Bill Text: FL S1238 | 2018 | Regular Session | Introduced
Bill Title: Homeowners' Associations
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2018-03-10 - Died in Regulated Industries [S1238 Detail]
Download: Florida-2018-S1238-Introduced.html
Florida Senate - 2018 SB 1238 By Senator Garcia 36-00343A-18 20181238__ 1 A bill to be entitled 2 An act relating to homeowners’ associations; amending 3 s. 720.303, F.S.; prohibiting an association from 4 hiring an attorney who represents the management 5 company of the association; requiring the association 6 to maintain bids for materials, equipment, or services 7 as part of the official records; providing that a 8 renter of property in a community operated by an 9 association has a right to inspect and copy the 10 association’s bylaws and rules; providing requirements 11 relating to the posting of specified documents on an 12 association’s website; requiring an association to 13 provide members with a copy of the most recent annual 14 financial report or a written notice detailing how to 15 obtain such report; prohibiting an association and its 16 officers, directors, employees, and agents from using 17 a debit card issued in the name of the association, or 18 billed directly to the association, for the payment of 19 any association expense; providing that the use of 20 such debit card for any expense that is not a lawful 21 obligation of the association may be prosecuted as 22 credit card fraud; deleting a provision requiring the 23 board to certify written ballots or agreements to 24 recall a director or directors; requiring certain 25 directors to turn over all records and property of the 26 association in his or her possession within a certain 27 timeframe; requiring a director to turn all records 28 and property of the association over to the board 29 within 10 business days if a recall is deemed 30 effective due to the failure to duly notice and hold a 31 board meeting within a specified timeframe; conforming 32 provisions to changes made by the act; amending s. 33 720.3033, F.S.; prohibiting an officer, director, or 34 manager from soliciting, offering to accept, or 35 accepting a kickback for which consideration has not 36 been provided; providing criminal penalties; requiring 37 that an officer or director charged with certain 38 crimes be removed from office; providing requirements 39 for filling the vacancy left by such removal; 40 prohibiting such officer or director from being 41 appointed or elected to a position with any 42 association or having access to official association 43 records while a criminal charge is pending; providing 44 an exception; requiring an officer or director to be 45 reinstated for the remainder of his or her term if the 46 charges are resolved without a finding of guilt; 47 amending s. 720.305, F.S.; providing requirements 48 relating to the suspension of voting rights of unit 49 owners and members; amending s. 720.306, F.S.; 50 providing board member term limits; conforming a 51 cross-reference; amending s. 720.3085, F.S.; 52 prohibiting specified parties from purchasing a unit 53 at a foreclosure sale resulting from an association’s 54 foreclosure of association lien for unpaid assessments 55 or from taking a title by deed in lieu of foreclosure; 56 amending s. 720.309, F.S.; prohibiting an association 57 from employing or contracting with service providers 58 owned or operated by specified persons; prohibiting 59 certain parties from purchasing a parcel at a 60 foreclosure sale resulting from the association’s 61 foreclosure of association lien for unpaid assessments 62 or from taking a deed in lieu of a foreclosure; 63 authorizing a contract with a specific party to be 64 canceled by a majority vote of the parcel owners under 65 certain circumstances; creating s. 720.3095, F.S.; 66 providing requirements and procedures relating to 67 conflicts of interest; defining the term “relative”; 68 amending s. 720.311, F.S.; conforming a cross 69 reference; providing an effective date. 70 71 Be It Enacted by the Legislature of the State of Florida: 72 73 Section 1. Present subsections (9) through (12) of section 74 720.303, Florida Statutes, are redesignated as subsections (10) 75 through (13), respectively, a new subsection (9) is added to 76 that section, and subsections (1), (4), (5), and (7) and 77 paragraphs (b), (c), and (d), and present paragraphs (f), (i), 78 and (l) of present subsection (10), are amended, to read: 79 720.303 Association powers and duties; meetings of board; 80 official records; budgets; financial reporting; association 81 funds; recalls.— 82 (1) POWERS AND DUTIES.—An association thatwhichoperates a 83 community as defined in s. 720.301,must beoperated by an84association that isa Florida corporation. After October 1, 85 1995, the association must be incorporated and the initial 86 governing documents must be recorded in the official records of 87 the county in which the community is located. An association may 88 operate more than one community. The officers and directors of 89 an association have a fiduciary relationship to the members who 90 are served by the association. The powers and duties of an 91 association include those set forth in this chapter and, except 92 as expressly limited or restricted in this chapter, those set 93 forth in the governing documents. After control of the 94 association is obtained by members other than the developer, the 95 association may institute, maintain, settle, or appeal actions 96 or hearings in its name on behalf of all members concerning 97 matters of common interest to the members, including, but not 98 limited to, the common areas; roof or structural components of a 99 building, or other improvements for which the association is 100 responsible; mechanical, electrical, or plumbing elements 101 serving an improvement or building for which the association is 102 responsible; representations of the developer pertaining to any 103 existing or proposed commonly used facility; and protesting ad 104 valorem taxes on commonly used facilities. The association may 105 defend actions in eminent domain or bring inverse condemnation 106 actions. Before commencing litigation against any party in the 107 name of the association involving amounts in controversy in 108 excess of $100,000, the association must obtain the affirmative 109 approval of a majority of the voting interests at a meeting of 110 the membership at which a quorum has been attained. An 111 association may not hire an attorney who represents the 112 management company of the association. This subsection does not 113 limit any statutory or common-law right of any individual member 114 or class of members to bring any action without participation by 115 the association. A member does not have authority to act for the 116 association by virtue of being a member. An association may have 117 more than one class of members and may issue membership 118 certificates. An association of 15 or fewer parcel owners may 119 enforce only the requirements of those deed restrictions 120 established prior to the purchase of each parcel upon an 121 affected parcel owner or owners. 122 (4) OFFICIAL RECORDS.—The association shall maintain each 123 of the following items, when applicable, which constitute the 124 official records of the association: 125 (a) Copies of any plans, specifications, permits, and 126 warranties related to improvements constructed on the common 127 areas or other property that the association is obligated to 128 maintain, repair, or replace. 129 (b) A copy of the bylaws of the association and of each 130 amendment to the bylaws. 131 (c) A copy of the articles of incorporation of the 132 association and of each amendment thereto. 133 (d) A copy of the declaration of covenants and a copy of 134 each amendment thereto. 135 (e) A copy of the current rules of the homeowners’ 136 association. 137 (f) The minutes of all meetings of the board of directors 138 and of the members, which minutes must be retained for at least 139 7 years. 140 (g) A current roster of all members and their mailing 141 addresses and parcel identifications. The association shall also 142 maintain the e-mailelectronic mailingaddresses and the numbers 143 designated by members for receiving notice sent by electronic 144 transmission of those members consenting to receive notice by 145 electronic transmission. The e-mailelectronic mailingaddresses 146 and numbers provided by parcelunitowners to receive notice by 147 electronic transmission shall be removed from association 148 records when consent to receive notice by electronic 149 transmission is revoked. However, the association is not liable 150 for an erroneous disclosure of the e-mailelectronic mail151 address or the number for receiving electronic transmission of 152 notices. 153 (h) All of the association’s insurance policies or a copy 154 thereof, which policies must be retained for at least 7 years. 155 (i) A current copy of all contracts to which the 156 association is a party, including, without limitation, any 157 management agreement, lease, or other contract under which the 158 association has any obligation or responsibility. Bids received 159 by the association for work to be performed must also be 160 considered official records and must be kept for a period of 1 161 year. 162 (j) The financial and accounting records of the 163 association, kept according to good accounting practices. All 164 financial and accounting records must be maintained for a period 165 of at least 7 years. The financial and accounting records must 166 include: 167 1. Accurate, itemized, and detailed records of all receipts 168 and expenditures. 169 2. A current account and a periodic statement of the 170 account for each member, designating the name and current 171 address of each member who is obligated to pay assessments, the 172 due date and amount of each assessment or other charge against 173 the member, the date and amount of each payment on the account, 174 and the balance due. 175 3. All tax returns, financial statements, and financial 176 reports of the association. 177 4. Any other records that identify, measure, record, or 178 communicate financial information. 179 (k) A copy of the disclosure summary described in s. 180 720.401(1). 181 (l) Bids for materials, equipment, or services. 182 (m)(l)All other written records of the association not 183 specifically included in the foregoing which are related to the 184 operation of the association. 185 (5) INSPECTION AND COPYING OF RECORDS.—The official records 186 shall be maintained within the state for at least 7 years and 187 shall be made available to a parcel owner for inspection or 188 photocopying within 45 miles of the community or within the 189 county in which the association is located within 10 business 190 days after receipt by the board or its designee of a written 191 request. This subsection may be complied with by having a copy 192 of the official records available for inspection or copying in 193 the community or, at the option of the association, by making 194 the records available to a parcel owner electronically via the 195 Internet or by allowing the records to be viewed in electronic 196 format on a computer screen and printed upon request. If the 197 association has a photocopy machine available where the records 198 are maintained, it must provide parcel owners with copies on 199 request during the inspection if the entire request is limited 200 to no more than 25 pages. An association shall allow a member or 201 his or her authorized representative to use a portable device, 202 including a smartphone, tablet, portable scanner, or any other 203 technology capable of scanning or taking photographs, to make an 204 electronic copy of the official records in lieu of the 205 association’s providing the member or his or her authorized 206 representative with a copy of such records. The association may 207 not charge a fee to a member or his or her authorized 208 representative for the use of a portable device. 209 (a) The failure of an association to provide access to the 210 records within 10 business days after receipt of a written 211 request submitted by certified mail, return receipt requested, 212 creates a rebuttable presumption that the association willfully 213 failed to comply with this subsection. 214 (b) A member who is denied access to official records is 215 entitled to the actual damages or minimum damages for the 216 association’s willful failure to comply with this subsection. 217 The minimum damages are to be $50 per calendar day up to 10 218 days, the calculation to begin on the 11th business day after 219 receipt of the written request. 220 (c) The association may adopt reasonable written rules 221 governing the frequency, time, location, notice, records to be 222 inspected, and manner of inspections, but may not require a 223 parcel owner to demonstrate any proper purpose for the 224 inspection, state any reason for the inspection, or limit a 225 parcel owner’s right to inspect records to less than one 8-hour 226 business day per month. The association may impose fees to cover 227 the costs of providing copies of the official records, including 228 the costs of copying and the costs required for personnel to 229 retrieve and copy the records if the time spent retrieving and 230 copying the records exceeds one-half hour and if the personnel 231 costs do not exceed $20 per hour. Personnel costs may not be 232 charged for records requests that result in the copying of 25 or 233 fewer pages. The association may charge up to 25 cents per page 234 for copies made on the association’s photocopier. If the 235 association does not have a photocopy machine available where 236 the records are kept, or if the records requested to be copied 237 exceed 25 pages in length, the association may have copies made 238 by an outside duplicating service and may charge the actual cost 239 of copying, as supported by the vendor invoice. The association 240 shall maintain an adequate number of copies of the recorded 241 governing documents, to ensure their availability to members and 242 prospective members. Notwithstanding this paragraph, the 243 following records are not accessible to members or parcel 244 owners: 245 1. Any record protected by the lawyer-client privilege as 246 described in s. 90.502 and any record protected by the work 247 product privilege, including, but not limited to, a record 248 prepared by an association attorney or prepared at the 249 attorney’s express direction which reflects a mental impression, 250 conclusion, litigation strategy, or legal theory of the attorney 251 or the association and which was prepared exclusively for civil 252 or criminal litigation or for adversarial administrative 253 proceedings or which was prepared in anticipation of such 254 litigation or proceedings until the conclusion of the litigation 255 or proceedings. 256 2. Information obtained by an association in connection 257 with the approval of the lease, sale, or other transfer of a 258 parcel. 259 3. Personnel records of association or management company 260 employees, including, but not limited to, disciplinary, payroll, 261 health, and insurance records. For purposes of this 262 subparagraph, the term “personnel records” does not include 263 written employment agreements with an association or management 264 company employee or budgetary or financial records that indicate 265 the compensation paid to an association or management company 266 employee. 267 4. Medical records of parcel owners or community residents. 268 5. Social security numbers, driver license numbers, credit 269 card numbers, e-mailelectronic mailingaddresses, telephone 270 numbers, facsimile numbers, emergency contact information, any 271 addresses for a parcel owner other than as provided for 272 association notice requirements, and other personal identifying 273 information of any person, excluding the person’s name, parcel 274 designation, mailing address, and property address. 275 Notwithstanding the restrictions in this subparagraph, an 276 association may print and distribute to parcel owners a 277 directory containing the name, parcel address, and all telephone 278 numbers of each parcel owner. However, an owner may exclude his 279 or her telephone numbers from the directory by so requesting in 280 writing to the association. An owner may consent in writing to 281 the disclosure of other contact information described in this 282 subparagraph. The association is not liable for the disclosure 283 of information that is protected under this subparagraph if the 284 information is included in an official record of the association 285 and is voluntarily provided by an owner and not requested by the 286 association. 287 6. Any electronic security measure that is used by the 288 association to safeguard data, including passwords. 289 7. The software and operating system used by the 290 association which allows the manipulation of data, even if the 291 owner owns a copy of the same software used by the association. 292 The data is part of the official records of the association. 293 (d) The association or its authorized agent is not required 294 to provide a prospective purchaser or lienholder with 295 information about the residential subdivision or the association 296 other than information or documents required by this chapter to 297 be made available or disclosed. The association or its 298 authorized agent may charge a reasonable fee to the prospective 299 purchaser or lienholder or the current parcel owner or member 300 for providing good faith responses to requests for information 301 by or on behalf of a prospective purchaser or lienholder, other 302 than that required by law, if the fee does not exceed $150 plus 303 the reasonable cost of photocopying and any attorney fees 304 incurred by the association in connection with the response. 305 (e) A renter of property in a community operated by the 306 association has a right to inspect and copy the association’s 307 bylaws and rules. 308 (f)1. By July 1, 2019, an association with 150 or more 309 parcels shall post digital copies of the documents specified in 310 subparagraph 2. on its website. 311 a. The association’s website must be: 312 (I) An independent website or web portal wholly owned and 313 operated by the association; or 314 (II) A website or web portal operated by a third-party 315 provider from whom the association owns, leases, rents, or 316 otherwise obtains the right to operate a web page, subpage, web 317 portal, or collection of subpages or web portals dedicated to 318 the association’s activities and on which required notices, 319 records, and documents may be posted by the association. 320 b. The association’s website must be accessible through the 321 Internet and must contain a subpage, web portal, or other 322 protected electronic location that is inaccessible to the 323 general public and accessible only to parcel owners and 324 employees of the association. 325 c. Upon a parcel owner’s written request, the association 326 must provide the parcel owner with a username and password and 327 access to the protected sections of the association’s website 328 which contain any notices, records, or documents that must be 329 electronically provided. 330 2. Current copies of the following documents must be posted 331 in digital format on the association’s website: 332 a. The recorded declaration of covenants and each amendment 333 to each declaration. 334 b. The recorded bylaws of the association and each 335 amendment to the bylaws. 336 c. The articles of incorporation of the association, or 337 other documents creating the association, and each amendment 338 thereto. The copy posted pursuant to this sub-subparagraph must 339 be a copy of the articles of incorporation filed with the 340 Department of State. 341 d. The rules of the association. 342 e. Any management agreement, lease, or other contract to 343 which the association is a party or under which the association 344 or the parcel owners have an obligation or responsibility. 345 Summaries of bids for materials, equipment, or services must be 346 maintained on the website for 1 year. 347 f. The annual budget required by paragraph (6)(a) and any 348 proposed budget to be considered at the annual meeting. 349 g. The financial report required by subsection (7) and any 350 proposed financial report to be considered at a meeting. 351 h. The written certification or educational certificate of 352 each director required by s. 720.3033(1)(a). 353 i. All contracts or transactions between the association 354 and any director, officer, corporation, firm, or association 355 that is not an affiliated homeowners’ association or any other 356 entity in which an association director is also a director or 357 officer and financially interested. 358 j. Any contract or document regarding a conflict of 359 interest or possible conflict of interest as provided in ss. 360 468.436(2) and 720.3033(2). 361 k. The notice of any member meeting and the agenda for the 362 meeting, as required by subparagraph (2)(c)1., no later than 7 363 days before the meeting. The notice must be posted in plain view 364 on the front page of the website, or on a separate subpage of 365 the website labeled “Notices” which is conspicuously visible and 366 linked from the front page. The association must also post on 367 its website any document to be considered and voted on by the 368 owners during the meeting or any document listed on the agenda 369 at least 7 days before the meeting at which the document or the 370 information in the document will be considered. 371 l. Notice of any board meeting, the agenda, and any other 372 document required for the meeting as required by paragraph 373 (2)(c), which must be posted no later than the date required for 374 notice pursuant to paragraph (2)(c). 375 3. The association shall ensure that the information and 376 records described in this subsection, which are not permitted to 377 be accessible to parcel owners, are not posted on the 378 association’s website. If protected information or information 379 restricted from being accessible to parcel owners is included in 380 documents that are required to be posted on the association’s 381 website, the association must ensure the information is redacted 382 before posting the documents online. 383 (7) FINANCIAL REPORTING.—Within 90 days after the end of 384 the fiscal year, or annually on the date provided in the bylaws, 385 the association shall prepare and complete, or contract with a 386 third party for the preparation and completion of, a financial 387 report for the preceding fiscal year. Within 21 days after the 388 final financial report is completed by the association or 389 received from the third party, but not later than 120 days after 390 the end of the fiscal year or other date as provided in the 391 bylaws, the association shall, within the time limits set forth 392 in subsection (5), provide each member with a copy of the most 393 recent annual financial report or a written notice that a copy 394 of the most recent financial report will be mailed or hand 395 delivered to the member without charge and within 5 business 396 days after receipt of a written request from the memberis397availableupon request at no charge to themember. Financial 398 reports shall be prepared as follows: 399 (a) An association that meets the criteria of this 400 paragraph shall prepare or cause to be prepared a complete set 401 of financial statements in accordance with generally accepted 402 accounting principles as adopted by the Board of Accountancy. 403 The financial statements shall be based upon the association’s 404 total annual revenues, as follows: 405 1. An association with total annual revenues of $150,000 or 406 more, but less than $300,000, shall prepare compiled financial 407 statements. 408 2. An association with total annual revenues of at least 409 $300,000, but less than $500,000, shall prepare reviewed 410 financial statements. 411 3. An association with total annual revenues of $500,000 or 412 more shall prepare audited financial statements. 413 (b)1. An association with total annual revenues of less 414 than $150,000 shall prepare a report of cash receipts and 415 expenditures. 416 2. A report of cash receipts and disbursement must disclose 417 the amount of receipts by accounts and receipt classifications 418 and the amount of expenses by accounts and expense 419 classifications, including, but not limited to, the following, 420 as applicable: costs for security, professional, and management 421 fees and expenses; taxes; costs for recreation facilities; 422 expenses for refuse collection and utility services; expenses 423 for lawn care; costs for building maintenance and repair; 424 insurance costs; administration and salary expenses; and 425 reserves if maintained by the association. 426 (c) If 20 percent of the parcel owners petition the board 427 for a level of financial reporting higher than that required by 428 this section, the association shall duly notice and hold a 429 meeting of members within 30 days of receipt of the petition for 430 the purpose of voting on raising the level of reporting for that 431 fiscal year. Upon approval of a majority of the total voting 432 interests of the parcel owners, the association shall prepare or 433 cause to be prepared, shall amend the budget or adopt a special 434 assessment to pay for the financial report regardless of any 435 provision to the contrary in the governing documents, and shall 436 provide within 90 days of the meeting or the end of the fiscal 437 year, whichever occurs later: 438 1. Compiled, reviewed, or audited financial statements, if 439 the association is otherwise required to prepare a report of 440 cash receipts and expenditures; 441 2. Reviewed or audited financial statements, if the 442 association is otherwise required to prepare compiled financial 443 statements; or 444 3. Audited financial statements if the association is 445 otherwise required to prepare reviewed financial statements. 446 (d) If approved by a majority of the voting interests 447 present at a properly called meeting of the association, an 448 association may prepare or cause to be prepared: 449 1. A report of cash receipts and expenditures in lieu of a 450 compiled, reviewed, or audited financial statement; 451 2. A report of cash receipts and expenditures or a compiled 452 financial statement in lieu of a reviewed or audited financial 453 statement; or 454 3. A report of cash receipts and expenditures, a compiled 455 financial statement, or a reviewed financial statement in lieu 456 of an audited financial statement. 457 (9) DEBIT CARDS.— 458 (a) An association and its officers, directors, employees, 459 and agents may not use a debit card issued in the name of the 460 association, or billed directly to the association, for the 461 payment of any association expense. 462 (b) Use of a debit card issued in the name of the 463 association, or billed directly to the association, for any 464 expense that is not a lawful obligation of the association may 465 be prosecuted as credit card fraud pursuant to s. 817.61. 466 (11)(10)RECALL OF DIRECTORS.— 467 (b)1. Board directors may be recalled by an agreement in 468 writing or by written ballot without a membership meeting. The 469 agreement in writing or the written ballots, or a copy thereof, 470 shall be served on the association by certified mail or by 471 personal service in the manner authorized by chapter 48 and the 472 Florida Rules of Civil Procedure. 473 2. The board shall duly notice and hold a meeting of the 474 board within 5 full business days after receipt of the agreement 475 in writing or written ballots.At the meeting, the board shall476either certify the written ballots or written agreement to477recall a director or directors of the board, in which caseSuch 478 director or directors shall be recalled effective immediately 479 and shall turn over to the board within 105full business days 480 after the voteany andall records and property of the 481 association in their possession, or proceed as described in482paragraph (d). 483 3. When it is determined by the department pursuant to 484 binding arbitration proceedings that an initial recall effort 485 was defective, written recall agreements or written ballots used 486 in the first recall effort and not found to be defective may be 487 reused in one subsequent recall effort. However, in no event is 488 a written agreement or written ballot valid for more than 120 489 days after it has been signed by the member. 490 4. Any rescission or revocation of a member’s written 491 recall ballot or agreement must be in writing and, in order to 492 be effective, must be delivered to the association before the 493 association is served with the written recall agreements or 494 ballots. 495 5. The agreement in writing or ballot mustshalllist at 496 least as many possible replacement directors as there are 497 directors subject to the recall, when at least a majority of the 498 board is sought to be recalled; the person executing the recall 499 instrument may vote for as many replacement candidates as there 500 are directors subject to the recall. 501 (c)1. If the declaration, articles of incorporation, or 502 bylaws specifically provide, the members may also recall and 503 remove a board director or directors by a vote taken at a 504 meeting. If so provided in the governing documents, a special 505 meeting of the members to recall a director or directors of the 506 board of administration may be called by 10 percent of the 507 voting interests giving notice of the meeting as required for a 508 meeting of members, and the notice shall state the purpose of 509 the meeting. Electronic transmission may not be used as a method 510 of giving notice of a meeting called in whole or in part for 511 this purpose. 512 2. The board shall duly notice and hold a board meeting 513 within 5 full business days after the adjournment of the member 514 meeting to recall one or more directors. At the meeting, the 515 board shall certify the recall, in which case such member or 516 members shall be recalled effective immediately and shall turn 517 over to the board within 5 full business days any and all 518 records and property of the association in their possession, or519shall proceed as set forth in paragraph (d). 520(d) If the board determines not to certify the written521agreement or written ballots to recall a director or directors522of the board or does not certify the recall by a vote at a523meeting, the board shall, within 5 full business days after the524meeting, file with the department a petition for binding525arbitration pursuant to the applicable procedures in ss.526718.112(2)(j) and 718.1255 and the rules adopted thereunder. For527the purposes of this section, the members who voted at the528meeting or who executed the agreement in writing shall529constitute one party under the petition for arbitration. If the530arbitrator certifies the recall as to any director or directors531of the board, the recall will be effective upon mailing of the532final order of arbitration to the association. The director or533directors so recalled shall deliver to the board any and all534records of the association in their possession within 5 full535business days after the effective date of the recall.536 (e)(f)If the board fails to duly notice and hold a board 537 meeting within 5 full business days after service of an 538 agreement in writing or within 5 full business days after the 539 adjournment of the member recall meeting, the recall shall be 540 deemed effective and the board directors so recalled shall 541immediatelyturn over to the board within 10 full business days 542 after the vote all records and property of the association. 543(i) The minutes of the board meeting at which the board544decides whether to certify the recall are an official545association record. The minutes must record the date and time of546the meeting, the decision of the board, and the vote count taken547on each board member subject to the recall. In addition, when548the board decides not to certify the recall, as to each vote549rejected, the minutes must identify the parcel number and the550specific reason for each such rejection.551 (j)(l)The division may not accept for filing a recall 552 petition, whether filed pursuant to paragraph (b), paragraph 553 (c), paragraph (f)(g), or paragraph (i)(k)and regardless of 554 whether the recall was certified, when there are 60 or fewer 555 days until the scheduled reelection of the board member sought 556 to be recalled or when 60 or fewer days have not elapsed since 557 the election of the board member sought to be recalled. 558 Section 2. Present subsections (4) and (5) of section 559 720.3033, Florida Statutes, are redesignated as subsections (5) 560 and (6), respectively, a new subsection (4) is added to that 561 section, and subsection (3) of that section is amended, to read: 562 720.3033 Officers and directors.— 563 (3) An officer, director, or manager may not solicit, offer 564 to accept, or accept any good or service of value or kickback 565 for which consideration has not been provided for his or her 566 benefit or for the benefit of a member of his or her immediate 567 family from any person providing or proposing to provide goods 568 or services to the association. Any such officer, director, or 569 manager who knowingly so solicits, offers to accept, or accepts 570 any good or service of value or a kickback is subject a criminal 571 penalty as provided in subsection (4), if applicable. If the 572 board finds that an officer or director has violated this 573 subsection, the board shall immediately remove the officer or 574 director from office. The vacancy shall be filled according to 575 law until the end of the director’s term of office. However, an 576 officer, director, or manager may accept food to be consumed at 577 a business meeting with a value of less than $25 per individual 578 or a service or good received in connection with trade fairs or 579 education programs. 580 (4) As required by s. 617.0830, an officer, director, or 581 agent shall discharge his or her duties in good faith, with the 582 care an ordinarily prudent person in a like position would 583 exercise under similar circumstances, and in a manner he or she 584 reasonably believes to be in the interests of the association. 585 An officer, director, or agent is liable for monetary damages as 586 provided in s. 617.0834 if such officer, director, or agent 587 breached or failed to perform his or her duties and the breach 588 of, or failure to perform, his or her duties constitutes a 589 violation of criminal law as provided in s. 617.0834; 590 constitutes a transaction from which the officer or director 591 derived an improper personal benefit, either directly or 592 indirectly; or constitutes recklessness or an act or omission 593 that was in bad faith, with malicious purpose, or in a manner 594 exhibiting wanton and willful disregard of human rights, safety, 595 or property. Forgery of a ballot envelope or voting certificate 596 used in a homeowners’ association election is punishable as 597 provided in s. 831.01; the theft or embezzlement of funds of a 598 homeowners’ association is punishable as provided in s. 812.014; 599 and the destruction of or the refusal to allow inspection or 600 copying of an official record of a homeowners’ association which 601 is required to be accessible to parcel owners within the periods 602 required by general law in furtherance of any crime is 603 punishable as tampering with physical evidence as provided in s. 604 918.13 or as obstruction of justice as provided in chapter 843. 605 An officer or director charged by information or indictment with 606 a crime referenced in this paragraph must be removed from 607 office, and the vacancy shall be filled according to law until 608 the end of the officer’s or director’s period of suspension or 609 the end of his or her term of office, whichever occurs first. If 610 a criminal charge is pending against the officer or director, he 611 or she may not be appointed or elected to a position as an 612 officer or a director of any association and may not have access 613 to the official records of any association, except pursuant to a 614 court order. However, if the charges are resolved without a 615 finding of guilt, the officer or director must be reinstated for 616 the remainder of his or her term of office, if any. 617 Section 3. Subsection (4) of section 720.305, Florida 618 Statutes, is amended to read: 619 720.305 Obligations of members; remedies at law or in 620 equity; levy of fines and suspension of use rights.— 621 (4) An association may suspend the voting rights of a 622 parcel owner or member for the nonpayment of any fee, fine, or 623 other monetary obligation due to the association that is more 624 than $1,000 and more than 90 days delinquent. Proof of such 625 obligation must be provided to the parcel owner or member at 626 least 30 days before such suspension takes effect. A voting 627 interest or consent right allocated to a parcel owner or member 628 which has been suspended by the association shall be subtracted 629 from the total number of voting interests in the association, 630 which shall be reduced by the number of suspended voting 631 interests when calculating the total percentage or number of all 632 voting interests available to take or approve any action, and 633 the suspended voting interests mayshallnot be considered for 634 any purpose, including, but not limited to, the percentage or 635 number of voting interests necessary to constitute a quorum, the 636 percentage or number of voting interests required to conduct an 637 election, or the percentage or number of voting interests 638 required to approve an action under this chapter or pursuant to 639 the governing documents. The notice and hearing requirements 640 under subsection (2) do not apply to a suspension imposed under 641 this subsection. The suspension ends upon full payment of all 642 obligations currently due or overdue to the association. 643 Section 4. Paragraphs (a) and (c) of subsection (9) of 644 section 720.306, Florida Statutes, are amended to read: 645 720.306 Meetings of members; voting and election 646 procedures; amendments.— 647 (9) ELECTIONS AND BOARD VACANCIES.— 648 (a)1. Elections of directors must be conducted in 649 accordance with the procedures set forth in the governing 650 documents of the association. Except as provided in paragraph 651 (b), all members of the association are eligible to serve on the 652 board of directors, and a member may nominate himself or herself 653 as a candidate for the board at a meeting where the election is 654 to be held; provided, however, that if the election process 655 allows candidates to be nominated in advance of the meeting, the 656 association is not required to allow nominations at the meeting. 657 An election is not required unless more candidates are nominated 658 than vacancies exist. Except as otherwise provided in the 659 governing documents, boards of directors must be elected by a 660 plurality of the votes cast by eligible voters. Any challenge to 661 the election process must be commenced within 60 days after the 662 election results are announced. 663 2. A board member may not serve more than four consecutive 664 2-year terms or more than eight consecutive 1-year terms, unless 665 approved by an affirmative vote of two-thirds of the total 666 voting interests of the association or unless there are not 667 enough eligible candidates to fill the vacancies on the board at 668 the time of the vacancy. 669 (c) Any election dispute between a member and an 670 association must be submitted to mandatory binding arbitration 671 with the division. Such proceedings must be conducted in the 672 manner provided by s. 718.1255 and the procedural rules adopted 673 by the division. Unless otherwise provided in the bylaws, any 674 vacancy occurring on the board before the expiration of a term 675 may be filled by an affirmative vote of the majority of the 676 remaining directors, even if the remaining directors constitute 677 less than a quorum, or by the sole remaining director. In the 678 alternative, a board may hold an election to fill the vacancy, 679 in which case the election procedures must conform to the 680 requirements of the governing documents. Unless otherwise 681 provided in the bylaws, a board member appointed or elected 682 under this section is appointed for the unexpired term of the 683 seat being filled. Filling vacancies created by recall is 684 governed by s. 720.303(11)s. 720.303(10)and rules adopted by 685 the division. 686 Section 5. Paragraph (f) of subsection (1) of section 687 720.3085, Florida Statutes, is amended to read: 688 720.3085 Payment for assessments; lien claims.— 689 (1) When authorized by the governing documents, the 690 association has a lien on each parcel to secure the payment of 691 assessments and other amounts provided for by this section. 692 Except as otherwise set forth in this section, the lien is 693 effective from and shall relate back to the date on which the 694 original declaration of the community was recorded. However, as 695 to first mortgages of record, the lien is effective from and 696 after recording of a claim of lien in the public records of the 697 county in which the parcel is located. This subsection does not 698 bestow upon any lien, mortgage, or certified judgment of record 699 on July 1, 2008, including the lien for unpaid assessments 700 created in this section, a priority that, by law, the lien, 701 mortgage, or judgment did not have before July 1, 2008. 702 (f) The association may purchase the parcel at the 703 foreclosure sale and hold, lease, mortgage, or convey the 704 parcel. However, a board member, manager, or management company 705 may not purchase a parcel at a foreclosure sale resulting from 706 the association’s foreclosure of its lien for unpaid assessments 707 or take title by deed in lieu of foreclosure. 708 Section 6. Section 720.309, Florida Statutes, is amended to 709 read: 710 720.309 Agreements entered into by the association; 711 conflicts of interest.— 712 (1) Any grant or reservation made by any document, and any 713 contract that has a term greater than 10 years, that is made by 714 an association before control of the association is turned over 715 to the members other than the developer, and that provides for 716 the operation, maintenance, or management of the association or 717 common areas, must be fair and reasonable. 718 (2) If the governing documents provide for the cost of 719 communications services as defined in s. 202.11, information 720 services or Internet services obtained pursuant to a bulk 721 contract shall be deemed an operating expense of the 722 association. If the governing documents do not provide for such 723 services, the board may contract for the services, and the cost 724 shall be deemed an operating expense of the association but must 725 be allocated on a per-parcel basis rather than a percentage 726 basis, notwithstanding that the governing documents provide for 727 other than an equal sharing of operating expenses. Any contract 728 entered into before July 1, 2011, in which the cost of the 729 service is not equally divided among all parcel owners may be 730 changed by a majority of the voting interests present at a 731 regular or special meeting of the association in order to 732 allocate the cost equally among all parcels. 733 (a) Any contract entered into by the board may be canceled 734 by a majority of the voting interests present at the next 735 regular or special meeting of the association, whichever occurs 736 first. Any member may make a motion to cancel such contract, but 737 if no motion is made or if such motion fails to obtain the 738 required vote, the contract shall be deemed ratified for the 739 term expressed therein. 740 (b) Any contract entered into by the board must provide, 741 and shall be deemed to provide if not expressly set forth 742 therein, that a hearing-impaired or legally blind parcel owner 743 who does not occupy the parcel with a non-hearing-impaired or 744 sighted person, or a parcel owner who receives supplemental 745 security income under Title XVI of the Social Security Act or 746 food assistance as administered by the Department of Children 747 and Families pursuant to s. 414.31, may discontinue the service 748 without incurring disconnect fees, penalties, or subsequent 749 service charges, and may not be required to pay any operating 750 expenses charge related to such service for those parcels. If 751 fewer than all parcel owners share the expenses of the 752 communications services, information services, or Internet 753 services, the expense must be shared by all participating parcel 754 owners. The association may use the provisions of s. 720.3085 to 755 enforce payment by the parcel owners receiving such services. 756 (c) A resident of any parcel, whether a tenant or parcel 757 owner, may not be denied access to available franchised, 758 licensed, or certificated cable or video service providers if 759 the resident pays the provider directly for services. A resident 760 or a cable or video service provider may not be required to pay 761 anything of value in order to obtain or provide such service 762 except for the charges normally paid for like services by 763 residents of single-family homes located outside the community 764 but within the same franchised, licensed, or certificated area, 765 and except for installation charges agreed to between the 766 resident and the service provider. 767 (3) An association may not employ or contract with any 768 service provider that is owned or operated by a board member or 769 with any person who has a financial relationship with a board 770 member or officer, or a relative within the third degree of 771 consanguinity or affinity of a board member or officer. This 772 subsection does not apply to a service provider in which a board 773 member or officer, or a relative within the third degree of 774 consanguinity or affinity of a board member or officer, owns 775 less than 1 percent of the equity shares. 776 (4) A party contracting to provide maintenance or 777 management services to an association managing a community after 778 transfer of control of the association, as provided in s. 779 720.307, may not purchase a parcel at a foreclosure sale 780 resulting from the association’s foreclosure of association lien 781 for unpaid assessment or take a deed in lieu of a foreclosure. 782 If 50 percent or more of the parcels in the community are owned 783 by a party contracting to provide maintenance or management 784 services to an association managing a parcel after transfer of 785 control of the association, as provided in s. 720.307, or by an 786 officer or board member of such party, the contract with the 787 party providing maintenance or management services may be 788 canceled by a majority vote of the parcel owners other than the 789 contracting party or an officer or board member of such party. 790 Section 7. Section 720.3095, Florida Statutes, is created 791 to read: 792 720.3095 Conflicts of interest.— 793 (1) Directors and officers of a board of an association and 794 the relatives of such directors and officers must disclose to 795 the board any activity that may reasonably be construed to be a 796 conflict of interest. A rebuttable presumption of a conflict of 797 interest exists if any of the following occurs without prior 798 notice, as required in subsection (4): 799 (a) A director or an officer, or a relative of a director 800 or an officer, enters into a contract for goods or services with 801 the association. 802 (b) A director or an officer, or a relative of a director 803 or an officer, holds an interest in a corporation, limited 804 liability corporation, partnership, limited liability 805 partnership, or other business entity that conducts business 806 with the association or proposes to enter into a contract or 807 other transaction with the association. 808 (2) If a director or an officer, or a relative of a 809 director or an officer, proposes to engage in an activity that 810 is a conflict of interest, as described in subsection (1), the 811 proposed activity must be listed on, and all contracts and 812 transactional documents related to the proposed activity must be 813 attached to, the meeting agenda. If the board votes against the 814 proposed activity, the director or officer, or the relative of 815 the director or officer, must notify the board in writing of his 816 or her intention not to pursue the proposed activity or to 817 withdraw from office. If the board finds that an officer or a 818 director has violated this subsection, the officer or director 819 shall be deemed removed from office. The vacancy shall be filled 820 according to general law. 821 (3) A director or an officer, or a relative of a director 822 or an officer, who is a party to, or has an interest in, an 823 activity that is a possible conflict of interest, as described 824 in subsection (1), may attend the meeting at which the activity 825 is considered by the board and is authorized to make a 826 presentation to the board regarding the activity. After the 827 presentation, the director or officer, or the relative of the 828 director or officer, must leave the meeting during the 829 discussion of, and the vote on, the activity. A director or an 830 officer who is a party to, or has an interest in, the activity 831 must recuse himself or herself from the vote. 832 (4) A contract entered into between a director or an 833 officer, or a relative of a director or an officer, and the 834 association which has not been properly disclosed as a conflict 835 of interest or potential conflict of interest is voidable and 836 terminates upon the filing of a written notice with the board of 837 directors terminating the contract and which contains the 838 consent of at least 20 percent of the voting interests of the 839 association. 840 (5) As used in this section, the term “relative” means a 841 relative within the third degree of consanguinity or affinity. 842 Section 8. Subsection (1) of section 720.311, Florida 843 Statutes, is amended to read: 844 720.311 Dispute resolution.— 845 (1) The Legislature finds that alternative dispute 846 resolution has made progress in reducing court dockets and 847 trials and in offering a more efficient, cost-effective option 848 to litigation. The filing of any petition for arbitration or the 849 serving of a demand for presuit mediation as provided for in 850 this section shall toll the applicable statute of limitations. 851 Any recall dispute filed with the department pursuant to s. 852 720.303(11)s. 720.303(10)shall be conducted by the department 853 in accordance with the provisions of ss. 718.112(2)(j) and 854 718.1255 and the rules adopted by the division. In addition, the 855 department shall conduct mandatory binding arbitration of 856 election disputes between a member and an association pursuant 857 to s. 718.1255 and rules adopted by the division. Neither 858 election disputes nor recall disputes are eligible for presuit 859 mediation; these disputes shall be arbitrated by the department. 860 At the conclusion of the proceeding, the department shall charge 861 the parties a fee in an amount adequate to cover all costs and 862 expenses incurred by the department in conducting the 863 proceeding. Initially, the petitioner shall remit a filing fee 864 of at least $200 to the department. The fees paid to the 865 department shall become a recoverable cost in the arbitration 866 proceeding, and the prevailing party in an arbitration 867 proceeding shall recover its reasonable costs and attorney 868attorney’sfees in an amount found reasonable by the arbitrator. 869 The department shall adopt rules to effectuate the purposes of 870 this section. 871 Section 9. This act shall take effect July 1, 2018.