Nicole Kurtz Authors Article in Today’s Daily Business Review: “Court: Association Declaration’s Reference to Alterations Encompasses Material Alterations”

Nicole-Kurtz-2014-200x300The firm’s Nicole R. Kurtz authored an article that is featured as a Board of Contributor’s guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “Court: Association Declaration’s Reference to Alterations Encompasses Material Alterations,” focuses on a recent ruling that illustrates how Florida courts will turn to the plain and unambiguous meanings of terms in interpreting a community association’s governing documents.  For associations with declarations of condominium stating that the board of directors has the authority to approve alterations to the common elements, the decision emphasizes that such authority extends to all additions or improvements to the association’s common elements, including material alterations.  Nicole’s article reads:

. . . In 2016, the [Regency Tower condominium] association’s board of directors voted, without obtaining membership approval, to replace the existing Carrara marble flooring in the lobby with ceramic tile flooring. In response, one of the association’s unit owners challenged the board of directors’ authority to replace the lobby flooring without first obtaining approval from the association’s members.

The unit owner asserted his challenge by filing a petition for arbitration with the state’s Division of Condominiums, Timeshares and Mobile Homes. After the petition was dismissed by the arbitrator, he filed a lawsuit against the association in circuit court.

dbr-logo-300x57The owner’s position, in both the arbitration and the lawsuit, was that the association’s declaration of condominium did not include a provision detailing the procedure for approving “material alterations,” as it only referenced the board of directors’ authority to approve “alterations.” As such, the owner argued that Section 718.113(2)(a), Florida Statutes, which is triggered should there not be a procedure in an association’s declaration of condominium for the approval of material alterations, applied and precluded the board of directors from being able to unilaterally approve of the lobby flooring modification.

The statute provides that if an association’s declaration of condominium does not specify a procedure for the approval of material alterations or substantial additions, then 75 percent of the total voting interests of the association must approve the alterations or additions.

The association’s position, in both the arbitration and the lawsuit, was that the statute did not apply because its declaration of condominium was not silent on the matter of material alterations. In fact, it detailed that the association had the power to make “such alterations or improvements to the COMMON PROPERTY” upon board approval. In taking this position, the association effectively argued that the term “alterations,” as used in the declaration of condominium, was broad enough to include material alterations, such that the statute would not be triggered.

Both the arbitrator and circuit court agreed with the association’s arguments and found that the term “alterations” in the declaration was broad enough to encompass material alterations.  They concluded that the declaration of condominium permitted the board of directors, alone, to approve of the lobby flooring modification as a material alteration to the association’s common elements.

In the unit owner’s subsequent appeal, the Fourth District Court of Appeal considered the question of whether the association’s declaration of condominium specified a procedure for the association to perform material alterations to the common elements. The appellate panel concluded that the lobby was a common element of The Regency Tower, and replacing its flooring was, in fact, a material alteration.

With this in mind, the panel closely examined the statute as well as the association’s declaration of condominium, and it ultimately concluded that the terms “alterations” and “material alterations” must be given their plain and unambiguous meaning. In so finding, the Fourth DCA determined that the term “alterations” could not be split into “non-material alterations” and “material alterations,” as argued by the challenging unit owner. Instead, it concluded the term “alterations” referred to any addition or improvement to the common elements, material or otherwise.

The opinion found that the association’s declaration of condominium provided a manner for the approval of all alterations, material and otherwise, by a vote of the board of directors alone. As such, the statute was not triggered in the case. . .

Our firm salutes Nicole for sharing her insights into the ramifications of this ruling with the readers of the Daily Business ReviewClick here to read the complete article in the newspaper’s website (registration required).