By Bob Murrell
Woodward, Pires & Lombardo, P.A.
In this issue, we will continue to look at the new laws signed into law by Florida Gov. Rick Scott on June 13. Today, we will continue to look at House Bill 807 and its impact on cooperatives under Chapter 719 and homeowners’ associations under Chapter 720.
Many of the changes to Chapter 719 were simply Acatch-up@ additions to the statute to bring Chapter 719 more in line with Chapter 718. The first of these was the inclusion of all telephone numbers in a directory and the right of the owner to consent to additional information, just as we saw in the prior amendments impacting condominiums.
Also, just as we saw with Chapter 718, an outgoing board member or committee member must relinquish all official records and property of the association in his or her possession, or under his or her control, to the incoming board, within five days after election. If not, the outgoing board member may be subject to a civil penalty.
Another area of catch up that the legislature was making was in changes to Section 719.104(4) of the Cooperative Act. This section has been amended regarding the required year-end financial reports for cooperative associations. The statue will now provide, like the Condominium Act, that within 90 days after the end of the fiscal year or calendar year, or annually on the date provided in the bylaws, a cooperative association must prepare a financial report covering the preceding fiscal year. The report must be provided to the members, or made available, no later than 120 days after the end of the fiscal year, calendar year or date set forth in the bylaws.
The required financial statements include a compiled financial statement for those cooperative associations with annual revenues between $150,000 and $299,999; a reviewed financial statement for cooperative associations with annual revenues between $300,000 and $499,999; and audited financial statements for cooperative associations with revenues in excess of $500,000. Associations with total annual revenues of less than $150,000 shall prepare a report of cash receipts and expenditures. The law exempts cooperative associations operating less than 50 units. By a majority vote of the members, an association may waive the required reports (although some type of report is always required) but for no more than three consecutive years.
Board eligibility for cooperative associations also was addressed by the legislature in this new statute, again to be more similar to the requirements for condominiums. Section 719.106(1)(a)2, Fla. Statute, has been amended to provide that a person who has been suspended or removed from office by the Division of Florida Condominiums, Timeshares and Mobile Homes is not eligible to be a candidate for the board and may not be listed on the ballot. In addition, persons who have been charged with theft of association funds may not serve on the board while such charges are pending. Also persons convicted of a felony are not eligible for board membership unless their civil rights have been restored for at least five years as of the date such person seeks election to the board.
The final item impacting cooperative associations, which also mirrors the Condominium Act provisions, are emergency powers granted to the board of directors. Such powers that are granted include the power and authority to determine when the property must be evacuated and granting the board power to prohibit property owners from returning to the community until it is determined that it is safe to do so. The power granted is limited to that time reasonably necessary to protect the health, safety and welfare of the association and the unit owners and their family members, tenants, guests, agents or invitees.
Next, we will look at the changes to the Homeowners’ Association Act, Chapter 720.