Q: Is a homeowners’ association permitted to adopt amendments changing the leasing rights of owners in the community? I was recently told that the statute was changed, and rental restriction amendments are no longer permitted. Is this correct? (W.K., via e-mail)
A: Not exactly. Chapter 720 of the Florida Statutes is called the Florida Homeowners’ Association Act. This law was amended in 2021 to address amendments that regulate the leasing of “parcels” within a homeowners’ association. Typically, the parcel is the home and the land the home sits on, and usually other improved or unimproved portions of lots.
A new Section 720.306(1)(h) was added, which says that any amendment to the homeowners’ association’s governing documents, adopted after July 1, 2021, that prohibits or regulates rental agreements, only applies to a parcel owner that acquires title to their parcel after the effective date of the amendment, or to a parcel owner who consents to the amendment. However, this restriction does not apply to amendments which regulate or prohibit rental agreements for terms of 6 months or less. Further, amendments that prohibit the rental of parcels for more than 3 times in a calendar year also apply to all parcel owners.
To the extent this statute can be applied retroactively to existing HOA’s, a very complex and debatable subject, homeowners’ associations continue to have the ability to adopt amendments that regulate or prohibit leases of 6 months or less, and still have the ability to adopt amendments which prohibit leasing more than 3 times in a calendar year.
For condominiums, Section 718.110(13) of the Florida Condominium Act states that any amendment which prohibits a unit owner from leasing their units, alters the duration of the rental term, or limits the number of times an owner may rent their unit during a specified period, only applies to those owners who take title after the effective date of the amendment, or those owners who consent to the amendment. There is no 6-month/3 times per year exception in the Condominium Act.
Q: The board of directors of my condominium association was recently discussing the budget and options to raise additional funds. One suggestion that was made was charging new owners a fee when they purchased their unit. I am familiar with certain communities, such as country clubs, charging initiation fees. Is this permissible for our condominium association? (R.G., via e-mail)
A: Section 718.112(2)(k) of the Florida Condominium Act states that the association may not charge a fee in connection with a sale, mortgage, lease, sublease, or other transfers of unit, subject to certain exceptions. One exception is that an association is permitted to charge a fee not to exceed $150.00 per applicant if the association has the authority to approve the transfer and the fee for such approval is authorized by the condominium documents.
The statute does permit developers to charge capital contributions, sometimes called start-up fees, and this is common. Recent amendments to the section of the statute on “estoppel letters” also references capital contributions, creating a bit of conflict in the law. Although this issue has not been addressed by the appellate court, the overwhelming if not unanimous opinion of attorneys who practice in this field is that such charges would not be upheld.
As you note, country clubs almost universally charge fees of this nature. In many cases, these organizations are not governed by any of Florida’s housing statutes. Those which are subject to housing laws are usually governed by Chapter 720, the Florida Homeowners’ Association Act. The Homeowners’ Association Act does not have a similar provision prohibiting transfer fees. Initial contributions to capital are not uncommon in HOA’s, though they would need to be authorized by the declaration of covenants.