that are required by this chapter to be maintained during the period for which such records are required to be maintained, or who knowingly or intentionally fails to create or maintain accounting records that are required to be created or maintained, with the intent of causing harm to the association or one or more of its members, is personally subject to a civil penalty pursuant to s.

718.501(1)(d).

3.

The association shall maintain an adequate number of copies of the declaration, articles of incorporation, bylaws, and rules, and all amendments to each of the foregoing, as well as the question and answer sheet as described in s.

718.504 and year-end financial information required under this section, on the condominium property to ensure their availability to unit owners and prospective purchasers, and may charge its actual costs for preparing and furnishing these documents to those requesting the documents.

An association shall allow a member or his or her authorized representative to use a portable device, including a smartphone, tablet, portable scanner, or any other technology capable of scanning or taking photographs, to make an electronic copy of the official records in lieu of the association’s providing the member or his or her authorized representative with a copy of such records.

The association may not charge a member or his or her authorized representative for the use of a portable device.

Notwithstanding this paragraph, the following records are not accessible to unit owners:

a.

Any record protected by the lawyer-client privilege as described in s.

90.502 and any record protected by the work- product privilege, including a record prepared by an association Page 14 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 attorney or prepared at the attorney’s express direction, which reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association, and which was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings, or which was prepared in anticipation of such litigation or proceedings until the conclusion of the litigation or proceedings.

b.

Information obtained by an association in connection with the approval of the lease, sale, or other transfer of a unit.

c.

Personnel records of association or management company employees, including, but not limited to, disciplinary, payroll, health, and insurance records.

For purposes of this sub- subparagraph, the term “personnel records” does not include written employment agreements with an association employee or management company, or budgetary or financial records that indicate the compensation paid to an association employee.

d.

Medical records of unit owners.

e.

Social security numbers, driver license numbers, credit card numbers, e-mail addresses, telephone numbers, facsimile numbers, emergency contact information, addresses of a unit owner other than as provided to fulfill the association’s notice requirements, and other personal identifying information of any person, excluding the person’s name, unit designation, mailing address, property address, and any address, e-mail address, or facsimile number provided to the association to fulfill the association’s notice requirements.

Notwithstanding the restrictions in this sub-subparagraph, an association may print and distribute to unit owners a directory containing the name, Page 15 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 unit address, and all telephone numbers of each unit owner.

However, an owner may exclude his or her telephone numbers from the directory by so requesting in writing to the association.

An owner may consent in writing to the disclosure of other contact information described in this sub-subparagraph.

The association is not liable for the inadvertent disclosure of information that is protected under this sub-subparagraph if the information is included in an official record of the association and is voluntarily provided by an owner and not requested by the association.

f.

Electronic security measures that are used by the association to safeguard data, including passwords.

g.

The software and operating system used by the association which allow the manipulation of data, even if the owner owns a copy of the same software used by the association.

The data is part of the official records of the association.

h.

All affirmative acknowledgments made pursuant to s.

718.121(4)(c).

(g)1.

By January 1, 2019, an association managing a condominium with 150 or more units which does not contain timeshare units shall post digital copies of the documents specified in subparagraph 2.

on its website or make such documents available through an application that can be downloaded on a mobile device.

a.

The association’s website or application must be:

(I) An independent website, application, or web portal wholly owned and operated by the association;

or (II) A website, application, or web portal operated by a third-party provider with whom the association owns, leases, Page 16 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 rents, or otherwise obtains the right to operate a web page, subpage, web portal, collection of subpages or web portals, or an application which is dedicated to the association’s activities and on which required notices, records, and documents may be posted or made available by the association.

b.

The association’s website or application must be accessible through the Internet and must contain a subpage, web portal, or other protected electronic location that is inaccessible to the general public and accessible only to unit owners and employees of the association.

c.

Upon a unit owner’s written request, the association must provide the unit owner with a username and password and access to the protected sections of the association’s website or application which contain any notices, records, or documents that must be electronically provided.

2.

A current copy of the following documents must be posted in digital format on the association’s website or application:

a.

The recorded declaration of condominium of each condominium operated by the association and each amendment to each declaration.

b.

The recorded bylaws of the association and each amendment to the bylaws.

c.

The articles of incorporation of the association, or other documents creating the association, and each amendment to the articles of incorporation or other documents.

The copy posted pursuant to this sub-subparagraph must be a copy of the articles of incorporation filed with the Department of State.

d.

The rules of the association.

e.

A list of all executory contracts or documents to which Page 17 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 the association is a party or under which the association or the unit owners have an obligation or responsibility and, after bidding for the related materials, equipment, or services has closed, a list of bids received by the association within the past year.

Summaries of bids for materials, equipment, or services which exceed $500 must be maintained on the website or application for 1 year.

In lieu of summaries, complete copies of the bids may be posted.

f.

The annual budget required by s.

718.112(2)(f) and any proposed budget to be considered at the annual meeting.

g.

The financial report required by subsection (13) and any monthly income or expense statement to be considered at a meeting.

h.

The certification of each director required by s.

718.112(2)(d)4.b.

i.

All contracts or transactions between the association and any director, officer, corporation, firm, or association that is not an affiliated condominium association or any other entity in which an association director is also a director or officer and financially interested.

j.

Any contract or document regarding a conflict of interest or possible conflict of interest as provided in ss.

468.436(2)(b)6.

and 718.3027(3).

k.

The notice of any unit owner meeting and the agenda for the meeting, as required by s.

718.112(2)(d)3., no later than 14 days before the meeting.

The notice must be posted in plain view on the front page of the website or application, or on a separate subpage of the website or application labeled “Notices” which is conspicuously visible and linked from the front page.

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 The association must also post on its website or application any document to be considered and voted on by the owners during the meeting or any document listed on the agenda at least 7 days before the meeting at which the document or the information within the document will be considered.

l.

Notice of any board meeting, the agenda, and any other document required for the meeting as required by s.

718.112(2)(c), which must be posted no later than the date required for notice under s.

718.112(2)(c).

m.

The inspection reports described in ss.

553.899 and 718.301(4)(p) and any other inspection report relating to a structural or life safety inspection of condominium property.

n.

The reserve study required under s.

718.112(2).

3.

The association shall ensure that the information and records described in paragraph (c), which are not allowed to be accessible to unit owners, are not posted on the association’s website or application.

If protected information or information restricted from being accessible to unit owners is included in documents that are required to be posted on the association’s website or application, the association shall ensure the information is redacted before posting the documents.

Notwithstanding the foregoing, the association or its agent is not liable for disclosing information that is protected or restricted under this paragraph unless such disclosure was made with a knowing or intentional disregard of the protected or restricted nature of such information.

4.

The failure of the association to post information required under subparagraph 2.

is not in and of itself sufficient to invalidate any action or decision of the Page 19 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 association’s board or its committees.

(13) FINANCIAL REPORTING.—Within 90 days after the end of the fiscal year, or annually on a date provided in the bylaws, the association shall prepare and complete, or contract for the preparation and completion of, a financial report for the preceding fiscal year.

Within 21 days after the final financial report is completed by the association or received from the third party, but not later than 120 days after the end of the fiscal year or other date as provided in the bylaws, the association shall mail to each unit owner at the address last furnished to the association by the unit owner, or hand deliver to each unit owner, a copy of the most recent financial report or a notice that a copy of the most recent financial report will be mailed or hand delivered to the unit owner, without charge, within 5 business days after receipt of a written request from the unit owner.

The division shall adopt rules setting forth uniform accounting principles and standards to be used by all associations and addressing the financial reporting requirements for multicondominium associations.

The rules must include, but not be limited to, standards for presenting a summary of association reserves, including a good faith estimate disclosing the annual amount of reserve funds that would be necessary for the association to fully fund reserves for each reserve item based on the straight-line accounting method or to fully fund reserves based on the pooling method.

This disclosure is not applicable to reserves funded via the pooling method.

In adopting such rules, the division shall consider the number of members and annual revenues of an association.

Financial reports shall be prepared as follows:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 (a) An association that meets the criteria of this paragraph shall prepare a complete set of financial statements in accordance with generally accepted accounting principles.

The financial statements must be based upon the association’s total annual revenues, as follows:

1.

An association with total annual revenues of $150,000 or more, but less than $300,000, shall prepare compiled financial statements.

2.

An association with total annual revenues of at least $300,000, but less than $500,000, shall prepare reviewed financial statements.

3.

An association with total annual revenues of $500,000 or more shall prepare audited financial statements.

(b)1.

An association with total annual revenues of less than $150,000 shall prepare a report of cash receipts and expenditures.

2.

A report of cash receipts and disbursements must disclose the amount of receipts by accounts and receipt classifications and the amount of expenses by accounts and expense classifications, including, but not limited to, the following, as applicable:

costs for security, professional and management fees and expenses, taxes, costs for recreation facilities, expenses for refuse collection and utility services, expenses for lawn care, costs for building maintenance and repair, insurance costs, administration and salary expenses, and reserves accumulated and expended for capital expenditures, deferred maintenance, and any other category for which the association maintains reserves.

(c) An association may prepare, without a meeting of or Page 21 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 approval by the unit owners:

1.

Compiled, reviewed, or audited financial statements, if the association is required to prepare a report of cash receipts and expenditures;

2.

Reviewed or audited financial statements, if the association is required to prepare compiled financial statements;

or 3.

Audited financial statements if the association is required to prepare reviewed financial statements.

(d) If approved by a majority of the voting interests present at a properly called meeting of the association, an association may prepare:

1.

A report of cash receipts and expenditures in lieu of a compiled, reviewed, or audited financial statement;

2.

A report of cash receipts and expenditures or a compiled financial statement in lieu of a reviewed or audited financial statement;

or 3.

A report of cash receipts and expenditures, a compiled financial statement, or a reviewed financial statement in lieu of an audited financial statement.

Such meeting and approval must occur before the end of the fiscal year and is effective only for the fiscal year in which the vote is taken, except that the approval may also be effective for the following fiscal year.

If the developer has not turned over control of the association, all unit owners, including the developer, may vote on issues related to the preparation of the association’s financial reports, from the date of incorporation of the association through the end of the Page 22 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 second fiscal year after the fiscal year in which the certificate of a surveyor and mapper is recorded pursuant to s.

718.104(4)(e) or an instrument that transfers title to a unit in the condominium which is not accompanied by a recorded assignment of developer rights in favor of the grantee of such unit is recorded, whichever occurs first.

Thereafter, all unit owners except the developer may vote on such issues until control is turned over to the association by the developer.

Any audit or review prepared under this section shall be paid for by the developer if done before turnover of control of the association.

(e) A unit owner may provide written notice to the division of the association’s failure to mail or hand deliver him or her a copy of the most recent financial report within 5 business days after he or she submitted a written request to the association for a copy of such report.

If the division determines that the association failed to mail or hand deliver a copy of the most recent financial report to the unit owner, the division shall provide written notice to the association that the association must mail or hand deliver a copy of the most recent financial report to the unit owner and the division within 5 business days after it receives such notice from the division.

An association that fails to comply with the division’s request may not waive the financial reporting requirement provided in paragraph (d) for the fiscal year in which the unit owner’s request was made and the following fiscal year.

A financial report received by the division pursuant to this paragraph shall be maintained, and the division shall provide a copy of such report to an association member upon his Page 23 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 or her request.

Section 4.

Paragraphs (d) and (f) of subsection (2) of section 718.112, Florida Statutes, are amended, and paragraph (p) is added to that subsection, to read:

718.112 Bylaws.— (2) REQUIRED PROVISIONS.—The bylaws shall provide for the following and, if they do not do so, shall be deemed to include the following:

(d) Unit owner meetings.— 1.

An annual meeting of the unit owners must be held at the location provided in the association bylaws and, if the bylaws are silent as to the location, the meeting must be held within 45 miles of the condominium property.

However, such distance requirement does not apply to an association governing a timeshare condominium.

2.

Unless the bylaws provide otherwise, a vacancy on the board caused by the expiration of a director’s term must be filled by electing a new board member, and the election must be by secret ballot.

An election is not required if the number of vacancies equals or exceeds the number of candidates.

For purposes of this paragraph, the term “candidate” means an eligible person who has timely submitted the written notice, as described in sub-subparagraph 4.a., of his or her intention to become a candidate.

Except in a timeshare or nonresidential condominium, or if the staggered term of a board member does not expire until a later annual meeting, or if all members’ terms would otherwise expire but there are no candidates, the terms of all board members expire at the annual meeting, and such members may stand for reelection unless prohibited by the bylaws.

Board Page 24 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 members may serve terms longer than 1 year if permitted by the bylaws or articles of incorporation.

A board member may not serve more than 8 consecutive years unless approved by an affirmative vote of unit owners representing two-thirds of all votes cast in the election or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.

Only board service that occurs on or after July 1, 2018, may be used when calculating a board member’s term limit.

If the number of board members whose terms expire at the annual meeting equals or exceeds the number of candidates, the candidates become members of the board effective upon the adjournment of the annual meeting.

Unless the bylaws provide otherwise, any remaining vacancies shall be filled by the affirmative vote of the majority of the directors making up the newly constituted board even if the directors constitute less than a quorum or there is only one director.

In a residential condominium association of more than 10 units or in a residential condominium association that does not include timeshare units or timeshare interests, co-owners of a unit may not serve as members of the board of directors at the same time unless they own more than one unit or unless there are not enough eligible candidates to fill the vacancies on the board at the time of the vacancy.

A unit owner in a residential condominium desiring to be a candidate for board membership must comply with sub-subparagraph 4.a.

and must be eligible to be a candidate to serve on the board of directors at the time of the deadline for submitting a notice of intent to run in order to have his or her name listed as a proper candidate on the ballot or to serve on the board.

A person who has been suspended or Page 25 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 removed by the division under this chapter, or who is delinquent in the payment of any assessment due to the association, is not eligible to be a candidate for board membership and may not be listed on the ballot.

For purposes of this paragraph, a person is delinquent if a payment is not made by the due date as specifically identified in the declaration of condominium, bylaws, or articles of incorporation.

If a due date is not specifically identified in the declaration of condominium, bylaws, or articles of incorporation, the due date is the first day of the assessment period.

A person who has been convicted of any felony in this state or in a United States District or Territorial Court, or who has been convicted of any offense in another jurisdiction which would be considered a felony if committed in this state, is not eligible for board membership unless such felon’s civil rights have been restored for at least 5 years as of the date such person seeks election to the board.

The validity of an action by the board is not affected if it is later determined that a board member is ineligible for board membership due to having been convicted of a felony.

This subparagraph does not limit the term of a member of the board of a nonresidential or timeshare condominium.

3.

The bylaws must provide the method of calling meetings of unit owners, including annual meetings.

Written notice of an annual meeting must include an agenda;

be mailed, hand delivered, or electronically transmitted to each unit owner at least 14 days before the annual meeting;

and be posted in a conspicuous place on the condominium property or association property at least 14 continuous days before the annual meeting.

Written notice of a meeting other than an annual meeting must Page 26 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 include an agenda;

be mailed, hand delivered, or electronically transmitted to each unit owner;

and be posted in a conspicuous place on the condominium property or association property within the timeframe specified in the bylaws.

If the bylaws do not specify a timeframe for written notice of a meeting other than an annual meeting, notice must be provided at least 14 continuous days before the meeting.

Upon notice to the unit owners, the board shall, by duly adopted rule, designate a specific location on the condominium property or association property where all notices of unit owner meetings must be posted.

This requirement does not apply if there is no condominium property for posting notices.

In lieu of, or in addition to, the physical posting of meeting notices, the association may, by reasonable rule, adopt a procedure for conspicuously posting and repeatedly broadcasting the notice and the agenda on a closed-circuit cable television system serving the condominium association.

However, if broadcast notice is used in lieu of a notice posted physically on the condominium property, the notice and agenda must be broadcast at least four times every broadcast hour of each day that a posted notice is otherwise required under this section.

If broadcast notice is provided, the notice and agenda must be broadcast in a manner and for a sufficient continuous length of time so as to allow an average reader to observe the notice and read and comprehend the entire content of the notice and the agenda.

In addition to any of the authorized means of providing notice of a meeting of the board, the association may, by rule, adopt a procedure for conspicuously posting the meeting notice and the agenda on a website serving the condominium association for at least the Page 27 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 minimum period of time for which a notice of a meeting is also required to be physically posted on the condominium property.

Any rule adopted shall, in addition to other matters, include a requirement that the association send an electronic notice in the same manner as a notice for a meeting of the members, which must include a hyperlink to the website where the notice is posted, to unit owners whose e-mail addresses are included in the association’s official records.

Unless a unit owner waives in writing the right to receive notice of the annual meeting, such notice must be hand delivered, mailed, or electronically transmitted to each unit owner.

Notice for meetings and notice for all other purposes must be mailed to each unit owner at the address last furnished to the association by the unit owner, or hand delivered to each unit owner.

However, if a unit is owned by more than one person, the association must provide notice to the address that the developer identifies for that purpose and thereafter as one or more of the owners of the unit advise the association in writing, or if no address is given or the owners of the unit do not agree, to the address provided on the deed of record.

An officer of the association, or the manager or other person providing notice of the association meeting, must provide an affidavit or United States Postal Service certificate of mailing, to be included in the official records of the association affirming that the notice was mailed or hand delivered in accordance with this provision.

4.

The members of the board of a residential condominium shall be elected by written ballot or voting machine.

Proxies may not be used in electing the board in general elections or elections to fill vacancies caused by recall, resignation, or Page 28 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 otherwise, unless otherwise provided in this chapter.

This subparagraph does not apply to an association governing a timeshare condominium.

a.

At least 60 days before a scheduled election, the association shall mail, deliver, or electronically transmit, by separate association mailing or included in another association mailing, delivery, or transmission, including regularly published newsletters, to each unit owner entitled to a vote, a first notice of the date of the election.

A unit owner or other eligible person desiring to be a candidate for the board must give written notice of his or her intent to be a candidate to the association at least 40 days before a scheduled election.

Together with the written notice and agenda as set forth in subparagraph 3., the association shall mail, deliver, or electronically transmit a second notice of the election to all unit owners entitled to vote, together with a ballot that lists all candidates not less than 14 days or more than 34 days before the date of the election.

Upon request of a candidate, an information sheet, no larger than 8 1/2 inches by 11 inches, which must be furnished by the candidate at least 35 days before the election, must be included with the mailing, delivery, or transmission of the ballot, with the costs of mailing, delivery, or electronic transmission and copying to be borne by the association.

The association is not liable for the contents of the information sheets prepared by the candidates.

In order to reduce costs, the association may print or duplicate the information sheets on both sides of the paper.

The division shall by rule establish voting procedures consistent with this sub-subparagraph, including rules establishing procedures for Page 29 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 giving notice by electronic transmission and rules providing for the secrecy of ballots.

Elections shall be decided by a plurality of ballots cast.

There is no quorum requirement;

however, at least 20 percent of the eligible voters must cast a ballot in order to have a valid election.

A unit owner may not authorize any other person to vote his or her ballot, and any ballots improperly cast are invalid.

A unit owner who violates this provision may be fined by the association in accordance with s.

718.303.

A unit owner who needs assistance in casting the ballot for the reasons stated in s.

101.051 may obtain such assistance.

The regular election must occur on the date of the annual meeting.

Notwithstanding this sub-subparagraph, an election is not required unless more candidates file notices of intent to run or are nominated than board vacancies exist.

b.

Within 90 days after being elected or appointed to the board of an association of a residential condominium, each newly elected or appointed director shall do both of the following:

(I) Certify by affidavit in writing to the secretary of the association that he or she has read the association’s declaration of condominium, articles of incorporation, bylaws, and current written policies;

that he or she will work to uphold such documents and policies to the best of his or her ability;

and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members.

In lieu of this written certification, within 90 days after being elected or appointed to the board, the newly elected or appointed director may (II) Submit a certificate of having satisfactorily completed the educational curriculum administered by a division- Page 30 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 approved condominium education provider within 1 year before or 90 days after the date of election or appointment.

The affidavit and written certification or educational certificate is valid and does not have to be resubmitted as long as the director serves on the board without interruption.

A director of an association of a residential condominium who fails to timely file the affidavit and written certification or educational certificate is suspended from service on the board until he or she complies with this sub-subparagraph.

The board may temporarily fill the vacancy during the period of suspension.

The secretary shall require cause the association to retain a director’s affidavit and written certification or educational certificate for inspection by the members for 5 years after a director’s election or the duration of the director’s uninterrupted tenure, whichever is longer.

Failure to have such affidavit and written certification or educational certificate on file does not affect the validity of any board action.

c.

Any challenge to the election process must be commenced within 60 days after the election results are announced.

5.

Any approval by unit owners called for by this chapter or the applicable declaration or bylaws, including, but not limited to, the approval requirement in s.

718.111(8), must be made at a duly noticed meeting of unit owners and is subject to all requirements of this chapter or the applicable condominium documents relating to unit owner decisionmaking, except that unit owners may take action by written agreement, without meetings, on matters for which action by written agreement Page 31 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 without meetings is expressly allowed by the applicable bylaws or declaration or any law that provides for such action.

6.

Unit owners may waive notice of specific meetings if allowed by the applicable bylaws or declaration or any law.

Notice of meetings of the board of administration, unit owner meetings, except unit owner meetings called to recall board members under paragraph (j), and committee meetings may be given by electronic transmission to unit owners who consent to receive notice by electronic transmission.

A unit owner who consents to receiving notices by electronic transmission is solely responsible for removing or bypassing filters that block receipt of mass e-mails sent to members on behalf of the association in the course of giving electronic notices.

7.

Unit owners have the right to participate in meetings of unit owners with reference to all designated agenda items.

However, the association may adopt reasonable rules governing the frequency, duration, and manner of unit owner participation.

8.

A unit owner may tape record or videotape a meeting of the unit owners subject to reasonable rules adopted by the division.

9.

Unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by the affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director.

In the alternative, a board may hold an election to fill the vacancy, in which case the election procedures must conform to sub-subparagraph 4.a.

unless the association governs 10 units or fewer and has opted out of the statutory election process, in which case the bylaws Page 32 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 of the association control.

Unless otherwise provided in the bylaws, a board member appointed or elected under this section shall fill the vacancy for the unexpired term of the seat being filled.

Filling vacancies created by recall is governed by paragraph (j) and rules adopted by the division.

10.

This chapter does not limit the use of general or limited proxies, require the use of general or limited proxies, or require the use of a written ballot or voting machine for any agenda item or election at any meeting of a timeshare condominium association or nonresidential condominium association.

Notwithstanding subparagraph (b)2.

and sub-subparagraph 4.a., an association of 10 or fewer units may, by affirmative vote of a majority of the total voting interests, provide for different voting and election procedures in its bylaws, which may be by a proxy specifically delineating the different voting and election procedures.

The different voting and election procedures may provide for elections to be conducted by limited or general proxy.

(f) Annual budget.— 1.

The proposed annual budget of estimated revenues and expenses must be detailed and must show the amounts budgeted by accounts and expense classifications, including, at a minimum, any applicable expenses listed in s.

718.504(21).

The board shall adopt the annual budget at least 14 days prior to the start of the association’s fiscal year.

In the event that the board fails to timely adopt the annual budget a second time, it shall be deemed a minor violation and the prior year’s budget Page 33 of 89 CODING:

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Florida Senate - 2022 CS for CS for SB 1702 595-03329-22 20221702c2 shall continue in effect until a new budget is adopted.

A multicondominium association shall adopt a separate budget of common expenses for each condominium the association operates and shall adopt a separate budget of common expenses for the association.

In addition, if the association maintains limited common elements with the cost to be shared only by those entitled to use the limited common elements as provided for in s.

718.113(1), the budget or a schedule attached to it must show the amount budgeted for this maintenance.

If, after turnover of control of the association to the unit owners, any of the expenses listed in s.

718.504(21) are not applicable, they need not be listed.

2.a.

In addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance.

These accounts must include, but are not limited to, the maintenance and replacement of the condominium property identified in s.

718.301(4)(p) roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000.

The amount to be reserved must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item.