STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES

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1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION Carl E. Lindback, Jr. and Marlene M. Lindback, Petitioners, v. Case No Sand Pebbles of Islamorada Association, Inc., Respondent. / SUMMARY FINAL ORDER This final order is entered pursuant to rule 61B , Florida Administrative Code, which permits the arbitrator to enter a summary final order where there are no disputed issues of material fact. PROCEDURAL HISTORY On April 5, 2004, Carl E. Lindbeck, Jr., and Marlene M. Lindbeck, petitioners/unit owners, filed a petition for mandatory non-binding arbitration, naming Sand Pebbles of Islamorada Association, Inc., as the respondent/association. In the petition, the unit owners alleged that the multi-level wooden stairwell, landing and sundeck located outside their unit are rotting and in need of replacement. The owners further alleged that the association is responsible for repairing the structures, as they are common elements. The association admitted that it was responsible for repairing the stairs and landing up to the second level as those structures are considered to be common elements originally constructed with the condominium, but initially asserted that the 1

2 stairs, landing and sundeck located above the second floor would not be repaired or replaced at the association s expense because those structures are not common elements to be maintained by the association. On July 21, 2004, the arbitrator conducted a status conference with the attorneys representing both parties in this matter. During the status conference, counsel for the association announced that the association had changed its position concerning the stairwell in question and had agreed that the wooden structure adjacent to the petitioners unit is a common element, including the landing and sundeck located above the second floor of the unit. Counsel further stated that on July 10, 2004, the association conducted a unit owner vote to alter the common element stairwell structure by permanently removing the portion of the structure located above the second floor of the unit and up to the roof. According to the notice of results of alteration vote submitted by the association, the vote resulted in thirteen (13) votes in favor of such removal and two (2) votes against, out of sixteen (16) possible votes, which is greater than 75% approval of the owners as required by section (2)(a), Florida Statutes. Because the petition submitted by the owners only disputed whether the stairwell structure was a common element to be maintained by the association, the disputed issue was deemed moot. However, the owners were permitted to file an amended petition alleging any dispute which reflected the new position asserted by the association and the accompanying unit owner vote. In their amended petition, the petitioners argue that the condominium declaration must be amended in order for the action resulting from the unit owner vote to be put into effect. Secondly, petitioners argue that the amendment should be declared invalid because it improperly 2

3 discriminates against the petitioners. The association denied that the unit owner vote constitutes an amendment to the declaration. There is no evidence that the declaration has been amended to reflect the results of the unit owner vote. The petitioners also contend that voting requirements for material alterations under section (2)(a), Florida Statutes, are not applicable in this matter because the statutory amendment (to the effect that if the declaration is silent on the issue of material alterations to the common elements, a vote of 75% of the voting interests is required) was adopted after the declaration of condominium for Sand Pebbles of Islamorada was recorded in the public records. Rather, the petitioners argue that because the declaration was recorded in 1991, section (2), Florida Statutes (1989), which prohibits alterations except in a manner provided in the declaration or except as provided in this section controls the dispute in this case. Petitioners argue that as there is no provision in the declaration for the approval of alterations or additions, section (2), Florida Statutes (1989) applies and since the petitioners have not consented to the alteration, it cannot be permitted. In support thereof, the petitioners cite Wellington Property Management v. Parc Corniche Condominium Association, Inc., 755 So.2d 824 (Fla. 5th DCA 2000), in which the court ruled that vested rights of owners in the common elements cannot be removed in absence of a provision existing in the declaration at the time of purchase, and in the absence of such a provision the owners are entitled to rely on the continued availability of the common elements. The petitioners argue that the Parc Corniche court ruled that the statutory amendment was a substantial and substantive change and could not be applied retroactively, as permitting the statute to relate back would unconstitutionally interfere with the owners contractual rights and deprive them of their 3

4 vested interest in and to the common elements. Both parties have submitted extensive legal arguments to support their positions and this order is entered after consideration of the complete record in this matter. CONCLUSIONS OF LAW The owners argue in their amended petition that the vote taken by the association to alter the stairwell structure adjacent to their unit constitutes an amendment to the declaration of condominium and such amendment is invalid as it discriminates against them in violation of section 15.3 of the declaration which prohibits amendments that discriminate against a unit owner unless that owner consents. Obviously, the petitioners did not vote in favor of the alteration to the stairwell structure constructed adjacent to their unit. Pursuant to section (2), Florida Statutes, the petitioners contend that as unit owners, they are entitled to an undivided share in the common elements as an appurtenance to their unit. Thus, according to the petitioners, in order to remove the top portion of the stairwell structure, the association must amend its declaration with the consent of the unit owners and absent such consent, the alteration cannot be accomplished. In certain cases, where an association proposes to materially alter a common element in accordance with section (2), Florida Statutes, the proposed change may also alter the appurtenances to a unit, thereby requiring compliance with section (4), Florida Statutes, which provides that no amendment may materially alter or modify the appurtenances to a unit without consent of all record owners. In general terms, a material alteration of the appurtenances to a unit occurs when the unit owners use of the common elements is foreclosed altogether, such as where a limited common 4

5 element is extended onto the common elements. See Kamfjord v. Harbour Green Condominium Association, Inc., Arb. Case No , Summary Final Order (October 28, 1993)(proposed patio project whereby a unit owner sought to take over part of the common elements found to both materially alter the common elements and the units and appurtenances thereto, and therefore requires 100% approval of the unit owners). See also, In re: Petition for Declaratory Statement, Hawthorne Residents Cooperative Association, Inc., Case No. 89L-188 (February 28, 1991)(proposed amendment to create 20 units on undeveloped property would materially alter or modify the right to use a common area of the cooperative, which right is appurtenant to each member of the cooperative). However, material alterations to the common elements do not in the usual case also materially alter the appurtenances to a unit. See Lodolcetta v. Carton Condominium Association, Inc., Arb. Case No , Final Order (April 24, 1995)(association s conversion of a game room into a manager s office resulted in a material alteration to the common elements, but did not alter the appurtenances to the units as the owners were not deprived of use of the area); Raska v. The Fountains Association, Inc., Arb. Case , Final Order (December 23, 1994)(alteration of a practice putting green by removing the artificial turf and placing tables and chairs on the common area previously occupied green was held to be a material alteration but no change to the appurtenances to the units had resulted). In the instant case, the common element stairway can still be utilized by the petitioners and other unit owners, albeit not in the same manner. In Stearns v. Aquavista Owners Association of Panama City Beach, Arb. Case No , Final Order (April 29, 1996), the arbitrator ruled that when the association changed a game 5

6 room to a lunch room and storage area, while the change constituted a material alteration, the use of the common areas was still viable and was not a material change to the appurtenances to the owner s unit. Likewise, while the arbitrator finds that in this case the change to the stairwell structure in question is a material alteration to the common elements, it is not a material alteration to the appurtenances to the petitioners unit. Accordingly, while compliance with section (4), Florida Statutes, is not required under these circumstances, the association must achieve a vote in compliance with section (2), Florida Statutes, because the condominium s governing documents are silent on voting requirements for material alterations to the common elements. The petitioners also argue that the use of the statutory default of 75% unit owner approval for altering the common element stairwell structure was inappropriate since the condominium declaration was recorded prior to the date the statutory amendment was enacted. Prior to the amendment to section (2), Florida Statutes, requiring 75% unit owner approval for material alterations where a declaration is silent, the Division commonly took the position that if the declaration failed to provide the manner in which an association could materially alter its common elements, the declaration could be amended using the general amendatory process to provide a method of securing material alterations to the common elements; thereafter, the new declaration provision would be utilized to approve material alterations. Review South Garden Condominium Association, Case No. 82A-253, Declaratory Statement (January 10, 1983); In re Petition for Declaratory Statement of Three Palms Pointe Condominium; Fred Fogg, Case No. 98L-147, Final Order Dismissing Petition for Declaratory Statement (October 6

7 20, 1989). Subsequent to the enactment of the 1992 amendment providing the 75% default voting mechanism, arbitration case law has consistently held that the amendment does not affect protected property rights and is properly applied to preexisting condominiums where a declaration is silent on material alterations. See Kamfjord v. Harbour Green Condominium Association, Inc., Arb. Case No , Summary Final Order (October 28, 1993)(arbitrator ruled that if the proposed patio extension only constituted a material alteration, section (2), Florida Statutes, requiring at least 75% unit owner approval must be obtained, even where the declaration was recorded prior to the enactment of the statute); James v. Perdido Towers Owners Association, Inc., Arb. Case No , Summary Final Order (March 4, 1997)(where the declaration is silent, 75% approval of unit owners must be obtained for material alterations). Furthermore, in Westgate Blue Tree, LTD v. Blue Tree Resort at Lake Buena Vista Condominium Association, Inc., Arb. Case No , Summary Final Order (January 7, 2005), the arbitrator ruled that the amendment to section (2), Florida Statutes, was procedural or remedial in nature and appropriately applies to those condominiums created prior to the date of its enactment. The arbitrator also noted in that case that it would be no small task to conclude that Parc Cornishe opinion continues to breathe, given both the corrective legislature passed to counter the opinion and the later opinion of the Florida Supreme Court in Woodside Village Condominium Association v. Jahren, 806 So. 2d 452 (Fla. 2002). In Woodside, the court opined that the right to rent was not a vested right protected by the declaration, statute or other documents and prospective purchasers were put on notice that under the general 7

8 amendatory provisions of the declaration, the rights not deemed fundamental or otherwise protected could be changed. In the declaratory statement in the case of In Re: Le Chateau Association, Inc., DPR DS (February 17, 2003), the Division examined the issue of 75% approval required where the condominium declaration is recorded before the amendment to section , Florida Statutes. The declaratory statement provided the following: The legislature has determined that an association s alterations to the common elements are not a material alteration or modification of the appurtenances to a unit and never intended to be by expressly overruling the Wellington decision.the bill analysis indicates that the legislature is clarifying existing law, which means that this not a substantive change to any fundamental property interests acquired under declarations recorded prior to See Palma Del Mar Condo. Ass n #5 of St. Petersburg, Inc. v. Commercial Laundries of W. Fla., Inc., 586 So. 2d 315, 371 (Fla. 1991)( courts may consider subsequent legislation to determine the intended result of a previously enacted statute... particularly since there had been a judicial interpretation... contrary to its original intent. ). Therefore, amendments passed under the general amendment provisions of a declaration that authorize an association to materially alter or modify the common elements do not fall within the class of amendments that may implicate fundamental property interests, such as a change in the percentage share of ownership of the common elements under section (4), Florida Statues. Citing to this declaratory statement, the arbitrator in Blue Tree Resort properly concluded that: The declaratory statement provides undeniable evidence of legislative intent to respond to and overrule Parc Corniche, provides for a proper demarcation between the corresponding sections of the statute, and promotes a consistency in application of the statute that gives meaning and purpose to both sections of the statute. It provides a basis for giving meaning to that portion of section (4), Florida Statutes, providing that material 8

9 alterations to the common elements governed by section (2), Florida Statutes, shall not be deemed to constitute a material alteration or modification of the appurtenances to the units. Based on the foregoing, the petitioners reliance on Parc Corniche is misplaced and their argument that section (2), Florida Statutes, does not apply to Sand Pebbles of Islamorada because its declaration was recorded prior to the date of the enactment of the statutory amendment is rejected. As the association secured at least 75% approval from the unit owners in compliance with section (2), Florida Statutes, its decision to rebuild the wooden stairwell structure up to the second story of the petitioners unit and permanently remove the stairs, landing and sundeck located above the second floor is affirmed. Accordingly, the relief requested in the petitioners amended petition for arbitration is hereby denied. DONE AND ORDERED this 21 st day of June, 2005, at Tallahassee, Leon County, Florida. Melissa Mnookin, Arbitrator Department of Business and Professional Regulation Arbitration Section Northwood Centre 1940 North Monroe Street Tallahassee, Florida Certificate of Service I hereby certify that a true and correct copy of the foregoing summary final order has been sent by U.S. Mail and facsimile to the following persons on this 21 st day of June, 2005: 9

10 Theodore R. Bayer, Esq South Dadeland Boulevard Suite 300 Miami, Florida Fax (305) David H. Rogel, Esq. Becker & Poliakoff, P.A. 121 Alhambra Plaza 10 th Floor Coral Gables, Florida Fax (305) Melissa Mnookin, Arbitrator Right to Appeal As provided by section , F.S., this final order may be appealed by filing a complaint for trial de novo with a court of competent jurisdiction in the circuit in which the condominium is located, within 30 days of the entry and mailing of this final order. This order does not constitute final agency action and is not appealable to the district courts of appeal. If this final order is not timely appealed, it will become binding on the parties and may be enforced in the courts. Attorney s Fees As provided by s , F.S., the prevailing party in this proceeding is entitled to have the other party pay its reasonable costs and attorney s fees. Rule 61B , F.A.C. requires that a party seeking an award of costs and attorney s fees must file a motion seeking the award not later than 45 days after rendition of this final order. The motion must be actually received by the Division within this 45 day period and must conform to the requirements of rule 61B , F.A.C. The filing of an appeal by trial de novo of this final order tolls the time for the filing of a motion seeking prevailing party costs and attorney s fees until 45 days following the conclusion of the de novo appeal proceeding and any subsequent appeal. 10

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