STATE OF FLORIDA
DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS, AND MOBILE HOMES
IN RE: PETITION FOR ARBITRATION
Richard L. Mesnick, and
Edward D. Garfield,
Petitioners,
v.
Case No. 02-5367
Hillsboro Le Baron Condominium
Apartments, Inc.,
Respondent.
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PARTIAL SUMMARY FINAL ORDER
Comes now, the undersigned arbitrator, and issues this order as follows:
The petitioners filed this action seeking to challenge a 1979 amendment to the
declaration changing the membership approval requirement with respect to rules and
regulations from 75% to 66 2/3%. While the amendment was accomplished with
the approval of not less than 75% of the voting interests, petitioners allege that the
amendment was passed without joinder of the mortgagees as required by the
declaration.
Petitioners also challenge a 1987 amendment to the declaration
amending the rules and regulations and granting the association fining authority and
prohibiting pets. It is said that the 1987 amendment was accomplished using the
diminished voting requirement of the 1979 amendment and is therefore void.
The petition alleges that the validity of certain other amendments to the
declaration has already been determined in a manner adverse to the association in a
lawsuit in which the circuit court struck down a 1990 amendment to the declaration
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shifting maintenance responsibility from the association to the individual owners with
respect to balconies. The court, according to the petition, declared the amendment
to be void and of no effect because the association had failed to obtain the joinder of
the first mortgagees as required by the original declaration.
A copy of the final
summary judgment on September 5, 1997 in Conroy v. Hillsboro Le Baron
Condominium Apartments, Inc., Case no. 97-3857 CACE 09, in the circuit court in
and for Broward County, is contained in the file. In that case, it appears that the
association sought to challenge a 1990 amendment to the declaration that shifted
the responsibility for repairing the individual owners’ balcony from the owner to the
association.
The association in that case argued that the amendment was void
because, among other things, the mortgagees did not join in the amendment. The
court found that in addition to changing the individual owner’s share of common
expense without 100% vote of the owners, the amendment was accomplished
without the joinder of the mortgagees as required by the original declaration:
It is undisputed that not even one first mortgagee
approved the 1990 Declaration Amendment. Accordingly,
summary judgement is entered in favor of the Association
because Plaintiff is travelling on an Amendment which is
void and of no effect.
In its order, the court cited with approval the arbitration final order entered by the
Division in Tortuga Club, Inc. v. Szarek, Arb. Case No. 95-0274, in which the
arbitrator ruled that an amendment to the declaration passed without the requisite
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approval of all institutional first mortgagees was void.
Another case that dealt with similar issues is Richardson v. Jupiter Bay
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The arbitrator also ruled that the unit owners, found by the arbitrator to have standing to maintain the
challenge, were not bound by the illegal amendments addressing floor coverings despite the fact that
they signed a statement at the time of purchase agreeing to be bound by the documents.
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Condominium Association, Inc., Arb. Case No. 02-4354, Final Order (July 3, 2002).
In that case, the owners brought suit against the association seeking to invalidate
certain amendments to the bylaws that imposed rental restrictions. The bylaws had
been subject to a series of amendments beginning in 1991 and continuing through
2001. The association argued that the statute of limitations precluded the owners
from challenging the earlier amendments.
The arbitrator found that the bylaw
amendments were inconsistent with the declaration of condominium which
recognized the right of the owners to rent their units. The bylaw amendments placed
additional substantive restrictions on the right to rent found in the declaration and
were declared invalid. The association had, in effect, used the bylaw amendment
provision to modify the right to rent found in the declaration, instead of using the
higher percentage provision pertaining to amendments to the declaration.
On the
statute of limitations issue, the arbitrator ruled that the amendments were void rather
than voidable, and that the statute of limitations therefore did not apply:
The association, in attempting to amend rights
granted in the declaration by following the amendatory
procedures set forth in the bylaws, acted without
authority. Therefore, the arbitrator rules that the statute of
limitations does not apply in this limited scenario.
The arbitrator has considered the various arguments advanced by the parties
and hereby rules that consistent with the foregoing authorities, the statute of
limitations does not apply to this challenge. The arbitrator also rules that, subject to
any remaining viable legal defenses, the subject amendments are invalid due to the
failure to join the first mortgagees.
DONE AND ORDERED this 4th day of February, 2003, at Tallahassee, Leon
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County, Florida.
Copies furnished to:
Edward S. Hammel, Esquire
Sachs, Sax & Klein, P.A.
301 Yamato Road, Ste. 4150
Boca Raton, Florida 33431
_________________________________
Karl M. Scheuerman, Arbitrator
Department of Business and
Professional Regulation
Arbitration Section
Northwood Centre
1940 North Monroe Street
Tallahassee, Florida 32399-1029
Marvin P. Pastel II Esquire
Becker & Poliakoff, P.A.
3111 Stirling Road
Ft. Lauderdale, Florida 33312-6566
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