STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION HARBOUR BOAT CLUB CONDOMINIUM ASSOCIATION, INC., Petitioner, v. Case No. 00-1744 DANIEL GARBINSKI, and PATRICIA O. GARBINSKI, Respondents. / FINAL ORDER Comes now, the undersigned arbitrator and enters this order as follows: The petition for arbitration, which was filed in this matter on October 5, 2000, seeks as relief an order requiring the respondents/unit owners to return an area modified by them to the condition the area was in prior to such alteration. The petitioner/association further sought an order requiring the respondents to cease their sole and exclusive use of the area, which the association contends is part of the common elements of the condominium. The respondents filed an answer asserting that the area is part of their unit and also raising the affirmative defenses of estoppel, waiver, statute of limitations and laches. The case proceeded to final hearing, which was conducted by the arbitrator in person in Marco Island, Florida, on April 27, 2001. The petitioner was represented by Jamie Greusel, Esq., and the respondents were represented by David T. Lupo, Esq. The parties filed memoranda of law at the conclusion of the hearing. During the hearing, the 1
arbitrator viewed the unit and subject area. This final order is based upon consideration of the entire record in this matter. The petitioner presented the testimony of Herbert Savage, the architect who designed the building at Harbour Boat Club Condominium. He testified that due to a fire which occurred during construction, part of the building was redesigned, and another floor was added. The witness authenticated his signature on Exhibit P-1, dated January 14, 1981, which is the Architect s Certificate reflecting that he had examined the building and prepared plans of each of the units showing their actual dimension, and that the declaration of condominium is accurate. Mr. Savage also testified that he drew Exhibit P-2, a floor plan of the respondents unit, after the fire and that it shows the unit as revised. Regarding the area off the study and described by the petitioner as being analogous to an attic in a single family home, Mr. Savage testified that this area (which is the area in dispute) was not designed to be part of the unit. He further stated that a door from the study leading into the area, which door was not shown on the plat, was provided so that there would be access to the attic for emergency reasons, and only for the maintenance of the condom inium building. The attic area, as originally built, has exposed trusses. The petitioner presented the testimony of John Berback, the fire marshall of the City of Marco Island. He testified that, pursuant to a complaint, he visited unit 301-B at Harbour Island, the unit in question. He testified that the subject area looked, upon inspection, like an addition within the attic space. He testified that none of the alterations were within the fire code, that permits had not been issued for the construction and that the matter was handled as a building code violation. He further testified that storage of clothes and other items within the attic would also be a violation of the fire code. 2
The petitioner s next witness, Melvin Turner, testified that he owns the unit next door to that of the respondents. Mr. Turner became aware of alterations preformed by the respondents in early 1998, at which time he noticed a hundred two-by-fours in the vicinity of the unit. The respondents son, a man in his thirties, showed Mr. Turner the work being performed. Mr. Turner reported the matter to the association s board of directors. Mr. Turner himself became a director in July 2000. Mr. Turner stated that, due to the nature of the alterations made by respondents, the trusses in the attic area cannot be inspected by the association for termites, since the trusses are covered up. Daniel Garbinski, respondent, testified that he purchased unit 301-B in 1987. He saw the attic area, in which the subject area was surrounded by studs. According to the real estate broker, the area was for the respondents use. Mr. Garbinski stated that he probably still would have purchased the unit had it not been for the attic; however, the extra storage space was a factor. He further testified that two of the condominium directors, Gerald White, the president, and Ted Steinberger, the secretary, saw the area in 1987, during which time the respondents were using the space to store Christm as ornaments and books. Mr. Steinberger and Mr. White said that the area was for the respondents use. Mr. Garbinski testified that the work the respondents did in early 1998 to the attic space included adding studs, drywall, and insulation. They added air conditioning to the attic space by extending the existing ductwork in the unit. There is now a computer in the subject area, and a bed. Mr. Garbinski did not know if the contractor was licensed. He stated that the Garbinskis did not think they needed a permit. Beyond this area is an unfinished area under the eaves that the respondents use for storage. Patricia Garbinski testified that when considering buying the subject unit, the 3
respondents viewed it with Frank Tarbert, the real estate agent for the developer and John Knaus, an independent broker. Mr. Knaus said that the attic area also would belong to the respondents. Mrs. Garbinski stated that the light fixtures in the area were installed by a licensed electrician. The respondents built the ceiling, and added three light fixtures and approximately three outlets off the unit s fuse box. Mrs. Garbinski stated that she and her husband received Exhibit P-6, a letter dated April 18, 2000, from the association s attorney stating that the respondents did not have the association s permission to alter the common elements and demanding that they cease use of the area and return it to its original condition. She asserted that they would not have spent $10,000 to finish the area if they did not believe they owned it. She added that they did not believe that they needed board approval because the area belongs to the respondents. The association cites as authority for its claim, Article 6.1(b) of the declaration of condominium, which provides that there shall be no material alteration of or substantial addition to the common elements which costs more than $5,000 in the aggregate in any calendar year without the prior approval by the owners of not less than 75% of the common elements. The association also asserts Article 6.2(c) of the declaration, which provides that a unit owner shall make no changes or alteration to any interior boundary wall or exterior wall without first obtaining approval in writing of owners of all other units in the building and the approval of the board of directors of the association. The subsection further provides that all alterations and improvements must be in compliance with all existing building codes. The respondents assert that when their unit was redesigned following the fire, the boundaries of their unit were extended to include the attic area, which is accessible only 4
through a door off the unit s study. The undersigned notes, however, that this theory does not comport with the testimony of the architect, who stated that the attic area was not designed to be part of the unit. More significantly, the plat of the unit, consisting of two floors as it was redesigned after the fire, is shown in Exhibit P-2, with the boundaries of the unit not including the attic space, which is located below the kitchen and to the right of the study on the plat. This plat, which is attached to this order for reference, was recorded in the public records of Collier County, Florida, as part of the declaration of condominium on January 19, 1981. Accordingly, the respondents were on notice of the actual boundaries of the unit they purchased in 1987, by virtue of such recordation since a purchaser takes subject to the recorded declaration. See Engle v. Acopian, 432 So. 2d 113 (Fla. 5th DCA 1983) (all persons are charged with knowledge of matters properly of record). The door leading to the attic was installed to permit the association to have access to this area for emergency and maintenance purposes, not to make the attic part of the unit. The respondents assertion, that the area was partly framed and pipes within the area were enclosed by drywall, leading to the belief that the area was intended to be living space, is simply not convincing. If the area was intended to be part of the unit, it would have been finished with drywall and air-conditioned as was the interior of the unit. The respondents assertion, that the developer s negligence in failing to record an amendment to the plat to show the enlargement of the unit would work an injustice on the innocent purchasers, is simply not supported by the facts as set forth above. The attic was never intended to be part of the unit and the recorded plat shows the unit as actually redesigned and built. Since the attic area is not within the unit, it is clearly part of the common elements, and the respondents use and alteration of such area without permission of other unit 5
owners or the board were clearly violative of the declaration as cited above. Accordingly, the petitioner has presented a prima facie case establishing its entitlement to the relief requested. Respondents assert the affirmative defense of estoppel in pais, claiming that the board ratified that the floor plan of the unit included the attic area, a contention which the undersigned notes is not supported by the evidence. In fact, the unit as designed, built and recorded does not include the attic area. The respondents further argue that the representation of John Knaus, a real estate agent acting for the developer, was relied upon by the respondents, who subsequently acted upon the representation that the attic was part of their unit, by using and enclosing the space. They argue that such fraudulent representation will cause the respondents a loss when the association now asserts a contrary position. The undersigned notes that the attic space was not purchased as part of the air-conditioned unit. The respondents testimony reflects that they understood that they could use the area for storage, which they did for a number of years. There was no evidence that they were advised that they could expand the air-conditioned living space of the unit into the attic area, which they did in 1998 after becoming year-round residents in 1995. More importantly, the association is not bound by the broker s statements and the respondents were not entitled to rely upon the statements of the broker, particularly where they were on notice by virtue of the recorded declaration of the actual boundaries of their unit. See Esplanade Patio Homeowners Association, Inc. v. Rolle, 613 So. 2d 531, 532 (Fla. 3rd DCA 1993) (statement by the sales agent of the developer, that a restriction against satellite dishes could not be enforced, could not bind the association itself). The respondents further assert the defense of negligent estoppel, arguing that 6
the fraudulent conduct of the association through the action of the developer s broker, Mr. Knaus, bar the association from now asserting ownership of the attic area. This defense is rejected by the undersigned for the same reasons as set forth above regarding estoppel in pais. The association is not bound by the broker s statements; furthermore, any reliance of the respondents on such statements was not reasonable since the statements were in contravention of the recorded declaration. Respondents also assert as a defense the statute of limitations, stating that the respondents took possession of the attic in June 1987. They assert Sections 95.11 and 95.12, Florida Statutes, arguing that the present action is barred because it was not instituted within five, four or seven years under the above-cited sections, the applicability of each particular provision of which depends upon whether the action is considered one other than for recovery of real property founded on a written instrument (5 years), other such action (4 years), or action for recovery of real property (7 years). It is undisputed that the association gained access through the unit to the attic from time to time for maintenance purposes, including investigating a leak following damage from Hurricane Andrew in 1992. It is reasonable to conclude that the association s agents viewed the boxes of ornaments and clothing stored in the attic by respondents, and apparently did not object. Even accepting Mr. Garbinski s testimony that Ted Steinberger, a director, stated that the area was for the respondents use, such conversation occurred in 1987 when the area was used only for storage 1. There was no evidence that the 1 Although not asserted by respondents, it is noted that such assertion would not give rise to a defense of estoppel. See Villas at Eagles Point Condominium Assn., Inc. v. Kahn, Arb. Case No. 94-0391, Arbitration Final Order (July 10, 1995) (aff d, Kahn v. Villas at Eagles Point Condo. Assn., Inc., Case No. 96-0274 / 693 So. 2d 1029 (Fla. 2d DCA 1997) (estoppel not shown to 7
association was aware prior to the final apply where general partner of developer, who was also on board, verbally approved a patio on the common elements, where the documents did not give the developer the ability to unilaterally approve such changes and where the association acting as a board did not approve the change). 8
hearing that the use of the common element attic for storage was a fire hazard. Rather, it was the conversion and colonization of the common element area as air-conditioned living space that is the gravamen of the present dispute. This did not occur until early 1998. The association demanded restoration of the attic to its original condition by attorney letter on April 18, 2000, and instituted the present arbitration on October 5, 2000. Since the association took enforcement action well within the period described in the three statutes of limitations the respondents assert, this defense does not bar the petitioner s claim. The respondents next assert the defense of laches. They argue that petitioner s officers acknowledged that the attic was within the unit and petitioner had knowledge of respondents use of the attic from at least 1992, prior to the time that improvements were made, yet petitioner did not assert any right to the property in a timely manner. The respondents state that they then invested in improving the area and will be injured if relief is granted to petitioner. The present facts, however, do not give rise to laches. The actions or inactions of board members prior to the alteration work simply have no bearing on the present dispute. The undersigned notes that, as stated above, the instant dispute concerns the conversion of the attic to air-conditioned living space, a matter which the association addressed timely, within approximately two years. Further, no evidence was adduced that the association previously advised the respondents that they could use the area for anything other than storage. In the present case, there was no lapse prior to enforcement action regarding the conversion of the attic as would support a bar by laches. The initial burden was on the respondents to seek permission for the alteration to the common elements, an action they never took. Since the board did not have an opportunity to act 9
prior to the construction work performed by respondents, the respondents were not justified in ignoring the requirement of the declaration that they gain the proper approval before altering the common elements. In addition, the evidence in the present case reflects that the association did not actually become aware that there was a problem until the downstairs neighbors of the respondents complained that they could hear voices and see light through a vent in their porch and they felt that their privacy was compromised. Although the respondents dispute that they use an area near the neighbor s lanai, it was this complaint that prompted the association to take action, according to the testimony of Mr. Turner. Under the circumstances, there was no unreasonable delay as would give rise to the defense of laches. See Cypress Bend Condo. I Assn., Inc. v. Dexner, Arb. Case No. 95-0145, Arbitration Final Order (May 19, 1997) (defense of laches not successful where association waited four years after tile was installed to file action. Unit owner lived most of the time in Sweden, thus noise was not constant and delay was not unreasonable; once association determined that the owner would continue to use unit, it filed a petition for arbitration). Finally, respondents assert the affirmative defense of waiver, arguing that the association was aware of the respondents use of the area and asserted no right to it in the years following purchase of the unit. Rather, the association expressly or impliedly informed the respondents that the attic was part of the unit. The undersigned notes that, as set forth above regarding the defenses of estoppel and statute of limitations, the facts herein do not support such a defense. The association timely asserted its right to prevent the respondents from alteration of a common element without the consent required by the declaration by acting within two years of such discovery. See Condo. on the Bay Tower I 10
Assn., Inc. v. Bonanno, Arb. Case No. 93-0066, Arbitration Final Order (Feb. 24, 1994) (where unit owners extended sliding glass doors and exterior wall of unit onto balcony, and board members with knowledge failed to take action for two years, effective waiver did not occur). Since the association has demonstrated its right to the relief requested and no defenses sufficient to bar the claim exist, the relief is granted. The undersigned has considered all of the evidence, argument and authority presented by the parties. Any not overtly addressed herein were found to be immaterial, not necessary for disposition of the case, or inapposite. Based upon the foregoing, it is ORDERED and ADJUDGED: The relief requested by petitioner is GRANTED. Respondents shall remove the alterations to the attic area and return the area to its original state within 60 days of the mailing of this order. Respondents shall cease any use of the attic area. If respondents do not perform the above work within 60 days, the association may do so and bill the respondents. 11
Florida. DONE AND ORDERED this 10th day of May, 2001, at Tallahassee, Leon County, Tyler Powell, Arbitrator Dept. of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 RIGHT TO APPEAL As provided by s. 718.1255, F.S., this final order may be appealed by filing a petition 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. ATTORNEY S FEES As provided by s. 718.1255, F.S., the prevailing party in this proceeding is entitled to have the other parties pay its reasonable costs and attorney s fees. Rule 61B-45.048, 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-45.048, F.A.C. The filing of an appeal of this order does not toll the time for the filing of a motion seeking prevailing party costs and attorney s fees. 12
CERTIFICATE OF MAILING I HEREBY CERTIFY that a true and correct copy of the foregoing was faxed and mailed by U.S. mail, postage prepaid, this 10th day of May, 2001, to: JAMIE B GREUSEL ESQ BERRY AND GREUSEL 1104 N COLLIER BLVD MARCO ISLAND FL 34145 Petitioner s attorney DAVID T LUPO ESQ FREDERICK C KRAMER ESQ 950 N COLLIER BLVD STE 201 MARCO ISLAND FL 34145 Respondents attorneys Tyler Powell, Arbitrator 13
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