STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES AND MOBILE HOMES IN RE: PETITION FOR ARBITRATION ORLANDO IGLESIAS and NANCY IGLESIAS, Petitioners, v. Case No. 2013-04-2248 AQUA VISTA TOWNHOMES CONDOMINIUM ASSOCIATION, INC., Respondent. / ORDER APPROVING DANIELLA ADAMS AS QUALIFIED REPREENTATIVE FOR THE ASSOCIATION AND SUMMARY FINAL ORDER Pertinent Procedural History On October 8, 2013, Petitioners Orlando Iglesias and Nancy Iglesias filed a Petition for Mandatory Non-binding Arbitration naming the Aqua Vista Townhomes Condominium Association, Inc. (the Association) as Respondent. Petitioners allege that the Association has improperly denied Petitioners remote control access devices to allow them access to the common element parking lot unless and until Petitioners enter into an agreement with the Association acknowledging the Association s right to approve any prospective tenant for Petitioners unit. On October 16, 2013, an Order Requiring Answer was entered. On November 8, 2013, Daniella Adams, President, and Wayne Dennis, Vice President and Treasurer, of the Association filed a Request for an Extension of Time to File an Answer. On November 13, 2013, an Order Granting Respondent s Motion was entered, which also 1
required the Association to file a properly completed Qualified Representative Application along with the Minutes of the board meeting authorizing him or her to represent the Association in this matter. On December 12, 2013, Wayne Dennis, board member, filed, on behalf of the Association, an unsigned letter requesting a second extension of time to file an answer. On December 13, 2013, a Notice of Communication and Order Requiring Completed Qualified Representative Application and Denying the Association s Motion for an Extension of Time was entered. On December 16, 2013, the Association filed an Answer with exhibits and the Qualified Representative Application of Daniella Adams, President of the Association. Attached was a copy of the Minutes of the December 13, 2013 meeting at which the board authorized Ms. Adams to represent it in this matter. On January 3, 2014, a Notice of Case Management Conference was entered. On January 16, 2014, a telephonic case management conference was conducted. Present by telephone were counsel for Petitioners, Paul Haralson, the Association s Qualified Representative, Daniella Adams and Wayne Dennis, board member. Qualified Representative Upon review of Ms. Adams executed Qualified Representative Application form, Ms. Adams is approved as the Qualified Representative for the Association in this case. 2
Statement of Issue Whether the Association has violated the Declaration of Condominium by denying Petitioners remote control access devices to access the common element parking lot due to Petitioners refusal to enter into an agreement with the Association acknowledging the Association s right to approve any prospective tenant for Petitioners unit. Findings of Fact 1. Petitioners, Orlando Iglesias and Nancy Iglesias, are owners of units in the Aqua Vista Townhomes Condominium, Inc. and by virtue of their ownership of their units are members of the condominium association 2. Respondent, the Association, is the corporate entity responsible for the operation of Aqua Vista Townhomes Condominium Association. 3. Section 19.2 of the Declaration of Condominium, states: Leases. No lease of a Unit by the Owner thereof shall be for a period of less than thirty (30) days; provided, however, and notwithstanding any provision to the contrary, the Developer may lease or rent any Unit owned by the Developer for any period of time and from time to time. No Unit Owner may lease or rent his Unit if delinquent in the payment of any Assessments. If all Assessments are paid up to date, a Unit Owner may rent or lease such Owner s Unit without further approval. However, the Unit Owner renting or leasing such Owner s Unit shall promptly notify the Association or Management Firm of each renter and the term of such rental or lease. The sub-leasing or sub-renting of a Unit Owner s interest shall be subject to the same limitations as are applicable to the leasing or renting thereof. The Association shall have the right to require upon notice to all Unit Owners that a substantially uniform form of lease or sublease be used by all Unit Owners (including the Developer) intending to rent or lease after said notice and to provide such form as a Common Expense. Entire Units only may be rented, provided the occupancy is only by the lessee and his family and guests; no individual rooms may be rented. 3
as follows: A tenant of a Unit shall have all the use rights in the Association Property and Common Elements otherwise readily available for use generally by Unit Owners and the Owner of the leased Unit shall not have such rights, except as a guest. This shall not, however, interfere with access rights of an Owner as landlord pursuant to applicable law. 4. Section 22.4 of the Declaration of Condominium, states, in pertinent part, The consent of Owners holding at least 75% of the total votes in the Association and the approval of the holders of first mortgages on Units which represent at least 51% of the votes of Units that are subject to first mortgages shall be required to add or amend any material provisions of this Declaration which establish, provide for, govern or regulate any of the following: (j) Leasing of Units. *** as follows: 5. The preamble of the Initial Rules and Regulations, states, in pertinent part, These Initial Rules and Regulations may be modified, added to or repealed at any time by the Board. Any consent or approval given by the Association under these Rules and Regulations shall be revocable at any time, except for approvals of resale or leases. These Rules and Regulations and all others hereinafter promulgated shall apply to and be binding upon all Unit Owners. The Unit Owners shall at all times obey said Rules and Regulations and shall use their best efforts to see to it that they are faithfully observed by their families, guests, invitees, servants, lessees and other persons over whom they exercise control and supervision. 6. It is undisputed by the parties that vehicles can only access the Aqua Vista parking lot through the entrance gate by using a remote control access device. 7. It is undisputed by the parties that the Association has initiated a requirement that all unit owners to sign an acknowledgement that remote control access 4
devices for tenants will be re-activated after any prospective tenants have been satisfactorily screened and approved by the association. 8. It is undisputed by the parties that Sections 19.2 and 22.4 of the Declaration of Condominium have not been amended. Conclusions of Law The Association is an association within the meaning of Section 718.103, Florida Statutes. Pursuant to Section 718.1255, Florida Statutes, the undersigned has jurisdiction over the parties to, and the subject matter of, this dispute. This Summary Final Order is entered pursuant to Rule 61B-45.030, Florida Administrative Code, which requires the arbitrator to summarily enter a final order if no disputed issues of material fact exist. Petitioners have alleged that the Association has conditioned providing Petitioners remote control access devices to the common area parking lot upon Petitioner s execution of an acknowledgement of the Association s right for prior approval of tenants. In its defense, the Association asserts that, in accordance with the Rules and Regulations, the Association has a right to amend the Rules and Regulations as needed and that specifically, Section 9 of the Initial Rules and Regulations authorizes the Association to adopt regulations relating to parking. The Association alleges the acknowledgement is merely a parking regulation. Additionally, the Association asserts that, pursuant to Section 23 of the Initial Rules and Regulations which prohibits Unit Owners from doing anything that will increase the Association s insurance rates, the requirement of prior approval of tenants and lessees is necessary to keep insurance rates down for the Association. Finally, the Association alleges that Petitioners have previously submitted completed tenant information sheets to the 5
Association and that the currently required acknowledgement is no different from the previous requirement. Validity of Rules and Policies Condominiums and the forms of ownership interests therein are strictly creatures of statute. See Sections 718.101-718.622, Florida Statutes; see also Winkelman v. Toll, 661 So.2d 102, 105 (Fla. 4th DCA 1995); Suntide Condominium Ass'n, Inc. v. Division of Florida Land Sales & Condominiums, 463 So.2d 314, 317 (Fla. 1st DCA 1984). The declaration is often referred to as the condominium's constitution, which strictly governs the relationships among the condominium unit owners and the condominium association. See, e.g., Schmidt v. Sherrill, 442 So.2d 963, 965 (Fla. 4th DCA 1983). In Hidden Harbour Estates, Inc. v. Basso, 393 So.2d 637 (Fla. 4th DCA 1981), the court reasoned: There are essentially two categories of cases in which a condominium association attempts to enforce rules of restrictive uses. The first category is that dealing with the validity of restrictions found in the declaration of condominium itself. The second category of cases involves the validity of rules promulgated by the association's board of directors or the refusal of the board of directors to allow a particular use when the board is invested with the power to grant or deny a particular use. See White Egret Condo., Inc. v. Franklin, 379 So.2d 346 (Fla. 1979). The test used by the courts to determine if a rule or policy is valid was explored in the arbitration case of Arredondo v. Solimar of Key Biscayne Condominium Association, Inc., Arb. Case No. 97-0134, Partial Summary Final Order (December 3, 1997): The test identified by the courts in assessing whether a board rule is valid is whether the rule contravenes an express or implied condition found in the declaration, and whether the rule reflects reasoned decision making, i.e., whether the rule is reasonable and is designed to accomplish its stated purpose. Beachwood Villas Condominium v. Poor, 448 So. 2d 1143 (Fla. 4th DCA 1984); Hidden Harbour Estates, Inc. v. Basso, 393 So. 2d 637 (Fla. 4th DCA 1981); Hidden Harbour Estates, Inc. v. Norman, 309 6
So. 2d (Fla. 4th DCA 1975). An association cannot adopt a rule which in effect amends the declaration of condominium. Gordon v. Palm Aire Country Club Condominium Association, Inc., 497 So. 2d 1284 (Fla. 4th DCA 1986). Board rules are not entitled to any presumption of correctness. Beachwood Villas. In the arbitration case of Neville v. Sand Dollar III, Inc., Arb. Case No. 94-0452, Summary Final Order (April 12, 1995), the arbitrator concluded that a board rule which set a minimum rental period was invalid as in conflict with the declaration where the declaration set forth the right to rent which was unfettered by restrictions as to frequency and period of term In Petersilke v. Windwood Condominium Association, Inc., Arb. Case No. 94-0245, Summary Final Order (October 21, 1994), the arbitrator ruled that a board rule which set a minimum lease term of 1 year was invalid as in conflict with the declaration which permitted leasing for periods of not less than three months. In Reis v. Siesta Dunes Condominium Association, Inc., Arb. Case No. 92-0148, Final Order (July 2, 1993), the arbitrator held that a board rule which established a minimum lease term of 2 weeks was invalid where the declaration simply required prior board approval of the lease; if the tenant was not approved, the association was required to provide an alternative tenant for the same terms and conditions. Under the declaration, the owner and not the association had the right to set the lease term, and the rule was found to violate a right reasonably inferable from the declaration the right to set the lease term. As previously stated, Section 19.2 of the Declaration places four (4) requirements on a unit owner in order to rent their unit: 1) the minimal time period for renting is thirty (30) days; 2) the Unit Owners must not be delinquent in the payment of Association assessments; 3) if the Association has a standard rental or lease agreement, the Unit Owner must utilize the Association s agreement or, in the alternative, the Unit Owner s agreement must substantially conform to the Association s agreement; and 4) Unit Owners may not rent out individual rooms in a unit. 1 Additionally, Section 3.4(d) of the Declaration grants unit owners, along with tenants a non-exclusive easement of ingress and egress on the Association common element sidewalks, streets, paths, walks and 1 Additionally, the Declaration provides that the tenants have the same use rights to the common elements as a unit owner. 7
other portions of the Common Element. Nothing in Section 19.2 of the Declaration grants the Association the authority to require unit owners to request approval of tenants prior to renting their unit(s). There are numerous condominium cases continuing to hold that the bylaws or rules purporting to restrict the right to rent may contain no provision inconsistent with rights granted under the declaration. See, e.g., Arredono v. Solimar of Key Biscayne Condo. Ass n, Partial Summary Final Order (December 3, 1997); West Winds Estates Condo. Ass n, Inc. v. Miller, Arb. Case No. 97-1872, Summary Final Order (January 14, 1998); Richardson v. Jupiter Bay Condo. Ass n, Inc., 02-4354, Final Order (July 3, 2002). Accordingly, the Association s policy or requirement that a unit owner acknowledge the Association s right to approve tenants prior to issuing a remote control access device to the owner is a right not granted to the Association under the Declaration of Condominium and imposes a significant substantive restriction that infringes on the Unit Owner s right to rent his/her unit. Accordingly, the Association s requirement that a unit owner enter into an acknowledgement of the Association s right to approved tenants is invalid. As discussed previously, the Declaration restricts the Association s power relating to renting or leasing of a unit to four (4) specific limitations. While the Association has raised additional reasons why the prior approval requirement should be enforced, including Petitioner s alleged prior history of renting to felons, to people who park in non-parking areas, to rental agents and others, these reasons cannot override the fact that the Declaration does not authorize the Association to require prior 8
approval of tenants and the Association cannot condition remote control access devices to tenants and unit owners to a non-existent right. 2 Based upon the foregoing, it is ORDERED: 1. Daniella Adams is approved as the Association s Qualified Representative in this proceeding. 2. The Association is found to have violated Section 19.4 of the Declaration of Condominium and the Petitioners request for relief is GRANTED. 3. By 5:00 p.m. on March 14, 2014, the Association shall provide Petitioners remote control access devices and activation of such devices. DONE AND ORDERED this 4 th day of March, 2014, 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 Telephone: (850) 414-6867 Facsimile: (850) 487-0870 2 The Association also raises as a basis of its authority to require prior approval of tenets upon the following: 1. Prior approval requirements by the Developer, 2. The Laruen Book Childe Safety Ordinance of Miami-Dade County; 3. Section 775, 21, Florida Statutes, relating to sexual predators; and 4. Ordinance No. 2009-25, North Miami Beach Code. It is noted that actions taken by the developer prior to turnover are not the responsibility of the associations. See Dahm v. Sun Island Ass n, Inc., Arb. Case No. 2010-04-4307, Summary Final Order (April 6, 2011). Additionally, upon review of the above referenced ordinances and statutes, nothing in the foregoing grants the Association the right to require prior approval of tenants. 9
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 Fla. Admin. Code R. 61B-45.048. Certificate of Service I hereby certify that a true and correct copy of the foregoing final order has been sent by U.S. Mail and by facsimile where available to the following persons on this 4 th day of March, 2014: Paul Haralson, Esquire 7001 Biscayne Blvd. 2 nd Floor Miami, Florida 33138 FAX: 866-210-7095 Daniella Adams Qualified Representative 2074 NE 167 th Street Miami, Florida 33162 Tonya S. Chavis, Arbitrator 10