Fla. Stat. § 720.307

Transition of association control in a community.

turnoverdeveloperboard-controltransitionfiduciary-duty

Plain-English summary

Common Elements summary — Section 720.307 governs HOA turnover — the transfer of association control from the developer to the lot owners. The developer must turn over control of the board when 90% of the parcels in all phases have been conveyed to owners other than the developer, OR three months after the developer files an application for a final development order or final inspection on the last parcel, whichever comes first. At turnover the developer must deliver: all financial records, all governing documents, all contracts, all permits, all warranties, an audit of association finances by an independent CPA, all insurance policies, and the keys. The new board must give written notice to all members within 90 days of the turnover meeting. For successor boards: the most important post-turnover task is commissioning an independent audit and an independent property condition assessment within 90 days. Florida's construction-defect tolling rule (95.11 plus 720.307 case law) means the SOL clock starts running at turnover for claims against the developer. A board that "waits to see how things go" can lose claims worth millions before it ever gets advice.

Not legal advice. Statute reference is for education only — confirm citations on official sources and consult a Florida attorney for your situation.

Statutory text

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With respect to homeowners’ associations:

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; (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.

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.

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.

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.

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.

Synced from the Florida Legislature’s official site. Verify the current version before citing.

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Fla. Stat. § 720.307

Transition of association control in a community.

turnoverdeveloperboard-controltransitionfiduciary-duty

Save section

View official text

Plain-English summary

Not legal advice. Statute reference is for education only — confirm citations on official sources and consult a Florida attorney for your situation.

Statutory text

Search all statutes

With respect to homeowners’ associations:

Synced from the Florida Legislature’s official site. Verify the current version before citing.

Community discussion

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