The Legislative Session for 2010 has produced a few significant changes to the Co-operative Act (Chapter 719 F.S.). The following is a summary of these changes and an identification of the particular affected sections. Please note that this summary is not intended to be an exhaustive explanation of the intricate detail of the changes nor is it to be considered complete legal advice on the subject. It is recommended that if there are any questions regarding any of these changes, you contact this office for further discussion.
Among the most important revisions, Senate Bill (SB) 1196 incorporates changes to the manner in filling vacancies on the board; an extension for retrofitting for fire sprinkler or other engineered lifesafety systems previously scheduled to be completed by 2014 to 2019; collection requirements; and, obligating tenants to pay rent directly to associations under specified circumstances.
By way of clarification, changes were made to Sections 617.0721 (member voting), 617.0808 (removal of directors) and 617.1606 (access to records) in the Florida Not-For-Profit Corporations Act, to specifically state that the provisions of these Sections do not apply to co-operative associations.
Section 719.106(1)(d) was amended to add a new subsection 6, which provides that unless otherwise set forth in the bylaws, a vacancy on the board that occurs before the expiration of a term may be filled by the affirmative vote of the majority of the remaining directors, even if there is less than a quorum (or only one). Alternatively, the board may hold an election to fill the vacancy, which is done in the same fashion as the annual election. Unless the bylaws provide otherwise, any individual appointed or elected to fill the vacancy serves for the unexpired term of the seat being filled. This new provision does not affect the procedures for recall.
Section 719.1055(5) has been amended to delete language which prohibited owners from voting to forego retrofitting of a fire sprinkler system for common areas in a high rise building, meaning one greater than 75 feet in height. The new language now permits, upon a vote of a majority of the voting interest, to forego retrofitting in the common elements, association property and units of residential condominiums of any size. It further prohibits local authorities from compelling retrofitting until 2019 for those who did not vote to forego it. Additionally, if it is to be required, an application for a building permit must be filed by December 31, 2016, demonstrating the intent to become compliant by 2019. A new subsection 2 has been added to provide that if there had been a vote to forego retrofitting, a vote to require retrofitting will have to be called upon a petition of at least 10% of the voting interests. Such a vote may only be called once every 3 years.
Section 719.108(4) has been revised regarding collection procedures. If a lien is to be filed and pursued in the collection process, the change adopted this year requires a first notice of at least thirty (30) days be sent to the delinquent owner of the intent to file the lien. No lien may filed without the first notice. There are specific mailing instructions added as well.
A new subsection (10) has been added to Section 719.108, which provides for the authority of an association to collect rent from a “tenant” occupying a unit that is delinquent to the Association in any monetary obligation. (This would be a subtenant in a co-op.) The association is required to make written demand on the tenant, with a copy to the unit owner, and may only collect rent to the extent of the unpaid monetary obligation to the association. If the tenant does not pay, the association may evict the tenant as if the association was the landlord. However, the statute does not provide for the ability of the association to assess the costs involved against the unit. It also contemplates the possibility of a receiver collecting the rent.
We understand that there are numerous and significant changes made for 2010 and that the synopsis set forth herein is to provide an overview of the changes that most appreciably affect association operations. If you have further questions regarding any of the new provisions, please contact this office.
