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

Transcription

1 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION MARIE MILLER DAHM, Petitioner, v. Case No SUN ISLAND ASSOCIATION, INC., Respondent. / ORDER GRANTING PETITIONER S MOTION TO RECONSIDER SUMMARY FINAL ORDER Pertinent Procedural Background 1. On August 30, 2010, Petitioner, Marie Miller Dahm, filed a Mandatory Non-binding Arbitration Form Petition, naming Sun Island Association, Inc. (Association) as Respondent. 2. On October 6, 2010, Petitioner filed an Amended Petition which, in pertinent part, alleged that the board had improperly adopted a rule which imposed a minimal leasing period of three months. 3. On April 6, 2011, a Summary Final Order was entered which struck letters filed by Petitioner s Intervenors and determined, in pertinent part, that the Association s adoption and enforcement of the minimal leasing period was not improper. 4. On April 6, 2011, Petitioner filed a Motion to Reconsider Summary Final Order, related to the Minimum Lease Restriction. 1

2 5. On April 8, 2011, Petitioner filed a Corrected Motion to Reconsider Summary Final Order, related to the Minimum Lease Restriction. 6. On April 13, 2011, Raymond A. Piccin, Esquire, filed a Notice of Appearance as Petitioner s Counsel of Record and Motion for Leave to Timely File Amended Motion to Reconsider Summary Final Order. 7. On April 20, 2011, Respondent filed a Motion for Attorney s Fees. 8. On April 26, 2011, Petitioner filed an Amended Motion to Reconsider Summary Final Order. 9. On May 3, 2011, an Order Permitting Respondent to File a Response to Petitioner s Amended Motion to Reconsider Summary Final Order was entered. 10. On May 18, 2011, the Association filed a Response to the Amended Motion to Reconsider Summary Final Order. 11. On May 20, 2011, the Association filed Exhibit 1 to the Association s Response to the Amended Motion to Reconsider Summary Final order. Motion for Reconsideration Rule 61B , Florida Administrative Code, allows a party to file a motion for rehearing within 15 days after entry of a final order. Rehearing represents an opportunity to address clear errors of law or fact made in the final order. Petitioner seeks reconsideration of the arbitrator s Summary Final Order which found, in pertinent part, that: A. The Association s imposition of a minimum leasing period of three months was valid. 2

3 requirement. B. The Association was not estopped from enforcing the minimal leasing Petitioner s motion asserts that the Association s adoption of the rule establishing a minimal leasing period of three months was ultra vires 1 and that the rule, therefore, is void ab initio. 2 Additionally, Petitioner s motion asserts that if the adopted rule is ultra vires and void ab initio, then the statute of limitations does not apply. See generally, Markham v. Nepture Hollywood Beach Club, Inc., 527 So. 2d 814 (Fla. 1988); The Word of Life Ministry, Inc. v. Miller, 778 So. 2d 360 (Fla. 1st DCA 2001); Moore v. Smith- Snagg, 793 So. 2d 1000 (Fla. 5th DCA 2001) on mot. for reh.; Bhoola v. City of St. Augustine Beach, Florida, 588 So. 2d 666 (Fla. 1991); c.f., Lavey v. The City of Two Rivers, 994 F. Supp (E.D. Wisc. 1998). Petitioner primarily relies on Neville v. Sand Dollar III, Inc., Arb. Case No , Final Order (April 12, 1995) and Kenneth Richardson v. Jupiter Bay Condominium Association, Inc., Arb. Case No , Final Order (July 3, 2002), for the proposition that where a rule is adopted by the board restricting lease duration and frequency which is in conflict with the declaration, the rule is void ab initio. In the present case, Paragraph 18, Section B of the Declaration, states: Rental or Lease A condominium parcel shall not be leased or rented without the prior written approval of the association, which approval shall not be unreasonably withheld. The Board of Directors shall have the right to require that a substantially uniform form of lease be used. In addition, Article IX, Section 2. of the Bylaws, provides: The Board of Directors may from time to time adopt or amend previously adopted rules and regulations governing 1 Latin phrase meaning literally beyond the powers. 2 Latin phrase meaning from the beginning. 3

4 and restricting the use and maintenance of the condominium unit(s) provided, however, that copies of such rules and regulations are furnished to each unit owner prior to the time the same become effective, and where applicable or desirable, copies thereof shall be posted in a conspicuous place on the condominium property. Finally, Rule 15.c.1. of the Rules and Regulations states: Three (3) months is the minimum lease period for a unit. RULING SHALL BE ENFORCED. It is elementary that a board cannot adopt a rule modifying the provisions of the declaration or bylaws, without at the same time adopting an amendment to those documents. In Beachwood Villas Condominium v. Poor, 448 S0. 2d 1143, 1145 (Fla. 4th DCA 1984), the court stated: [P]rovided that a board-made rule does not contravene either an express provision of the declaration or a right reasonably inferable therefrom, it will be found valid, within the scope of the board s authority. In implementing the Beachwood test in Mohnani v. La Cancha Condominium Association, Inc., 590 So. 2d (1991), the court stated: [Id. at 37]. In resolving the first prong of the Beachwood test, a court must determine (A) whether a board is empowered to pass rules and regulations for the governance of the condominium, and (B) whether the topic is a legitimate subject for board rulemaking. To determine part A, the court must examine the relevant statutes and the condominium s declaration and bylaws. In the instant case, it is undisputed that the Board is empowered to pass rules. To determine whether the topic of a rule is a legitimate subject for board rulemaking, the Beachwood court stated that a rule will be found within a board s scope of authority if the board enacted rule does not contravene either an express provision of the declaration or a right reasonably inferable therefrom. 4

5 Provisions contained in the declaration are clothed with a very strong presumption of validity, while rules are not entitled to any such presumption. Beachwood Villas at 1144; Hidden Harbour Estates Inc. v. Basso, 393 So. 2d 637 (Fla. 4th DCA 1981). The court in Mohnani invalidated a board rule prohibiting an owner from renting during the first two years of ownership. The court found that the rule impermissibly infringed upon the right to rent that was reasonably inferable from the declaration. The declaration in that case simply provided that no owner could lease his unit without written notice to the association. In the case at hand, there is nothing in the declaration purporting to give the board the authority to adopt substantive limitations on the right to rent a unit. By placing a three (3) month minimal rental period requirement on the owners right to rent, the board rule infringed upon the right to rent provided by the declaration. Accordingly, the rule was ultra vires and void ab initio. See, Kenneth Richardson v. Jupiter Bay Condominium Association, Inc., Arb. Case No , Final Order (July 3, 2002), citing Bhoola v. City of St. Augustine Beach, Florida, 588 So.2d 666(Fla. 1991). Additionally, as the rule was void ab initio, the statute of limitations does not apply as a matter of law. See generally, Markham v. Nepture Hollywood Beach Club, Inc., 527 So. 2d 814 (Fla. 1988); The Word of Life Ministry, Inc. v. Miller, 778 So. 2d 360 (Fla. 1st DCA 2001); Moore v. Smith-Snagg, 793 So. 2d 1000 (Fla. 5th DCA 2001) on mot. for reh.; Bhoola v. City of St. Augustine Beach, Florida, 588 So. 2d 666 (Fla. 1991); c.f., Lavey v. The City of Two Rivers, 994 F. Supp (E.D. Wisc. 1998). Under this line of cases, if an action is properly viewed as ultra vires and void ab initio, the statute of limitations does not apply. Accordingly, the Association s rule which set a minimal 5

6 rental period of three (3) months was an ultra vires action in that the board exceeded its authority under the Declaration of Condominium, and therefore the rule was void ab initio and not subject to the statute of limitations. Based on the foregoing, it is ORDERED: Petitioner s Amended Motion for Reconsideration is GRANTED and the Association is prohibited from enforcing Rule 15.c.1 of the Rules and Regulations. DONE AND ORDERED this 22 nd day of June, 2011, at Tallahassee, Leon County, Florida. Tonya S. Chavis, Arbitrator Department of Business and Professional Regulation Arbitration Section Northwood Centre 1940 North Monroe Street Tallahassee, Florida Telephone: FAX: Copies furnished to: Scott H. Jackman, Esquire FAX: Cole, Scott & Kissane, P.A West Boy Scout Blvd. Suite 400 Tampa, Florida Raymond A. Piccin, Esquire FAX: Katzman, Garfinkel & Berger, P.A West Copans Road Margate, Florida