Tag Archives: Condominium

WHEN IS A MASTER ASSOCIATION SUBJECT TO CHAPTER 718 OF FLORIDA STATUTES?

Many communities throughout Florida were and continue to be developed with multiple layers of community associations. Often, such communities face legal questions that require a determination as to what statutory provisions should apply to their operation. Although it has seemed a fairly straight-forward proposition for over thirty (30) years, the issue of whether or not a recreation or master association is subject to the requirements of Chapter 718 of Florida Statutes (the “Condominium Act”) has recently become not as “black and white” as many would prefer.

In 1988, the 5th District Court of Appeal decided what had been considered the defining case on the topic, Downey v. Jungle Den Villas Recreation Association, Inc., 525 So. 2d 438 (Fla. 5th DCA 1988).  The Jungle Den decision applied a “two-pronged test” when considering the qualifications of the recreation or master association.  The first test, called “constituency”, considers whether the facilities are used exclusively by condominium unit owners.  The second test, called “functionality”, reviews the activities performed by the association being considered and whether it involves condominium property.   In 1991, in light of the Jungle Den decision, Section 718.103(2) F.S. was amended to include a definition of an “association” to be “any entity which operates or maintains other real property in which unit owner have use rights, where membership in the entity is composed exclusively of unit owners or their elected or appointed representatives and is a required condition of unit ownership.”  The Statutory change took a portion of the Jungle Den decision and codified it.  In other words, under the 1991 change to the Statute, if the members of a mandatory membership recreation or master association are exclusively condominium unit owners, the recreation or master association is subject to the Condominium Act.  As a result, for many years, the constituency test was applied more weightily than the functionality test and often would be the only criteria considered to conclude that the association was subject to the Condominium Act.

However, in 2018, the 3rd District Court of Appeal was called upon to review a commercial complex made up of a master association and four (4) condominium associations in deciding a case involving this same issue in Dimitri v. Commercial Center of Miami Master Association, Inc., 253 So. 3d 715 (Fla. 3d DCA 2018)The association in Dimitri was formed in 1982 and operates the master association for a group of condominium buildings, each with its own sub-association. The master association is responsible to maintain or provide for the maintenance of all common property in the complex which is not owned and controlled by any of the sub-associations. The master association did not have any responsibility on any of the condominiums.  The primary issue decided in Dimitri was whether the change in the Statute in 1991 applied to the association in the case. The Court also considered the two-prong test relative to the operation of the association, and whether it was subject to the Condominium Act.

Since the governing documents for the association in the Dimitri case were recorded in 1982, the Court concluded first that they pre-dated the Statutory definition and the facts would have to be reviewed further to determine whether the newer version of the Statute applied.  The decision indicated that the declaration of covenants involved did not contain the specific “magic” phrase required to result in subsequent substantive changes in the Statute being automatically applied to the association at issue, that phrase being that the community is subject to particular laws “as they may be amended from time to time.”  Since the documents here did not include this language, the Court determined that the change to the Statute in 1991 did not apply to the 1982 documents and, therefore, was inapplicable to that community.  Additionally, as a general rule, statutes are not retroactive in nature.  In order for a Statute to be retroactive in its application, the Statute must expressly so state.  The Court in Dimitri concluded that Section 718.103(2) F.S. had no such express intent and, as a result, was not retroactive in its application.  Only the prior definition in the Statute when the association was formed in 1982 would be applied to this complex, which did not result in the complex being subject to the Condominium Act.

In considering the two-prong test from Jungle Den, while the constituency of the Association was exclusively condominium unit owners, the Court further concluded that the association there did not administer and manage “condominium property” as it was defined in the Statute in place in 1982.  As a result, it did not satisfy the second level of the test (functionality) and, consequently, was not subject to the Condominium Act.

For any condominium community in Florida that was developed with a master and/or recreation association, a thorough analysis should be undertaken by experienced community association counsel to make certain that the master and/or recreation association is following the correct law that applies to it.  Likewise, the same analysis should be undertaken for any master and/or recreation association to ensure that it is operating in accordance with the appropriate Statute and to avoid potential claims of improper governance.

Third District Court of Appeal Overturns Large Judgement Against Condominium Association

The Florida court system has been described as complex and confusing to the layperson and, while there is no requirement that an individual be represented by counsel in court, the recent holding of the Third District Court of Appeal demonstrates the importance of having not only attorney representation in court proceedings, but competent representation in the area involved.

In the case of Lincoln Mews Condominium Association, Inc. v. Harris, Case No. 3D18-1379, May 1, 2019, the Appellate Court was asked to review a default judgment entered against the Condominium Association for over $500,000.  In its decision, the Court reviewed the procedural history of the case and described it as “bizarre”!

The case was originally brought by an attorney, on behalf of a unit owner, Stephanie Harris, and, purportedly, the Association, against President of the Association personally, and the Association itself.  According to the Appellate Court, the initial complaint contained claims that were not legally supported or even amounting to actual legal causes of action.  Shortly after the case was filed, the attorney who filed the case withdrew from representing the unit owner.

Then, Ms. Harris, continued for a time without an attorney.  On her own, she then filed two amended complaints, the first of which, among other odd things, dropped the Association as a party and, five days later, a second amended complaint was filed, attempting to re-add the Association back into the case, and which contained more what the Appellate court considered to be outlandish claims.  Moreover, the new pleadings were not even properly served on the Association, as is required under court rules and procedures.

Some months later, Ms. Harris hired a new attorney, who filed a third amended complaint, adding other parties and, again, included the Association.  Once again the Association was not properly served.  This newest complaint contained even more of what the Appellate Court called “colorful” claims.  Due to the failure to serve the Association with the third amended complaint, the Association did not respond to it.  As a result of there being no response from the Association filed with the Court, the owner’s new attorney filed a motion for a default against the Association, which was ultimately granted by the lower court.

Subsequently, even though Ms. Harris failed to properly establish a legal basis for her claims or provide any evidence, the lower court judge entered an order against the Association for $500,000.  The case then apparently sat dormant for some time.

Four years later, Ms. Harris hired yet another attorney (her third in this case) to pursue collection of the default judgment against the Association.  She even attempted to have a receiver appointed over the entire condominium.  Remarkably, even though the Association, which was finally made aware of the judgment against it and had filed appropriate pleadings to vacate the judgment, the lower court denied the Association motion to vacate the judgment, which resulted in the appeal to the Third DCA.

The Appellate Court correctly decided that by dropping the Association in the first amended complaint which Ms. Harris filed on her own, the court no longer had “personal” jurisdiction over the Association, which is required in order for a judgment to be entered against it.  To add the Association back into the case, it had to be properly served, as if the case was brand new, which did not happen here.  As a result, all subsequent proceedings against the Association were considered void.

It is gratifying that the Appellate Court in this case was able to get through all of the filings, which it also characterized as a “strange and protracted record”, and to make this proper procedural ruling.  The Appellate Court even recognized the injustice that had been created against this Association.

However, there is no guaranty that this decision will provide protection to an unwary association that finds itself caught up in the court system by an overly zealous unit owner.  It is a recommended business practice for associations to have its counsel periodically check local court records to see if the association has been named in a law suit of which it might not otherwise be aware.  The local courts have website access available for this purpose.  It is also recommended to have its counsel be listed as the Registered Agent of the association to ensure that when the attorney, as Registered Agent for the association, so that any new litigation, properly served on the association is timely addressed to best protect the interests of the association.

Three Kaye Bender Rembaum Attorneys Receive New Florida Bar Certification as Specialists in Condominium and Planned Development Law

Kaye Bender Rembaum is pleased to announce that the Florida Bar has confirmed that three of its attorneys, founding and Managing Member Robert L. Kaye, Firm Member Andrew B. Black and Senior Associate Allison L. Hertz, are among the inaugural class of esteemed attorneys to be officially certified by the Florida Bar in the new area of Condominium and Planned Development Law. The new certification became effective as of June 1, 2018.

Board Certification is the highest level of recognition by the Florida Bar and recognizes attorneys’ special knowledge, skills and proficiency in various areas of law, and professionalism and ethics in practice. Only Certified attorneys may utilize terms such as “specialist”, “expert”, and/or “B.C.S.” (Board Certified Specialist) when referring to their legal credentials. Board Certified Florida Bar Members are rigorously evaluated for professionalism and tested for their expertise in their areas of law. According to the Florida Bar, certification is the highest evaluation of attorneys’ competency. Attorneys must meet stringent application criteria before officially becoming certified, including satisfactory peer review as it relates to character, ethics and professionalism, satisfying the certification area’s higher level of continuing legal education requirements and passing a rigorous examination.

Robert Kaye, Andrew Black and Allison Hertz are especially honored and proud to be among the Florida Bar’s inaugural class to receive this particular certification. The Firm is pleased to not only offer its clients the high quality legal services that they are accustomed to receive from all of its attorneys but to also have available board certified legal services with this designation in this area of law.

Those Certified account for less than one percent (1%) of nearly 118,000 Florida lawyers. Thus far, only 127 lawyers obtained this new Certification. The Florida Bar website maintains a free online directory of all Board Certified attorneys, categorized by specialty area. You may find it at FloridaBar.org/certification.