Appellate Courts Clarify Statue Of Limitations Affect On Claims To Invalidate Amendments To Governing Documents

The declaration of condominium is the “constitution” governing the ownership and control of the condominium property and operations of the association. The declaration of covenants and restrictions governing a homeowners’ association is essentially the same – it is a deed restriction typically limiting the use, occupancy, maintenance and control of the property within a deeded community.

Understanding that these are the most significant documents governing the community (whether condominium or HOA), typically amendments or changes to these documents require the affirmative vote of a super-majority of the owners. If the document does not state the voting percentage specifically, the various Florida Statutes for the different types of community provide for at least two-thirds (2/3rds) of the total membership to vote in favor for an amendment to a declaration of condominium (with the exception of other identified items that require 100% to change) per Section 718.110(1)(a) F.S., and Section 720.306(1)(b), F.S.

It is reasonable to assume that amendments that did not receive the requisite amount of membership consent would automatically be invalidated by the courts. This is only true, however, if the issue is brought to the courts in a timely fashion. In some cases, simply waiting around and failing to take action may convert what should be an invalid amendment into an enforceable obligation due to the application of the statute of limitations.

A Statute of Limitations sets forth the maximum time frame to file a legal action making a claim or to enforce a party’s rights, depending upon the type of claim being made. After that statutorily-indicated time period runs, any claim asserting that cause of action will likely fail – regardless of whether the person or entity bringing the case is “right” or wrong” in the empirical sense.

In Florida, the most often cited Statute of Limitations is found in Section 95.11, F.S., which contains the time limits for the following common types of cases:

FIVE YEARS: An action on a judgment or court decree; an action on a written contract; an action to foreclose a mortgage and other actions founded on written instruments;

FOUR YEARS: An action founded on negligence; to determine paternity (with the time running from the date the child reaches the age of majority); an action founded on the design, planning, or construction of an improvement to real property; product liability actions; trespass actions; actions based on fraud, etc.;
TWO YEARS: An action founded on professional malpractice; actions to recover overtime wages; actions based on libel or slander; and,

ONE YEAR: Actions for specific performance, to enforce equitable liens and the like.

In three (3) recent cases, the Florida appellate courts have found that the statute of limitations to challenge the validity of an amendment to a declaration of condominium or an amendment to a declaration of restrictive covenants is five (5) years, as a claim on a contract. In Harris v. Aberdeen Property Owners Association, Inc., decided in 2014, the Fourth District Court of Appeal ruled that a homeowner could not challenge the validity of an amendment to a master association declaration that required owners in a sub-association within the community to become members of the club. The Court ultimately ruled that the homeowner could not challenge the validity of the amendment because the amendment was recorded more than five (5) years before the lawsuit was filed. While the homeowner was able to continue her case on a request for declaratory relief, it was clear that her effort to invalidate the amendment altogether did not succeed.

In Silver Shells Corporation v. St. Marten at Silver Shells Condominium Association, Inc., decided in 2015, the First District Court of Appeal found that a condominium association waited too long to challenge a very significant amendment recorded by the developer. In that case, the developer identified the beach lot as common area, but retained control over a portion of that lot to construct a future pavilion or other amenities. In 2000, the developer recorded an amendment removing the beach lot from the common area altogether so it could retain control over and ownership of that property. The association objected, claiming the developer basically “stole” a valuable property right and property ownership in violation of the original master declaration, so it filed a lawsuit challenging the amendment in 2009. The Court ruled that since the association claimed the developer breached the master declaration, the five-year statute of limitations associated with an action on a written contract applied. The association lost the case. In the Harris case, the Court started the statute of limitations clock ticking when the Plaintiff acquired title to her property. In the Silver Shells case, the Court applied Section 718.124, Florida Statutes and therefore did not start the clock ticking on the statute of limitations until turnover of control from the developer. Even with that later start date, the association there waited too long to make the challenge and lost out.

Another ruling issued within the last month follows this same logic. In Hilton v. Pearson and Paradise by the Sea Property Owners Association, Inc., the First District Court of Appeal refused to invalidate two amendments to the declaration of restrictive covenants, regardless of the plaintiffs’ claim that the amendments did not receive the proper vote. The amendments at issue were adopted in 2001 and 2005, and the law suit was filed in 2013.

Bottom line is that whenever amending governing documents, the board should confer with experience association counsel to ensure the association is following all required procedures so as to avoid a successful legal challenge. However, if the board has reason to believe proper procedures were not followed, be aware that there is a limited window of time within which to raise a legal challenge, and it is also best to confer with legal counsel before doing so.