2021 Legislative Session: Update on Key Bills
One of the issues that can make the most impact on Florida community associations is skyrocketing insurance rates or lack of availability of coverage altogether. Many carriers are no longer offering commercial residential coverage to Florida associations – or have left the Florida market altogether. There are two main driving factors to the situation we find ourselves in – a significant increase in perils and fraudulent claims abusing the system. While the legislature can’t do much to address the increase in perils; it can make an attempt to curtail fraud and abuse.
FirstService Residential worked with other stakeholders throughout the 2021 legislative session in an effort to encourage carriers to return to the marketplace to promote competition that would have a positive impact on community associations without overly prejudicing those associations.
SB 76, which was just signed by Governor DeSantis, was designed to address much of the fraud in the current marketplace and offer certain modifications to the claims process in an effort to get insurance carriers back in the market. Florida has approximately 76% of all property insurance lawsuits in the country whereas the property insurance claims in Florida represent only about 7% of the national total of such claims. SB 76 reduces the statute of limitations to file claims from 3 years to 2 years. An insured still has another year to file any subsequent claims coming from that initial claim of loss. SB 76 also alters the way attorneys’ fees are awarded in property claims, with the goal of disincentivizing fraudulent claims.
Senate Bill (SB) 76
Insurance rates aren’t expected to immediately decrease. There are many factors in play that are well outside of anyone's control such as the increase of powerful storms affecting Florida, fires in California, freezes in Texas, the availability and affordability of the reinsurance carriers must purchase, etc. But the legislature felt that there are some things that can be done and SB 76 is an effort to address to at least stabilize the marketplace and give carriers an incentive to make rates more reasonable and policies more accessible.
SB 76 focuses on reducing litigation related to property insurance claims and also places restrictions on companies soliciting insureds to file roof claims. The process to bring a claim is changed by SB 76 by a new presuit process and places additional requirements on insurance carriers to promptly investigate, review, and evaluate the notices of intent to bring a court case. The bill prohibits advertisements by contractors that encourage, instruct, or induce a consumer to contact a contractor or public adjuster to make an insurance claim for roof damage. The bill prohibits contractors from offering residential property owners inducements (gift cards, cash, rebates, coupons) in exchange for allowing a contractor to inspect the roof or to file a roof claim with the property owner's insurance carrier. Finally, in an effort to address fraud, the bill makes it illegal for contractors to perform repairs for an insured property owner without first providing the property owner with a detailed cost estimate. There is a significant fine (up to $10,000) for any violation of this by any roof contractor or its employees.
SB 630, a collaboration between FirstService Residential, Community Associations Institute, the Real Property Section of the Florida Bar, Florida Association of Realtors, Florida Homebuilders Association, the Florida Association of Insurance Agents, and others, passed the Florida Legislature and has been signed by the governor. It goes into effect on July 1, 2021.
Senate Bill (SB) 630
Another change that will likely make a significant impact in controlling insurance costs was passed as part of SB 630. It deals with subrogation, where one carrier sues another carrier to be reimbursed after they have paid for a claim. Currently, a condominium association’s master insurance policy cannot go after a unit owner’s policy; however, if an owner’s negligence leads to a loss under the association’s policy, the association may certainly go after that owner for recourse. However, a unit owner’s policy may go after the association’s master policy even if the loss was the fault of the unit owner. Some unit owner policy carriers have made it a standard practice to go after the association’s master policy carrier on all claims. Language in the bill returns it to an even playing field; all policies cover what they are responsible for and neither carrier may subrogate against the other.
SB 56 has passed the legislature and was signed by the governor, going into effect on July 1, 2021. In accordance with the revised laws, in order for associations to collect attorneys’ fees, they must send a 30-day Notice of Late Assessment prior to sending a Notice of Intent to Record Claim of Lien letter. The 30-day Notice of Late Assessment is now required to be done in accordance with a new statutory prescribed form prepared by, or on behalf of, the association or their management company. This form must include a detailed breakdown of the total amount due – including regular maintenance and special assessments, fines, late fees, and interest, but not attorneys’ fees. In addition to the new 30-day Notice of Late Assessment, the revised statutes state that the 30-day Notice of Late Assessment must be sent to the unit owner at the last address reflected in the association’s records and, if this is not the unit address, it must also be sent to the unit address. In addition, the bill amends the Condominium Act to extend the notice period for the Notice of Intent to Record a Claim of Lien from 30 days to 45 days (the HOA Act already requires 45 days). This proposed bill, as originally presented, was much more onerous and costly to associations but FirstService Residential was able to successfully advocate for key changes to mitigate that negative impact substantially. However, as this new change in the law will be burdensome, tedious, and costly for associations, FirstService Residential has already begun the effort to make changes to it during the 2022 legislative Session.
Senate Bill (SB) 56
HB 463 passed, which exempts HOA swimming pools that serve no more than 32 parcels from supervision by the Florida Department of Health. This is same exemption that currently exists for similar sized condominiums and cooperatives. This bill has been approved by the governor and goes into effect on July 1, 2021.
House of Representatives Bill (HB) 463
As part of our promise of excellent, comprehensive service delivery, FirstService Residential will continue to advocate for associations before policymakers and regulators.