On June 16, 2021, Governor DeSantis signed Florida SB 630, which will become effective on July 1, 2021. The bill modifies certain provisions in the Florida Statutes that impact condominium associations and homeowners’ associations. Among the changes made was one that restricts the right of a homeowner’s association to implement rental restrictions applicable to properties subject to the association’s governing documents.
Before this new legislation, the only limit on rental restrictions in the Florida Statutes, which pertained to community associations, related to condominium associations; there was no such limitation for homeowners’ associations. For a condominium association, the limit on rental restrictions, found in Section 718.110(13), Florida Statutes, provides as follows: “An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment.”
However, effective July 1, 2021, a declaration or other governing document of a homeowners’ association that has more than 15 parcel owners, or an amendment to a declaration or other governing document of such a homeowners’ association, that contains a prohibition or regulation as to rental agreements, “applies only to a parcel owner who acquires title to the parcel after the effective date of the governing document or amendment, or to a parcel owner who consents, individually or through a representative, to the governing document or amendment”. This new statutory provision will be reflected in a new subsection “(h)”, to be added to Section 720.306 of the Florida Statutes.
While this language closely mirrors the language found in Section 718.110(13), Florida Statutes, there are certain differences. Section 718.110(13), Florida Statutes states that the rental restriction applies to condominium owners “who acquire title to their units after the effective date of that amendment” and to those “who consent to the amendment”. In contrast, Section 720.306(1)(h), Florida Statutes, will provide that the rental restriction will apply to a parcel owner “who acquires title to the parcel after the effective date of the governing document or amendment” and to a parcel owner “who consents, individually or through a representative, to the governing document or amendment”. It is unclear what is meant by the reference to an owner who “consents to the governing document” as no vote of the parcel owners is taken at the time a declaration (the governing document) is first adopted. A vote of the parcel owners is only taken when a declaration is amended.
The new section “(h)” added to Section 720.306 of the Florida Statutes will also clarify that a rental prohibition or regulation that does not apply to a current title holder (because that owner did not consent to the amendment) also will not apply to a subsequent title holder following certain “ownership changes”. In particular, the rental prohibition or regulation will not apply to an heir who acquires the title as a result of the prior owner’s death or where title is transferred from the prior owner to an entity affiliated with a prior owner. Instead, the prohibition or regulation will only apply once the heir or affiliated entity transfers title to another party.
There will be an exception to the rule of limited application (to successor owners or owners voting for the amendment) as to certain rental prohibitions or regulations for those restrictions that are put in place on or after July 1, 2021. However, those exceptions are limited to: (a) rental restrictions that prohibit or regulate lease terms which are less than 6 months; and (b) rental restrictions that prohibit rentals of a parcel more than three times in a calendar year. Those restrictions, once adopted into an association’s governing documents, will apply to all owners in the association regardless of when or how the owner’s title was acquired and regardless of how that owner voted as to an amendment adopting said restrictions.
Again, the restrictions will not apply to rental restrictions that are in place prior to July 1, 2021. As a result, HOA governing documents or amendments that were recorded prior to July 1, 2021, and which contained prohibitions or regulations as to rental agreements, remain binding as to all owners, regardless of the nature of those prohibitions or regulations.
For guidance as to how to prepare a proposed amendment to your HOA declaration that complies with the new HOA rental restrictions or for guidance on additional changes resulting from Florida SB 630, you can reach out to our association law team.