Florida Statutes 720.307 – Transition of association control in a community
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With respect to homeowners’ associations:
(1) Members other than the developer are entitled to elect at least a majority of the members of the board of directors of the homeowners’ association when the earlier of the following events occurs:
(a) Three months after 90 percent of the parcels in all phases of the community that will ultimately be operated by the homeowners’ association have been conveyed to members other than the developer;
Terms Used In Florida Statutes 720.307
- association: means a Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. See Florida Statutes 720.301
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- community: includes all real property, including undeveloped phases, that is or was the subject of a development-of-regional-impact development order, together with any approved modification thereto. See Florida Statutes 720.301
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Developer: means a person or entity that:(a) Creates the community served by the association; or(b) Succeeds to the rights and liabilities of the person or entity that created the community served by the association, provided that such is evidenced in writing. See Florida Statutes 720.301
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Governing documents: means :
(a) The recorded declaration of covenants for a community and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto; and(b) The articles of incorporation and bylaws of the homeowners' association and any duly adopted amendments thereto. See Florida Statutes 720.301- Member: means a member of an association, and may include, but is not limited to, a parcel owner or an association representing parcel owners or a combination thereof, and includes any person or entity obligated by the governing documents to pay an assessment or amenity fee. See Florida Statutes 720.301
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Parcel: means a platted or unplatted lot, tract, unit, or other subdivision of real property within a community, as described in the declaration:
(a) Which is capable of separate conveyance; and(b) Of which the parcel owner, or an association in which the parcel owner must be a member, is obligated:1. See Florida Statutes 720.301(b) Such other percentage of the parcels has been conveyed to members, or such other date or event has occurred, as is set forth in the governing documents in order to comply with the requirements of any governmentally chartered entity with regard to the mortgage financing of parcels;(c) Upon the developer abandoning or deserting its responsibility to maintain and complete the amenities or infrastructure as disclosed in the governing documents. There is a rebuttable presumption that the developer has abandoned and deserted the property if the developer has unpaid assessments or guaranteed amounts under s. 720.308 for a period of more than 2 years;(d) Upon the developer filing a petition seeking protection under chapter 7 of the federal Bankruptcy Code;(e) Upon the developer losing title to the property through a foreclosure action or the transfer of a deed in lieu of foreclosure, unless the successor owner has accepted an assignment of developer rights and responsibilities first arising after the date of such assignment; or(f) Upon a receiver for the developer being appointed by a circuit court and not being discharged within 30 days after such appointment, unless the court determines within 30 days after such appointment that transfer of control would be detrimental to the association or its members.For purposes of this section, the term “members other than the developer” shall not include builders, contractors, or others who purchase a parcel for the purpose of constructing improvements thereon for resale.
(2) Members other than the developer are entitled to elect at least one member of the board of directors of the homeowners’ association if 50 percent of the parcels in all phases of the community which will ultimately be operated by the association have been conveyed to members other than the developer.(3) The developer is entitled to elect at least one member of the board of directors of the homeowners’ association as long as the developer holds for sale in the ordinary course of business at least 5 percent of the parcels in all phases of the community. After the developer relinquishes control of the homeowners’ association, the developer may exercise the right to vote any developer-owned voting interests in the same manner as any other member, except for purposes of reacquiring control of the homeowners’ association or selecting the majority of the members of the board of directors.(4) At the time the members are entitled to elect at least a majority of the board of directors of the homeowners’ association, the developer shall, at the developer’s expense, within no more than 90 days deliver the following documents to the board:(a) All deeds to common property owned by the association.(b) The original of the association’s declarations of covenants and restrictions.(c) A certified copy of the articles of incorporation of the association.(d) A copy of the bylaws.(e) The minute books, including all minutes.(f) The books and records of the association.(g) Policies, rules, and regulations, if any, which have been adopted.(h) Resignations of directors who are required to resign because the developer is required to relinquish control of the association.(i) The financial records of the association from the date of incorporation through the date of turnover.(j) All association funds and control thereof.(k) All tangible property of the association.(l) A copy of all contracts which may be in force with the association as one of the parties.(m) A list of the names and addresses and telephone numbers of all contractors, subcontractors, or others in the current employ of the association.(n) Any and all insurance policies in effect.(o) Any permits issued to the association by governmental entities.(p) Any and all warranties in effect.(q) A roster of current homeowners and their addresses and telephone numbers and section and lot numbers.(r) Employment and service contracts in effect.(s) All other contracts in effect to which the association is a party.(t) The financial records, including financial statements of the association, and source documents from the incorporation of the association through the date of turnover. The records shall be audited by an independent certified public accountant for the period from the incorporation of the association or from the period covered by the last audit, if an audit has been performed for each fiscal year since incorporation. All financial statements shall be prepared in accordance with generally accepted accounting principles and shall be audited in accordance with generally accepted auditing standards, as prescribed by the Board of Accountancy, pursuant to chapter 473. The certified public accountant performing the audit shall examine to the extent necessary supporting documents and records, including the cash disbursements and related paid invoices to determine if expenditures were for association purposes and the billings, cash receipts, and related records of the association to determine that the developer was charged and paid the proper amounts of assessments. This paragraph applies to associations with a date of incorporation after December 31, 2007.(5) This section does not apply to a homeowners’ association in existence on the effective date of this act, or to a homeowners’ association, no matter when created, if such association is created in a community that is included in an effective development-of-regional-impact development order as of the effective date of this act, together with any approved modifications thereof.