Client Update 2007

T H E L A W 0 F F I C E S 0 F

BRUDNY & RABIN, P.A.

CLIENT UPDATE

June 2007

TABLE OF CONTENTS

2007 LEGISLATION AFFECTING COMMUNITY ASSOCIATIONS

I. Issues Requiring Immediate Attention

by Homeowners’ Associations ………………………….... 1

A. Architectural Control …………….……………..... 1-3

B. Collections – Notice Requirements ………............. 3

II. Other Legislation ………………………………..……...... 4

A. Senate Bill 902 ………………………………........ 4

Lender Consent - Condominiums ……….……………....... 4-5

Homeowners’ Associations:

1. Committees ……………………..……………..... 5

2. Fees For Providing Information ............................ 5

3. Budgeting and Reserves……………………......... 5-6

4. Financial Reporting………………………..…....... 6-7

5. Attorneys’ Fees……………………..................... 7

6. Developer Audits……………………………........ 7

7. Developer Guarantees……………………............ 7

8. Pre-Suit Mediation Requirements…...................... 7

B. Senate Bill 1844 – Other Collections Changes

Relating to Homeowners’ Associations………...... 7-8

C. House Bill 7031 – Changes Affecting Condominiums

Mobile Homes and Homeowners’ Associations..... 9

1. Self-Insurance and Pooling of Insurance Options

………………………………………................ 9-10

2. Condominium Conversions…………………….... 10

3. Budget and Contract Disclosures For

Condominiums and Cooperatives………….......... 10

D. House Bill 7057 – Hurricane Damage

Mitigation …………..…………………………... 10-11

E. Property Taxes and Insurance………………...... 11

F. Senate Bill 314 – Termination of

Condominiums…………………………………... 11

G. Summary…………………………….……...... 11-12

I. ISSUES REQUIRING IMMEDIATE ATTENTION BY HOMEOWNERS’ ASSOCIATIONS:

Provisions contained within two bills which were signed by the Governor on June 19, 2007 become effective on July 1, 2007, and require immediate attention by homeowners’ associations. The first of these bills is critical to all homeowners’ associations who exercise architectural control in regard to exterior changes that are made in the community. The second bill relates to collection of past-due assessments, which only impacts some associations.

A. ARCHITECTURAL CONTROL:

A new Section 720.3035 has been added to the Florida Statutes as this relates to homeowners’ associations, and this is a very significant change which is expected to cause problems and disputes, due in part to the July 1, 2007 effective date. This legislation indicates that the authority of an association or any committee to review and approve plans or applications for the location, size, type, or appearance of any structure or improvement, or to enforce standards for the external appearance of any structure or improvement, “shall be permitted only to the extent that the authority is specifically stated or reasonably inferred as to such location, size, type, or appearance in the Declaration of Covenants or other published guidelines and standards authorized by the Declaration of Covenants”.

We believe this to mean that there must be detailed architectural standards contained in the Declaration, or in Rules or Architectural Guidelines which are authorized by the Declaration, and which have been adopted by the Board or an architectural committee (depending on the governing documents), in order to regulate alterations to properties in homeowners’ associations. All homeowners’ associations should make sure that they have authority for rulemaking, and if not to attempt to adopt an amendment immediately for this purpose. The associations also need to immediately attempt to develop detailed architectural standards for the location, size, type and appearance of any structures, improvements, or alterations.

The statute goes on to say that if the Declaration or any published standards or guidelines provide any options for the use of materials, or for the size of structures or improvements, or the design or location of the structures or improvements, the association or the committee cannot restrict the right of an owner to select from any of the options provided. Another change is to clarify that only one front setback may exist on a parcel, even if it is bounded by a roadway or easement.

The next subsection of this statute indicates that the rights of the owners to make improvements or alterations, subject only to the published guidelines and standards, is not to be unreasonably infringed upon or impaired by the association or any committee, and if such an infringement does take place, the adversely affected owner shall be entitled to recover damages, including costs and attorneys’ fees, if it can be shown that the association unreasonably or willfully impaired the rights of the owners to make improvements or alterations.

The final subsection recognizes that standards and guidelines cannot be inconsistent with the Declaration of Covenants, so Declarations need to be reviewed to ensure consistency between any guidelines and the specific restrictions contained in the Declaration.

This is a very significant change in regard to homeowners’ associations and will require each homeowners’ association to very quickly review their Declaration and all of their written criteria in regard to architectural control, as well as the amendment procedures for the Declaration, and the authority to adopt rules and regulations. Any homeowners’ association which needs legal input on this critical new law needs to contact their association attorney.

Our office has developed a checklist of architectural issues to be considered and we can assist associations in attempting to deal with this difficult new legislation. Since it is not realistic to adopt detailed standards on all types of alterations by July 1, 2007, we are recommending that associations adopt a temporary “stop-gap” resolution or motion at a Board meeting as soon as reasonably possible. We have wording we can suggest for this purpose.

Also, in some Declarations the architectural committee has the authority to adopt standards, rather than the Board. We are recommending that Boards consider assuming control of this process, if permitted by the documents, by designating the Board of Directors as the committee which will have the authority to adopt standards and approve future applications. The committee can be utilized as an advisory committee to assist the Board in developing standards and reviewing applications.

A final point relates to applications which have submitted prior to July 1, 2007. It appears that these applications would also be governed by the new statute, and unless there are detailed standards and criteria in regard to the issues raised by any pending application, any association which has doubts as to whether any pending application should be granted should consider denying the application, and asking the owner to resubmit the application with such additional information or modifications as the association deems necessary or appropriate. Unless applications are denied prior to July 1, 2007, the association may not have the authority to deny these under the new statute, in the absence of detailed standards and guidelines applicable to the subject matter of the application.

Some of the examples of architectural criteria which may need to be developed by homeowners’ associations to the extent that these are not specifically spelled out in the Declaration include: paint colors (a specific palette of paint colors is recommended); locations for satellite dishes and antennas; criteria for fences; requirements for mailboxes; criteria for any improvements on patios or balconies, including screening or enclosures; and numerous other criteria and standards which include any potential exterior modifications or additions which an owner may wish to make.

This is a very challenging and burdensome new law which requires immediate attention for all homeowners’ associations who wish to retain the right to exercise architectural control.

B. SENATE BILL 1844 – NEW COLLECTIONS NOTICE REQUIREMENTS FOR HOMEOWNERS’ ASSOCIATIONS:

This is another significant change relating to homeowners’ associations. A new Section 720.3085 has been created in the Florida Statutes which regulates the collection process for homeowners’ associations, in regard to a number of issues. Among the changes included in this new statute is one which requires immediate attention.

In order to attempt to prevent premature foreclosures against homeowners, some new notice requirements have been added. The statute now requires that before a claim of lien may be filed against the lot or unit, a written notice or demand for past-due assessments and other amounts owed must be sent to the owner at least 45 days prior to the time that a claim of lien is filed. Any such demand must be sent by registered or certified mail, return receipt requested, and also by first-class United States mail, to the owner at his or her last address as reflected in the records of the association. If the address shown in the association's records is one other than the address of the unit or lot in the community, a copy of the demand needs to be sent to both the property address and the off-site address, by both regular and certified mail. The cost of the mailing can be included in the amount claimed in the letter. It is very important that associations keep proper records in connection with any such notices. This preliminary notice can either be sent by the association, before referring the matter to its attorney for collection, or otherwise the first notice from the attorneys’ office will now need to be a 45-day demand letter, indicating that a claim of lien will be filed if payment is not made. It is suggested that associations or their management companies provide a final 45-day notice before referring the matter to the attorneys’ office so that the attorney can then proceed with a claim of lien and another final demand letter. However, if associations prefer, the initial 45-day demand letter can be sent from our office.

The statute also includes a requirement that no foreclosure suit may be brought until notice has been provided of the intent to foreclose, at least 45 days prior to the time that a foreclosure suit is filed. This means that there are now two 45-day notices which are required (one prior to the filing of a claim of lien, and one prior to a foreclosure suit). In order to prevent significant delays in collections for homeowners’ associations, attention will need to be given to these time frames, and coordination between the association and the attorneys’ office will need to be verified.

Finally, as to current delinquent accounts, a lien can be filed before July 1, 2007 without requiring a new 45-day notice; and a foreclosure suit can also be filed before July 1, 2007 without providing a new 45-day notice. For this purpose, all homeowners’ associations should review the status of their delinquent accounts and determine whether they wish to file any liens or foreclosure actions prior to July 1, 2007.

II. OTHER LEGISLATION:

A. SENATE BILL 902:

Essentially, this same bill was passed by the Legislature last year, but was vetoed by Governor Bush since it contained some other provisions which were found to be objectionable. The new bill omitted the most objectionable provision, and this bill was signed by Governor Crist on June 19, 2007. There are several very significant changes which affect homeowners’ associations, and one relating to condominium associations.

CONDOMINIUMS:

(1) LENDER CONSENT – Section 718.110(11) of the Florida Statutes was amended, as this relates to condominium associations, to provide a more reasonable procedure for obtaining lender consents when these consents are needed to amend condominium documents. The legislation provides that as to any mortgages which are recorded after October 1, 2007, any requirement for lender consent is only applicable to changes which affect the priority of the mortgagee’s lien or which otherwise materially affect the rights and interest of the mortgagees. As to mortgages recorded before October 1, 2007, existing provisions in the condominium documents are enforceable, but in connection with obtaining consents or joinders from lenders, the association is entitled to rely upon the public records to identify the holders of outstanding mortgages, and they can use the address provided in the original recorded mortgage document or any assignment, unless a unit owner has other information. The association is required to write the owners and request the name and address where payments are currently being made. Therefore, notices are either to be sent to the address provided by the unit owner, or to the address shown on the public records if the unit owner does not provide alternative information. Notices are to be sent by a method that establishes proof of delivery (certified mail), and any mortgagee who fails to respond within 60 days from the date of mailing will be deemed to have consented to the amendment.

Any amendment adopted without the required consent of the mortgagees shall be voidable only by a mortgagee who is entitled to notice and an opportunity to consent, and any action to void such an amendment is subject to a five-year statute of limitations.

Finally, the legislation provides that notwithstanding any other provisions of this legislation, an amendment may be adopted to conform a Declaration of Condominium to the insurance coverage provisions in Section 718.111(11) without lender consent.

As to all condominium associations which have provisions in their documents which require lender consent for amendments, the Association may wish to consider the adoption of an amendment at this time. This legislative change makes it much easier for associations to obtain lender consent. One approach that we have taken previously for these types of Declarations is to change the procedure for future lender consents, so that only a majority of those lenders who provide contact information to the association need to consent, instead of 100 percent of the lenders. It is also possible to modify the issues which will require lender consent in order to delete those types of amendments that the lenders are not concerned with. If your association has any requirements for lender consent for amendments, please contact your association attorney to discuss this further and to determine what action might be taken to take advantage of this new statutory change.

HOMEOWNERS’ ASSOCIATIONS:

In addition to the new laws relating to architectural control which are discussed above, numerous other changes were made to the laws governing homeowners’ associations by this bill, effective July 1, 2007. Some of these changes are as follows:

(1) COMMITTEES – Section 720.303 of the Florida Statutes was amended as this relates to committees. This merely confirms that committees must conduct their business in the same manner as a Board of Directors when a final decision will be made regarding the expenditure of Association funds, or with respect to a committee that has the power to approve or disapprove architectural decisions.

(2) FEES FOR PROVIDING INFORMATION – An amendment was made to Section 720.303(5)(d) which authorizes homeowners’ associations to charge a reasonable fee to a prospective purchaser or a lien holder in regard to providing information about the subdivision or the association. This information is generally requested by lenders or title companies in connection with financing or real estate closings. The fee which is charged can be up to $150.00, in addition to the cost of photocopying, and any attorneys’ fees incurred by the association in connection with the response. Remember that you can include attorneys’ fees if you need your attorneys to review any response, or any particular questions that have been asked.

(3) BUDGETING AND RESERVES – A very significant change has been made to the budgeting provisions relating to homeowners’ associations found in Section 720.303(6). This addresses reserve accounts for capital expenditures and deferred maintenance. Once an association provides for reserve accounts which are governed by the new statute, the association is to thereafter determine, maintain and waive reserves in compliance with these requirements. The legislation indicates that “an Association shall be deemed to have provided for reserve accounts when reserve accounts have been initially established by the developer or when the membership of the Association affirmatively elects to provide for reserves”. If reserve accounts were not initially provided for by the developer, the membership of the association may elect to do so upon the affirmative approval of not less than a majority of the total voting interests of the association, either at a duly called meeting or by written consent. The approval is to indicate that reserve accounts will be provided for in the budget, and to designate the specific components for which the reserve accounts are to be established. Once the members have approved this, the Board must thereafter provide for the required reserve accounts in the budget each year thereafter. The reserves are to be computed based upon the estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item.

Once reserve accounts are established which are governed by the new statute (it appears that membership approval is required to the extent that reserves were not established by the developer, regardless of whether the Board has subsequently funded reserves), then there is also an opportunity for the membership to vote (by a majority of members present at a meeting, in person or by proxy, provided that a quorum is attained) to waive reserves or to provide less reserves than required by the calculations.

There is also an option to have reserves calculated based upon a pooled analysis of two or more of the required assets, similar to condominiums. There is also now some statutory guidance providing that reserve funds, and any interest accruing on the reserve funds, must remain in the reserve accounts unless they are used for other purposes approved by a majority vote of the membership as described above.

For those associations which are not subject to the requirements for reserves (where the developer has not established reserves or where the Board does not submit this issue to the membership in order to determine which components of reserves should be funded in accordance with the statutory formulas and procedures), homeowners’ associations can continue to utilize reserve funds, and provide for reserve funds in their budget, in accordance with the procedures which previously applied to these issues in the governing documents. There were no statutes which previously addressed the manner in which homeowners’ associations were to fund or utilize reserve accounts, so this is an issue that would be controlled by the governing documents.

It is very important to address this issue in connection with the upcoming budget season, in order to determine whether the Board wishes to have the membership vote on the issue of establishing certain reserve accounts pursuant to the statutory formulas, or to otherwise determine the extent to which the new law affects the budget and reserve process.

There is also an inherent complication in the new law since it requires some associations to fund reserves, but it recognizes that the funding is subject to any maximum increases which may be permitted for the budget of the association. Many homeowners’ association documents do not provide limits on budget increases, while others do provide limits as to how much the budget can be increased each year, and the procedures which must be followed to exceed these limits. Unlike the condominium law relating to budget increases, reserves are not excluded in determining the increase in the budget for homeowners’ associations, and this will undoubtedly cause some confusion in regard to the interplay between mandatory reserves and related limitations on budget increases. Membership votes will be required in most cases where the new law on reserves applies to a particular association.

(4) FINANCIAL REPORTING – The financial reporting provisions for homeowners’ associations have also been revised and these are now consistent with the condominium statute, providing for a report to be prepared within 90 days from the end of the fiscal year and to be provided to the members within 120 days after the end of the fiscal year or such other date as provided in the Bylaws. Prior legislation established financial reporting requirements for homeowners’ associations, so that financial reporting requirements are now very similar to condominium associations.

(5) ATTORNEYS’ FEES – A minor change was made in regard to attorneys’ fees in connection with an owner who prevails in a suit against an association. The statute has been adjusted to indicate that any owner who prevails is not only entitled to recover fees that he or she incurred, but also to be reimbursed for any assessments that the owner was required to contribute to in connection with the funding of the litigation.

(6) DEVELOPER AUDITS – There has been a change which requires developers to provide an audit from an independent CPA at the time of turnover, similar to that which is required for condominium associations. This applies only to associations which are incorporated after December 31, 2007.

(7) DEVELOPER GUARANTEES – There has also been wording added to Section 720.308 of the Florida Statutes to provide detailed criteria for guarantees of assessments in a homeowners’ association.

(8) PRE-SUIT MEDIATION REQUIREMENTS – A significant change has been made which will make it easier to enforce violations in homeowners’ associations, since the pre-suit mediation requirements have been changed. Instead of being required to file petitions with the State of Florida, an association now is required to make a written demand on the unit owner, indicating that if the owner fails to agree to participate in the mediation process within 20 days from the date of the letter, then the association may proceed with a lawsuit. There are detailed provisions as to the type of wording which must be included in all letters. There are also provisions for the association to recover costs and attorneys’ fees incurred in the pre-suit mediation process; time requirements within which the mediation process must be completed; and other provisions which should make it easier to attempt to utilize mediation prior to lawsuits, without incurring the unnecessary costs and delays which have been experienced in the mediation program administered by the State of Florida.

B. SENATE BILL 1844 – OTHER CHANGES RELATING TO COLLECTION OF ASSESSMENTS BY HOMEOWNERS’ ASSOCIATIONS:

In addition to the new notice requirements for collections by homeowners’ associations, outlined above, a number of other changes have been made which will impact the collection of past-due assessments by homeowners’ associations. These are contained in Senate Bill 1844, also effective July 1, 2007.

(1) A provision has been added whereby a new owner is jointly and severally liable with the prior owner for all unpaid assessments that came due up to the time that title was transferred. It is not clear as to whether this applies to a purchaser at a foreclosure sale. Previously, the association would still have had the right to file a lien against the property if assessments had not been paid by a prior owner, but the new law gives the association the right to proceed against both the prior owner and the new owner for any unpaid assessments which came due prior to a transfer of title.

(2) Many other changes have been made which attempt to make homeowners’ associations collections consistent with the condominium association statutes. These include:

(a) A provision that interest will accrue at the rate provided in the Declaration, and if there is no rate provided then interest accrues at the rate of 18 percent per year;

(b) There is authorization for a late fee if provided for in the Declaration or Bylaws, in the maximum amount of $25.00 per installment or 5 percent of the amount of the installment, whichever is greater; and

(c) The statute provides that when an owner is delinquent, any payments are applied first to interest which has accrued, then to any late fees, then to any costs and reasonable attorneys’ fees, before any payment is applied to the delinquent assessment. This should be helpful in dealing with partial payments in homeowners’ associations with respect to delinquent owners.

(3) A troublesome requirement has been added to the statute which allows an owner to serve and file with the court, once the foreclosure suit has been initiated, a “qualifying offer” to settle the case. This is defined as a written offer to pay all amounts secured by the lien, in addition to interest accruing during the pendency of the offer. The time frame for payment of the amounts due is not to exceed 60 days, and once a qualifying offer is filed, the court is required to place the foreclosure suit on hold for the period of time stated in the qualifying offer. There are other requirements set forth in regard to what needs to be contained in the qualifying offer, but based upon past experience it is anticipated that owners will not follow all of these requirements and may utilize this new statute in an attempt to delay and frustrate foreclosure proceedings. The intent of the law appears to be reasonable, but many debtors will not be able to comply with the specific requirements, or will not attempt to do so, and this will result in some confusion and delay in the foreclosure process.

Based upon this new statute, which provides some benefits to homeowners’ associations as well as some additional requirements which must be met, it is more important than ever for the associations to diligently pursue past-due accounts, given the additional notice periods and delays which have been built into the statute.

C. HOUSE BILL 7031 – CHANGES AFFECTING CONDOMINIUMS, MOBILE HOMES AND HOMEOWNERS’ ASSOCIATIONS:

This new legislation was approved by the Governor and became law on May 25, 2007. Some of the provisions of this bill include:

(1) SELF-INSURANCE AND POOLING OF INSURANCE OPTIONS – You may recall that last year's Legislature amended Section 718.111(11) of the Condominium Act, effective January 24, 2007, to permit a “pooling” of windstorm insurance coverage for a group of no fewer than three condominium, cooperative, or homeowners’ association communities, under certain models, provided such coverage was sufficient to cover a claim equal to the probable maximum loss for such communities in a 250-year windstorm event. This was in addition to the “self-insurance” option which has existed in the Condominium Act for years, but which, until last year, was effectively an illusionary provision, given strict requirements associated with this option, such as a requirement that at least 10 condominium associations participate in an entity which had to be in existence for a period of one year.

As a result of several laws which became effective during 2007, both the windstorm pooling and self-insurance options have been extended to cooperatives, mandatory membership homeowners’ associations, timeshare condominiums, and certain mobile home parks, and the provisions which have effectively precluded these options from being implemented, have been changed. As a result of the new legislation, for example, there is no minimum number of associations which must participate as part of a commercial self-insurance fund so long as participating associations are responsible for operating at least 50 residential parcels or units; there is no minimum period of time that the group must have been operative; and as indicated above, it is no longer solely limited to condominiums. Additionally, the windstorm pooling option, originally only found in the Condominium Act, has been extended to cooperatives and mandatory homeowners’ associations. In the Legislature’s most recent action, provisions have been added to Chapters 718, 719 and 720, expressly recognizing the cost of participation in a self-insurance fund or expenses associated with pooling of windstorm insurance as proper common expenses of the governing associations.

In summary, the Florida Legislature has taken major steps which make it more likely that community associations can take advantage of self-insurance or windstorm pooling options. As such, associations who once sought to explore these alternatives may wish to take another look at the issue with their insurance and other advisors, and those which have not done so previously may wish to take a look as well.

We note, however, that the requirements for self-insurance remain formidable. To obtain a Certificate of Authority from the Department of Insurance, a group of associations seeking to become a commercial self-insurance fund will be required to provide the Department of Insurance with, among other things: an indemnity agreement binding each member to individual, several, and proportionate liability for payment of actual losses and expenses incurred by the fund while any policy issued by the fund is in place; a plan of risk management, which has established measures and procedures to minimize both the frequency and severity of losses; evidence that the aggregate net worth of all members of the commercial self-insurance fund is at least $500,000.00; an initial deposit of cash or qualifying securities in the amount of $100,000.00 (or a qualifying bond in like amount); acceptable excess insurance policies providing established limits and coverage; fidelity bonding; and a detailed plan of operation showing sufficient revenues to pay current and future liabilities. Therefore, participation in a self-insurance fund still may not be reasonably practical or possible for most communities. The Legislature has, however, expanded the group of potential associations which might be able to do so, and for those that can, provided statutory authority enabling the creation of these funds by qualifying community associations.

(2) CONDOMINIUM CONVERSIONS – Part VI of the Condominium Act has been revised to add additional disclosure requirements for condominium conversions, and to provide a number of other changes to attempt to clarify requirements which must be followed in connection with these projects. Another provision in the law expands the requirements for disclosure reports, and clarifies that the unit owners and the association are third-party beneficiaries of the disclosure report, which provides them with the opportunity to bring potential legal action against the preparer of the inspection report which is utilized in connection with the disclosures.

(3) BUDGET AND CONTRACT DISCLOSURES FOR CONDOMINIUMS AND COOPERATIVES – The bill also provides requirements for additional disclosures by developers regarding the estimated operating budget for condominiums and cooperatives, and attempts to clarify the law relating to such disclosures.

D. HOUSE BILL 7057 – HURRICANE DAMAGE MITIGATION:

This bill was signed on June 12, 2007 and has now become law, as contained in Chapter 2007-126, Laws of Florida. This law re-designates the Florida Comprehensive Hurricane Damage Mitigation Program as the “My Safe Florida Home Program”, and one of the provisions in this bill requires all homes valued at over $750,000.00, and located in high-risk areas (this includes all of Pinellas County), to install hurricane mitigation improvements known as “opening protections” when any building permits are applied for on or after July 1, 2008 for which the estimated cost is $50,000.00 or more.

Additionally, for buildings located in the high-risk areas (referred to as the “wind-borne debris region”) that have an insured value of $300,000.00 or more, or a valuation for tax purposes of this amount, roof replacements must incorporate new recognized mitigation techniques for single-family residential structures. This legislation also provides for free home inspections of single-family residential homes throughout the State in order to determine what mitigation measures are recommended, and what insurance premium discounts may be available. Grants are provided to encourage owners to retrofit their properties to make them less vulnerable to hurricane damage, and eligibility for grants is afforded to persons who have obtained a recognized inspection after May 1, 2007 and who otherwise qualify under the criteria in the statute, which includes persons having a dwelling with an insured value of $300,000.00 or less.

Additional information regarding all of the programs, as well as contractors who are authorized to perform inspections (paid inspections may be used for those persons who do not wish to wait for a free inspection), can be found at the website of www.mysafefloridahome.com. There are many other provisions in this legislation which are not being addressed in detail at this time. As this relates to homeowners’ associations, standards must be in place if the homeowners’ association wishes to regulate the type of opening protections which homeowners may install, including shutters and other measures which are used.

E. PROPERTY TAXES AND INSURANCE:

There were numerous changes made by the Legislature regarding property taxes in Florida and one bill (Senate Bill 2498) which affects eligibility for property owners to obtain insurance from Citizens. Although these changes affect homeowners’ and condominium associations, it is not possible for any summary of these numerous provisions to be provided at this time.

F. SENATE BILL 314 – TERMINATION OF CONDOMINIUMS:

This legislation substantially revises provisions for termination of condominiums in the State of Florida. This bill has not yet become law. It was sent to the Governor on June 13, 2007, and the Governor has 15 days to either sign it or veto it, or it will otherwise become law. The provisions in the bill are quite complicated, and if any individual condominium associations have questions regarding the impact of this new legislation, they should contact their association attorney.

G. SUMMARY:

Due to the need to attempt to make all homeowners’ associations aware of the new legislation which may significantly impact their operations, this Update will not address some other laws which may indirectly affect some associations. A Supplemental Update may be issued at a later date if the Firm determines that this is warranted.

It should also be noted that there were a number of proposals which were made in the Legislature this year which may have adversely affected associations, and which did not pass. This was an extremely active legislative session in regard to homeowners’ and condominium association issues, and it is expected that some of the initiatives which were not successful this year will be brought up again next year. We will attempt to keep our clients advised of those changes in the law which are expected to impact association operations.

Finally, we are not including any updates regarding case law or arbitration decisions in this Update, and once again may include these in a subsequent publication.

If you wish to view or get copies of any of the bills which were proposed or which have been adopted, the website which should be utilized for access to the Florida Legislature is http:\\www.leg.state.fl.us. This is otherwise known as “Online Sunshine”, which is the official internet site of the Florida Legislature. You can view and obtain copies of any of the bills and this also has links to other legislative and governmental sites of interest.

Please let us know if you have any questions as to how any new legislation will impact your association, or if we can otherwise be of assistance to any of our clients in regard to any of these matters.

Sincerely, Sincerely,

Michael J. Brudny Bennett L. Rabin