MASTER ASSOCIATION V. SUB ASSOCIATION – WHO WINS?

A very interesting case was just decided by Florida’s Second District Court of Appeal. RIVIERA-FORT MYERS MASTER ASSOCIATION, INC., v. GFH INVESTMENTS, LLC. 2020 WL 7767856. To simplify, in a mixed-use community, meaning a community made up of commercial property and residential housing, the Master Association adopted seven amendments to the community’s master declaration. The court referred to the sub associations as the “Liner Buildings.” In general terms, the amendments addressed the Master Association’s authority to approve proposed uses of the property located in the sub communities, (Liner Buildings) increased assessments on them, and imposed additional restrictions on the Loiner’s tenants.

I write about the case because it is a great learning case about the relationship between a Master and a Sub and about community living in general. The court said so much that we will break up this blog over a two week period. Let’s start:

Are all amendments voted on by owners to the governing documents legal?

“In determining the enforceability of an amendment to restrictive covenants, the test is one of reasonableness.”Holiday Pines Prop. Owners Ass’n v. Wetherington, 596 So. 2d 84, 87 (Fla. 4th DCA 1992). This court defined “reasonable” as “not arbitrary, capricious, or in bad faith.” Hollywood Towers Condo. Ass’n v. Hampton, 40 So. 3d 784, 787 (Fla. 4th DCA 2010). In other words, as we stated in Holiday Pines, the modification of restrictions cannot “destroy the general plan of development.” Holiday Pines, 596 So. 2d at 87 (citing Nelle v. Loch Haven Homeowners Ass’n, 413 So. 2d 28 (Fla. 1982)). Amendments which cause “the relationship of lot owners to each other and the right of individual control over one’s own property”to be altered are unenforceable. Id. at 88. Such an alteration is considered a “radical change of plans.” Id. Klinow v. Island Court at Boca W. Prop. Owners’ Ass’n, 64 So.3d 177, 180 (Fla. 4th DCA 2011) (footnote omitted). Klinow further defined “radical change” as “a change which would create an inconsistent scheme, or a deviation in benefit from that of the grantee to that of the grantor.” Id. (citing FlamingoRanch Estates, Inc. v. Sunshine Ranches Homeowners, Inc.,303 So. 2d 665, 666 (Fla. 4th DCA 1974)).

Can the HOA Be More Restrictive than the local zoning authority?

It is well established that restrictive covenants can be more restrictive than limitations imposed by municipalities. See, e.g., Luani Plaza, Inc. v. Burton, 149 So. 3d 712, 714–16 (Fla. 3d DCA 2014) (allowing a business owners’ association to prohibit residential use of a commercial property despite municipal permission for residential use); Stuart Sportfishing, Inc. v. Kehoe, 541 So. 2d 169, 170 (Fla. 4th DCA 1989) (holding that a less-restrictive zoning ordinance did not control over a more-stringent restrictive covenant); Tolar v. Meyer, 96 So. 2d 554, 556 (Fla. 3d DCA 1957) (holding that a zoning decision allowing property to be used as a church did not control over a restrictive covenant prohibiting such a use).

Do Owners Give Up Some Freedom When They Move Into a Condo or HOA?

Owners of property in condominium complexes necessarily accept a greater degree of restriction on their property rights); Hidden Harbour Estates, Inc. v. Basso, 393 So. 2d 637, 640 (Fla. 4th DCA 1981)

CAN THE MASTER ASSOCIATION MAKE RULES AND
REGULATIONS GOVERNING PETS THAT ARE DIFFERENT THAN THE SUBS?

We agree with the Master association’s assertion that these restrictions on number, size, type,and breed of pets are reasonable, as are the requirements that owners leash and pick up after their animals. The Liner Buildings are in relatively close proximity to the condominium buildings, and it is inevitable that dogs kept in the Liner Buildings will need to go outside and use the common areas of the property, and they can therefore be regulated to a reasonable degree to protect the community members’ mutual enjoyment of the common areas. Cf. Majestic View Condo. Ass’n v. Bolotin, 429 So. 2d 438, 440 (Fla. 4th DCA 1983) (implying in dicta that such pet restrictions are reasonable in the condominium setting). As such, the circuit court erred in enjoining the enforcement of this amendment.

WHAT ABOUT PARKING RULES?

In this case, the Master Association made a rule that said the owners in the sub associations cannot park in common areas and can only park in designated parking spaces assigned to that community. In upholding the decision of the Master Association, the court relied on Juno By The Sea North Condominium Ass’n (The Towers), Inc. v. Manfredonia, 397 So. 2d 297 (Fla. 4th DCA 1980), a seventy-unit condominium building had three parking lots: a covered lot with twenty spaces that had been designated in the master declaration as limited common elements and sold to individual unit owners who had exclusive use of those spaces; a second lot that had been designated as a common element with fifty spaces that were unassigned; and a third lot across the street with additional auxiliary parking. Id. at 301. Due to congestion, the condominium association assigned the fifty spaces in the common area lot to the fifty units that did not own exclusive spaces in the covered lot. Id. The owners of the covered spaces sued, contending that the association could not prohibit their use of the common area lot. The Fourth District disagreed. To the contrary, the court held that the limitation on use of the common area lot passed the test of reasonableness because the association’s plan fairly ensured that each unit had access to parking. Id. at 302–05. Thus, even though the fifty-space lot remained a common area, its use reasonably could be restricted to certain unit owners.

CAN THE MASTER ASSOCIATION AMEND THE GOVERNING DOCS TO IN EFFECT CONTROL THE LEASING PROVISIONS IN THE SUB COMMUNITY?

Here is what the court said:

The Liner Buildings, although separate structures, are part of a community for which courts have granted “a greater degree of control over and limitation upon the rights of the individual owner than might be tolerated given more traditional forms of property ownership.” Seagate Condo. Ass’n v. Duffy, 330 So. 2d 484, 486 (Fla. 4th DCA 1976), approved sub nom. Woodside Vill. Condo. Ass’n v. Jahren, 806 So. 2d 452 (Fla. 2002). Indeed, the court in Seagate held that even an absolute prohibition against the leasing of units in a condominium complex can be a reasonable use limitation: Given the unique problems of condominium living in general and the special problems endemic to a tourist oriented community in South Florida in particular, appellant’s avowed objective—to inhibit transiency and to impart a certain degree of continuity of residence and a residential character to their community—is, we believe, a reasonable one, achieved in a not unreasonable manner by means of the restrictive provision in question. The attainment of this community goal outweighs the social value of retaining for the individual unit owner the absolutely unqualified right to dispose of his property in any way and for such duration or purpose as he alone so desires. Id. at 486–87. We reach the same conclusion here and conclude that the amendment adopting section 10.12 is reasonable and enforceable.

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