HB 1021, a substantial overhaul of the Florida Condominium Act commonly referred to as “Condo 3.0,” was signed by Governor Desantis and became effective July 1, 2024. While many of the changes to the Act were objectively necessary (such as the new heightened board member education requirements, the requirement of an association with more than 10 units to have board meetings not less than quarterly, and the mandatory funding of reserves for all structural components), many provisions of the bill pertaining to records requests, meeting notices, member participation at board meetings, and the pooling of structural-related reserves are vague and confusing. After the passage of SB 4-D in 2022 (adding section 553.899 regarding the milestone inspections), SB 154 was introduced the following year to provide further clarity. The sponsors of HB 1021 in the House of Representative will likely introduce another bill this year to further revise the Condominium Act (“Condo 4.0”) and hopefully address the various issues created by Condo 3.0.
Records Requests—Provision of Checklists
The Condominium Act now requires that in response to a written request to inspect records, the association must simultaneously provide the requester a checklist of all records made available for inspection and copying. The checklist must also identify any of the association’s official records that were not made available to the requester and to maintain the checklist provided in the official records of the association for seven years. The Act also provides that if the requested records are posted on an association’s website or are available for download through an application on a mobile device, the association may fulfill its obligations by directing all persons authorized to request access to the website or the application.
However, in so doing the association apparently must still provide the checklist for the records request. A simple solution would be to eliminate the requirement to provide a checklist if the records are electronically sent to the requester or if the association directs the requester to the association’s website or an application for a mobile device where the records are posted or may be downloaded.
Provision of Contracts with Meeting Notices
A newly added subparagraph to F.S. 718.112(c) (which governs board meetings) provides that meeting notices “…in which regular or special assessments against unit owners are to be considered must specifically state that assessments will be considered and provide the estimated cost and description of the purposes for such assessments.” The subparagraph then provides that if an agenda item pertains to the approval of a contract, a copy of the contract must be provided with the notice and must be made available for inspection and copying upon a written request from a unit owner, on the association’s website, or through an application that can be downloaded on a mobile device.
Thus, does the requirement to provide the contract with the meeting notice pertain only to contracts being approved at a meeting where regular or special assessments are being considered or to any meeting where a contract is being considered for approval? How does the association provide a copy of the contract? While this new requirement to provide contracts with the meeting notice is beneficial to the unit owners and will enable them to be informed and ask questions about the contract at the meeting, many contracts are lengthy, and the cost of copying and mailing it would be prohibitively expensive. The most reasonable approach is to provide a copy of any contract being brought for approval at any meeting or make the same available with a hyperlink to the association’s website or application in the meeting notice. A simple clarification to this subparagraph allowing for provision of the contract via a hyperlink is necessary.
Member Participation in Meetings
On the subject of member participation at board meetings, F.S. 718.112(2)(c) was revised to require (in a residential condominium of more than 10 units) the board of directors to meet at least once each quarter and for the meeting agenda to include “an opportunity for members to ask questions of the board.” The text of this subparagraph was further modified to provide that the right of unit owners to attend board meetings “…includes the right to speak at such meetings with reference to all designated agenda items and the right to ask questions relating to reports on the status of construction or repair projects, the status of revenues and expenditures during the current fiscal year, and other issues affecting the condominium.”
This language leaves open the question of whether the requirement for the “mandatory questions segment” of board meetings must only be done once per quarter (as suggested by the first sentence) or at every board meeting (as suggested by the second sentence). Interestingly, there is no requirement in the law that questions must be answered, and unit owner questions can presumably be taken under advisement if further research is required. Further, how can a board be expected to answer any question posed as to “other issues affecting the condominium”? A solution to the confusion caused by this amended subparagraph is to require the board to answer these open-ended questions at the mandatory quarterly meetings only and to remove the requirement to respond to questions as to “any other issues affecting the condominium.” Unit owners already have the right under subsection (1) to petition the board (provided 20 percent join in the petition) to address an item of business.
Pooling of SIRS FUNDS
Finally, associations existing on or before July 1, 2022, are in a mad scramble to obtain their structural integrity reserves (SIRS) study by the December 31, 2024, deadline and to adopt budgets which fully fund reserves for all of the structural components. However, while F.S. 718.112(f) allows for the pooling of traditional (or non-SIRS related) reserve items, it does not address the pooling of SIRS reserves. Another practical solution is to amend this paragraph to allow for the pooling of association reserve accounts for two or more required SIRS components.
To read the original FLCAJ article, please click here.
Jose Luis Baloyra provides counsel to condominium and homeowner associations and has been involved in all aspects of community association law. His work with these communities includes covenant enforcement, document review and drafting, analysis and review of bank loans, and general guidance to boards and managers on the statutory and documentary guidelines for the ongoing administration of their association.