DO YOUR GOVERNING DOCUMENTS CONTAIN THE MAGIC LANGUAGE?

Basically, every year, The Florida Legislature passes laws that effect condominiums and Homeowner Associations.  You may be surprised to learn however that just because these laws are passed by The Florida Legislature, it doesn’t mean that these laws automatically apply in your community association.

The best way for me to teach this issue is to talk about a case I unsuccessfully argued before The Florida Supreme Court a few years ago called Cohn v. The Grand Condominium.  The Grand Condominium is huge.  There are approximately 1,200 units.  800 of the units are residential units.  400 of the units are commercial units consisting of stores and hotel rooms.  Despite the fact that the residential owners outnumbered the commercial owners two to one or 800 to 400, the governing documents allowed the commercial owners to elect a majority of the Board of Directors.  Needless to say, the residential unit owners thought this was unfair.

Luckily, The Florida Legislature passed a law in 2007 however that bailed out not only the residents at The Grand, but all residents who live in a mixed-use condominium.  The new law stated that no matter what the governing documents say…. if the number of residential units outnumber the commercial units, the residential unit owners get to elect a majority of the Board.

The commercial owners filed a lawsuit challenging the constitutionality of the new law.  They argued that this law changed their contractual rights, and that this new law violated the contracts clause of both the Florida and the United States Constitution.

The case made it all the way to The Florida Supreme Court.  In a unanimous decision, the Florida Supreme Court struck down the new law as it applies to the Grand, for one reason.  The reason was that the Grand’s declaration of condominium did not contain “Kaufman language” that incorporates new statutes that get passed every year into the association’s governing documents.  Kaufman language typically reads something like “As referred to in this Declaration, the Florida Condominium Act shall mean the Act as it exists on the date this declaration is recorded, and as the Act shall be amended from time to time.”  Because the “as amended from time to time” language was not in the Grand’s declaration, The Florida Supreme Court said the commercial owners were not on advanced notice that these valuable voting rights can be taken away from them, and when they were, it was unconstitutional.

So, you know all those laws that were passed over the last few years that prevents people from running for the Board if they are delinquent, subjects owners to fines even if not mentioned in the governing documents, removes people from the Board for being delinquent, allows the Board to suspend voting rights, allows the Board to prevent access to the common elements?  Guess what?  If your declaration was recorded before these laws were passed, and you don’t have the “as amended from time to time” language in your governing documents, the Board can’t take any of these actions because it would be a violation of the unit owner’s contractual constitutional rights.

Please review your governing documents to determine if the necessary Kaufman language is contained therein.  If it isn’t, and your association wants to take advantage of these new laws, you will need to amend your governing documents accordingly.

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