Rembaum’s Association Roundup

2023 Legislative Update, Part II

What it Means to Your Community Association

By Jeffrey A. Rembaum, Esq. / Published August 2023

The 2023 Florida legislature adopted prolific legislation this session affecting Florida’s community associations. While many association members and stakeholders were focused on 2023 legislative amendments to the laws adopted in 2022 pertaining to the condominium and cooperative milestone and structural integrity reserve studies, the 2023 Florida legislature was also quite busy amending Chapter 720 of the Florida Statutes, the Homeowners’ Association Act, and many other chapters, too. Subjects include the following: (** denotes already passed into law)

• Condominium & Cooperative Association Legislation, Senate Bill 154 (a.k.a. the “Milestone and SIRS Glitch Bill”) **
• Patriot Day, House Bill 437 **
• Homeowners’ AssociationLegislation, House Bill 919 (a.k.a. the “Homeowners Association Bill of Rights”) **
• Property Owners’ Rights to Install, Display, and Store Items on Their Lot and Clarifies the Ability to Display Certain Flags, House Bill 437 **

Editor’s Note: The four bills above were covered in detail in the July issue of the Florida Community Association Journal.

• Actions for Negligence, House Bill 837 **
• Construction Defect Lawsuit Timeline in Which to File a Lawsuit is Significantly Shortened, Senate Bill 360 **
• Affordable Housing (Summary Only), Senate Bill 102 **
• Construction Liens, House Bill 331 **
• Legal Instruments, Senate Bill 286 **
• Massive Insurance Legislation, Senate Bills 2A & 2B (Special Session) **
• Bonus—An Emergency Life Safety Systems Update (ELSS)

Please take careful note that due to publication deadlines the information in this article is current as of June 30, 2023, and reflects both legislation already enacted into law and legislation expected to be enacted into law prior to July 1, 2023. Therefore, the online version of this 2023 Legislative Update will be updated. Please be sure to visit www.kbrlegal.com, www.rembaumsassociationroundup.com, or www.fcap.com after July 1, 2023, for the most up-to-date version of this article.

ADDITIONAL NEW LEGISLATION AFFECTING ALL ASSOCIATIONS

Actions For Negligence House Bill 837

Already Passed into Law and in Effect

Statute of Limitation Significantly Reduced

House Bill 837, an already existing law, shortens the time upon which to file a lawsuit founded on negligence from four years to two years. In addition, additional litigation protections are created for armed forces service members when on active duty and such active duty materially affects the service member’s ability to appear (in court, etc.).

§95.11, Fla. Stat.

Modified Comparative Negligence

This bill also modifies Florida’s damages apportionment standard from a pure comparative negligence approach to a modified comparative negligence approach, except that this modification does not apply to personal injury or wrongful death cases arising out of medical negligence pursuant to chapter 766, Fla. Stat.

Under the bill, any party to a negligence action not brought under Chapter 766, Fla. Stat., (medical negligence) who is more than 50 percent at fault for his or her own harm recovers no damages. For example, in an automobile accident causing a plaintiff $100,000 in damages, then i) If the defendant is fully at fault, the plaintiff recovers all of his damages—that is, $100,000; ii) If the plaintiff is 49 percent at fault and the defendant is 51 percent at fault, the plaintiff recovers 51 percent of his damages—that is, $51,000; iii) If the plaintiff and the defendant are each 50 percent at fault, the plaintiff recovers 50 percent of his damages—that is $50,000; and iv) If the plaintiff is more than 50 percent at fault for his own damages—meaning the defendant is less responsible than the plaintiff for the plaintiff’s damages—the plaintiff recovers nothing. Note that a plaintiff bringing a medical negligence action under chapter 766 who is more than 50 percent at fault for his or her own harm may still recover the percentage of damages for which he or she is not at fault.

Construction Defect Lawsuit Timeline in Which to File a Lawsuit is Significantly Shortened Senate Bill 360

Already Passed into Law and in Effect

Construction Defects

Senate Bill 360, an already existing law, shortens the time in which to bring a latent (hidden) construction-related defect claim from ten years to seven years. When bringing an action (lawsuit) founded on the design, planning, or construction of an improvement to real property, such claim begins from the time one knew, or should have known, of such defect as measured from the issuance of the certificate of occupancy and must be brought within four years. Now, however, the period to file the lawsuit is measured from the earlier date of the issuance of the temporary certificate of occupancy, or certificate of completion, rather than from the date of the issuance of the certificate of occupancy.

§95.11, Fla. Stat.

Notwithstanding being within the statute of limitations to file a lawsuit, the statute of repose acts as a hard deadline in which to file such a lawsuit. As to latent defects, assume a latent defect was discovered in year eight from the issuance of the certificate of occupancy, and the aggrieved owner could not possibly have known of the defect earlier. In the past, so long as the claim was brought within four years from the time of discovery but not later than ten years from the issuance of the certificate of occupancy, then the case could proceed. But, however, with the shortening of the statute of repose to seven years, using the aforementioned example, such lawsuit could not be filed (or, if filed, a strong defense would exist) because it would have already passed the seven-year statute of repose when first discovered.

Affordable Housing (Summary only) Senate Bill 102

Already Passed into Law and in Effect

Senate Bill 102 makes various changes and additions to affordable housing-related programs and policies at both the state and local level and became law when signed on March 29, 2023.

One major goal at all levels of government is to ensure that citizens have access to affordable housing. Housing is considered affordable when it costs less than 30 percent of a family’s gross income. A family paying more than 30 percent of its income for housing is considered “cost burdened,” while those paying more than 50 percent are considered “extremely cost burdened.” Severely cost-burdened households are more likely to sacrifice other necessities such as healthy food and healthcare to pay for housing and to experience unstable housing situations such as eviction.

Much of the bill involves the Florida Housing Finance Corporation (FHFC), a public-private entity that administers the two largest statewide affordable housing programs: the State Apartment Incentive Loan (SAIL) program and the State Housing Initiatives Partnership (SHIP) program.

With Regard to the FHFC, the Bill Does the Following:

• Provides up to $150 million annually to the SAIL program for certain specified uses such as infill and projects near military installations. These funds are to be redirected from the General Revenue service charge, and this provision sunsets in 2033.
• Provides up to a $5,000 refund for sales tax paid on building materials used to construct an affordable housing unit funded through the FHFC.
• Creates a new tax donation program to allow corporate taxpayers to direct certain tax payments to the FHFC, up to $100 million annually, to fund the SAIL program.
• Codifies the Florida Hometown Heroes down payment assistance program, retaining the structure as it exists while increasing the monetary limit per loan and the scope of eligibility.
• Adds two members to the FHFC board of directors, one appointed bythe leader of each chamber of the legislature.
• Broadens the ability for the FHFC to invest in affordable housing developments for those in or aging out of foster care.

With Regard to Local Governments, the Bill Makes These Provisions:

• Preempts local governments’ requirements regarding zoning, density, and height to allow for streamlined development of affordable housing in commercial and mixed-use zoned areas under certain circumstances. Developments that meet the requirements may not require a zoning change or comprehensive plan amendment.
• Removes a local government’s ability to approve affordable housing on residential parcels by bypassing state and local laws that may otherwise preclude such development, while retaining such right for commercial and industrial parcels.
• Removes provision in current law allowing local governments to impose rent control under certain circumstances, preempting rent control ordinances entirely.
• Requires counties and cities to update and electronically publish theinventory of publicly owned properties, for counties including property owned by a dependent special district, which may be appropriate for affordable housing development.
• Authorizes the FHFC, through contract with the Florida Housing Coalition, to provide technical assistance to local governments to facilitate the use or lease of county or municipal property for affordable housing purposes.
• Requires local governments to maintain a public written policy outlining procedures for expediting building permits and development orders for affordable housing projects.

The Bill also Introduces Three Ad Valorem Property Tax Exemptions:

• An ad valorem tax exemption for land owned by a nonprofit entity that is leased for a minimum of 99 years for the purpose of providing affordable housing.
• An ad valorem tax exemption that applies to rent-restricted units within newly constructed or substantially rehabilitated developments setting aside at least 70 units for affordable housing for households earning 120 percent of area median income or less.
• Authorizes counties and municipalities to offer, through ordinance, an ad valorem tax exemption to property owners who dedicate units for affordable housing for households earning 60 percent of area median income or less.
  §713, Fla. Stat.

Construction Liens House Bill 331

Already Passed into Law and Becomes Effective

October 1, 2023

House Bill 331 effectuates significant changes to the construction lien process which become effective October 1, 2023, if passed into law.

The Notice of Commencement

Failure of a property owner to record a notice of commencement prior to beginning a construction project subjects the owner of the property to potential double payment to all contractors, subcontractors, and suppliers. This bill allows the following:

• Modifies the statutorily provided notice of commencement form to reflect that the person signing the notice may use an online notary.
• Authorizes a building permit applicant to submit to the clerk’s office official records identifying information for the recorded notice of commencement, including the instru ment number or the number and page of the book, to the issuing authority in lieu of a certified copy of the notice or notarized statement of filing.
• Provides that the building permit issuing authority is not liable in any civil action for failing to verify that the building permit applicant submitted one of the acceptable forms of proof that the applicant filed a notice of commencement. Increases the contract amount which excuses a building permit applicant from filing a copy of the notice of commencement or an authorized alternative with the issuing authority, from $2,500 to $7,500.

Who Is a Contractor?

The bill amends the definition of “contractor” to include any licensed general contractor or building contractor who provides construction or program management services. This guarantees to such licensed general contractors and building contractors the ability to claim construction liens if they are not paid for their work.

Manner of Serving Documents

The bill allows the following:

• Specifies that all documents allowed or required underthe construction lien law must be served as provided in §713.18, Fla. Stat., relating to manner of serving documents.
• Clarifies that “actual delivery” of a notice means “hand delivery.”
• Provides that service by mail must be made to the personto be served.
• Clarifies that service of a notice sent through the mail is effective upon mailing or shipping.
• Specifies that service to a partnership, corporation, or limited liability company may be made on an employee or agent authorized by the business to receive service.

Further, the bill modifies the requirement that, for service to be effective on the date of mailing, the person serving a notice to a contractor where a payment bond applies must maintain electronic tracking records generated by the USPS, deleting the requirement that the records be electronic and specifying that they may be either generated or approved by the USPS. The bill also deletes the requirements that such tracking records contain the name and address of the person served.

Notice of Contest of Lien

The bill specifies that after the property owner files a notice of contest of lien with the clerk’s office and the clerk’s office serves a copy of the notice on the lienor and records the notice with a certificate of service, the clerk’s office must serve a copy of the recorded notice on the lienor and the owner or the owner’s attorney.

Discharge of Liens

The bill provides that the methods specified for discharging a lien may also be used to release a lien, in whole or in part.

Attorneys’ Fees and Costs

The bill provides that a prevailing party in an action to enforce a lien transferred to a security may recover his or her reasonable attorneys’ fees in an amount to be determined by the court. The bill also clarifies that where a prevailing party is entitled to recover his or her reasonable attorneys’ fees in an arbitration action to enforce a claim against a payment bond, the amount of the attorneys’ fees to be awarded may be determined by the arbitrator.

Computation of Time

The bill provides that in computing any time period relating to the construction lien law, if the last day of the time period is a Saturday, Sunday, legal holiday, or any day observed as a holiday by the clerk’s office or designated as such by the chief judge of the circuit, the time period is extended to the end of the next business day.

However, the bill also provides that if the clerk’s office is closed in response to an emergency for one or more days, so that a person may not present a document for recording or an action for filing in person with the clerk’s staff, the time period for recording a document or filing an action with the clerk’s office relating to the construction lien law is tolled. Under the bill, when the clerk’s office reopens, the time period is extended by the number of days the clerk’s office was closed.

Duration of Lien

The bill specifies that after the property owner files a notice of contest of lien with the clerk’s office and the clerk’s office serves a copy of the notice on the lienor and records the notice with a certificate of service, the clerk’s office must serve a copy of the recorded notice on the lienor and the owner or the owner’s attorney.

Notice of Termination

The bill requires that a notice of termination be served before recording on each lienor in privity with the owner and on each person who timely served a notice to owner before the recording of the notice of termination. Under the bill, if it is thus served, a notice of termination terminates the notice of commencement 30 days after it is recorded. However, the bill also requires an owner to serve a copy of the notice of termination on any lienor who began work under a notice of commencement before its termination, lacks a direct contract with the owner, and timely serves a notice to owner after the notice of termination is recorded.

The bill also provides the following:

• Specifies that the notice of termination is effective as to such lienors 30 days after service.
• Specifies that a notice of termination must include a statement that the owner will serve a copy of the notice on all lienors who timely serve a notice to owner after the notice of termination’s recording. Deletes a provision specifying that an owner may only record a notice of termination after construction completion or when construction ceases before completion and all lienors have been paid, specifying instead that such notice may be recorded after all lienors have been paid.
• Clarifies that the notice of termination must include the official records reference numbers and recording date affixed to the recorded notice of commencement by the recording office.

Legal Instruments Senate Bill 286

Already Passed into Law and in Effect

Senate Bill 286 amends laws relating to various legal instruments effective July 1, 2023. The bill offers the following:

• Expands the scope of existing law on the finality of a clerk’s deed following foreclosure sale to apply to any form of lien. Currently, only foreclosure of a mortgage is governed by the statute on finality of a clerk’s deed.
• Requires the foreclosure court to award attorney fees to a senior lienholder when a junior lienholder wrongfully tries to foreclose a senior lien. The bill also reaffirms the common law rule that a superior lien may not be foreclosed by a junior lienholder.
• Expands application of an assignment of rents to apply to a successor landowner and adds that regular association fees (HOA, condominium, or cooperative) may be paid from the rent collected. An assignment of rents (if authorized by the mortgage terms) is a temporary relief allowing a foreclosing lienholder to collect rents from the property during the pendency of the foreclosure case and use those rents for upkeep of the property.
• Makes a technical change to the statute authorizing electronic signatures by adding a clarification of the term “witness.” When used as a noun, “witness” means an individual whose electronic signature is affixed to an electronic record to attest or subscribe to a principal’s signature on such record. This definition of “witness” applies retroactively to January 1, 2020, which is the effective date for most of the statutory provisions for online notarization.
• Expands application of an “order to show cause” procedure in foreclosure law to allow use of the procedure when a successor landowner is being foreclosed. The current order to show cause procedure compels the defendant to either resume making regular payments or vacate the premises but is only applicable when the mortgagor still holds title to the property.
  §702, Fla. Stat.

Insurance Senate Bills 2A & 2B, (Special Session)

Already Passed into Law and in Effect

SENATE BILL 2A:

Reinsurance

The State of Florida provided for an optional hurricane reinsurance that insurance companies can purchase at reasonable near-market rates with the goal being to stave off additional premium increases.

Timeline Reductions

1. The claim filing deadline is reduced from 2 years to 1 year for a newly reopened claim and from 3 years to 18 months for a supplemental claim.
2. The time is reduced for insurance companies to pay or deny claims from 90 to 60 days.
3. The time is reduced for insurance companies to review and acknowledge a claim communication from 14 days to 7 days.
4. The time is reduced for aninsurance company to begin investigation of a claim from14 days to 7 days.
5. The time for an insurance company to conduct a physical inspection is reduced from 45 days to 30 days, and this applies to hurricane claims as well.
6. Insurance companies may use electronic methods to investigate damage and allow policyholders to participate in the use of such methods.
7. Insurance companies are required to send any adjuster report estimating the damage to the policyholder within seven days after it is created.
8. All undisputed amounts of benefits must be paid out to the policyholder within 60 days rather than the previously existing 90 days.

All of the aforementioned became effective March 1, 2023.

Attorneys’ Fee Awards

One-way attorneys’ fee provisions related to property insurance claims have been eliminated, meaning neither party is awarded prevailing party attorneys’ fees and each party is responsible for payment of their own attorneys’ fees. However, this is mitigated through the offer of judgment whereby if an offer is made and at trial the other side does not exceed at least 125 percent of such offer, then that could trigger the prevailing party to still have to pay the other side’s attorneys’ fees.

Assignment of Benefits

No post-loss insurance benefits under any residential property insurance policy or commercial property insurance policy issued on or after January 1, 2023, can be assigned to a third party. Therefore, assignment of benefits is no longer an option.

Bad Faith

Before a policyholder can sue a property insurance company for bad faith—based on how the insurance company settled the claim—the court of competent jurisdiction must first find that a breach of contract occurred. In addition, receiving an appraisal award higher than the insurance companies’ appraisers’ final estimate may be evidence of bad faith, but on its own does not give rise to a bad faith claim.

Flood Insurance

Citizens’ residential policyholders can be required to obtain flood insurance as a condition of having coverage from Citizens. Considering that the state of Florida is primarily built on swampland, this makes sense.

Mandatory Arbitration

Insurance companies can now offer a policy with mandatory arbitration to settle disputes rather than litigation so long as the insurance company also offers a policy without a mandatory binding arbitration clause. If such binding arbitration is required, then a premium discount is required for such policy.

This bill substantially amends §§624.1551, 624.3161, 626.9373, 626.9541, 627.351, 627.3511, 627.3518, 627.428, 627.7011, 627.70131, 627.70132, 627.70152, 627.7074, 627.7142, 627.7152, 631.252, and 768.79 of the Florida Statutes. This bill creates §215.5552 and §627.70154 of the Florida Statutes.

Portions of this bill become effective upon becoming law; other parts on January 1, 2023; and the remaining provisions on March 1, 2023.

Senate Bill 2B

Already Passed into Law and in Effect

The bill creates the Local Government Emergency Bridge Loan Program within the Department of Economic Opportunity to provide financial assistance to local governments impacted by Hurricane Ian or Hurricane Nicole. The bill appropriates $50 million in nonrecurring funds from the General Revenue Fund for the program. The bill transfers $650 million to the Emergency Preparedness and Response Fund to be used for responding to a declared state of emergency. The bill takes effect upon becoming a law.

§288.066, Fla. Stat.

Additional Topics Of Interest

Emergency Life Safety Systems Update (ELSS)

Awaiting Further Agency Action

It is reported that by 2016 over 4300 Florida condominium associations had voted to opt out of having to install the mandatory sprinkler systems and, instead, opted for the installation of the “emergency life safety systems” (ELSS), as required by the Florida Fire Prevention Code and Chapter 718, Fla. Stat.

Recently the Florida Fire Code Advisory Committee (the “Committee”) proposed a delay in the implementation of the emergency life safety systems in those buildings that have opted out of a full fire sprinkler system. This is a rulemaking process that will not be finalized until December 2023, if at all. Before the Committee’s approved changes can be put into law, these rule changes must be approved by the State of Florida, and then Chapter 718 provisions regarding the ELSS will be in need of amendment as well. Thus far, the Committee has approved amendments to the ELSS requirements as follows:

1. By January 1, 2025, the condominium association must have the ELSS study completed and submitted to the local Fire Marshal for review.
2. By January 1, 2026, contractors must have applied for and received permits for the installation of the ELSS.
3. By January 1, 2027, installation of the ELSS must be complete and have passed all final inspections by the local Fire Marshal.

As to those condominium associations that choose to protect their building with fire sprinklers,

1. By January 1, 2025, the condominium association must have the plans for the installation of the sprinkler system completed and submitted to the local Fire Marshal for review.
2. By January 1, 2026, contractors must have applied for and received permits for the installation of the fire sprinkler system.
3. By January 1, 2027, installation of the fire sprinkler system must be complete and have passed all finalinspections by the local Fire Marshal.

Remember, too, while an automatic sprinkler system is not required in buildings having an approved and implemented ELSS, nevertheless and notwithstanding,

the ELSS can still include the following:

1. partial automatic sprinkler protection
2. smoke detection systems
3. smoke control systems
4. compartmentation
5. other approved systems

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