News, Questions & Answers

Update: New laws applicable to homeowner associations

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Q: Thank you for the condominium update a few weeks ago. We understand there are new laws impacting our homeowner’s association, as well.  Would you please recap the changes we need to know about?  

-Q.E. Naples

A: Great question, thank you. Below is a summary of new laws applicable to Homeowner Associations subject to Chapter 720 Florida Statutes as of July 1, 2018 or October 1, 2018 as indicated:

  1. E-Mail Communication by Directors – 720.303(2)(a)/HB841 Effective July 1, 2018.  Board members may communicate via e-mail but may not cast votes via e-mail.  This aligns Chapter 720 with Chapter 718 and Chapter 719 on this point.
  1. Fines and Suspensions – 720.305(2)(b)14/HB841 Effective July 1, 2018.  If the committee approves the fine it must be paid within 5 days of the committee meeting.  This aligns 720 with 718 and 719 on the 5-day to pay requirement.
  1. Amendments – 720.306(1)(e)-(f)/HB841 Effective July 1, 2018.  Amendments must be presented to owners for a vote in the underline and strike through format or with the “substantial amendment” notation just like condominiums and cooperatives.  Allows that an “immaterial error or omission” in the amendment process does not invalidate an otherwise properly adopted amendment.  All amendments to the governing documents must be recorded in the public records to be legally affective. This includes amendments to the Board adopted rules which in the past did not have to be recorded.
  1. Elections – 720.305(9)(a)/HB841 Effective July 1, 2018.  If an election of directors is not required because there are not more candidates than there are available seats on the Board, and if nominations are not required from the floor, then those candidates that submitted their names to run for the board are automatically seated at the annual membership meeting even if a quorum does not exist.
  1. Restrictive Endorsements – 720.3085(3)(b)/HB841 Effective July 1, 2018.  Clarifies that any purported accord and satisfaction or restrictive endorsement on an assessment payment is void and the payment is applied according to the law.
  1. Covenant Preservation Summary Notice – 720.303 and 720.3032/HB617 Effective October 1, 2018.  Substantially revises the method and notice requirements for a board to preserve the declaration of covenants from being extinguished by MRTA.  This is important for homeowners associations that are approaching 30 years from the date that the original Declaration of Covenants was recorded.
  1. Covenant Revitalization – 720.403(3)/HB617 Effective October 1, 2018.  Expands the ability to revitalize covenants beyond residential homeowner associations so that commercial property associations and other non-residential associations can revitalize the covenants.

Q: The pool was recently renovated in my sub-neighborhood association and is already having issues and there are members claiming bidding laws weren’t followed and conflict of interest exists. (a relative of the Master Association Board member’s company did the work).  And people even claim the HOA president got a new roof and bath out of this deal.

-L.J., Bonita Springs

A: In a condominium the Association must obtain competitive bids for projects or services that will cost more than 5% of the annual budget including reserves.  For HOA’s it is the same, but thea percentage is 10%. There are exceptions to the competitive bidding requirements, but renovation of the pool would not be an exception.  If the cost was less than the statutory percentage no competitive bidding is required by law, but it is good business practice to competitive bid any goods or services that will cost a significant amount of money.  Obviously, if the HOA president obtained free services in exchange for awarding the pool project his would be violation of the law. However, I would caution you about making such allegations based on rumor in order to avoid allegations of slander or defamation.  It would be a conflict for a relative of your HOA sub-neighborhood Board member to do the pool project work and this would have to have been disclosed and approved properly by the disinterested Board members. However, from your question you indicate it was a relative of member of the Master Board of Directors.  This would not have been conflict.