Precedents in Condo Law Evolution of HOA’s and Governing Laws

Precedents in Condo Law

By 2010, the Community Associations Institute (CAI), a national organization providing resources for planned unit developments and homeowners associations, estimated that 24.8 million American homes, and 62 million residents are currently being governed by HOAs.

In Florida, co-ops and condominiums are governed under Chapter 718 of the Florida Statutes, also known as the Florida Condominium Act. HOAs are governed by Chapter 720, the Homeowners Association Act. Both chapters are living documents subject to change and revisions in the law, and it is imperative to refer to the most recently revised copy when searching for legal precedents or information. Chapter 719 concerns Florida’s cooperatives, which are normally governed by a proprietary lease, a declaration, bylaws and articles of incorporation.

A property’s governing documents—declarations, covenants, conditions and restrictions, and articles of incorporation—are legal contracts, and board members and residents’ need a working knowledge of the contents in order to understand how the law applies in any given situation.

How It All Began

Homeowners associations first formed in the middle of the 19th century during the period when America was moving from an agricultural society to an industrialized nation. Emerging railroad lines made commuting to cities possible, while at the same time railroad communities began to grow up around the rural railroad stations. The growth away from the dirty, noisy cities effectively formed the first suburbs, and the first homeowners associations but not much happened with those early HOAs before the mid-20th century.

In the 1960’s, the federal government became involved as a major force in the expansion of HOAs. The Federal Housing Authority (FHA) and the Urban Land Institute (ULI) pushed for large, architecturally uniform residential developments. As available land decreased, and construction costs increased, federal mortgage insurance rules were modified to include homeowners associations. In an effort to make high-density residential homes attractive to potential buyers, developers included open green areas and association grounds. Since residents would still pay the taxes on these common areas, local governments were on board with the developers. Services formerly provided by the municipalities were then initially offered by the developers.

The Effect of Kaufman

Joshua Krut, a partner with the law firm of Weiss, Serota, Helfman, Pastoriza, Cole, & Boniske in Fort Lauderdale explains the importance of one single phrase, included or excluded in most of the Sunshine State’s governing documents.

He cites the term Kaufman language. “Kaufman Language” refers to a simple statement pertaining to governance under Florida Statutes Chapter 718 or 720. Typical wording may be, “This community shall be governed by Chapter 718/720 of the Florida Statutes as exists on the date hereof, and as same may be amended from time to time.”

This particular terminology was coined Kaufman Language after a 1977 Florida lawsuit, Kaufman v. Shere, which essentially has the effect of incorporating "substantive" statutory changes into the governing documents of a community. The judge ruled, in part, that the Declaration of Condominium by which the property was created and governed had provided for the adoption of future legislative acts as amendments to the declaration by including this phrase. A full review of this complicated case, Kaufman v. Shere, is available online.

Absence of Kaufman Language allows—with some notable exceptions—that the statute as it exists, on the date the governing documents are recorded, will govern the substantive rights and duties of the parties. Inclusion of Kaufman Language allows, in theory, that subsequent changes in the law should be automatically available.

While such language allows an association to keep current with changing laws, the courts have been consistent in ruling that substantive amendments which have the effect of retroactively impairing contract rights are generally impermissible. Procedural changes, however, are to be retroactively applied to all existing associations. Examples of procedural changes may affect election procedures, board member certification, or record access. Understanding the difference is critical.

If a review of the governing documents does not reveal Kaufman Language, a board may vote to amend the existing documents, and add the language. The knowledge and guidance of the association attorney will be invaluable during this process. “Including Kaufman language is usually beneficial,” Krut says.

Another Landmark Case

Krut explains another case, a prominent Florida lawsuit, Cohn v. The Grand Condominium Association, Inc. In this situation, the existence of Kaufman Language—or rather the absence of it—was cited in the 2011 decision, published by the Florida Supreme Court following the decision reached in Cohn v. The Grand Condominium Association, Inc.

The Grand Condominium Association, Inc. was created in 1986 as a mixed use condominium comprised of 810 residential units, 259 commercial units, and 141 retail units. The governing documents and bylaws provided for a seven-member board of directors to govern the association, with two board members elected by the residents, two by the commercial owners, and two by the retail owners. The seventh board member was elected at-large, however the allocation of voting power obviously favored the commercial and retail unit owners.

In 1995, the Florida Legislature adopted Section 718.404, Florida Statutes, regulating mixed use condominiums based on the percentage of residential composition. When a mixed-use property was comprised of 50% or greater residents, then the residential unit owners must be entitled to a majority vote. In 2007, the Legislature amended the statute to make it retroactive, and Susan Cohn, a residential unit owner at the Grand, requested the Grand change its voting system to meet the new requirements of the statute.

In response, the Grand filed a declaratory judgment action in the Circuit Court, claiming the retroactive portion of the Statute was unconstitutional, and an impairment of an existing contract. The original contract from 1986 did not contain Kaufman Language, and voting rights are substantive, rather than procedural. Without “Kaufman Language,” it is the law in Florida that the statute in effect at the time of the recording of the declaration is the operative statutory provisions for the condominium, at least as to substantive statutory issues. Procedural issues, such as the election procedures adopted by the Legislature in 1992, would apply regardless of whether or not Kaufman Language was contained in the Declaration.

This case is more complex than space here allows; what is clear from this decision is that in a multi-use condominium, the retroactive effect of Section 718.404 only applies when Kaufman Language is in place.

Jed L. Frankel is a board-certified civil trial lawyer, and a partner at Eisinger, Brown, Lewis, Frankel & Chaiet, P.A., in Hollywood, Florida. Frankel focuses his practice on both community associations and real estate law.

Pets as Support Animals

Frankel states “pet issues” tend to be some of the more daunting challenges faced by community associations. “Claims by unit owners for an emotional assistance animal, even in no-pet communities have risen dramatically,” he says.

Frankel speaks of one case in South Florida that has attracted attention for more than a year. This case is not fully settled in the court systems but there are numerous lessons for both residents and associations to understand.

In the case Frankel references, a resident requested his “no-pet” community overlook the policy and allow his support dog for emotional reasons. In addition to the “no-pet” policy the choice of the support dog, a pit–bull, was also an issue; pit-bulls are a restricted breed in Miami-Dade County, where the man lived. When the association refused the accommodation, the resident sued.

“In the present case, if the county ordinance were enforced,” Judge Jose Martinez ruled, “it would violate the FHA by permitting a discriminatory housing practice. In failing to grant plaintiff’s request to live with his assistance animal because of the dog’s alleged breed, the plaintiff is not afforded an equal opportunity to use and enjoy his dwelling.”

Michael Bender, a firm member and partner with Kaye Bender Rembaum, a community association law firm with clients throughout Florida, weighs in on the subject and attests to its relevance and importance to boards and associations. “We do an hour-long class at our firm each month about the Fair Housing Act and assistance animals—or emotional support animals—for boards and managers so they can know what’s going on,” he says.

Many communities that have pet restrictions or no-pet rules are reconsidering their policies with the fear of facing potential legal issues, according to Bender. “These are discrimination cases where the association is being charged with discrimination for refusing to allow the resident to keep their assistance animal,” he says. “Many no-pet communities are fighting against animals under the guise that they are not pets, but necessary to address a disability that affects a major life function, whether it be sleeping, eating, coping, or being able to go outside. They say having the animal allows the resident to function better in their community.”

What happens, though, when a neighbor sees his neighbor with a dog when he has been told policies that prohibit such? The potential for abuse of this system becomes clear. “When valid, I think it’s fantastic, if—per se—a pet can take the place of a medication for anxiety or depression,” continues Bender. “Unfortunately, the abuse is rampant; half the time the assistance animals are not valid.” That’s why Bender strongly recommends that a board or association always consult with legal counsel before deciding on whether or not to accept an assistance or emotional support animal into the community.

The case is set to continue while the resident presents proof of a disability, proof that the service animal will improve one or more of his major life activities, and proof that the support animal would not adversely impact the lives of other residents in the community.

In the case of Woodside Village v. Hertzmark, the court ruled that a tenant with mental illness could be evicted because the tenant did not walk his dog in the designated areas and failed to properly dispose of the dog's waste, thus creating problems for other homeowners.

“These cases illustrates the minefield an association must navigate when it receives a request for an accommodation under the Fair Housing Act,” states Frankel. “ Is even state law preempted by the Fair Housing Act? How might Judge Martinez’ analysis be applied in a no-pet building where the neighbor living next to the individual requesting a support animal is deathly allergic to same? Is that grounds to deny the request or must the association look into ‘reasonable accommodations’ for the neighbor as well?” he says.

Frankel and Krut agree that seeking guidance from legal counsel—sooner rather than later—when faced with a request for accommodation is always a wise course of action. Reviewing governing documents, declarations, covenants, and articles of incorporation on a regular basis, preferably with the association lawyer may save time, effort and valuable dollars. No one really wins when a case remains ongoing in the legal system for months, or even years. By taking a proactive, educational approach and reviewing benchmark cases, a board may finds itself better equipped to navigate the slippery slope of legality.     

Anne Childers is a freelance writer and a frequent contributor to The South Florida Cooperator. Associate Editor Blake French contributed to this article.

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  • We recently had an incident where the assistance animal caused substantive damage to our guest suites. We repeatedly asked for legal documentation under the guidelines of the FHA when we learned that the pet was resident in our community. We eventually received the documentation, but it was current, and did not show this supposed lifetime assistance that the dog in question supposedly provided on a daily basis. It was also strange that the animal did not accompany the resident while on a two week vacation. I agree that abuse of law is rampant, but what annoys me more are the hoops that people with bonafid disabilities have to jump through because of the abusers of this law. And there are no consequences for those who abuse the law, including physicians.