RENTAL RESTRICTIONS

During the legislative session in 2004 the Florida legislature enacted SB 1184, an association bill that was actually a collection of many other bills. Among the provisions included in this bill was an important paragraph that partially stopped condominium boards from creating rental restrictions, using the Supreme Court decision of Woodside Village Condominium Association, Inc. v. Jahren to justify taking away owners' vested rights. This one sentence created within the Condo Act -- FS 718.110(13) --

makes sure that existing rental rights are grandfathered in. 

FS 718.110(13)  Any amendment restricting unit owners' rights relating to the rental of units applies only to unit owners who consent to the amendment and unit owners who purchase their units after the effective date of that amendment.

RENTAL RESTRICTION CASES

Woodside Village Condominium Association, Inc. v. Jahren

ARBITRATION CASES

Goodwin v. Island Club Condominium, Inc.,

Arb. Case No. 2004-04-4285, Partial Summary Final Order (January 12, 2005)

• Where the association was unable to amend the declaration to impose additional leasing restrictions, but instead amended the bylaws to limit the right to lease set forth in the declaration, the bylaw amendment constituted an illegal amendment to the declaration and was invalid. Woodside holds that purchasers are only on notice of lawful amendments to the documents, and does not act to validate amendments to the documents that are otherwise invalid.

Long, et al. v. Ocean Harbour of Islamorada Condominium Association, Inc.

• Where the declaration is silent on the manner of making material alterations to the common elements, and where the bylaws, although incorporated into the declaration, provide that no vote of the owners is required for material alterations undertaken by the association costing less than a specified sum, the bylaw provision did not override the statutory requirement that where the declaration is silent, the approval of 75% of the total voting interests shall be required.

Westgate Blue Tree Orlando v. Blue Tree Resort at Lake Buena Vista Condo Assoc., Inc.,
Arb. Case No. 2004-03-9446, Summary Final Order (January 7, 2005)

• Where the association constructed a check-in building on the property of the timeshare condominium resort, the addition of the office constituted a material alteration to the common elements within the meaning of Section 718.113(2), Florida Statutes.
• The manner of accomplishing material alterations to the common elements does not amount to a vested substantive right under either the appropriate case law or the statute.  Rather, the manner of creating material alterations or substantial additions is procedural or remedial in nature, as clarified by legislation overruling Wellington Property Management v. Parc Corniche, 755 So. 2d 824 (Fla. 5th DCA 2000), which decision was inconsistent in spirit with Woodside Village Association v. Jahren, 806 So. 2d 452 (Fla. 2002), teaching that rights not deemed fundamental by the statute or the documents could be changed by amendment to the declaration.  Woodside did not recognize a vested right to the procedural manner in which changes could be accomplished under section 718.113(2), Florida Statutes.
• The 1992 amendment to section 718.113(2), Florida Statutes, providing that where the declaration is silent on the manner of making material alterations to the common elements, a vote of 75% of the total voting interests is required, applies to declarations recorded prior to the statutory amendment.  There is no vested right to the procedure whereby material alterations to the common elements may be accomplished.
• Section 721.13(8) of the Timeshare Act, effective in June 2000, providing that the board of timeshare condominium association may make material alterations to the common elements without complying with section 718.113(2), Florida Statutes, applies to pre-existing declarations of condominiums and does not, in operation, impair vested rights.

• The 2000 amended to section 721.13(8) of the Timeshare Act which purports to exempt timeshare associations from section 718.110(4), Florida Statutes, may only be retroactively exempt to the extent that it does not impair any rights created by section 718.110(4), Florida Statutes.

McWilliam v. Maya Marca Condo. Apts., Inc., Case No. 2005-03-4074 

(Scheuerman / Final Order Dismissing Amended Petition / September 5, 2005)

• Where an owner filed a petition seeking to challenge an unwritten rule of the board prohibiting leasing of a unit within the first 3 years of ownership of a unit, the petition was dismissed where the owner had failed to allege that the association had sought to enforce the rule against him. Taking the allegations of the petition to be true, the association had threatened to enforce the rule against a different owner.

• Where the first petition challenging a rental rule was dismissed without prejudice because it was not shown that the association had sought to enforce the rule against the petitioning unit owner, it was inappropriate for the petitioner in the amended petition to add an additional unit owner as party petitioner. No allegations regarding the unrelated petitioners can confer standing on the original petitioner to challenge the unwritten rule. The original petitioner must sink or swim on his own merits.

Jaramillo v. Cypress Club Condo., Inc., Case No. 2005-03-7541 

(Scheuerman / Summary Final Order / November 1, 2005)

• Where the declaration was amended to provide that no unit owner may lease his unit within 2 years from his initial purchase of the unit, but did not prohibit or otherwise address the sale of a unit under a current lease, the unit owner who leased his unit prior to the effective date of the amendment and who attempted to gain association approval of his purchaser was entitled to such approval notwithstanding the association’s argument that approval of the transfer of the unit while under lease would result in a per se violation of the amendment to the declaration prohibiting unit owners to lease within the first two years of their purchase. The objective of the amendment would not be violated where the new purchaser’s two year moratorium on leasing commenced upon expiration of the existing lease.

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