Woodside Village Condominium Association v. Jahren
806 So.2d 452 (Fla. 01/03/2002)
Samuel R. Mandelbaum and James R. De Furio of
Becker & Poliakoff, P.A., Tampa, Florida, for Petitioner. Robert G. Walker, Jr.,
Clearwater, Florida, for Respondents.
The opinion of the court was delivered by:
Anstead, J.
We have for review Woodside Village Condominium
Ass'n, Inc. v. Jahren, 754 So. 2d 831 (Fla. 2d DCA 2000), which expressly and
directly conflicts with White Egret Condominium, Inc. v. Franklin, 379 So. 2d
346 (Fla. 1979), Flagler Federal Savings & Loan Ass'n v. Crestview Towers
Condominium Ass'n, Inc., 595 So. 2d 198 (Fla. 3d DCA 1992), and Seagate
Condominium Ass'n, Inc. v. Duffy, 330 So. 2d 484 (Fla. 4th DCA 1976).
We have jurisdiction. See art. V, § 3(b)(3),
Fla. Const. For the reasons set forth below, we quash the district court's
decision invalidating certain restrictions on leasing set out in the
petitioner's Declaration of Condominium.
FACTS
At issue is the validity of amendments to the
Declaration of Condominium adopted by the condominium owners which restrict the
leasing of units in Woodside Village. Woodside Village is a condominium
development located in Clearwater, Florida, consisting of 288 units. It was
established in 1979 pursuant to Florida's "Condominium Act," chapter 718,
Florida Statutes (1977). Petitioner, Woodside Village Condominium Association,
Inc. ("Association"), is the condominium association that was formed pursuant to
the Declaration of Condominium of Woodside Village ("Declaration"), recorded in
the public records of Pinellas County. Respondents, Adolph S. Jahren and Gary M.
McClernan, each own residential condominium units in Woodside Village. X 1
The original Declaration of Condominium for
Woodside Village included a provision regarding leasing:
10.3 Leasing. The apartment may be leased or rented without prior approval, for
any period of one (1) year or less, and may be leased by successive leases for
periods in excess of one (1) year without the approval of the Board of Directors
of the Association. In the event apartment owner leases to a lessee for a period
of one (1) year or less and the apartment owner and lessee desire to extend that
lease for a term of one (1) year or less, said extension shall not require the
approval of the Association. However, if the Association finds during the term
of any such lease that the lessee has violated the rules and regulations of the
Association or the terms and provisions of the Declaration of Condominium of
Woodside Village or other documents governing Woodside Village, a Condominium,
or that the lessee has otherwise been the cause of a nuisance or annoyance to
the residents of Woodside Village, then the Association may so notify lessor of
its disapproval of such lessee in writing and lessor shall be precluded from
extending any lease to said lessee without the written approval of the
Association.
Further, section 11.1(b) stated: "Lease. No
apartment owner may dispose of an apartment or any interest therein for a term
in excess of one (1) year without approval of the Board of Directors of the
Association." Thus, while leasing was permitted under the original Declaration,
initial leases in excess of one year were subject to board approval. In
addition, section 10.3 was amended in 1995 to require that all leases and
renewals receive prior approval from the Board of Directors.
In 1997 some owners became concerned that units
were increasingly becoming non-owner occupied, and that such a condition would
have a negative impact on the quality of life in Woodside Village and on the
market value of units. Accordingly, section 10.3 was amended in March of 1997 to
limit the leasing of units to a term of no more than nine months in any
twelve-month period. A provision was also added prohibiting owners from leasing
their units during the first twelve months of ownership. These amendments were
adopted by a vote of at least two-thirds of the unit owners as required by the
Declaration. As amended, section 10.3 provides:
10.3 Leasing. All leases, subleases or
assignments of leases and all renewals of such agreements shall be first
submitted to the Board of Directors for approval or disapproval. No record owner
or owners of units in this condominium shall rent or lease more than three of
their units at any one time. No lease of an owner or owners who have three units
rented or leased shall be approved by the Association. No unit may be rented for
more than a total of nine (9) months in any twelve (12) month period. However,
if the Association finds during the term of any such lease that the lessee has
violated the rules and regulations of the Association or the terms and
provisions of the Declaration of Condominium of Woodside Village or other
documents governing Woodside Village, a Condominium, or that the lessee has
otherwise been the cause of a nuisance or annoyance to the residents of Woodside
Village, then the Association may so notify lessor of its disapproval of such
lessee in writing and lessor shall be precluded from extending any lease to said
lessee without the written approval of the Association.
No owner shall enter into a lease, rental
agreement, or other similar conveyance of use of a unit during the first twelve
(12) months of ownership of that unit. (Emphasis added.)
The following year the Association notified
respondents in writing that two of their respective units were not in compliance
with the nine-month lease restriction set out in section 10.3 as amended.
When the respondents failed to come into
compliance with the leasing restrictions, the Association filed complaints in
circuit court seeking injunctions to enforce compliance with the provisions of
the Declaration. Respondents filed essentially identical answers admitting
notice of their failure to comply with section 10.3, but denying that compliance
could be mandated under Florida law. In addition, respondents filed
counterclaims for declaratory and injunctive relief asserting that the lease
restriction was unreasonable, arbitrary, and capricious, and had no purpose
other than to effectively ban all leasing of units. Respondents also asserted
the lease restriction was confiscatory and deprived them of lawful uses which
were permissible at the time of purchase. Accordingly, respondents sought an
injunction prohibiting the Association from enforcing the lease restriction or,
alternatively, requiring the Association to compensate respondents for the fair
market value of their units.
Thereafter, the Association and respondents
filed separate motions for summary judgment. X2 Following a hearing on
the parties' motions, the circuit court granted summary judgment in respondents'
favor. Although the circuit court acknowledged that the Association has the
authority to pass an amendment restricting the leasing of units, it concluded
that the lease restriction at issue impermissibly "creates more than one class
of ownership because it cannot be applied retroactively against unit owners who
purchased their unit prior to the date of the amendment." The court ruled that
the Association would be required to purchase respondents' units if it decided
to enforce the nine-month lease restriction retroactively.
On appeal, the Second District affirmed the
trial court's final summary judgment and held that the lease restriction could
not be enforced because it was adopted after the respondents acquired their
units and no significant lease restrictions existed when respondents purchased
their units. See Woodside Village Condominium Ass'n, Inc. v. Jahren, 754 So. 2d
831, 833 (Fla. 2d DCA 2000). The court acknowledged that the lease restrictions
would be valid if they predated the respondents' purchase of units. See id. at
832-33. In its analysis, the court rejected the reasoning of Flagler Federal
Savings & Loan Ass'n v. Crestview Towers Condominium Ass'n, 595 So. 2d 198 (Fla.
3d DCA 1992), and distinguished Seagate Condominium Ass'n, Inc. v. Duffy, 330
So. 2d 484 (Fla. 4th DCA 1976), wherein the Third and Fourth Districts upheld
the validity of amendments to condominium declarations imposing additional lease
restrictions on existing unit owners. See id. at 833- 35. X 3 The
district court also cited an accommodation for leasing that Woodside Village
made in a discrimination lawsuit on behalf of the handicapped as additional
support for its holding. See id. at 835-36.
ANALYSIS
Condominiums and the forms of ownership
interests therein are strictly creatures of statute. See §§ 718.101-718.622,
Fla. Stat. (2000); see also Winkelman v. Toll, 661 So. 2d 102, 105 (Fla. 4th DCA
1995); Suntide Condominium Ass'n v. Division of Florida Land Sales &
Condominiums, 463 So. 2d 314, 317 (Fla. 1st DCA 1984). In Florida, Chapter 718,
Florida Statutes, known as Florida's "Condominium Act," gives statutory
recognition to the condominium form of ownership of real property and
establishes a detailed scheme for the creation, sale, and operation of
condominiums. Pursuant to section 718.104(2), a condominium is created by
recording a declaration of condominium in the public records of the county where
the land is located. See § 718.104(2), Fla. Stat. (2000).
The declaration, which some courts have
referred to as the condominium's "constitution," X 4 strictly governs the
relationships among the condominium unit owners and the condominium association.
As explained by the court in Pepe v. Whispering Sands Condominium Ass'n, Inc.,
351 So. 2d 755 (Fla. 2d DCA 1977):
A declaration of a condominium is more than a
mere contract spelling out mutual rights and obligations of the parties
thereto-it assumes some of the attributes of a covenant running with the land,
circumscribing the extent and limits of the enjoyment and use of real property.
Stated otherwise, it spells out the true extent of the purchased, and thus
granted, use interest therein. Absent consent, or an amendment of the
declaration of condominium as may be provided for in such declaration, or as may
be provided by statute in the absence of such a provision, this enjoyment and
use cannot be impaired or diminished. Id. at 757-58 (footnotes omitted).
Hence, because condominiums are a creature of
statute courts must look to the statutory scheme as well as the condominium
declaration and other documents to determine the legal rights of owners and the
association. See §§ 718.101-718.622, Fla. Stat. (2000); see also Shorewood West
Condominium Ass'n v. Sadri, 992 P.2d 1008, 1012 (Wash. 2000) (noting that the
property rights condominium unit owners have in their units are creations of
condominium statute and are subject to the statute, the declaration, the
association's bylaws, and amendments to the declaration and bylaws).
From the outset, courts have recognized that
condominium living is unique and involves a greater degree of restrictions upon
the rights of the individual unit owners when compared to other property owners.
See Seagate Condominium Ass'n, 330 So. 2d at 486 (citing cases). For instance,
in White Egret Condominium, Inc. v. Franklin, 379 So. 2d 346 (Fla. 1979), we
recognized that "[r]easonable restrictions concerning use, occupancy and
transfer of condominium units are necessary for the operation and protection of
the owners in the condominium concept." Id. at 350. In White Egret, we quoted
favorably from Hidden Harbour Estates, Inc. v. Norman, 309 So. 2d 180 (Fla. 4th
DCA 1975), to further explain the restrictive nature of condominium ownership
and living:
[I]nherent in the condominium concept is the
principle that to promote the health, happiness, and peace of mind of the
majority of the unit owners since they are living in such close proximity and
using facilities in common, each unit owner must give up a certain degree of
freedom of choice which he might otherwise enjoy in separate, privately owned
property. Condominium unit owners comprise a little democratic sub society of
necessity more restrictive as it pertains to use of condominium property than
may be existent outside the condominium organization. White Egret, 379 So. 2d at
350.
Consistent with this analysis of condominium
ownership, courts have acknowledged that "increased controls and limitations
upon the rights of unit owners to transfer their property are necessary
concomitants of condominium living." Aquarian Foundation, Inc. v. Sholom House,
Inc., 448 So. 2d 1166, 1167 (Fla. 3d DCA 1984). Indeed, section 718.104(5),
Florida Statutes (2000), expressly recognizes that a declaration of condominium
may contain restrictions concerning the use, occupancy, and transfer of units.
See § 718.104(5), Fla. Stat. (2000).
Courts have also consistently recognized that
restrictions contained within a declaration of condominium should be clothed
with a very strong presumption of validity when challenged. The logic behind
this presumption was explained in Hidden Harbour Estates, Inc. v. Basso, 393 So.
2d 637 (Fla. 4th DCA 1981), wherein the court reasoned:
There are essentially two categories of cases
in which a condominium association attempts to enforce rules of restrictive
uses. The first category is that dealing with the validity of restrictions found
in the declaration of condominium itself. The second category of cases involves
the validity of rules promulgated by the association's board of directors or the
refusal of the board of directors to allow a particular use when the board is
invested with the power to grant or deny a particular use.
In the first category, the restrictions are
clothed with a very strong presumption of validity which arises from the fact
that each individual unit owner purchases his unit knowing of and accepting the
restrictions to be imposed. Such restrictions are very much in the nature of
covenants running with the land and they will not be invalidated absent a
showing that they are wholly arbitrary in their application, in violation of
public policy, or that they abrogate some fundamental constitutional right. See
White Egret Condominium, Inc. v. Franklin, 379 So. 2d 346 (Fla. 1979). Id. at
639-40 (emphasis added).
AMENDMENTS TO DECLARATION
Significantly, section 718.110 also provides
broad authority for amending a declaration of condominium. In particular,
section 718.110(1)(a) provides:
If the declaration fails to provide a method of
amendment, the declaration may be amended as to all matters except those listed
in subsection (4) or subsection (8) if the amendment is approved by the owners
of not less than two-thirds of the units. Except as to those matters described
in subsection (4) or subsection (8), no declaration recorded after April 1,
1992, shall require that amendments be approved by more than four-fifths of the
voting interests. § 718.110(1)(a), Fla. Stat. (2000) (emphasis added).
Based upon this broad statutory authority and
the provisions for amendment set out in the declaration of condominium, courts
have recognized the authority of condominium unit owners to amend the
declaration on a wide variety of issues, including restrictions on leasing. Of
course, section 718.110(1)(a) itself contains some restrictions on the amendment
process. For example, pursuant to subsections (4) and (8), all unit owners must
consent to amendments which materially alter or modify the size, configuration
or appurtenances to the unit, change the percentage by which the unit owner
shares the common expenses and owns the common surplus of the condominium, or
permit timeshare estates to be created in any unit of the condominium, unless
otherwise provided in the declaration as originally recorded. See § 718.110(4),
(8), Fla. Stat. (2000). These provisions are not at issue here.
SEAGATE
In Seagate Condominium Ass'n, Inc. v. Duffy,
330 So. 2d 484 (Fla. 4th DCA 1976), the court upheld an amendment to the
declaration of condominium prohibiting leasing of any units, except for limited
periods in cases of hardship. The amendment provided:
As previously stated, it is the intent that the
owner of each unit of Seagate Towers Condominium shall occupy and use such unit
as a private dwelling for himself and his immediate family, and for no other
purpose including business purposes. Therefore, the leasing of units to others
as a regular practice for business, speculative, investment or other similar
purposes is not permitted.
To meet special situations and to avoid undue
hardship or practical difficulties the Board of Directors may grant permission
to an owner to lease his unit to a specified lessee for a period not less than
four consecutive months nor more than twelve consecutive months. Id. at 484-85.
The trial court held that the amendment was
both an unreasonable restriction and an unlawful restraint on alienation and
awarded damages for lost rents to the unit owners who challenged the amendment.
See id. at 485. On appeal, the Fourth District reversed, and explained:
It is our opinion that appellant's leasing
restriction constitutes neither an unlimited nor unreasonable restraint on
alienation. The restriction is not unlimited in several respects: it prohibits
only a specific form of alienation, i.e., leasing; under general but not
unlimited circumstances, i.e., the condominium association will consider its
suspension in hardship for a not unlimited period of time, i.e., because it can
be terminated at any time by a vote of the condominium unit owners pursuant to
the amendment provisions of their Declaration of Condominium. The restriction,
moreover, is reasonable. Given the unique problems of condominium living in
general and the special problems endemic to a tourist oriented community in
South Florida in particular, appellant's avowed objective-to inhibit transciency
and to impart a certain degree of continuity of residence and a residential
character to their community-is, we believe, a reasonable one, achieved in a not
unreasonable manner by means of the restrictive provision in question. The
attainment of this community goal outweighs the social value of retaining for
the individual unit owner the absolutely unqualified right to dispose of his
property in any way and for such duration or purpose as he alone so desires. Id.
at 486-87 (footnote omitted).
The district court upheld the amendment even as
it was applied to unit owners who acquired their units prior to the amendments.
FLAGLER FEDERAL
In Flagler Federal Savings & Loan Ass'n v.
Crestview Towers Condominium Ass'n, 595 So. 2d 198 (Fla. 3d DCA 1992), the court
also addressed a declaration amendment prohibiting leasing as applied to an
owner who acquired title to a unit prior to the amendment. The original
declaration provided that unit owners could not lease their units without the
express approval of the association, but excluded from the leasing restriction
institutional mortgagees acquiring title. While this provision was in effect,
Flagler Federal became the mortgagee on units 216 and 503. Subsequently, the
declaration was amended to prohibit leasing entirely and eliminated the previous
exclusion for institutional mortgagees acquiring title. In 1987, Flagler Federal
acquired title to unit 503 by purchasing the unit at a foreclosure sale and
acquired title to unit 216 when the mortgagors gave it a quitclaim deed in lieu
of foreclosure. Thereafter, when the association objected to Flagler Federal's
attempt to lease the units, the bank filed suit seeking declaratory and
injunctive relief. The trial court denied the bank's claim and granted the
association a final summary judgment upholding the lease restriction as amended.
On appeal, the Third District affirmed, holding
that both units were bound by the amendment to the declaration. First, the court
rejected Flagler Federal's argument that title to unit 216, acquired by
quitclaim deed in lieu of foreclosure, related back to the date of the mortgage.
See id. at 220.
Thus, the court found that the operative date
for determining the applicability of the declaration amendment to unit 216 was
the date of the quitclaim deed. See id. The court noted that when Flagler
Federal acquired title by quitclaim deed the amended declaration was in effect.
Further, the court stated Flagler Federal had notice of the recorded declaration
and its amendment provisions when it mortgaged the unit and acquired the unit.
Accordingly, the court concluded that Flagler Federal could not complain that
the declaration amendment was binding on unit 216. See id.
Although Flagler Federal's title to unit 503
related back to the date of its mortgage, the court held it was nonetheless
bound by the subsequent declaration amendment prohibiting leasing. See id. at
200. In so doing, the court recognized that restrictions found in a declaration
"are clothed with a very strong presumption of validity which arises from the
fact that each individual unit owner purchases his unit knowing of and accepting
the restrictions to be imposed." Id. (quoting Hidden Harbour Estates, Inc. v.
Basso, 393 So. 2d 637, 639 (Fla. 4th DCA 1981)). As to the effect of the
subsequent amendment, the court reasoned that since Flagler Federal was on
notice of the recorded declaration's provisions for amendments to the
declaration when it issued the mortgage, it, like other unit owners who acquired
title prior to the amendment, was bound by the subsequent amendments to the
declaration. See id.
OTHER JURISDICTIONS
We note that the majority of courts in other
jurisdictions have held that a duly adopted amendment restricting either
occupancy or leasing is binding upon unit owners who purchased their units
before the amendment was effective. See Ritchey v. Villa Nueva Condominium
Ass'n, 146 Cal. Rptr. 695, 700 (Cal. Ct. App. 1978); Hill v. Fontaine
Condominium Ass'n, Inc., 334 S.E.2d 690, 692 (Ga. 1985); Apple II Condominium
Ass'n v. Worth Bank & Trust Co., 659 N.E.2d 93 (Ill. App. Ct. 1995); Breezy
Point Holiday Harbor Lodge-Beachside Apartment Owners' Ass'n v. B.P. P'ship, 531
N.W.2d 917, 920 (Minn. Ct. App. 1995) (in dicta); McElveen-Hunter v. Fountain
Manor Ass'n, Inc., 386 S.E.2d 435, 436 (N.C. Ct. App. 1989), aff'd, 399 S.E.2d
112 (N.C. 1991); Shorewood West Condominium Ass'n v. Sadri, 992 P.2d 1008, 1012
(Wash. 2000); cf. Burgess v. Pelkey, 738 A.2d 783, 788 (D.C. 1999); but see 560
Ocean Club, L.P. v. Ocean Club Condominium Ass'n (In re 560 Ocean Club, L.P.),
133 B.R. 310, 320 (Bankr. D.N.J. 1991); Breene v. Plaza Tower Ass'n, 310 N.W.2d
730, 734 (N.D. 1981).
An appellate opinion from Illinois is
illustrative of these decisions. In Apple II Condominium Ass'n v. Worth Bank &
Trust Co., the Illinois appellate court applied the Fourth District's analysis
in Basso in upholding the validity of a declaration amendment which restricted
leasing of units to no more than once during ownership, with no lease exceeding
twelve months. In enforcing the amendment, the court declared:
The Condominium Property Act specifically
states that amendments to the Declaration "shall be deemed effective upon
recordation unless the amendment sets forth a different effective date." (765
ILCS 605/17 (West 1994).) In our view, neither the fact that there were no
restrictions on the property when the Harmons purchased their unit nor the fact
that the Harmons purchased the property for investment purposes is relevant to
the proper resolution of the issues presented in this case. As purchasers of the
condominium property, the Harmons are charged with knowledge of the Condominium
Property Act and that the Declaration governing their unit was subject to
amendment. Section 18.4(h) of the Act specifically recognizes that the Board may
implement rules governing the "use of the property," so long as the restrictions
do not impair those rights guaranteed by the First Amendment to the United
States Constitution or the Free Speech provisions of the Illinois Constitution.
(See 765 ILCS 605/18.4(h) (West 1994).) In the absence of a provision either in
the Amendment or in the original Declaration, condominium owners do not have
vested rights in the status quo ante. See Crest Builders, Inc. v. Willow Falls
Improvement Association (1979), 74 Ill.App.3d 420, 30 Ill.Dec. 452, 393 N.E.2d
107 (party challenging amendment has no vested interest in the Declaration as
originally written); McElveen-Hunter v. Fountain Manor Association, Inc. (1989),
96 N.C.App. 627, 386 S.E.2d 435 (noting that most courts have adopted the
"sounder view" that changes to a condominium declaration are binding upon both
previous and subsequent owners). Apple II Condominium Ass'n, 659 N.E.2d at 97.
The court further reasoned that the approval of
the amendment by the association's membership made the leasing restriction a
"category one" restriction under Basso, thereby elevating the level of deference
given by the court. See id. at 98.
Accordingly, the court concluded that when an
amendment has been passed by an association's membership it would presume the
restriction was valid and uphold it unless it was shown that the restriction was
arbitrary, against public policy, or in violation of some fundamental
constitutional right. See id. at 98-99.
We agree with this reasoning. To hold
otherwise, we would have to conclude that the right to amend a declaration of
condominium is substantially limited, well beyond those limitations imposed by
the Legislature in section 718.110(4) and (8). We would also be faced with the
difficult task of deciding what subjects could be addressed by the amendment
process, a task much better suited for the Legislature, as can be seen by its
imposition of restrictions in section 718.110.
THIS CASE
Respondents in this case purchased their units
subject to the Declaration which expressly provides that it can be amended and
sets forth the procedure for doing so. See Providence Square Ass'n v. Biancardi,
507 So. 2d 1366, 1372 (Fla. 1987) (noting that condominium purchasers are
charged with notice of the recorded documents). Section 14 of the Declaration
generally provides that an amendment may be adopted by a supermajority of
two-thirds of the owners. X 5 Further, section 13 expressly states that
each owner shall be governed by the Declaration as amended from time to time:
13. Compliance and Default. Each apartment
owner shall be governed by and shall comply with the terms of this Declaration,
the By-Laws and the Rules and Regulations adopted pursuant thereto, and
Management Agreement, and said documents as they may be amended from time to
time. Failure of the apartment owner to comply therewith shall entitle the
Association or other apartment owners to the following relief in addition to
other remedies provided in this Declaration and the Condominium Act . . . .
(Emphasis added.)
In addition, the legal description for each of
respondents' units that were allegedly being used in violation of the lease
restriction provides that the units are subject to the restrictions contained in
the Declaration and subsequent amendments thereto. X 6
Thus, we find that respondents were on notice
that the unique form of ownership they acquired when they purchased their units
in the Woodside Village Condominium was subject to change through the amendment
process, and that they would be bound by properly adopted amendments. See Kroop
v. Caravelle Condominium, Inc., 323 So. 2d 307, 309 (Fla. 3d DCA 1975)
(upholding restriction limiting leasing to once during ownership where
condominium owner acquired unit with knowledge that the declaration might
thereafter be lawfully amended); see also Ritchey v. Villa Nueva Condominium
Ass'n, 146 Cal. Rptr. 695, 700 (Cal. Ct. App. 1978) (noting that declaration
provided bylaws could be amended and that purchaser would be subject to any
reasonable amendment properly adopted); McElveen-Hunter v. Fountain Manor Ass'n,
Inc., 386 S.E.2d 435, 436 (N.C. Ct. App. 1989), aff'd, 399 S.E.2d 112 (N.C.
1991) (noting that plaintiff acquired her units subject to the right of other
owners to restrict their occupancy through properly enacted amendments to the
declaration); Worthinglen Condominium Unit Owners' Ass'n v. Brown, 566 N.E.2d
1275, 1277 (Ohio Ct. App. 1989) (stating that purchasers of condominium units
should realize that the regime in existence at the time of purchase may not
continue indefinitely and that changes in the declaration may take the form of
restrictions on the unit owners' use of their property); cf. Burgess v. Pelkey,
738 A.2d 783, 789 (D.C. 1999) (stating unit owner was on notice at time of
purchase of the possibility that his rights in the cooperative could be affected
by subsequent changes in the cooperative's bylaws and house rules).
It is also uncontradicted that the Association
acted within the framework of the Declaration in adopting the amendment at
issue. As noted above, the Declaration for Woodside Village specifically
provides for amendment and sets forth the procedure for doing so. Further,
pursuant to the Declaration, the amendment imposing the nine-month lease
restriction was approved by at least two-thirds of the condominium unit owners.
Hence, we conclude that the lease restriction amendment was properly enacted
under the amendment provisions of the Declaration, and that the respondents took
title to their units subject to the amendment provision set out in the
Declaration and authorized by statute.
We also conclude that the respondents have
failed to demonstrate that the restriction, in and of itself, violates public
policy or respondents' constitutional rights, at least as asserted herein. See
Apple II Condominium Ass'n, 659 N.E.2d at 98-99. The respondents have simply
failed to point out any provision in the statutory scheme for condominiums or
any provision in the state or federal constitutions that would bar such lease
restrictions. It is apparent from the circumstances giving rise to its adoption
that the amendment was intended to promote owner occupancy of the condominium
units, a goal certainly consistent with the concept of condominium living as
originally contemplated by the legislation authorizing the condominium form of
land ownership. Although a different restriction could have been adopted to
better promote owner occupancy within the condominium, we cannot conclude that
the amendment restricting leases to nine months in any twelve-month period is
arbitrary in its attempt to achieve this goal. As discussed above, most such
restrictions simply come with the unique territory of condominium ownership.
Indeed, it is restrictions such as these that distinguish condominium living
from rental apartments or single-family residences. Hence, persons acquiring
units in condominiums are on constructive notice of the extensive restrictions
that go with this unique, and some would say, restrictive, form of residential
property ownership and living. Accordingly, we conclude the amendment is valid
and enforceable against respondents.
ABILITIES AMENDMENT
Petitioner maintains that the district court
also erred in concluding that a subsequent amendment to the Declaration known as
the "Abilities Amendment," when viewed together with the nine-month lease
restriction, impermissibly created two classes of condominium unit ownership.
X 7 As reflected in the decision below, Abilities of Florida, Inc.
("Abilities") is a non-profit corporation that obtains financing through the
U.S. Department of Housing and Urban Development ("HUD") to purchase condominium
units that it then leases to handicapped persons. HUD refused to finance
Abilities' purchase of units at Woodside Village because of the nine-month lease
restriction. As a result, Abilities filed a federal lawsuit alleging that
Woodside Village had violated fair housing laws by failing to provide a
reasonable accommodation to tenants based on their disabilities. The federal
court entered a temporary injunction against the Association barring the
enforcement of the lease restriction against Abilities. Subsequently, the
parties settled the lawsuit. One condition of the settlement was that the
Association adopt the so-called "Abilities Amendment," which would permit
Abilities to purchase six units at the condominium that would be exempt from the
nine-month lease restriction. The amendment was properly adopted by the
Association's members in November of 1997.
On appeal, the district court agreed with the
trial court that the Abilities Amendment impermissibly created two classes of
condominium ownership, although the court cited no authority to support its
conclusion. See Woodside Village Condominium Ass'n, 754 So. 2d at 836.
In so doing, the court rejected petitioner's
claims that the issue was not properly before the trial court and that the
amendment should not be considered in an equal protection argument regarding an
arbitrary creation and treatment of two classes of unit owners since the "class"
created by the amendment resulted from the settlement of a contested claim
involving alleged civil rights violations. See id.
As a preliminary matter, it should be noted
that some courts and commentators have expressed considerable doubt as to
whether the actions of a community association, such as a condominium
association, constitute state action necessary for constitutional claims. See,
e.g., Laguna Royale Owners' Ass'n v. Darger, 174 Cal. Rptr. 136, 144 (Cal. Ct.
App. 1981) ("[T]here is considerable doubt of whether the actions of Association
constitute state action so as to bring into play the constitutional
guarantees."); Lewis A. Schiller, Limitations on the Enforceability of
Condominium Rules, 22 Stetson L. Rev. 1133, 1167 (1993) (noting that state
action appears to be lacking in condominium rules, although author expressed
view that constitutional standards should apply to condominium rules). On the
other hand, some courts have either assumed state action exists or have chosen
not to address the issue. For example, in White Egret, this Court analyzed a due
process and equal protection challenge to an age restriction contained in a
declaration without specifically discussing the issue of state action. See White
Egret Condominium, Inc. v. Franklin, 379 So. 2d 346 (Fla. 1979); see also
Franklin v. Spadafora, 447 N.E.2d 1244, 1249-51 (Mass. 1983) (assuming state
action for purposes of analyzing claim that an amendment limiting to two the
number of units which could be owned by any individual or entity deprived
plaintiffs of their due process and equal protection rights). We resolve the
issue here by concluding that no colorable claim of discrimination has been
demonstrated.
We recognize that amendments which grant
different benefits or impose different restrictions on truly similarly situated
unit owners may be subject to challenge. For instance, in Pearlman v. Lake Dora
Villas Management, Inc., 479 So. 2d 780 (Fla. 5th DCA 1985), the court
invalidated a declaration provision prohibiting all children under sixteen from
permanent residence, except children of transferees from an institutional first
mortgage. In so doing, the court agreed with the appellants' argument that the
provision violated equal protection by its arbitrary creation and treatment of
two classes of grantees. See id. at 780. The court reasoned as follows:
The Association does not argue that children
under the age of sixteen whose parents own a unit as transferees from an
institutional first mortgage are less intrusive that those children whose
parents obtained title from another source. It speculates such a group may be
smaller and the exception is required for financing purposes. However true that
may be as a practical matter, the distinction between the two classes of
children still remains arbitrary and discriminatory. Id. at 781.
However, unlike the situation in Pearlman, the
distinction between Abilities and other unit owners, such as the respondents, is
not arbitrary and discriminatory. Rather, it is directly related to providing
reasonable accommodations to enable handicapped persons an equal opportunity to
use and enjoy a unit in the complex through the assistance of Abilities.
As noted by petitioner, both federal law
and section 760.23, Florida Statutes (2000), generally prohibit discrimination
in the sale or rental of a dwelling based on, among other things, a person's
handicap. For purposes of section 760.23(7) and (8),
X 8 pertaining to discrimination
because of a handicap, discrimination includes "[a] refusal to make reasonable
accommodations in rules, policies, practices, or services, when such
accommodations may be necessary to afford such person equal opportunity to use
and enjoy a dwelling." § 760.23(9)(b), Fla. Stat. (2000). Thus, contrary to the
holdings below, we conclude the Abilities Amendment does not constitute an
arbitrary and discriminatory creation of two classes of unit owners in its
attempt to accommodate the disabled. Cf. Lakeside Manor Condominium Ass'n, Inc.
v. Forehand, 513 So. 2d 1104, 1106 (Fla. 5th DCA 1987) (rejecting argument that
right of first refusal in condominium declaration pertaining to sales and leases
was invalid merely because the developer and first mortgage holders were exempt
from its operation).
LEGISLATIVE OVERSIGHT
We recognize the concerns that owners, such as
respondents, who purchased their individual condominium units for investments
have regarding the imposition of lease restrictions through subsequent
declaration amendments without the consent of all unit owners. The question is,
of course, how far can two-thirds of the condominium owners go in restricting
leasing rights in the condominium units. The answer will usually be found in the
legislative scheme creating and governing condominiums. Although we believe such
concerns are not without merit, we are constrained to the view that they are
better addressed by the Legislature. If condominium owners are to be restrained
in their enactment of such lease restrictions, it is appropriate that such
restraint be set out in the legislative scheme that created and regulates
condominiums and condominium living. As noted above, the Legislature has
demonstrated its awareness of the need for limitations on the authority of unit
owners to amend a declaration by its enactment of section 718.110(1)(a), (4),
and (8). However, as noted, in this instance no provision in the Condominium Act
prohibits the adoption of an amendment imposing a lease restriction, nor does
any provision require the consent of all unit owners to adopt such an amendment.
To the contrary, the Condominium Act provides broad authority for amending a
declaration of condominium. See § 718.110(1)(a), Fla. Stat. (2000).
For the reasons stated above, we quash the
decision below and approve the decisions reached in Seagate and Flagler Federal
to the extent consistent with this opinion.
It is so ordered.
WELLS, C.J., and SHAW, HARDING, PARIENTE, and LEWIS, JJ., concur.
QUINCE, J., concurs specially with an opinion.
QUINCE, J., specially concurring.
I concur in the majority's decision which quashes the decision by the Second
District Court of Appeal. I write simply to urge the Legislature to seriously
consider placing some restrictions on present and/or future condominium owners'
ability to alter the rights of existing condominium owners. At the time the
units in question here were purchased, the owners had the right to lease their
property with relatively few restrictions. One of the owners purchased his units
in 1979 and had enjoyed this leasing right for eighteen years before the
Declaration of Condominium was amended. The twelve-month lease which was
permitted at the time these unit owners purchased their units is no longer
valid. These owners can now only lease their property for nine months in any
twelve month period. As the district court pointed out the amendment has
deprived these owners of a valuable right that existed at the time of purchase.
See Woodside Village Condominium Assoc., Inc. v. Jahren, 754 So. 2d 831, 833
(Fla. 2d DCA 2000). This valuable right may well have been the determinative
factor for their decisions to buy these properties. As the district court
suggested, there should at least be some type of "escape" provision for those
"unit owners whose substantial property rights are altered by amendments to
declarations adopted after they acquire their property." 754 So. 2d at 835.
Footnotes:
1. According to the record, Jahren has been a unit owner in Woodside Village
since 1979. He currently owns four units which were purchased prior to the
Declaration amendment at issue in this case. McClernan has been a unit owner in
Woodside Village since 1996 when he purchased two units. Neither Jahren nor
McClernan resides in his units.
2. Prior to the parties' motions for summary
judgment, the two cases were consolidated.
3. The petitioner conceded in the district
court that the respondents could not be forced to terminate existing leases that
were entered into in good faith reliance on the prevailing provisions in the
Declaration at the time such leases were executed. For example, if the
respondents leased a unit for twelve months, the amendment barring leases for
more than nine months could not be enforced to terminate that lease.
4. See, e.g., Schmidt v. Sherrill, 442 So. 2d
963, 965 (Fla. 4th DCA 1983).
5. Section 14.5, however, provides in part that
"no amendment shall discriminate against any apartment owner nor against any
apartment or class or group of apartment owners unless the apartment owners so
affected . . . consent; and no amendment shall change any apartment nor the
share in the common elements, and other of its appurtenances nor increase the
owner's share of the common expenses unless the owner of the apartment concerned
. . . join[s] in the execution of the amendment."
6. For example, the legal description for unit
1203D owned by Jahren, as recited in the Association's complaint, reads as
follows: That certain condominium parcel described as Unit 1203D, Building 3,
Woodside Village, a Condominium, and an undivided interest or share in the
common elements appurtenant thereto, in accordance with and subject to the
covenant, conditions, restrictions, easements, terms and other provisions of the
Declaration of Condominium of Woodside Village, a Condominium, as recorded in
Official Records Book 4816, page 1517, and amendments thereto, and the Plat
thereof recorded in Condominium Plat Book 34, page 78-86, Public records of
Pinellas County, Florida. A/K/A 4215 East Bay Drive, #1203D, Clearwater, Florida
33764. (Emphasis added.) The legal descriptions for the other three units
involved in this case contain similar language.
7. It should be noted that a copy of the
"Abilities Amendment" is not in the record.
8. Section 760.23(7)-(8) provides: (7) It is
unlawful to discriminate in the sale or rental of, or to otherwise make
unavailable or deny, a dwelling to any buyer or renter because of a handicap of:
(a) That buyer or renter; (b) A person residing in or intending to reside in
that dwelling after it is sold, rented, or made available; or (c) Any person
associated with the buyer or renter. (8) It is unlawful to discriminate against
any person in the terms, conditions, or privileges of sale or rental of a
dwelling, or in the provision of services or facilities in connection with such
dwelling, because of a handicap of: (a) That buyer or renter; (b) A person
residing in or intending to reside in that dwelling after it is sold, rented, or
made available; or (c) Any person associated with the buyer or renter. §
760.23(7)-(8), Fla. Stat. (2000). Analogous federal provisions are found in 42
U.S.C. § 3604.