Gerstin & Associates Commercial Litigation, Community Associations & Commercial Real Estate

April 14, 2011

Florida Supreme Court Alters Community Association Declarations, in a Big Way.

Posted by : gerstin

Did Florida’s Supreme Court render laws governing condominium and homeowner association declarations useless and unenforceable?

Click here to read the Court’s full opinion

Florida’s community associations across the state are becoming increasingly concerned the legislature can no longer pass laws that affect Florida’s condominium and homeowner associations after the Supreme Court’s recent decision in  Cohn v. Grand.  Florida’s community associations should be concerned and need to take action, but as explained below all hope is far from lost.

The facts:

1.      The Grand was a condo hotel.

2.      When owner Cohn purchased a unit the Grand the Declaration stated “unit owners would governed by the “the Condominium Act of the State of Florida in effect as of the date of recording this Declaration.”

3.      The Declaration did not include the phrase, “as amended from time to time.”

4.      The dispute specifically arose as to whether the unit owners are afforded voting rights in accordance with the Condominium Act in effect at the time the Declaration was recorded or were said voting rights altered over time by each amendment made to legislation relating to condominium associations and in particular voting.

The legal argument:

Unit owners’ contractual rights, defined by the terms of the Florida Condominium Act (“Act”) at a fixed point in time, do not vary when changes to the Act are made because the term “as amended from time to time” was not included in the Declaration.

Florida law applied to the facts and the legal argument:

An overriding principle embedded in the Florida Constitution is that “state action” (legislation) that impairs a contract is unconstitutional. In determining whether legislation impairs a contract a three part test is used and the results are weighed and balanced:

1)      To what extent are the contractual rights impaired;

2)      Does the state have a good reason for enacting policy that changes contractual rights; and

3)      Are the means the state will use to achieve this policy reasonable?

The issue in Grand related to owner voting which has long been considered a substantive right. As such, the Court gave greater weight to item # 1 above and less to item # 2.

The Court’s Decision:

The Florida Supreme Court held “The Constitution prohibits the impairment of contracts; and the statute regulating mixed-use condominiums (F.S. 718.404(2)) impaired the Grand’s unit owner’s contractual rights, which are established in the Grand’s declaration.” In other words, the law at the time the Declaration was recorded, not at the present time, was the law that applies to owners’ voting rights in the Grand.

 

What this means to your Association:

The Grand decision should not be read as the end of legislative control over Florida community associations.. Surely, rules relating to enforcement of covenants would not be considered a substantive right that any  legislative changes would be outweighed and nullified. Instead, each such case will be reviewed by the courts on a “case-by-case” basis, if the magic words “as amended from time to time” is not in the Declaration.

What to do:

Check your community association’s Declaration and determine whether the drafter included the words “as amended from time to time” in relation to statutes that will be used to enforce and interpret the Declaration (Condo. Act or HOA Act.). If not, speak with your community association’s attorney and begin the process of amending your community association’s Declaration.

 


No Comments

(will not be published)
(opitional)

RSS South Florida Business, Real Estate & Litigation Headlines

  • UM lands $1M grant for international business center October 30, 2014
    The University of Miami received more than $1 million from the U.S. Department of Education to bolster its international business center. The Coral Gables-based university will match the funding, which will be provided over a period of four years to expand programming at the Center for International Business Education and Research. RELATED CONTENT: UM receiv
  • Sears-anchored shopping center sold for $23M October 30, 2014
    A shopping center in the Dadeland area of Miami-Dade County that's anchored by Sears Home Appliance Showroom traded for $23.25 million to a group of Miami investors. Coral Gables-based Dadeland North Ltd., led by Philip Leitman, sold the 40,600-square-foot retail plaza at 6605 S. Dixie Highway. It was built on the 2.6-acre site in 1980. RELATED CONTENT:
  • Carnival Cruise Lines CEO to retire October 30, 2014
    Carnival Cruise Lines CEO Gerry Cahill will retire after 20 years of service with the company. Cahill, 63, has been CEO of Carnival Corp.'s largest cruise line since 2007, growing the operation to 24 ships during his tenure. His retirement will take effect Nov. 30. "Gerry has been instrumental in taking Carnival Cruise Lines to new heights as one o
  • Land in Miami's Brickell area could sell for $100M October 30, 2014
    A vacant site in Miami's high-profile Brickell area is under contract for $100 million in a deal funded by New York-based Winchester Equities. The company, led by Avi Benamu and Jack Hazan, funded $5 million for a soft deposit on behalf of the potential buyer, Benami said. He didn't reveal the identity of the proposed buyer or the site, but said it

RSS South Florida Community Association Headlines

  • Scottsdale (AZ) woman claims bodies are buried in HOA park October 30, 2014
    A Scottsdale woman says she’s been keeping a secret about bodies buried in a park for more than a decade.   Joanne Lawlor broke the news to her neighbors in a community newsletter this month.      Read more……… The post Scottsdale (AZ) woman claims bodies are buried in HOA park appeared first on communityassociations.net.
  • More than 100 homeowners voice their HOA concerns in public hearing (SC) October 30, 2014
    More than 100 homeowners attended the public hearing to voice their concerns on county-wide Home Owners Associations.   Homeowner after homeowner spoke their piece Wednesday night. Their concerns ranged from feeling ignored, feeling they have no say, construction limitations, and not knowing where their money was going.        Read more…….. The post More tha
  • Condo board pres. believes he was target of arson over fees dispute (ON, Canada) October 30, 2014
    The president of a Toronto condo board is in hiding with his wife after they narrowly escaped what they believe was an arson motivated by a dispute over condos fees.   The fire broke out on the first floor of a townhouse on Grandravine Drive near Keele Street and Sheppard Avenue West around 4:30 a.m. on […] The post Condo board pres. believes he was target o