This week continues our annual review of 2021 legislative changes, continuing the discussion of Senate Bill 630, which took effect July 1, 2021.
Developer Escrow Funds
Section 718.202(3) of the Condominium Act has been amended to address a developer’s use of pre-closing deposits. The developer may, if the sale contract so provides, use the funds in excess of 10% of the purchase price held in the escrow account for the actual costs incurred by the developer for construction.
The term “actual costs” has been clarified to include expenditures for demolition, site clearing, permit fees, impact fees, and utility reservation fees, as well as architectural, engineering, and surveying fees that directly relate to construction and development of the condominium property. Deposit funds cannot be used for salaries, commissions, or expenses of salespersons; for advertising, marketing, or promotional purposes; or for loan fees and costs, principal and interest on loans, attorney fees, accounting fees, or insurance costs.
Section 718.303 of the Condominium Act has been amended to state that a fine is due 5 days after notice of the approved fine is provided. The previous statute provided that the fine was due 5 days after the date of the committee meeting at which the fine was approved. Interestingly, this new change applies only to the payment of fines, not suspension of use rights.
The term “occupant” has been removed from the statute and replaced with “tenant” regarding the parties to whom notice of the fines or suspension must be given.
Section 718.405(5) of the Condominium Act has been amended to provide that multicondominium associations may adopt consolidated or combined declarations of condominium. This has been a somewhat common practice in Southwest Florida, but it was never specifically addressed in the law. This will be a benefit for associations that operate several condominiums with “mirror image” declarations.
A consolidation cannot “merge the condominiums” (usually relevant to the manner of cost sharing) or change the legal descriptions of the condominium parcels, unless accomplished in accordance with law, which normally requires approval of 100 percent of unit owners and mortgage holders.
This amendment applies to associations existing on July 1, 2021 and is said to clarify existing law, thereby providing those associations who have engaged in this process previously with a statute to rely upon.
Jurisdiction of Division of Florida Condominiums, Timeshares, and Mobile Homes
Section 718.501(1) of the Condominium Act expands the scope of the division’s investigative authority to include the authority to investigate complaints related to the maintenance of and unit owner access to association records.
Cooperative Law Changes
Switching gears, Senate Bill 630 also made a number of important changes to Chapter 719 of the Florida Statutes, the Florida Cooperative Act.
Definition of Cooperative Unit
Section 719.103(25) of the Cooperative Act contains an amendment that may have significant impact on cooperatives. The statutory definition of the term “unit” has been amended to state that “an interest in a unit is an interest in real property.”
The purpose of this change is to lay to rest potentially conflicting court decisions on whether a cooperative parcel is a real property interest. This has application in areas as diverse as homestead protections and passage of title by death. It will also perhaps impact the operation of associations in areas such as approval of new shareholders.
Section 719.104(2)(c) of the Cooperative Act was amended to address access to records and now provides that an association may not require a member to demonstrate any purpose or state any reason to inspect the official records.
Next week, we will continue with our review of changes to the Cooperative Act in Senate Bill 630.
Joseph Adams is a Board Certified Specialist in Condominium and Planned Development Law, and an Office Managing Shareholder with Becker & Poliakoff. Please send your community association legal questions to firstname.lastname@example.org. Past editions of the Q&A may be viewed at floridacondohoalawblog.com.