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HomeMy Public PortalAboutLTC 035-2022 - Legislative Session Week 6 Report[1]– JMG/MH 1 Session 2022 Bal Harbour Village – Week 6 Report Enclosed is our 2022 Session, Week 6 Report which includes a weekly update on legislative issues. As we move through Session and issues arise, we will include those in our weekly reports as well. Please let us know if you have questions on issues included in this report, or on any other issue of concern. We will be happy to provide information to you. Condominium/Community Association Legislation (SB 1702 by Senator Bradley) SB 1702, sponsored by Senator Bradley, deals with Mandatory Building Inspections. Among other issues, this bill would move the required milestone inspections from 40 to 30 years and every 10 years thereafter and for buildings within 3 miles of a coastline, the requirement would be every 20 years and every 7 years thereafter, and would enhance requirements at each phase. This legislation sets forth a mandatory structural inspection program for multi-family residential buildings in the state of Florida. Within this program are milestone inspection intervals that change with regards to the age of the building in question. Inspections are conducted by licensed architects or engineers using a two-tiered approach, the costs of inspection are at the expense of the building owner or the board of administration. A visual inspection is first performed to try to detect any structural flaws such as cracks, distortion, or signs of leakage. Also, stage two of the milestone inspection shall be conducted by a licensed engineer or licensed architect, as opposed to a “special inspector” under prior language of the bill. This amendment was brought about in response to challenges by engineers and architects regarding a lack of threshold inspectors in the State of Florida. To avoid phase 2 inspection delays and the costs associated with finding a threshold inspector, engineers, and architects – who are more readily available in the State of Florida – with heavy experience( at least 5 year license-holders) in building and inspecting the structural components of buildings will conduct these inspections. If the initial inspection results in any structural distress; a second inspection must be conducted by a licensed engineer or architect who will further test the structural integrity of the building to either confirm that the building is safe for its intended use, or to recommend a program for fully assessing and repairing damaged portions of the building. Upon inspection, boards of administrations of condominium associations and cooperative associations must distribute a copy of each inspection report for a condominium building or cooperative building to unit owners and publish the report on the association’s website under certain circumstances. Additionally, this bill enables local enforcement agencies to prescribe timelines and penalties with respect to compliance with milestone inspections. Finally, the Florida Building Commission is given discretion to develop comprehensive structural and life safety standards; these standards are to be made available for local government adoption; they may decline to adopt such standards. 2 SB 1702 was voted upon favorably in the first committee stop and now has passed in the Regulated Industries Committee by a vote of 8 – 0 on February 1st. Condominium and Cooperative Associations (A proposed committee bill, PCB PPE 3 has been submitted and now filed as HB 7069) The House released a comprehensive condominium and cooperative associations proposed committee bill, now filed as HB 7069 that differs somewhat from the Senate bill, SB 1702 by Senator Bradley summarized above. The bill: Creates a statewide building recertification requirement for condominiums and cooperative buildings that are three stories or higher in height 30 years after initial occupancy and 25 years after initial occupancy for buildings located within three miles of the coast. Requires recertifications every 10 years after a building’s initial recertification. Requires an additional, more intensive inspection, or a “phase 2 inspection,” if a building recertification reveals substantial structural deterioration. Requires building officials to provide written notice to associations when buildings must be recertified. Requires recertification and phase 2 reports be submitted to building officials and unit owners. Provides local building officials with ability to assess penalties for failing to comply with the requirements for building recertifications and phase 2 inspections. Requires condominiums and cooperatives to conduct structural integrity reserve studies every 10 years for buildings that are three stories or higher in height and prohibits waiver of funding for certain reserves further outlined here. o The bill provides that the amount of funds placed in reserve is determined by the condominium or cooperative association’s most recent structural integrity reserve study. If the amount to be reserved for an item is not in the association’s most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, then the association may use the traditional formula or alternative formula to determine the amount of funds to reserve. o The bill also provides that effective July 1, 2024, a unit-owner controlled association may not waive collecting reserves or collect less reserve funds than required for items that are required to be inspected in a structural integrity reserve study for an association building that is three stories or higher in height. In addition, unit-owner controlled associations may not use such reserve funds for purposes other than their intended purpose. o The bill repeals the ability of a developer-controlled association to waive collecting reserves or reduce the funding of reserves. The bill also repeals the ability of a developer-controlled association to use reserves funds for purposes other than their intended purposes. Requires developers to complete structural integrity reserve studies for every building that is three stories or higher, prior to turning over an association to the unit owners. Requires structural integrity reserve study inspections, and recertification and phase 2 inspections to be performed by licensed engineers or architects. Provides that structural integrity reserve studies, and recertification and phase 2 inspection reports are a part of an association’s official records and must be provided to a potential purchaser of a unit. Provides that failing to perform a required structural integrity reserves study, recertification, or phase 2 inspection is breach of a board member or officer’s fiduciary duty. Requires a community association manager to provide a recertification report to a local building official, if the manager receives the report. Provides for an additional way for condominium associations to terminate if the cost of repairs identified in a phase 2 inspection are more than 65 percent of the total fair market value of the units in the association. 3 Authorizes DBPR to enforce the structural integrity reserve studies and recertification and phase 2 inspection requirements. Requires associations to notify DBPR about the number of buildings in their association that are three stories or higher. The bill provides an appropriation and staff to DBPR to implement the bill as well. The bill appropriates DBPR a total of $500,944 ($333,380 in recurring funding and $167,564 in nonrecurring funding) from the Division of Florida Condominiums, Timeshares, and Mobile Homes Trust Fund. Additionally, the bill authorizes four full time positions to DBPR. HB 7069 has passed Appropriations committee with a vote of 23 – 0 and will be heard by the full House on 2/22. Local Governments (SB 620 Senator Hutson / HB 569 McClure) SB 620 as summarized below, has passed the full Senate on 1/27 with a vote of 22 – 14 and is now in messages to the House. The House companion bill, HB 569 was last heard in its second committee on 2/2 and passed with a vote of 11 – 6. Both are summarized below. The bill creates a cause of action for a business that has been adversely affected by an ordinance or charter provision taking into account several factors. The local government must respond to challenges of affected businesses so long as those business have seen effects local government legislation on 15% of their profits, as opposed to their overall revenue. The business must be in operation in Florida for at least three years, to be eligible to recover business damages caused by local legislation. The engrossed text of SB 620 contains the following key provisions; the first being a change to the imposition of attorney’s fees from an exclusively local government burden, to a prevailing party burden. This is significant as it lessens the costs of litigation for local governments and reduces the potential for forced settlements. Moreover, amongst the several exceptions already discussed in previous reports are two further exceptions covering any ordinance or charter relating to procurement and any ordinance or charter provision intended to promote, enable, or facilitate economic competition. This latter exception is important as it is necessary to prevent local governments from facing potential liability - from aggrieved businesses - incidental to legislation meant to spur development of businesses. Finally, a new business damages calculation was adopted to allow a business to recover present value of future lost profits caused by the ordinance; these lost profits are capped at the lesser of the two following options: 1. 7 years of lost profits; or 2. or future lost profits for a duration determined by the number of years the business had been in operation in the jurisdiction before the ordinance or charter provision was enacted. This bill now gives local governments some legislative recourse by adding zoning, development orders, and development permits to the list of legislation areas that are immune from challenge under this new business damages cause of action set forth by the bill. Likewise, bolstering protection from suit for damages, is this exception concerning the promotion of economic competition. This exception covers situations where amendments to ordinances covering business competition could give rise to a claim under this bill. Overall, since its inception, this current version of the bill has lessened some of the glaring financial costs to local governments. Along this same vein, is the curing provision allowing local governments to cure defects of a given ordinance or charter provision giving rise to the business damage cause of action. Specifically, local governments can avoid facing liability for business damages by creating ordinances under any available exception in this bill; they can also amend or repeal the bill in whole or in part, and as a last measure, governments can give a waiver to the affected business. This bill secured a favorable vote in the Senate chambers by a vote of 22 - 14 . SB 620 having been certified by the Senate has been sent to the House. 4 An amendment filed and passed on 1/31 to the House companion bill, HB 569, changes the substance of the bill to match identically that of the Senate bill SB 620. Labeled the Local Business Protection Act, this bill contains all the important provisions negotiated in committee and approved in the Senate chambers. The scope of the bill includes a business damages calculation along two metrics regarding future lost profit; ordinance exceptions not subject to business challenge; a prevailing party system for attorney fees; and the ability to cure by way of amendment, waiver to the business, and repealing part or the whole amendment. Despite heavy opposition, HB 569 passed in the Local Administration & Veterans Affairs Subcommittee by a vote of 11 – 6 on February 2, but was not heard this week. Local Ordinances (SB 280 Senator Hutson / HB 403 Representative Giallombardo) SB 280 has passed the Senate with a vote of 28 – 8 (on January 27) and has been sent to the House in message. HB 403 has passed 2 of its 3 committees of reference but was not heard this week. The bill calls for local governments to create business impact statements with each bit of proposed legislation. This impact statement must outline certain requirements, such as, an estimate of the direct economic impact of the proposed ordinance on private for-profit businesses in the municipality and a good faith estimate of the number of businesses likely to be impacted by the ordinance. As mentioned in the partner bill covering local ordinances, SB 620, are prevailing party attorney fees up to $50,000 . Thus, as things stand, the judge has the discretion of sanctioning those who file frivolous lawsuits and order the recovery of attorney’s fees to one or more parties, up to the capped amount. The major exceptions to this bill are the following: 1. Part II of Chapter 163 of the Florida Statutes covering growth policy; county and municipal planning; and land development. 2. F.S 553.73, Chapter 553 Section 73 of the Florida Statutes addresses the Florida Building Code. This means that any regulation pertaining to the Florida Building Code cannot be challenged under this bill by businesses who have been affected by promulgated regulations therein. 3. F.S 633.202, Chapter 633 Section 202 of the Florida Statutes addresses the Florida Fire Prevention Code. This means that any regulation pertaining to the Florida Fire Prevention Code cannot be challenged under this bill by businesses who have been affected by promulgated regulations therein. 4. F.S 190.005, Chapter 190 Section 005 of the Florida Statutes addresses any regulations pertaining to community development and establishing a district. 5. F.S 190.046 Chapter 190 Section 046 of the Florida Statutes addresses any regulations pertaining to the termination, contraction, or expansion of the boundaries of a community development district. 6. Ordinances related to the issuance or refinancing of debt; 7. Ordinances related to the adoption of budgets or budget amendments; 8. Ordinances required to implement a contract or an agreement, including, but not limited to, any federal, state, local, or private grant, or other financial assistance accepted by a local government; or 9. Emergency ordinances Upon a suit effectuated by a business on a local government, an automatic stay is placed on the legislation until resolution by a tribunal. To avoid an automatic stay being imposed on legislation for meritless lawsuits and subsequent appeals, this bill allows the automatic stay to be lifted upon certain conditions. The local government can enforce the ordinance - notwithstanding any further appeal - 30 days following a favorable 5 lower court judgement. This right to enforce the ordinance can be restricted if the plaintiff/appellant files a motion to stay the lower tribunal’s order AND that motion is granted by the appellate court. As noted above, SB 280 has passed the Senate with a vote of 28 – 8 (on January 27) and has been sent to the House in message. The sponsor of the companion bill, HB 403, Representative Giallombardo, filed a strike-all amendment which was adopted in committee. This amends the bill to identically match the Senate bill. Some of the changes in this amendment cover new requirements for the business impact statement; new timing requirements pertaining to filing, settlement, and promulgation of the business impact statement; exemptions on ordinances that are spared from the business impact statement requirement; and changes to the automatic stay and subsequent appeal process. HB 403, despite heavy opposition by stakeholders, passed through the Civil Justice & Property Rights Subcommittee, its second committee stop, by a vote of 12 – 6 on February 16th, 2022. Regulation of Vacation Rentals (SB 512 Senator Burgess, HB 325 Representative Fischer) SB 512, sponsored by Senator Burgess, preempts regulation of vacation rentals to the state. Current law does not allow local laws, ordinances, or regulations that prohibit vacation rentals or regulate the duration or frequency of rental of vacation rentals. However, this prohibition does not apply to any local law, ordinance, or regulation adopted on or before June 1, 2011. The bill permits “grandfathered” local laws, ordinances, or regulations adopted on or before June 1, 2011, to be amended to be less restrictive or to comply with local registration requirements. The bill does not affect vacation rental ordinances in jurisdictions located in an area of critical state concern, (the Florida Keys). Importantly, the bill preempts the regulation of advertising platforms to the state. An advertising platform is a person who electronically advertises a vacation rental to rent for transient occupancy, maintains a marketplace, and a reservation or payment system. The bill also Requires local governments to accept or deny a registration application within 15 days of receipt of an application. Authorizes the division to issue temporary licenses to permit the operation of the vacation rental while the license application is pending. Permits a local government to terminate a local registration for violations of local registration requirements. Authorizes the division to revoke or suspend state vacation rental licenses for violations of local registration requirements and violations of community association property restrictions. Authorizes the division to fine an advertising an amount not to exceed $1,000 for a violation of the provisions in the bill or rules of the division Provides that its terms do not supersede any current or future declaration or covenant for condominium, cooperative, or homeowners’ associations Requires a sexual offender or predator to register at the local sheriff’s office no later than 5:00 p.m., 24 hours after establishing a temporary residence in a vacation rental. Under this version of the bill, a local government may require vacation rentals to be registered but are allowed only a registration fee of no more than $50. A late filed amendment by the sponsor of the bill adds language concerning a cap on “collective registration applications,” set at $100 per application. A “collective registration application” refers to licenses issued to a group of houses or units found in separate locations that are represented by the same licensed agent, such collectives may have a maximum of 75 houses or units per license and is restricted to counties within one 6 district. This signifies that up to 75 homes can be licensed at $100 with a collective registration application. The amendments also address situations in which the Department of Business and Professional Finally, this amendment addresses the grandfather provision in that it would favor the least restrictive measure. Any ordinance preceding the cut-off date of June 1st, 2011, will take effect unless an ordinance enacted subsequent to that cut-off date proves to be less restrictive. This limits the applicability of local legislation that should be “grandfathered in,” but instead can be overlooked in light of newer and less invasive legislative measures. Under this adopted amendment, the processing of these collective applications could be problematic for local governments on two grounds. First, an application of up to 75 homes must be licensed by the local government within 15 days of the processed application, this places a timing constraint on local governments which will be increasingly difficult to meet given the sheer number of homes that must be inspected and processed. Secondly, the costs associated with the requisite inspections and any administrative processing fees would be borne by local governments; assuming there are 75 homes that require inspection and licensure, the costs of inspection for each home would surely exceed the allotted $1.33 per home from the collective registration fee. An impact of this bill; preemption of local government regulation of vacation homes may change the complexity of localities in Florida with an overabundance of vacation rentals entrenching themselves in communities across the state. Opponents also voiced their fears of big corporations purchasing homes and benefitting from such a “collective registration application” to rent out large quantities of homes within the state. This bill must strike a balance between maintaining local government control and addressing the issue of unlicensed rentals, and the threats posed by unlicensed rentals. SB 512 passed its first committee and has passed the Community Affairs Committee by a vote of 6 – 3. HB 325 has been voted on favorably in the Regulatory Reform Subcommittee by a vote of 10 – 6, its next checkpoint is the Ways & Means committee. Neither were heard this week. Sovereign Immunity (SB 974 Senator Gruters / HB 985 Representative Beltran) HB 985 would increase the cap for damages against the state and its agencies and subdivisions for torts to $1,000,000 per person, prohibits an insurance policy from conditioning the payment of benefits, in whole or in part, on the enactment of a claims bill. Also, beginning on July 1, 2023, the bill requires the Department of Financial Services to annually adjust the damages cap to reflect changes in the Consumer Prices Index. Importantly, this bill would eliminate any statute of limitations on sexual battery actions involving a victim who was younger than 16 years old at the time of the incident. The bill now also decreases from six months to three months the amount of time a government entity has to make a final disposition of a claim during the pre- suit process within s. 768.28(6), F.S., after which time the plaintiff may bring a lawsuit. SB 974 has just seen another change via a sponsor strike-all amendment, which changes the recovery limits on damages for tortious actions against a sovereign entity. The capped recovery for an individual claim has been changed from $300,000 per person to $1 million per person; and changed for multiple claims stemming from the same incident or occurrence, such claims will be capped at $3 million total as opposed to $400,000 per incident in prior revisions of the bill. Part of the bill that remained unchanged from prior revision, are the adjustments to the caps. Adjustments will be made every 10 years starting from January 1st , 2023, 10 years sooner than the start date on a revision preceding the amendment. Otherwise, these limitations shall be rounded to the nearest $10,000, and after every adjustment, the department must publish the adjusted liability limitation amounts on its website. Finally, the amendment requires the department to publish the adjusted liability limitation amounts on its website, and which amounts shall apply to causes of action accruing on or after October 1 following the 7 adjustment date. Claims arising on or after October 1st, 2022, shall be applicable for the purposes of this bill. The impact of this bill would be felt on taxpayers, as there are associated costs incurred by raising the caps on damages and costs of payment for insurance to cover such lawsuits against a sovereign entity. This amendment has been proposed to match HB 985, the House companion bill which has been garnering support in favor of the elevated damage caps. With these higher caps, it is clear that the damages sought by way of actions for tortious injury suffered will increase to match these higher caps. This will have an even more profound impact on taxpayers who will bear the brunt of these increased caps, as the costs are spread by the local government onto the taxpayers. HB 985 having already passed its first committee, was voted on favorably in the House Appropriations Committee by a vote of 23 – 1. With this strike-all amendment adopted, SB 974, passed in the Senate Committee for Community Affairs by a vote of 6 – 3. Neither were heard this week. Session Dates: January 11 through March 11, 2022.