STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION JOHN O ROHDE ASSOCIATION, INC., Petitioner, v. Case No. 2009-00-3607 YACHTSMAN COVE CONDOMINIUM ASSOCIATION, INC. Respondent. / SUMMARY FINAL ORDER Procedural History On February 6, 2009, Petitioner, John O Rohde filed an amended Mandatory Non-Binding Arbitration Petition, naming Yachtsman Cove Condominium Association, Inc. (Association), as Respondent. Petitioner alleged that the Association had materially altered the common element to overlay the carport and pool pavilion ceilings with a vinyl material authorized at a special meeting called on January 2, 2009, in violation of Fla. Stat. 718.113(2)(b) and Article 12.3 of the Association s Declaration of Condominium. On March 18, 2009, an Order Requiring Answer was entered. On April 9, 2009, an Answer was filed. On April 16, 2009, a case management conference was held. This order is entered after review of the entire file. 1
Statement of Issue Whether the Association violated Fla. Stat. 718.113(2)(a) and Articles 5.074 and 12.3 of the Association s Declaration of Condominium and made a material alteration by installing a vinyl overlay on the ceilings of the carport and pool pavilion without amending the Declaration of Condominium? Findings of Fact 1. John O Rohde, is the owner of Unit 111 of the Yachtsman Cove Condominium, which is subject to the Yachtsmans Cove Declaration of Condominium. 2. Yachtsmans Cove Condominium Association, Inc., is the legal entity responsible for the maintenance and operation of the Yachtsmans Cove Condominium, a condominium subject to chapter 718, Florida Statutes. 3. Article 5.074 of the Declaration of Condominium, in pertinent part, provides as follows: Material alteration of or substantial additions to the common elements may be effectuated only by amendment to the Declaration 1 4. Article 13.03 of the Declaration of Condominium, in pertinent part, provides as follows: Substantive amendments may be enacted by a favorable vote of the owners of 67% of the voting interests in the Association 2 1 This section also contains provisions relating to the Association acquiring possessory interests in land and facilities for use by the condominium unit owners. 2 This section also contains provisions relating to the approval of institutional first mortgages, and gives a laundry list of different types of amendments that require approval by the holders of institutional first mortgages. That list does not include amendments for material alterations or substantial additions. 2
5. Section 718.113(2)(a), Fla. Stat., provides, as follows: Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions. This paragraph is intended to clarify existing law and applies to associations existing on October 1, 2008. 6. By letter dated March 19, 2007, the Association s attorney, upon request of the Petitioner, who was at that time a member of the board, opined on the Association s plans to install the aluminum overlays on the carport and pool pavilion ceilings and upgrade the concrete surface of the flooring in the pool pavilion from painted concrete to tile. Based on the condition of the pool pavilion floor (in need of immediate repair) and the pool pavilion ceiling (not in need of repair), the attorney advised the board that, if challenged in an arbitration dispute, the installation of tile on the pool pavilion floor would likely constitute a necessary repair, but the overlaying of the carport and pool pavilion ceilings would likely constitute a material alteration. 7. On February 4, 2008, the Association presented a proposed amendment change to Article 5.074, to allow material alterations to the common elements described as installation of vinyl ceilings and electrical lighting upgrades of the carport/pool pavilion ceilings and installation of vinyl ceilings and electrical lighting upgrades of the pool pavilion. The proposed amendments failed. 3
8. On January 2, 2009, the Association s Board held a special meeting for the purpose of determining the lowest competitive bids received to repair the existing ceilings and install a vinyl overlay on the ceilings of the carport and pool pavilion. 9. It is undisputed by the parties that the existing carport and pool pavilion ceilings are constructed of interior grade drywall. It is undisputed by the parties that that the plaster covering the drywall is cracking and falling leaving the drywall exposed to the elements. 10. Upon review of the photographs of the ceilings, the ceilings show signs of damage due to age and exposure to the elements. There are indications of mold or mildew, or both, damaged and missing plaster coating, and sagging wood support beams. Additionally, light bulbs are exposed and unprotected from the elements. The ceilings are in poor condition and are in need of immediate repair. Conclusions of Law Petitioner, John Rohde, is a unit owner in the Yachtsman Cove Condominium, Inc. Respondent, Yachtsman Cove Condominium, Inc., (Association) is a condominium association within the meaning of Chapter 718, Florida Statutes. The undersigned has jurisdiction over the parties and of the subject matter of this dispute, pursuant to section 718.1255, Florida Statutes. Material Alteration or Necessary Maintenance Petitioner alleges the Association is in the process of materially altering the common elements by installing a vinyl overlay on the carport and pool pavilion ceilings. Petitioner alleges the Association has failed to comply with the requirements of Articles 5.074 and 13.03 of the Declaration of Condominium and section 718.113(2)(a), Florida 4
Statutes, by not amending the declaration of condominium prior to undertaking the repairs. Petitioner bases these allegations on the opinion of the Association s counsel s expressed in a letter to the board dated March 19, 2007. During Petitioner s term on the board, Petitioner and the other board members explored the possibility of upgrading the pool pavilion floor surface from painted concrete to tile and overlying the pool pavilion ceiling wallboard (gypsum board) with an aluminum material. The board requested a legal opinion from the board s counsel. The board s counsel, in his letter dated March 19, 2007, conditioned his opinion based on two factors: 1) the pool pavilion concrete flooring was requiring immediate and continual repair, and 2) the pavilion ceiling was not in need of repair. The 2007 opinion of the Board s counsel is not relevant to the case at hand, as Petitioner has made no allegations related to the pool pavilion floor and the carport and pool pavilion ceilings now require immediate attention. It is undisputed by the parties that the ceilings in the existing carport and pool pavilion are common elements of the Association. It is also undisputed by the parties that these ceilings are in need of repair. The ceilings are constructed of interior grade drywall with a drywall plaster overlay. It is undisputed by the parties that the carport and pool pavilion ceilings have become damaged over time. In Petitioner s Exhibit C to the Amended Petition, Petitioner acknowledges the need for the repairs to the ceilings, stating as follows: At the beginning of my meeting with you [Dick LaPosta, C.M.C.A. and property manager for the Association] I reminded you that I have always been in favor of the plan to overlay our existing carport and pool pavilion ceilings with a durable pre-finished material. You and the current seated board members are well aware that I first proposed such a 5
project to the Board of Directors in 2005 when I was serving in the position of Chairman of the Board of Directors. While the ceilings may not have needed repairs in 2005 or 2007, at this time, in 2009, the ceilings have deteriorated necessitating significant repairs. Upon review of the photographs submitted by the Association, and not refuted by Petitioner, the plaster coating on the ceilings is significantly chipping and peeling in many areas and is completely missing in numerous areas. The photographs show mold or mildew on substantial areas of the ceilings, on the exposed compact fluorescent light bulbs, and on the exposed electrical fixtures. Numerous ceiling wood support beams are sagging, missing, appear to be rotten or appear to be loose from the ceiling and at danger of falling. Pursuant to section 718.113(2)(a), Florida Statutes: Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions. This paragraph is intended to clarify existing law and applies to associations existing on October 1, 2008. In addressing the issue of material alterations, the court in Sterling Village Condominium, Inc. v. Breitenbach, 251 So.2d 685, 687 (Fla. 4th DCA 1971), defined material alterations to buildings as: To palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to 6
appreciably affect or influence its function, use, or appearance. There is an exception to the statutory requirements where the material change or alteration implicates the association s duty to maintain and repair the condominium property or improvements thereon. See Tiffany Plaza Condominium Association, Inc. v. Spencer, 416 So.2d 823 (Fla. 2d DCA 1982). It is clear that the current interior drywall ceiling made of gypsum board is in need of repair or replacement. It is undisputed by the parties that the current ceilings must be replaced with a durable pre-finished material. Under the definition provided by Sterling Village above, the question is whether the vinyl overlay has or will appreciably change or affect the function, use or appearance of the ceilings. Petitioner has raised no objection to the use of vinyl and or the appearance of the ceilings. Petitioner s sole objection is that this activity undertaken by the Association is a material alteration to the common elements and the Association has failed to obtain the necessary votes to amend the Declaration. The Association s necessary actions to repair and replace the damaged ceilings of the carport and pavilion does not appreciably affect or influence its function, use or appearance and is not a material alteration to the common elements. However, even if the installation of the vinyl overlay did constitute a material alteration, such action by the Association falls within the Association s duty to maintain and repair the condominium property. Based upon the foregoing, it is ORDERED: The relief requested by Petitioner is DENIED. 7
DONE AND ORDERED this day of May, 2009, at Tallahassee, Leon County, Florida. Tonya S. Chavis, Arbitrator Department of Business and Professional Regulation Arbitration Section 1940 North Monroe Street Tallahassee, Florida 32399-1029 Trial de novo and Attorney s Fees This decision shall be binding on the parties unless a complaint for trial de novo is filed in accordance with section 718.1255, Florida Statutes. As provided by section 718.1255, Florida Statutes., the prevailing party in this proceeding is entitled to have the other party pay reasonable costs and attorney s fees. Any such request must be filed in accordance with Rule 61B-45.048, F.A.C. Certificate of Service I hereby certify that a true and correct copy of the foregoing final order on default has been sent by U.S. Mail to the following persons on this day of May, 2009: John O. Rohde 15370 Transit Ct NE #111 N. Ft. Myers, Florida 33917 Gary Groth President Yachtmans Cove Condominium Association, Inc. 15397-601 Moon Raker Court N. Ft. Myers, Fl 33917 Tonya S. Chavis, Arbitrator 8
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