New rules boost homeowner association regulations

TALLAHASSEE, Fla. – July 2, 2013 – The recent housing downturn created some unexpected problems within Florida’s planned communities thanks to drops in home sales, developer bankruptcies and other problems. As a result, a bill (HB 7119) – which was passed by the Florida Legislature and signed into law by Gov. Rick Scott – went into effect on Monday, giving the state more oversight of planned communities.

Major provisions

• All Florida Homeowners Associations (HOAs) must register with the state Department of Business and Professional Regulation (DBPR) by Nov. 22, 2013. When registering, they must include their a) name, b) federal ID number, c) mailing and location addresses, d) total number of parcels, and e) total revenue and expenses in annual budget.

• HOA directors must disclose any affiliation they have with a vendor, and approval of those contracts requires a two-thirds vote of the directors. It also gives HOA members the right to disaffirm one of these contracts at a future members’ meeting with a simple majority vote.

• HOA directors cannot personally receive goods or services from any providers working with the association.

• Once a developer sells 50 percent of the parcels, the association must add one non-developer HOA member to its Board of Directors.

• Prohibits a community’s developer from making a unilateral amendment to the declaration governing an association if that amendment is arbitrary, capricious or in bad faith; or if it destroys the general plan of development, prejudices the rights of members to use common property, or materially shifts economic burdens from the developer to members.

In addition to major provisions, the new law also creates rules for troubled associations, such as oversight into the way a development is turned over to members if the developer faces bankruptcy or abandons the project.

The complete bill is posted online by the Florida Legislature.

© 2013 Florida Realtors®