Bill Text: FL S0744 | 2017 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Community Associations
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Vetoed) 2017-05-03 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1237 (Ch. 2017-188), HB 6027 (Ch. 2017-161), CS/SB 1520 (Ch. 2017-122) [S0744 Detail]
Download: Florida-2017-S0744-Introduced.html
Bill Title: Community Associations
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Vetoed) 2017-05-03 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1237 (Ch. 2017-188), HB 6027 (Ch. 2017-161), CS/SB 1520 (Ch. 2017-122) [S0744 Detail]
Download: Florida-2017-S0744-Introduced.html
Florida Senate - 2017 SB 744 By Senator Passidomo 28-00888A-17 2017744__ 1 A bill to be entitled 2 An act relating to community associations; amending s. 3 718.111, F.S.; revising reporting and record 4 requirements; amending s. 718.112, F.S.; authorizing 5 an association to adopt rules for posting certain 6 notices on a website; revising provisions relating to 7 required condominium and cooperative association 8 bylaws; revising provisions relating to evidence of 9 condominium and cooperative association compliance 10 with the applicable fire and life safety code; 11 revising unit and common elements required to be 12 retrofitted; revising provisions relating to an 13 association vote to forego retrofitting; providing 14 applicability; amending s. 718.707, F.S.; revising the 15 time period for classification as bulk assignee or 16 bulk buyer; amending s. 719.104, F.S.; revising 17 recordkeeping requirements; amending s. 719.1055, 18 F.S.; revising provisions relating to required 19 condominium and cooperative association bylaws; 20 revising provisions relating to evidence of 21 condominium and cooperative association compliance 22 with the applicable fire and life safety code; 23 revising unit and common elements required to be 24 retrofitted; revising provisions relating to an 25 association vote to forego retrofitting; providing 26 applicability; amending s. 719.106, F.S.; prohibiting 27 a board member from voting via e-mail; specifying 28 notice requirements when regular or special 29 assessments against unit owners are to be considered 30 at a meeting; authorizing an association to adopt 31 rules for posting certain notices on a website; 32 amending s. 720.303, F.S.; prohibiting a board member 33 from voting via e-mail; specifying reserve account 34 amounts for maintenance expenses or replacement costs; 35 revising requirements for the reserve account; 36 authorizing a developer to waive the reserves or 37 reduce funding of reserves under certain circumstances 38 and subject to certain requirements; revising certain 39 financial report requirements; deleting provisions 40 specifying when an association is deemed to have 41 provided for reserve accounts; revising the formula to 42 determine funding for specified reserve accounts; 43 requiring reserve funds and interest accruing to 44 remain in the reserve accounts and limiting the 45 expenditures for which such funds may be used under 46 certain circumstances; specifying the voting interests 47 that are eligible to vote to waive or reduce funding 48 of reserves; providing voting requirements to waive or 49 reduce funding of reserves; revising requirements for 50 pooled accounts; providing requirements if a board 51 adopts assessments against parcel owners under certain 52 circumstances; providing a limit on assessments under 53 certain circumstances; providing an exemption to 54 certain requirements; amending s. 720.306, F.S.; 55 providing elections requirements; amending s. 56 720.3085, F.S.; providing applicability; providing an 57 effective date. 58 59 Be It Enacted by the Legislature of the State of Florida: 60 61 Section 1. Subsections (12) and (13) of section 718.111, 62 Florida Statutes, are amended to read: 63 718.111 The association.— 64 (12) OFFICIAL RECORDS.— 65 (a) From the inception of the association, the association 66 shall maintain each of the following items, if applicable, which 67 constitutes the official records of the association: 68 1. A copy of the plans, permits, warranties, and other 69 items provided by the developer pursuant to s. 718.301(4). 70 2. A photocopy of the recorded declaration of condominium 71 of each condominium operated by the association and each 72 amendment to each declaration. 73 3. A photocopy of the recorded bylaws of the association 74 and each amendment to the bylaws. 75 4. A certified copy of the articles of incorporation of the 76 association, or other documents creating the association, and 77 each amendment thereto. 78 5. A copy of the current rules of the association. 79 6. A book or books that contain the minutes of all meetings 80 of the association, the board of administration, and the unit 81 owners, which minutes must be retained for at least 7 years. 82 7. A current roster of all unit owners and their mailing 83 addresses, unit identifications, and voting certifications, and, 84 if known, telephone numbers. The association shall also maintain 85 the electronic mailing addresses and facsimile numbers of unit 86 owners consenting to receive notice by electronic transmission. 87 The electronic mailing addresses and facsimile numbers are not 88 accessible to unit owners if consent to receive notice by 89 electronic transmission is not provided in accordance with 90 subparagraph (c)5. However, the association is not liable for an 91 inadvertent disclosure of the electronic mail address or 92 facsimile number for receiving electronic transmission of 93 notices. 94 8. All current insurance policies of the association and 95 condominiums operated by the association. 96 9. A current copy of any management agreement, lease, or 97 other contract to which the association is a party or under 98 which the association or the unit owners have an obligation or 99 responsibility. 100 10. Bills of sale or transfer for all property owned by the 101 association. 102 11. Accounting records for the association and separate 103 accounting records for each condominium that the association 104 operates. All accounting records must be maintained for at least 105 7 years. Any person who knowingly or intentionally defaces or 106 destroys such records, or who knowingly or intentionally fails 107 to create or maintain such records, with the intent of causing 108 harm to the association or one or more of its members, is 109 personally subject to a civil penalty pursuant to s. 110 718.501(1)(d). The accounting records must include, but are not 111 limited to: 112 a. Accurate, itemized, and detailed records of all receipts 113 and expenditures. 114 b. A current account and a monthly, bimonthly, or quarterly 115 statement of the account for each unit designating the name of 116 the unit owner, the due date and amount of each assessment, the 117 amount paid on the account, and the balance due. 118 c. All audits, reviews, accounting statements, and 119 financial reports of the association or condominium. 120 d. All contracts for work to be performed. Bids for work to 121 be performed are also considered official records and must be 122 maintained by the association for 1 year. 123 12. Ballots, sign-in sheets, voting proxies, and all other 124 papers and electronic records relating to voting by unit owners, 125 which must be maintained for 1 year from the date of the 126 election, vote, or meeting to which the document relates, 127 notwithstanding paragraph (b). 128 13. All rental records if the association is acting as 129 agent for the rental of condominium units. 130 14. A copy of the current question and answer sheet as 131 described in s. 718.504. 132 15. All other written records of the association not 133 specifically included in the foregoing which are related to the 134 operation of the association. 135 16. A copy of the inspection report as described in s. 136 718.301(4)(p). 137 (b) The official records of the association must be 138 maintained within the state for at least 7 years. The records of 139 the association shall be made available to a unit owner within 140 45 miles of the condominium property or within the county in 141 which the condominium property is located within 105working 142 days after receipt of a written request by the board or its 143 designee. However, such distance requirement does not apply to 144 an association governing a timeshare condominium. This paragraph 145 may be complied with by having a copy of the official records of 146 the association available for inspection or copying on the 147 condominium property or association property, or the association 148 may offer the option of making the records available to a unit 149 owner electronically via the Internet or by allowing the records 150 to be viewed in electronic format on a computer screen and 151 printed upon request. The association is not responsible for the 152 use or misuse of the information provided to an association 153 member or his or her authorized representative pursuant to the 154 compliance requirements of this chapter unless the association 155 has an affirmative duty not to disclose such information 156 pursuant to this chapter. 157 (c) The official records of the association are open to 158 inspection by any association member or the authorized 159 representative of such member at all reasonable times. The right 160 to inspect the records includes the right to make or obtain 161 copies, at the reasonable expense, if any, of the member. The 162 association may adopt reasonable rules regarding the frequency, 163 time, location, notice, and manner of record inspections and 164 copying. The failure of an association to provide the records 165 within 10 working days after receipt of a written request 166 creates a rebuttable presumption that the association willfully 167 failed to comply with this paragraph. A unit owner who is denied 168 access to official records is entitled to the actual damages or 169 minimum damages for the association’s willful failure to comply. 170 Minimum damages are $50 per calendar day for up to 10 days, 171 beginning on the 11th working day after receipt of the written 172 request. The failure to permit inspection entitles any person 173 prevailing in an enforcement action to recover reasonable 174 attorney fees from the person in control of the records who, 175 directly or indirectly, knowingly denied access to the records. 176 Any person who knowingly or intentionally defaces or destroys 177 accounting records that are required by this chapter to be 178 maintained during the period for which such records are required 179 to be maintained, or who knowingly or intentionally fails to 180 create or maintain accounting records that are required to be 181 created or maintained, with the intent of causing harm to the 182 association or one or more of its members, is personally subject 183 to a civil penalty pursuant to s. 718.501(1)(d). The association 184 shall maintain an adequate number of copies of the declaration, 185 articles of incorporation, bylaws, and rules, and all amendments 186 to each of the foregoing, as well as the question and answer 187 sheet as described in s. 718.504 and year-end financial 188 information required under this section, on the condominium 189 property to ensure their availability to unit owners and 190 prospective purchasers, and may charge its actual costs for 191 preparing and furnishing these documents to those requesting the 192 documents. An association shall allow a member or his or her 193 authorized representative to use a portable device, including a 194 smartphone, tablet, portable scanner, or any other technology 195 capable of scanning or taking photographs, to make an electronic 196 copy of the official records in lieu of the association’s 197 providing the member or his or her authorized representative 198 with a copy of such records. The association may not charge a 199 member or his or her authorized representative for the use of a 200 portable device. Notwithstanding this paragraph, the following 201 records are not accessible to unit owners: 202 1. Any record protected by the lawyer-client privilege as 203 described in s. 90.502 and any record protected by the work 204 product privilege, including a record prepared by an association 205 attorney or prepared at the attorney’s express direction, which 206 reflects a mental impression, conclusion, litigation strategy, 207 or legal theory of the attorney or the association, and which 208 was prepared exclusively for civil or criminal litigation or for 209 adversarial administrative proceedings, or which was prepared in 210 anticipation of such litigation or proceedings until the 211 conclusion of the litigation or proceedings. 212 2. Information obtained by an association in connection 213 with the approval of the lease, sale, or other transfer of a 214 unit. 215 3. Personnel records of association or management company 216 employees, including, but not limited to, disciplinary, payroll, 217 health, and insurance records. For purposes of this 218 subparagraph, the term “personnel records” does not include 219 written employment agreements with an association employee or 220 management company, or budgetary or financial records that 221 indicate the compensation paid to an association employee. 222 4. Medical records of unit owners. 223 5. Social security numbers, driver license numbers, credit 224 card numbers, e-mail addresses, telephone numbers, facsimile 225 numbers, emergency contact information, addresses of a unit 226 owner other than as provided to fulfill the association’s notice 227 requirements, and other personal identifying information of any 228 person, excluding the person’s name, unit designation, mailing 229 address, property address, and any address, e-mail address, or 230 facsimile number provided to the association to fulfill the 231 association’s notice requirements. Notwithstanding the 232 restrictions in this subparagraph, an association may print and 233 distribute to parcel owners a directory containing the name, 234 parcel address, and all telephone numbers of each parcel owner. 235 However, an owner may exclude his or her telephone numbers from 236 the directory by so requesting in writing to the association. An 237 owner may consent in writing to the disclosure of other contact 238 information described in this subparagraph. The association is 239 not liable for the inadvertent disclosure of information that is 240 protected under this subparagraph if the information is included 241 in an official record of the association and is voluntarily 242 provided by an owner and not requested by the association. 243 6. Electronic security measures that are used by the 244 association to safeguard data, including passwords. 245 7. The software and operating system used by the 246 association which allow the manipulation of data, even if the 247 owner owns a copy of the same software used by the association. 248 The data is part of the official records of the association. 249 (d) The association shall prepare a question and answer 250 sheet as described in s. 718.504, and shall update it annually. 251 (e)1. The association or its authorized agent is not 252 required to provide a prospective purchaser or lienholder with 253 information about the condominium or the association other than 254 information or documents required by this chapter to be made 255 available or disclosed. The association or its authorized agent 256 may charge a reasonable fee to the prospective purchaser, 257 lienholder, or the current unit owner for providing good faith 258 responses to requests for information by or on behalf of a 259 prospective purchaser or lienholder, other than that required by 260 law, if the fee does not exceed $150 plus the reasonable cost of 261 photocopying and any attorney’s fees incurred by the association 262 in connection with the response. 263 2. An association and its authorized agent are not liable 264 for providing such information in good faith pursuant to a 265 written request if the person providing the information includes 266 a written statement in substantially the following form: “The 267 responses herein are made in good faith and to the best of my 268 ability as to their accuracy.” 269 (f) An outgoing board or committee member must relinquish 270 all official records and property of the association in his or 271 her possession or under his or her control to the incoming board 272 within 5 days after the election. The division shall impose a 273 civil penalty as set forth in s. 718.501(1)(d)6. against an 274 outgoing board or committee member who willfully and knowingly 275 fails to relinquish such records and property. 276 (13) FINANCIAL REPORTING.—Within 90 days after the end of 277 the fiscal year, or annually on a date provided in the bylaws, 278 the association shall prepare and complete, or contract for the 279 preparation and completion of, a financial report for the 280 preceding fiscal year. Within 21 days after the final financial 281 report is completed by the association or received from the 282 third party, but not later than 120 days after the end of the 283 fiscal year or other date as provided in the bylaws, the 284 association shall mail to each unit owner at the address last 285 furnished to the association by the unit owner, or hand deliver 286 to each unit owner, a copy of the financial report or a notice 287 that a copy of the financial report will be mailed or hand 288 delivered to the unit owner, without charge, upon receipt of a 289 written request from the unit owner. The division shall adopt 290 rules setting forth uniform accounting principles and standards 291 to be used by all associations and addressing the financial 292 reporting requirements for multicondominium associations. The 293 rules must include, but not be limited to, standards for 294 presenting a summary of association reserves, including a good 295 faith estimate disclosing the annual amount of reserve funds 296 that would be necessary for the association to fully fund 297 reserves for each reserve item based on the straight-line 298 accounting method. This disclosure is not applicable to reserves 299 funded via the pooling method. In adopting such rules, the 300 division shall consider the number of members and annual 301 revenues of an association. Financial reports shall be prepared 302 as follows: 303 (a) An association that meets the criteria of this 304 paragraph shall prepare a complete set of financial statements 305 in accordance with generally accepted accounting principles. The 306 financial statements must be based upon the association’s total 307 annual revenues, as follows: 308 1. An association with total annual revenues of $150,000 or 309 more, but less than $300,000, shall prepare compiled financial 310 statements. 311 2. An association with total annual revenues of at least 312 $300,000, but less than $500,000, shall prepare reviewed 313 financial statements. 314 3. An association with total annual revenues of $500,000 or 315 more shall prepare audited financial statements. 316 (b)1. An association with total annual revenues of less 317 than $150,000 shall prepare a report of cash receipts and 318 expenditures. 3192.An association that operates fewer than 50 units,320regardless of the association’s annual revenues, shall prepare a321report of cash receipts and expenditures in lieu of financial322statements required by paragraph (a).323 2.3.A report of cash receipts and disbursements must 324 disclose the amount of receipts by accounts and receipt 325 classifications and the amount of expenses by accounts and 326 expense classifications, including, but not limited to, the 327 following, as applicable: costs for security, professional and 328 management fees and expenses, taxes, costs for recreation 329 facilities, expenses for refuse collection and utility services, 330 expenses for lawn care, costs for building maintenance and 331 repair, insurance costs, administration and salary expenses, and 332 reserves accumulated and expended for capital expenditures, 333 deferred maintenance, and any other category for which the 334 association maintains reserves. 335 (c) An association may prepare, without a meeting of or 336 approval by the unit owners: 337 1. Compiled, reviewed, or audited financial statements, if 338 the association is required to prepare a report of cash receipts 339 and expenditures; 340 2. Reviewed or audited financial statements, if the 341 association is required to prepare compiled financial 342 statements; or 343 3. Audited financial statements if the association is 344 required to prepare reviewed financial statements. 345 (d) If approved by a majority of the voting interests 346 present at a properly called meeting of the association, an 347 association may prepare: 348 1. A report of cash receipts and expenditures in lieu of a 349 compiled, reviewed, or audited financial statement; 350 2. A report of cash receipts and expenditures or a compiled 351 financial statement in lieu of a reviewed or audited financial 352 statement; or 353 3. A report of cash receipts and expenditures, a compiled 354 financial statement, or a reviewed financial statement in lieu 355 of an audited financial statement. 356 357 Such meeting and approval must occur before the end of the 358 fiscal year and is effective only for the fiscal year in which 359 the vote is taken, except that the approval may also be 360 effective for the following fiscal year. If the developer has 361 not turned over control of the association, all unit owners, 362 including the developer, may vote on issues related to the 363 preparation of the association’s financial reports, from the 364 date of incorporation of the association through the end of the 365 second fiscal year after the fiscal year in which the 366 certificate of a surveyor and mapper is recorded pursuant to s. 367 718.104(4)(e) or an instrument that transfers title to a unit in 368 the condominium which is not accompanied by a recorded 369 assignment of developer rights in favor of the grantee of such 370 unit is recorded, whichever occurs first. Thereafter, all unit 371 owners except the developer may vote on such issues until 372 control is turned over to the association by the developer. Any 373 audit or review prepared under this section shall be paid for by 374 the developer if done before turnover of control of the 375 association.An association may not waive the financial376reporting requirements of this section for more than 3377consecutive years.378 Section 2. Paragraphs (c) and (l) of subsection (2) of 379 section 718.112, Florida Statutes, are amended to read: 380 718.112 Bylaws.— 381 (2) REQUIRED PROVISIONS.—The bylaws shall provide for the 382 following and, if they do not do so, shall be deemed to include 383 the following: 384 (c) Board of administration meetings.—Meetings of the board 385 of administration at which a quorum of the members is present 386 are open to all unit owners. Members of the board of 387 administration may use e-mail as a means of communication but 388 may not cast a vote on an association matter via e-mail. A unit 389 owner may tape record or videotape the meetings. The right to 390 attend such meetings includes the right to speak at such 391 meetings with reference to all designated agenda items. The 392 division shall adopt reasonable rules governing the tape 393 recording and videotaping of the meeting. The association may 394 adopt written reasonable rules governing the frequency, 395 duration, and manner of unit owner statements. 396 1. Adequate notice of all board meetings, which must 397 specifically identify all agenda items, must be posted 398 conspicuously on the condominium property at least 48 continuous 399 hours before the meeting except in an emergency. If 20 percent 400 of the voting interests petition the board to address an item of 401 business, the board, within 60 days after receipt of the 402 petition, shall place the item on the agenda at its next regular 403 board meeting or at a special meeting called for that purpose. 404 An item not included on the notice may be taken up on an 405 emergency basis by a vote of at least a majority plus one of the 406 board members. Such emergency action must be noticed and 407 ratified at the next regular board meeting. Notice of any 408 meeting in which a regular or special assessment against unit 409 owners is to be considered must specifically state that 410 assessments will be considered and provide the estimated amount 411 and a description of the purposes for such assessments.However,412 Written notice of a meeting at which a nonemergency special 413 assessment or an amendment to rules regarding unit use will be 414 considered must be mailed, delivered, or electronically 415 transmitted to the unit owners and posted conspicuously on the 416 condominium property at least 14 days before the meeting. 417 Evidence of compliance with this 14-day notice requirement must 418 be made by an affidavit executed by the person providing the 419 notice and filed with the official records of the association. 420 Upon notice to the unit owners, the board shall, by duly adopted 421 rule, designate a specific location on the condominium or 422 association property where all notices of board meetings must be 423 posted. If there is no condominium property or association 424 property where notices can be posted, notices shall be mailed, 425 delivered, or electronically transmitted to each unit owner at 426 least 14 days before the meeting. In lieu of or in addition to 427 the physical posting of the notice on the condominium property, 428 the association may, by reasonable rule, adopt a procedure for 429 conspicuously posting and repeatedly broadcasting the notice and 430 the agenda on a closed-circuit cable television system serving 431 the condominium association. However, if broadcast notice is 432 used in lieu of a notice physically posted on condominium 433 property, the notice and agenda must be broadcast at least four 434 times every broadcast hour of each day that a posted notice is 435 otherwise required under this section. If broadcast notice is 436 provided, the notice and agenda must be broadcast in a manner 437 and for a sufficient continuous length of time so as to allow an 438 average reader to observe the notice and read and comprehend the 439 entire content of the notice and the agenda. In addition to any 440 of the authorized means of providing notice of a meeting of the 441 board, the association may, by rule, adopt a procedure for 442 conspicuously posting the meeting notice and the agenda on a 443 website serving the condominium association for at least the 444 minimum period of time for which a notice of a meeting is also 445 required to be physically posted on the condominium property. 446 Any rule adopted shall, in addition to other matters, include a 447 requirement that the association send an electronic notice 448 providing a hypertext link to the website where the notice is 449 posted.Notice of any meeting in which regular or special450assessments against unit owners are to be considered must451specifically state that assessments will be considered and452provide the nature, estimated cost, and description of the453purposes for such assessments.454 2. Meetings of a committee to take final action on behalf 455 of the board or make recommendations to the board regarding the 456 association budget are subject to this paragraph. Meetings of a 457 committee that does not take final action on behalf of the board 458 or make recommendations to the board regarding the association 459 budget are subject to this section, unless those meetings are 460 exempted from this section by the bylaws of the association. 461 3. Notwithstanding any other law, the requirement that 462 board meetings and committee meetings be open to the unit owners 463 does not apply to: 464 a. Meetings between the board or a committee and the 465 association’s attorney, with respect to proposed or pending 466 litigation, if the meeting is held for the purpose of seeking or 467 rendering legal advice; or 468 b. Board meetings held for the purpose of discussing 469 personnel matters. 470 (l) Certificate of compliance.—A provision that a 471 certificate of compliance from a licensed professional engineer 472electrical contractor or electricianmay be accepted by the 473 association’s board as evidence of complianceof the condominium474unitswith the applicable fire and life safety code must be 475 included. Notwithstanding chapter 633, s. 509.215, s. 476 553.895(1), orofany other code, statute, ordinance, 477 administrative rule, or regulation, or any interpretation of the 478 foregoing, an association, residential condominium,or unit 479 owner is not obligated to retrofit the common elements, 480 association property, or units of a residential condominium with 481 a fire sprinkler system or other engineered lifesafety system in 482 a building that is 75 feet or less in height. There is no 483 obligation to retrofit for a building greater than 75 feet in 484 height, calculated from the lowest level of fire department 485 vehicle access to the floor of the highest occupiable story,has486been certified for occupancy by the applicable governmental487entityif the unit owners have voted to forego such retrofitting 488 by the affirmative vote of a majority of all voting interests in 489 the affected condominium. There is no requirement that owners in 490 condominiums of 75 feet or less conduct an opt-out vote; such 491 condominiums are exempt from fire sprinkler or other engineered 492 lifesafety retrofitting. The preceding sentence is intended to 493 clarify existing law. The local authority having jurisdiction 494 may not require completion of retrofitting with a fire sprinkler 495 system or other engineered lifesafety system before January 1, 496 20222020. By December 31, 20182016, ana residential497condominiumassociation that operates a residential condominium 498 that is not in compliance with the requirements for a fire 499 sprinkler system or other engineered lifesafety system and has 500 not voted to forego retrofitting of such a system must initiate 501 an application for a building permit for the required 502 installation with the local government having jurisdiction 503 demonstrating that the association will become compliant by 504 December 31, 20212019. 505 1. A vote to forego required retrofitting may be obtained 506 by limited proxy or by a ballot personally cast at a duly called 507 membership meeting, or by execution of a written consent by the 508 member, or by electronic voting, and is effective upon recording 509 a certificate executed by an officer or agent of the association 510 attesting to such vote in the public records of the county where 511 the condominium is located. When an opt-out vote is to be 512 conducted at a meeting, the association shall mail orhand513 deliver to each unit owner written notice at least 14 days 514 before the membership meeting in which the vote to forego 515 retrofitting of the required fire sprinkler system or other 516 engineered lifesafety system is to take place. Within 30 days 517 after the association’s opt-out vote, notice of the results of 518 the opt-out vote must be mailed orhanddelivered to all unit 519 owners. Evidence of compliance with this notice requirement must 520 be made by affidavit executed by the person providing the notice 521 and filed among the official records of the association. Failure 522 to provide timely notice to unit owners does not invalidate an 523 otherwise valid opt-out vote if notice of the results is 524 provided to the owners.After notice is provided to each owner,525a copy must be provided by the current owner to a new owner526before closing and by a unit owner to a renter before signing a527lease.528 2. If there has been a previous vote to forego 529 retrofitting, a vote to require retrofitting may be obtained at 530 a special meeting of the unit owners called by a petition of at 531 least 10 percent of the voting interests or by a majority of the 532 board of directors.Such a vote may only be called once every 3533years.Notice shall be provided as required for any regularly 534 called meeting of the unit owners, and must state the purpose of 535 the meeting.Electronic transmission may not be used to provide536notice of a meeting called in whole or in part for this purpose.537 3. As part of the information collected annually from 538 condominiums, the division shall require condominium 539 associations to report the membership vote and recording of a 540 certificate under this subsection and, if retrofitting has been 541 undertaken, the per-unit cost of such work. The division shall 542 annually report to the Division of State Fire Marshal of the 543 Department of Financial Services the number of condominiums that 544 have elected to forego retrofitting. Compliance with this 545 administrative reporting requirement does not affect the 546 validity of an opt-out vote. 547 4. Notwithstanding s. 553.509, a residential association 548 may not be obligated to, and may forego the retrofitting of, any 549 improvements required by s. 553.509(2) upon an affirmative vote 550 of a majority of the voting interests in the affected 551 condominium. 552 Section 3. Section 718.707, Florida Statutes, is amended to 553 read: 554 718.707 Time limitation for classification as bulk assignee 555 or bulk buyer.—A person acquiring condominium parcels may not be 556 classified as a bulk assignee or bulk buyer unless the 557 condominium parcels were acquired on or after July 1, 2010, but558before July 1, 2018. The date of such acquisition shall be 559 determined by the date of recording a deed or other instrument 560 of conveyance for such parcels in the public records of the 561 county in which the condominium is located, or by the date of 562 issuing a certificate of title in a foreclosure proceeding with 563 respect to such condominium parcels. 564 Section 4. Paragraphs (a) and (b) of subsection (2) of 565 section 719.104, Florida Statutes, are amended to read: 566 719.104 Cooperatives; access to units; records; financial 567 reports; assessments; purchase of leases.— 568 (2) OFFICIAL RECORDS.— 569 (a) From the inception of the association, the association 570 shall maintain a copy of each of the following, where 571 applicable, which shall constitute the official records of the 572 association: 573 1. The plans, permits, warranties, and other items provided 574 by the developer pursuant to s. 719.301(4). 575 2. A photocopy of the cooperative documents. 576 3. A copy of the current rules of the association. 577 4. A book or books containing the minutes of all meetings 578 of the association, of the board of directors, and of the unit 579 owners, which minutes shall be retained for a period of not less 580 than 7 years. 581 5. A current roster of all unit owners and their mailing 582 addresses, unit identifications, voting certifications, and, if 583 known, telephone numbers. The association shall also maintain 584 the electronic mailing addresses and the numbers designated by 585 unit owners for receiving notice sent by electronic transmission 586 of those unit owners consenting to receive notice by electronic 587 transmission. The electronic mailing addresses and numbers 588 provided by unit owners to receive notice by electronic 589 transmission shall be removed from association records when 590 consent to receive notice by electronic transmission is revoked. 591 However, the association is not liable for an erroneous 592 disclosure of the electronic mail address or the number for 593 receiving electronic transmission of notices. 594 6. All current insurance policies of the association. 595 7. A current copy of any management agreement, lease, or 596 other contract to which the association is a party or under 597 which the association or the unit owners have an obligation or 598 responsibility. 599 8. Bills of sale or transfer for all property owned by the 600 association. 601 9. Accounting records for the association and separate 602 accounting records for each unit it operates, according to good 603 accounting practices. All accounting records shall be maintained 604 for a period of not less than 7 years. The accounting records 605 shall include, but not be limited to: 606 a. Accurate, itemized, and detailed records of all receipts 607 and expenditures. 608 b. A current account and a monthly, bimonthly, or quarterly 609 statement of the account for each unit designating the name of 610 the unit owner, the due date and amount of each assessment, the 611 amount paid upon the account, and the balance due. 612 c. All audits, reviews, accounting statements, and 613 financial reports of the association. 614 d. All contracts for work to be performed. Bids for work to 615 be performed shall also be considered official records and shall 616 be maintained for a period of 1 year. 617 10. Ballots, sign-in sheets, voting proxies, and all other 618 papers and electronic records relating to voting by unit owners, 619 which shall be maintained for a period of 1 year after the date 620 of the election, vote, or meeting to which the document relates. 621 11. All rental records where the association is acting as 622 agent for the rental of units. 623 12. A copy of the current question and answer sheet as 624 described in s. 719.504. 625 13. All other written records of the association not 626 specifically included in the foregoing which are related to the 627 operation of the association. 628 (b) The official records of the association must be 629 maintained within the state for at least 7 years. The records of 630 the association shall be made available to a unit owner within 631 45 miles of the cooperative property or within the county in 632 which the cooperative property is located within 105working 633 days after receipt of written request by the board or its 634 designee. This paragraph may be complied with by having a copy 635 of the official records of the association available for 636 inspection or copying on the cooperative property or the 637 association may offer the option of making the records available 638 to a unit owner electronically via the Internet or by allowing 639 the records to be viewed in an electronic format on a computer 640 screen and printed upon request. The association is not 641 responsible for the use or misuse of the information provided to 642 an association member or his or her authorized representative 643 pursuant to the compliance requirements of this chapter unless 644 the association has an affirmative duty not to disclose such 645 information pursuant to this chapter. 646 Section 5. Subsection (5) of section 719.1055, Florida 647 Statutes, is amended to read: 648 719.1055 Amendment of cooperative documents; alteration and 649 acquisition of property.— 650 (5) The bylaws must include a provision whereby a 651 certificate of compliance from a licensed professional engineer 652electrical contractor or electricianmay be accepted by the 653 association’s board as evidence of complianceof the cooperative654unitswith the applicable fire and life safety code. 655 (a)1. Notwithstanding chapter 633, s. 509.215, s. 656 553.895(1), or any other code, statute, ordinance, 657 administrative rule, or regulation, or any interpretation of the 658 foregoing, an associationa cooperativeor unit owner is not 659 obligated to retrofit the common elements or units of a 660 residential cooperative with a fire sprinkler system or other 661 engineered lifesafety system in a building that is 75 feet or 662 less in height. There is no obligation to retrofit for a 663 building greater than 75 feet in height, calculated from the 664 lowest level of fire department vehicle access to the floor of 665 the highest occupiable story,has been certified for occupancy666by the applicable governmental entityif the unit owners have 667 voted to forego such retrofitting by the affirmative vote of a 668 majority of all voting interests in the affected cooperative. 669 There is no requirement that owners in cooperatives of 75 feet 670 or less conduct an opt-out vote; such cooperatives are exempt 671 from fire sprinkler or other engineered life safety 672 retrofitting. The preceding sentence is intended to clarify 673 existing law. The local authority having jurisdiction may not 674 require completion of retrofitting with a fire sprinkler system 675 or other engineered life safety system before January 1, 2022 676the end of 2019. By December 31, 20182016, a cooperative that 677 is not in compliance with the requirements for a fire sprinkler 678 system or other engineered lifesafety system and has not voted 679 to forego retrofitting of such a system must initiate an 680 application for a building permit for the required installation 681 with the local government having jurisdiction demonstrating that 682 the cooperative will become compliant by December 31, 20212019. 683 2. A vote to forego required retrofitting may be obtained 684 by limited proxy or by a ballot personally cast at a duly called 685 membership meeting, or by execution of a written consent by the 686 member, or by electronic voting, and is effective upon recording 687 a certificate executed by an officer or agent of the association 688 attesting to such vote in the public records of the county where 689 the cooperative is located. When the opt-out vote is to be 690 conducted at a meeting, the cooperative shall mail orhand691 deliver to each unit owner written notice at least 14 days 692 before the membership meeting in which the vote to forego 693 retrofitting of the required fire sprinkler system or other 694 engineered lifesafety system is to take place. Within 30 days 695 after the cooperative’s opt-out vote, notice of the results of 696 the opt-out vote must be mailed orhanddelivered to all unit 697 owners. Evidence of compliance with this notice requirement must 698 be made by affidavit executed by the person providing the notice 699 and filed among the official records of the cooperative. Failure 700 to provide timely notice to unit owners does not invalidate an 701 otherwise valid opt-out vote if notice of the results is 702 provided to the owners.After notice is provided to each owner,703a copy must be provided by the current owner to a new owner704before closing and by a unit owner to a renter before signing a705lease.706 (b) If there has been a previous vote to forego 707 retrofitting, a vote to require retrofitting may be obtained at 708 a special meeting of the unit owners called by a petition of 709 least 10 percent of the voting interests or by a majority of the 710 board of directors.Such vote may only be called once every 3711years.Notice must be provided as required for any regularly 712 called meeting of the unit owners, and the notice must state the 713 purpose of the meeting.Electronic transmission may not be used714to provide notice of a meeting called in whole or in part for715this purpose.716 (c) As part of the information collected annually from 717 cooperatives, the division shall require associations to report 718 the membership vote and recording of a certificate under this 719 subsection and, if retrofitting has been undertaken, the per 720 unit cost of such work. The division shall annually report to 721 the Division of State Fire Marshal of the Department of 722 Financial Services the number of cooperatives that have elected 723 to forego retrofitting. Compliance with this administrative 724 reporting requirement does not affect the validity of an opt-out 725 vote. 726 Section 6. Paragraph (c) of subsection (1) of section 727 719.106, Florida Statutes, is amended to read: 728 719.106 Bylaws; cooperative ownership.— 729 (1) MANDATORY PROVISIONS.—The bylaws or other cooperative 730 documents shall provide for the following, and if they do not, 731 they shall be deemed to include the following: 732 (c) Board of administration meetings.—Members of the board 733 of administration may use e-mail as a means of communication, 734 but may not cast a vote on an association matter via e-mail. 735 Meetings of the board of administration at which a quorum of the 736 members is present shall be open to all unit owners. Any unit 737 owner may tape record or videotape meetings of the board of 738 administration. The right to attend such meetings includes the 739 right to speak at such meetings with reference to all designated 740 agenda items. The division shall adopt reasonable rules 741 governing the tape recording and videotaping of the meeting. The 742 association may adopt reasonable written rules governing the 743 frequency, duration, and manner of unit owner statements. 744 Adequate notice of all meetings shall be posted in a conspicuous 745 place upon the cooperative property at least 48 continuous hours 746 preceding the meeting, except in an emergency. Any item not 747 included on the notice may be taken up on an emergency basis by 748 at least a majority plus one of the members of the board. Such 749 emergency action shall be noticed and ratified at the next 750 regular meeting of the board. Notice of any meeting in which 751 regular or special assessments against unit owners are to be 752 considered must specifically state that assessments will be 753 considered and provide the estimated amount and description of 754 the purposes for such assessments.However,Written notice of 755 any meeting at which nonemergency special assessments, or at 756 which amendment to rules regarding unit use, will be considered 757 shall be mailed, delivered, or electronically transmitted to the 758 unit owners and posted conspicuously on the cooperative property 759 not less than 14 days before the meeting. Evidence of compliance 760 with this 14-day notice shall be made by an affidavit executed 761 by the person providing the notice and filed among the official 762 records of the association. Upon notice to the unit owners, the 763 board shall by duly adopted rule designate a specific location 764 on the cooperative property upon which all notices of board 765 meetings shall be posted. In lieu of or in addition to the 766 physical posting of notice of any meeting of the board of 767 administration on the cooperative property, the association may, 768 by reasonable rule, adopt a procedure for conspicuously posting 769 and repeatedly broadcasting the notice and the agenda on a 770 closed-circuit cable television system serving the cooperative 771 association. However, if broadcast notice is used in lieu of a 772 notice posted physically on the cooperative property, the notice 773 and agenda must be broadcast at least four times every broadcast 774 hour of each day that a posted notice is otherwise required 775 under this section. When broadcast notice is provided, the 776 notice and agenda must be broadcast in a manner and for a 777 sufficient continuous length of time so as to allow an average 778 reader to observe the notice and read and comprehend the entire 779 content of the notice and the agenda. In addition to any of the 780 authorized means of providing notice of a meeting of the board, 781 the association may, by rule, adopt a procedure for 782 conspicuously posting the meeting notice and the agenda on a 783 website serving the cooperative association for at least the 784 minimum period of time for which a notice of a meeting is also 785 required to be physically posted on the cooperative property. 786 Any rule adopted shall, in addition to other matters, include a 787 requirement that the association send an electronic notice 788 providing a hypertext link to the website where the notice is 789 posted.Notice of any meeting in which regular assessments790against unit owners are to be considered for any reason shall791specifically contain a statement that assessments will be792considered and the nature of any such assessments.Meetings of a 793 committee to take final action on behalf of the board or to make 794 recommendations to the board regarding the association budget 795 are subject to the provisions of this paragraph. Meetings of a 796 committee that does not take final action on behalf of the board 797 or make recommendations to the board regarding the association 798 budget are subject to the provisions of this section, unless 799 those meetings are exempted from this section by the bylaws of 800 the association. Notwithstanding any other law to the contrary, 801 the requirement that board meetings and committee meetings be 802 open to the unit owners does not apply to board or committee 803 meetings held for the purpose of discussing personnel matters or 804 meetings between the board or a committee and the association’s 805 attorney, with respect to proposed or pending litigation, if the 806 meeting is held for the purpose of seeking or rendering legal 807 advice. 808 Section 7. Paragraph (a) of subsection (2) and subsection 809 (6) of section 720.303, Florida Statutes, are amended to read: 810 720.303 Association powers and duties; meetings of board; 811 official records; budgets; budget meetings; financial reporting; 812 association funds; recalls.— 813 (2) BOARD MEETINGS.— 814 (a) Members of the board of administration may use e-mail 815 as a means of communication, but may not cast a vote on an 816 association matter via e-mail. A meeting of the board of 817 directors of an association occurs whenever a quorum of the 818 board gathers to conduct association business. Meetings of the 819 board must be open to all members, except for meetings between 820 the board and its attorney with respect to proposed or pending 821 litigation where the contents of the discussion would otherwise 822 be governed by the attorney-client privilege. A meeting of the 823 board must be held at a location that is accessible to a 824 physically handicapped person if requested by a physically 825 handicapped person who has a right to attend the meeting. The 826 provisions of this subsection shall also apply to the meetings 827 of any committee or other similar body when a final decision 828 will be made regarding the expenditure of association funds and 829 to meetings of any body vested with the power to approve or 830 disapprove architectural decisions with respect to a specific 831 parcel of residential property owned by a member of the 832 community. 833 (6) BUDGETS; BUDGET MEETINGS.— 834 (a) The association shall prepare an annual budget that 835 sets out the annual operating expenses. The budget must reflect 836 the estimated revenues and expenses for that year and the 837 estimated surplus or deficit as of the end of the current year. 838 The budget must set out separately all fees or charges paid for 839 by the association for recreational amenities, whether owned by 840 the association, the developer, or another person. The 841 association shall provide each member with a copy of the annual 842 budget or a written notice that a copy of the budget is 843 available upon request at no charge to the member. The copy must 844 be provided to the member within the time limits set forth in 845 subsection (5). 846 (b) In addition to annual operating expenses, the budget 847 mustmayinclude reserve accounts for capital expenditures and 848 deferred maintenanceforwhich are obligations of the 849 association underis responsible. If reserve accounts are not850established pursuant to paragraph (d), funding of such reserves851is limited to the extent thatthe governing documents for any 852 item that has a deferred maintenance expense or replacement cost 853 that exceeds $10,000. The amount to be reserved must be computed 854 using a formula based upon estimated remaining useful life and 855 estimated replacement cost or deferred maintenance expense of 856 each reserve item. The association may adjust replacement 857 reservelimit increases inassessments annually to take into 858 account any changes in estimates or extension of the useful life 859 of a reserve item caused by deferred maintenance. This 860 subsection does not apply to an adopted budget in which the 861 members of an association have determined, by a majority vote at 862 a duly called meeting, including reserves. If the budgetof the 863 association, to provide no reserves or less reserves than 864 required by this subsectionincludes reserve accounts865established pursuant to paragraph (d), such reserves shall be866determined, maintained, and waived in the manner provided in867this subsection. Once an association provides for reserve868accounts pursuant to paragraph (d), the association shall869thereafter determine, maintain, and waive reserves in compliance870with this subsection. This section does not preclude the 871 termination of a reserve account established pursuant to this 872 paragraph upon approval of a majority of the total voting 873 interests of the association. Upon such approval, the 874 terminating reserve account shall be removed from the budget. 875 (c)1.Before turnover of control of anIf the budget of the876 association pursuant to s. 720.307, the developer may vote the 877 voting interests allocated to its parcels to waive the reserves 878 or reduce the funding of reserves through the period expiring at 879 the end of the second fiscal year after the fiscal year in which 880 the governing documents are initially recorded or an instrument 881 that transfers title to a parcel subject to the governing 882 documents which is not accompanied by a recorded assignment of 883 developer rights in favor of the grantee of such parcel is 884 recorded, whichever occurs first, after which time reserves may 885 be waived or reduced only upon the vote of a majority of all 886 nondeveloper voting interests voting in person or by limited 887 proxy at a duly called meeting of the association.does not888provide for reserve accounts pursuant to paragraph (d) and the889association is responsible for the repair and maintenance of890capital improvements that may result in a special assessment if891reserves are not provided, each financial report for the892preceding fiscal year required by subsection (7) must contain893the following statement in conspicuous type:894THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR RESERVE895ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED MAINTENANCE THAT896MAY RESULT IN SPECIAL ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE897FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA898STATUTES, UPON OBTAINING THE APPROVAL OF A MAJORITY OF THE TOTAL899VOTING INTERESTS OF THE ASSOCIATION BY VOTE OF THE MEMBERS AT A900MEETING OR BY WRITTEN CONSENT.9012.If the budget of the association does provide for902funding accounts for deferred expenditures, including, but not903limited to, funds for capital expenditures and deferred904maintenance, but such accounts are not created or established905pursuant to paragraph (d), each financial report for the906preceding fiscal year required under subsection (7) must also907contain the following statement in conspicuous type:908THE BUDGET OF THE ASSOCIATION PROVIDES FOR LIMITED VOLUNTARY909DEFERRED EXPENDITURE ACCOUNTS, INCLUDING CAPITAL EXPENDITURES910AND DEFERRED MAINTENANCE, SUBJECT TO LIMITS ON FUNDING CONTAINED911IN OUR GOVERNING DOCUMENTS. BECAUSE THE OWNERS HAVE NOT ELECTED912TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6),913FLORIDA STATUTES, THESE FUNDS ARE NOT SUBJECT TO THE914RESTRICTIONS ON USE OF SUCH FUNDS SET FORTH IN THAT STATUTE, NOR915ARE RESERVES CALCULATED IN ACCORDANCE WITH THAT STATUTE.916(d)An association is deemed to have provided for reserve917accounts if reserve accounts have been initially established by918the developer or if the membership of the association919affirmatively elects to provide for reserves. If reserve920accounts are established by the developer, the budget must921designate the components for which the reserve accounts may be922used. If reserve accounts are not initially provided by the923developer, the membership of the association may elect to do so924upon the affirmative approval of a majority of the total voting925interests of the association. Such approval may be obtained by926vote of the members at a duly called meeting of the membership927or by the written consent of a majority of the total voting928interests of the association. The approval action of the929membership must state that reserve accounts shall be provided930for in the budget and must designate the components for which931the reserve accounts are to be established. Upon approval by the932membership, the board of directors shall include the required933reserve accounts in the budget in the next fiscal year following934the approval and each year thereafter. Once established as935provided in this subsection, the reserve accounts must be funded936or maintained or have their funding waived in the manner937provided in paragraph (f).938(e)The amount to be reserved in any account established939shall be computed by means of a formula that is based upon940estimated remaining useful life and estimated replacement cost941or deferred maintenance expense of each reserve item. The942association may adjust replacement reserve assessments annually943to take into account any changes in estimates of cost or useful944life of a reserve item.945(f)After one or more reserve accounts are established, the946membership of the association, upon a majority vote at a meeting947at which a quorum is present, may provide for no reserves or948less reserves than required by this section.If a meeting of the 949 parcelunitowners has been called to determine whether to waive 950 or reduce the funding of reserves and such result is not 951 achieved or a quorum is not present, the reservesasincluded in 952 the budget go into effect. After the turnover, the developer may 953 vote its voting interest to waive or reduce the funding of 954 reserves.Any vote taken pursuant to this subsection to waive or955reduce reserves is applicable only to one budget year.956 (d) Reserve funds and any interest accruing thereon shall 957 remain in the reserve account or accounts and may be used only 958 for authorized reserve expenditures unless their use for other 959 purposes is approved in advance by a majority vote at a duly 960 called meeting of the association. Before turnover of control of 961 an association by a developer to parcel owners other than the 962 developer pursuant to s. 720.307, the developer-controlled 963 association may not vote to use reserves for purposes other than 964 those for which they were intended without the approval of a 965 majority of all nondeveloper voting interests, voting in person 966 or by limited proxy at a duly called meeting of the association. 967 (e) The only voting interests that are eligible to vote on 968 questions that involve waiving or reducing the funding of 969 reserves, or using existing reserve funds for purposes other 970 than purposes for which the reserves were intended, are the 971 voting interests of the parcels subject to assessment to fund 972 the reserves in question. Any vote taken pursuant to this 973 subsection to waive or reduce reserves is applicable only to 1 974 budget year. Proxy questions relating to waiving or reducing the 975 funding of reserves or using existing reserve funds for purposes 976 other than purposes for which the reserves were intended must 977 contain the following statement in capitalized, bold letters in 978 a font size larger than any other used on the face of the proxy 979 ballot: WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING 980 ALTERNATIVE USES OF EXISTING RESERVES MAY RESULT IN PARCEL OWNER 981 LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS 982 REGARDING THOSE ITEMS. 983 (f) Funding formulas for reserves required by this section 984 shall be based on a pooled analysis of two or more of the items 985 for which reserves are required to be accrued pursuant to this 986 subsection. The amount of the contribution to the pooled reserve 987 account as disclosed on the proposed budget may not be less than 988 that required to ensure that the balance on hand at the 989 beginning of the period the budget will go into effect plus the 990 projected annual cash inflows over the remaining estimated 991 useful life of all of the assets that make up the reserve pool 992 are equal to or greater than the projected annual cash outflows 993 over the remaining estimated useful lives of all the assets that 994 make up the reserve pool based on the current reserve analysis. 995 The projected annual cash inflows may include estimated earnings 996 from investment of principal and accounts receivable minus the 997 allowance for doubtful accounts. The reserve funding formula may 998 not include any type of balloon payments. 999 (g) As an alternative to the pooled analysis method 1000 described in paragraph (f) and, if approved by a majority vote 1001 at a meeting of the members of the association at which a quorum 1002 is present, the funding formulas for reserves required 1003authorizedby this section maymustbe based on a separate 1004 analysis of each of the required assets or a pooled analysis of 1005 two or more of the required assets.1.If the association 1006 maintains separate reserve accounts for each of the required 1007 assets, the amount of the contribution to each reserve account 1008 is the sum of the following two calculations: 1009 1.a.The total amount necessary, if any, to bring a 1010 negative component balance to zero. 1011 2.b.The total estimated deferred maintenance expense or 1012 estimated replacement cost of the reserve component less the 1013 estimated balance of the reserve component as of the beginning 1014 of the period the budget will be in effect. The remainder, if 1015 greater than zero, shall be divided by the estimated remaining 1016 useful life of the component. 1017 1018 The formula may be adjusted each year for changes in estimates 1019 and deferred maintenance performed during the year and may 1020 include factors such as inflation and earnings on invested 1021 funds. An association may convert its funding formulas from a 1022 component method to a pooled method, as described in paragraph 1023 (f), at any time if approved by a majority vote at a meeting at 1024 which a quorum is present. 10252.If the association maintains a pooled account of two or1026more of the required reserve assets, the amount of the1027contribution to the pooled reserve account as disclosed on the1028proposed budget may not be less than that required to ensure1029that the balance on hand at the beginning of the period the1030budget will go into effect plus the projected annual cash1031inflows over the remaining estimated useful life of all of the1032assets that make up the reserve pool are equal to or greater1033than the projected annual cash outflows over the remaining1034estimated useful lives of all the assets that make up the1035reserve pool, based on the current reserve analysis. The1036projected annual cash inflows may include estimated earnings1037from investment of principal and accounts receivable minus the1038allowance for doubtful accounts. The reserve funding formula may1039not include any type of balloon payments.1040 (h)1.Reserve funds andAnyinterest accruing thereon shall1041remain in the reserve account or accounts and shall be used only1042for authorized reserve expenditures unless their use for other1043purposes is approved in advance by a majority vote at ameeting 1044 at which a proposed annual budget of an association will be 1045 considered by the board ora quorum is present. Prior to1046turnover of control of an association by a developer toparcel 1047 owners shall be open to all parcel owners, the developer1048controlled association shall not vote to use reserves for1049purposes other than those for which they were intended without1050the approval of a majority of all nondeveloper voting interests1051voting in person or by limited proxy at a duly called meeting of1052the association. 1053 2.a. If a board adopts in any fiscal year an annual budget 1054 which requires assessments against parcel owners which exceed 1055 115 percent of assessments for the preceding fiscal year, the 1056 board shall conduct a special meeting of the parcel owners to 1057 consider a substitute budget if the board receives, within 21 1058 days after adoption of the annual budget, a written request for 1059 a special meeting from at least 10 percent of all voting 1060 interests. The special meeting shall be conducted within 60 days 1061 after adoption of the annual budget. At least 14 days before 1062 such special meeting, the board shall hand deliver to each 1063 parcel owner, or mail to each parcel owner at the address last 1064 furnished to the association, a notice of the meeting. An 1065 officer or manager of the association, or other person providing 1066 notice of such meeting, shall execute an affidavit evidencing 1067 compliance with this notice requirement, and such affidavit 1068 shall be filed among the official records of the association. 1069 Parcel owners may consider and adopt a substitute budget at the 1070 special meeting. A substitute budget is adopted if approved by a 1071 majority of all voting interests unless the bylaws require 1072 adoption by a greater percentage of voting interests. If there 1073 is not a quorum at the special meeting or a substitute budget is 1074 not adopted, the annual budget previously adopted by the board 1075 shall take effect as scheduled. 1076 b. Any determination of whether assessments exceed 115 1077 percent of assessments for the prior fiscal year shall exclude 1078 any authorized provision for reasonable reserves for repair or 1079 replacement of the association property, anticipated expenses of 1080 the association which the board does not expect to be incurred 1081 on a regular or annual basis, or assessments for betterments to 1082 the condominium property. 1083 c. If the developer controls the board, assessments may not 1084 exceed 115 percent of assessments for the prior fiscal year 1085 unless approved by a majority of all voting interests. 1086 (i) The provisions of paragraphs (b)-(h) do not apply to 1087 mandatory reserve accounts required to be established and 1088 maintained by an association at the direction of a county or 1089 municipal government, water or drainage management district, 1090 community development district, or other political subdivision 1091 that has the authority to approve and control subdivision 1092 infrastructure which is being entrusted to the care of an 1093 association on condition that the association establish and 1094 maintain one or more mandatory reserve accounts for the deferred 1095 maintenance or replacement of the infrastructure in accordance 1096 with the requirements of that entrusting authority. 1097 Section 8. Paragraph (a) of subsection (9) of section 1098 720.306, Florida Statutes, is amended to read: 1099 720.306 Meetings of members; voting and election 1100 procedures; amendments.— 1101 (9) ELECTIONS AND BOARD VACANCIES.— 1102 (a) Elections of directors must be conducted in accordance 1103 with the procedures set forth in the governing documents of the 1104 association. Except as provided in paragraph (b), all members of 1105 the association are eligible to serve on the board of directors, 1106 and a member may nominate himself or herself as a candidate for 1107 the board at a meeting where the election is to be held; 1108 provided, however, that if the election process allows 1109 candidates to be nominated in advance of the meeting, the 1110 association is not required to allow nominations at the meeting. 1111 An election is not required unless more candidates are nominated 1112 than vacancies exist. If an election is not required because 1113 there are either an equal number or fewer qualified candidates 1114 than vacancies exist, and if nominations from the floor are not 1115 required pursuant to this section or the bylaws, write-in 1116 nominations are not permitted and such candidates shall commence 1117 service on the board of directors, regardless of whether a 1118 quorum is attained at the annual meeting. Except as otherwise 1119 provided in the governing documents, boards of directors must be 1120 elected by a plurality of the votes cast by eligible voters. Any 1121 challenge to the election process must be commenced within 60 1122 days after the election results are announced. 1123 Section 9. Paragraph (b) of subsection (3) of section 1124 720.3085, Florida Statutes, is amended to read: 1125 720.3085 Payment for assessments; lien claims.— 1126 (3) Assessments and installments on assessments that are 1127 not paid when due bear interest from the due date until paid at 1128 the rate provided in the declaration of covenants or the bylaws 1129 of the association, which rate may not exceed the rate allowed 1130 by law. If no rate is provided in the declaration or bylaws, 1131 interest accrues at the rate of 18 percent per year. 1132 (b) Any payment received by an association and accepted 1133 shall be applied first to any interest accrued, then to any 1134 administrative late fee, then to any costs and reasonable 1135 attorney fees incurred in collection, and then to the delinquent 1136 assessment. This paragraph applies notwithstanding any 1137 restrictive endorsement, designation, or instruction placed on 1138 or accompanying a payment. A late fee is not subject to the 1139 provisions of chapter 687 and is not a fine. The foregoing is 1140 applicable notwithstanding s. 673.3111, any purported accord and 1141 satisfaction, or any restrictive endorsement, designation, or 1142 instruction placed on or accompanying a payment. The preceding 1143 sentence is intended to clarify existing law. 1144 Section 10. This act shall take effect July 1, 2017.