Legislative Report - Florida 2007
By Ellen Hirsch de Haan, J.D.
The 2007 Legislative Session was an exceptionally busy one for laws affecting the operation of Condominiums, Cooperatives, Homeowners' Associations and Timeshares in Florida. After several years of almost no change, more than half a dozen separate bills were passed, and signed into law by Governor Charlie Crist. Most of the Laws became effective on July 1, 2007, except as noted below.
This is the first of a series of articles to bring community association boards and members up to date on the new Laws. Please note: Florida Statutes, Chapter 718 governs Condominium; Chapter 719 governs Cooperatives; Chapter 720 governs homeowner associations; and Chapter 721 governs Timeshares.
Committee Substitute for Committee Substitute For Senate Bill 902 (CS/CS/SB 902) - Changes to Chapters 718 and 720:
Condominium Law - Chapter 718, Florida Statutes
- Beach access: Section 718.106 was created to prohibit local government from impairing a condominium unit owner, or his/her guest, from having pedestrian access to a public beach which is immediately adjacent to the condominium property, except if the access limit is necessary to protect public health, safety or natural resources. Please note: a governmental entity is still permitted to regulate activities which take place on the beach.
- Lender consent for Condominium Document amendments: Section 718.110(11) was substantially amended to address a problem which has plagued older condominiums. For a number of years, Declarations of Condominium were drafted to require that amendments to the Declaration be approved by a percentage of the association members, but also by 100 percent of the mortgage lenders who held mortgages on the individual units.
This has been a serious problem for many condominiums, given the sale and resale of mortgages, and the volatility of the mortgage market, and created a time-consuming and expensive challenge for the Boards to find all of the lenders, and seek out their written approvals, for such things as a change to the number of Directors on the Board, or adoption of a guest restrictions (generally, matters which have no impact on the security of the lender's collateral). Frequently, the lenders did not respond to the Association's letters at all.
The new Law provides a procedure for handling mortgage lender amendment approval requirements, when the change does not affect the rights or interests of the mortgagees:
The next article will continue this discussion of new Laws of concern to all types of Community Associations.
- Beginning with mortgages recorded after October 1, 2007, lender approval requirements which are set forth in Condominium Governing Documents will only be enforceable for amendments which impact on priority of the mortgagee's lien or rights to foreclose; or otherwise materially impact on lender rights regarding the loan.
- If the mortgage was recorded before October 1, 2007, the requirement that the lender approve will still be enforceable, but will be subject to the following:
Another important part of the new Law involves the statute of limitations on the ability to challenge a previously adopted amendment. For older Condominium Associations which have documents requiring lender approval of all amendments, an amendment may have been adopted 12 years ago, and there are no records to show whether the lender approval was obtained. Section 718.110(11)(e) provides that amendments cannot be challenged if more than five years has passed since they were adopted.
- The Association can rely on the Public Records to search out the holders of the outstanding mortgages. The mailing address will be that of the lender shown on the latest recorded mortgage or assignment of mortgage.
- The Association would then send out a written request to each owner to determine the name and address of the person to whom the mortgage payments are currently being made. If no information is provided to the contrary, the Association can use the mailing document on the mortgage in the Public Records.
- Notice of the amendment and a request for approval must be sent to the mortgagees by certified mail/return receipt requested, or some other method that establishes proof of delivery.
- Then, if the lender does not respond within 60 days from the date of mailing the notice is deemed to have consented to the amendment.