Governing Documents and Amendments

July 31, 2022

Miami Herald Real Estate Column by Jonathan Mofsky: “Ruling Shows Pitfalls of Associations Enacting Changes Without Required Votes”

The firm’s latest “Real Estate Counselor” column in today’s Miami Herald is authored by partner Jonathan M. Mofsky and titled “Ruling Shows Pitfalls of Associations Enacting Changes Without Required Votes.” It focuses on a recent ruling by Florida’s Fifth District Court of Appeal that illustrates the potential consequences of associations that undergo alterations to their amenities and enact rule changes without the required vote and approval of their unit owners. Jonathan’s article reads:

. . . The case initially stems from a filing for mandatory non-binding arbitration with the Division of Florida Condominiums, Timeshares and Mobile Homes under the Department of Business and Professional Regulation. Michelle and Kevin Flint, owners of several units at the Lexington Place condominium in Orlando, objected to the condo association’s elimination of a common element dog park and a court for wallyball (i.e., a sport similar to volleyball played on a racquetball court). They alleged the association performed these material alterations without a vote and majority approval of the unit owners in violation of its own declaration of condominium.

The Flints also challenged a board-enacted rule that prevented tenants from maintaining pets at the condominium, which they claimed violated the pet restrictions contained in the declaration.

The couple prevailed in these proceedings on both issues. However, the association chose to escalate the matter by filing a lawsuit in Orange County circuit court based on the same arguments originally presented in arbitration.

The circuit court also ruled in favor of the Flints and affirmed the arbitrator’s decision. After considering the different provisions in the association’s declaration as well as the arguments of the parties, the court found that because the association’s declaration required approval by a majority vote of the unit owners prior to performing the alterations, the association’s board of directors alone lacked the authority to eliminate the community’s dog park and wallyball court.

July 3, 2022

Firm’s Miami Herald Real Estate Column by Lindsey Thurswell Lehr: “Community Associations Should Consider Amending Their Amendments Process”

by Siegfried Rivera

Siegfried Rivera

The latest edition of the firm’s Miami Herald “Real Estate Counselor” column appears in today’s edition of the newspaper and is authored by Lindsey Thurswell Lehr. The article, which is headlined “Community Associations Should Consider Amending Their Amendments Process,” focuses on the inability for many community associations to amend their governing documents, and it suggests a possible solution. Lindsey’s article reads:

. . . Declarations, covenants and bylaws are recorded in the local court registry and provided to all buyers prior to their purchase, as they essentially set the terms of the contract and serve as mini constitutions setting forth the rights and duties between unit owners and their association.

These governing documents are originally codified by a community’s developer, and they often include dated and problematic provisions that are in dire need of updating as communities grow and owners’ goals change.

However, amendments to an association’s recorded governing documents often require a vote of the unit-owner membership, and sometimes the documents demand a minimum approval of two-thirds or even three-quarters of all the owners for an amendment to be ratified.

Such voting thresholds are extremely difficult for most communities to achieve. In fact, many Florida communities have difficulty achieving the legally mandated minimum voter-participation requirements to conduct valid board member elections or hold membership meetings.

Indeed, changing the recorded governing documents is often significantly more difficult than matters requiring only a simple vote of the board of directors, but communities with troublesome and outdated provisions should still take the challenge head on and make it a priority.

August 18, 2021

Community Association Tenant Vetting, Approvals Require Careful Guidance by Qualified Pros

by Christyne Santisteban

Christyne Santisteban

Florida community associations typically have the right under their governing documents to regulate and approve leases and tenants. However, some association boards of directors are under the misconception that they can easily develop and implement new leasing restrictions via a board vote, and that they have the authority to approve or reject prospective tenants as they please without facing any scrutiny of their decisions.

As my colleague Laura Manning-Hudson wrote in this blog in her June 9 post titled “Suit Against Boca Condo Association Spotlights Importance of Governing Document Amendments, Filings,” a lawsuit filed earlier this year against Boca Pointe Condominium Association highlights the importance of properly adopting leasing restrictions to an association’s governing documents and recording them in the local court registry where the association is located.

According to the suit, the association’s new leasing restriction, which it apparently adopted via a simple vote of the board the directors, was never approved by all the unit-owner association members via a formal vote. The only leasing restriction in the association’s recorded declaration states that owners are only restricted from renting units for terms of less than thirty days, contradicting the new restriction that the board tried to implement. If the allegations in the lawsuit hold up in court, the association could be forced to pay the plaintiff unit-owners’ lost rental income and legal bills.

June 9, 2021

Suit Against Boca Condo Association Spotlights Importance of Governing Document Amendments, Filings

by Laura Manning-Hudson

Laura Manning-Hudson

A lawsuit that was recently filed against the Promenade at Boca Pointe Condominium Association highlights the importance of properly adopting changes to an association’s governing documents and recording them in the local court registry where the association is located. If the allegations in the lawsuit hold up in court, the association for the Boca-area community could be forced to pay the plaintiff unit-owners’ lost rental income and legal bills.

According to the suit, the association is making up rules to prevent condo owners Gerardo and Ana Vizcaino from leasing their unit for a full year. The suit states that the association’s new rule, which it apparently adopted at an August 2020 board meeting after a simple vote of the board the directors, was never approved by the members by a formal vote.

Indeed, the suit alleges that the association president acknowledged in a notice to all of the unit owners that the board’s adoption of a rule restricting rentals to one tenant per 12-month period was invalid because it had not been approved by the unit owners via an amendment to the governing documents. The only restriction in the association’s recorded declaration pertaining to rentals states that owners are only restricted from renting units for terms of less than thirty days. No other restrictions are included in the recorded governing documents.

May 11, 2021

Article by Michael Toback in Today’s Daily Business Review: “Ruling Illustrates Perils in Foreclosures of Noncompliance With Documents, Miscalculating Claim of Lien”

by Siegfried Rivera

Siegfried Rivera

An article by the firm’s Michael Toback was posted today as the featured expert guest commentary column on the homepage of the website of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and will soon be appearing in the “Board of Contributors” page of the print edition. The article, which is titled “Ruling Illustrates Perils in Foreclosures of Noncompliance With Documents, Miscalculating Claim of Lien,” discusses a recent ruling by the state’s Fourth District Court of Appeal that highlights not only the significance of associations complying with the provisions of their governing documents in foreclosures, but also the implications of a mistake in the calculation of the “assessment amount due” in determining the ultimate validity of an association’s claim of lien.

Michael’s article begins by noting that most community association governing documents require the association to provide an annual budget to each homeowner with the assessments for the coming year and their due dates, as well as a certificate setting forth the amount of current assessments upon request. If an owner becomes delinquent in their assessment payments, Florida law calls for associations to issue a demand letter to the owner outlining the amounts that are outstanding. If such demands prove unsuccessful after 45 days (30 days for condominiums), associations may then file a claim of lien against the owner’s residence for the assessment amount due.

His article continues:

. . . In Pash v. Mahogany Way Homeowners Association, the HOA filed a foreclosure against unit-owner Gary Pash claiming he had failed to pay outstanding quarterly assessments and costs. Both parties filed dueling summary judgment motions, and the circuit court ultimately entered summary judgment for the HOA and denied summary judgment for the owner.

The Fourth DCA panel’s majority opinion overturned the HOA’s summary judgment, concluding that the evidence presented by the HOA failed to include each of the relevant budgets and notices, together with the proof they were provided to the unit owner, in order to combat Pash’s affidavit in opposition.

October 16, 2020

New Post-Pandemic Normal Calls for Community Associations to Reexamine Restrictions on Working from Home

by Laura Manning-Hudson

Laura Manning-Hudson

A recent survey by the Community Associations Institute found that 67 percent of respondents have noticed an increase in home-based businesses operating within their communities due to the COVID-19 pandemic. In the same survey, 83 percent of respondents reported that their community restricts home-based businesses, but 73 percent indicated that their association was now being more lenient when it came to approving residents’ requests to operate businesses such as daycares, school learning pods, hair stylists and others from their homes.

Most Florida community associations have restrictions prohibiting commercial business activities from being conducted in residents’ units. Some include blanket bans on commercial activity altogether, while others make a distinction between permissible and impermissible activities.

homework-300x200 It makes sense for associations to regulate and restrict businesses from operating within their communities, especially for commercial activities that entail increased traffic and noise, but the upsurge in working from home in the new post-pandemic normal calls for HOAs and condominium associations to take a prudent approach that is guided by reason. Today’s technology allows for a great deal of work to be done from home with no disruptions whatsoever to the community at large. Rather than attempting to ban all commercial activities in a community, the better option is to specifically delineate in the governing documents the types of activities that are not allowed.

October 22, 2018

Updated Methods for Preserving Association Governing Documents Under Marketable Record Title Act

by Roberto C. Blanch

Roberto C. Blanch

The Florida Marketable Record Title Act (MRTA) requires HOAs to reaffirm and renew their covenants and restrictions 30 years after they were originally recorded in the local county records. MRTA was created to extinguish claims to property which are at least 30 years old in an effort to stabilize property law by clearing old defects from the chains of title to real property, limiting the period of record searches, and clearly defining marketability by extinguishing old interests of record.

One of the unintended consequences of the Act is that the declarations of covenants, conditions and restrictions recorded by HOAs may be set to expire after 30 years of the date in which they were recorded. Keep in mind that for most HOAs, if the residents are no longer compelled to act in accordance with the community’s declaration, the results could be catastrophic for the associations’ administration and finances.

The Florida legislature passed a law earlier this year to update the process for HOAs to renew and preserve their covenants and restrictions under MRTA in order to keep them in place after the 30-year term. Under the new law, which is now in effect, at any time during the 30-year period following the effective date of the title for the covenants and restrictions of a community association, the association may preserve and protect those covenants or restrictions from extinguishment by following more simplified filing procedures which include the following:

September 24, 2018

Let Reason Dictate in Restrictions of Commercial Activity by Community Associations Against Residents

by Laura Manning-Hudson

Laura Manning-Hudson

Many associations’ governing documents include clauses that prohibit commercial business activities from being conducted in a resident’s unit. Some include a blanket stipulation banning commercial activity altogether, while others make a distinction between permissible and impermissible activities. While it makes sense for associations to want to regulate and restrict businesses from operating within their communities, HOAs and condominium associations should take a prudent approach that is guided by reason.

When considering how to regulate and enforce restrictions against commercial activities, associations should focus on the impact that particular activities have on the community and the quality of life of those who make it their home. Today’s technology allows for a great deal of work to be done from home with no disruptions whatsoever to the community at large. homework-300x200 Rather than attempting to ban all commercial activities in a community, the better option is to specifically delineate in the governing documents the types of activities that are not allowed.

Some of the activities that communities wish to ban are those that entail significant vehicular traffic, including from clients as well as vendors and delivery vehicles. Continue reading

May 23, 2018

Size Matters: Should Your Condo Super-Size Its Board of Directors?

by Nicole R. Kurtz

Nicole R. Kurtz

For many condominium associations in Florida, the amount of board members serving on a board of directors is usually dictated by the association’s governing documents or bylaws. There are associations, however, whose documents are silent on the number of directors that can be elected. In the absence of such a provision, condominium associations would have to refer to Chapter 718, Florida Statutes, which provides that a board of administration of a condominium shall be composed of five members. For those bylaws that do include language with specifications regarding a board’s size, the average number of board members serving typically ranges from three to five board members. But is there an ideal size?

While there is no “right” size for a board of directors, community associations that are considering decreasing or increasing their existing board’s size should always evaluate the pros and cons of doing so. It is possible for a board to be either too big or too small. Continue reading

November 23, 2016

Firm’s Attorneys Discuss Ramifications of Thwarted Condominium Termination with Reporters from Daily Business Review, The Real Deal

by Siegfried Rivera

Siegfried Rivera

The firm’s Helio De La Torre and Lindsey Thurswell Lehr were interviewed during the last few days by reporters from the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and The Real Deal, one of South Florida’s leading sources for real estate news and analysis. They were asked by the journalists for their insights into the ramifications of a decision last week by the Third District Court of Appeal that has significant implications for the future of condominium terminations in Florida.

The case pitted the Tropicana Condominium Association against the developer of the neighboring Ritz-Carlton Residences in Sunny Isles Beach. The appellate court ruled in favor of the developer, which had ties with a group of five unit owners at the Tropicana, finding that the property’s bylaws required unanimous approval for a sale, despite the 80 percent threshold in the amended condominium termination legislation from 2007. It agreed that the five holdouts’ refusal to sell was enough to block the termination that was favored by the association because the property’s 1983 governing documents predate the legislative amendment and require all unit owners to approve termination.

The Third DCA ruled that the 2007 changes to the Florida statute don’t apply retroactively to condominium declarations from prior to 2007 unless they contain certain language that incorporates amendments to the state’s Condominium Act.

The appellate court said in its ruling that “when referencing Florida’s Condominium Act, the declaration [for Tropicana] did not contain the words ‘as amended from time to time.’ Absent this language in the declaration, changes by the legislature to the Condominium Act subsequent to the effective date of the declaration do not become part of the declaration automatically.”

As Helio explains in the article from The Real Deal that appeared on Nov. 18:

“The statute seemingly had language that suggested the intent was to make it retroactive,” said law firm partner Helio De La Torre, who has represented condo associations in similar cases centering on termination of associations through votes by unit owners. He is a partner of Coral Gables-based Siegfried Rivera, P.A.

Continue reading