Gelfand & Arpe, P. A.

NOVEMBER 2000
MEMORANDUM TO CLIENTS

COVENANT ENFORCEMENT: CAN YOU REALLY REQUIRE COMPLIANCE?

What is one of a community association=s most important functions? The universal answer usually is preservation of aesthetic appearance. That purpose appears to be a function of all associations.

Certainly there are other matters of importance. Condominium and cooperative associations frequently must maintain buildings. Homeowners= associations frequently must maintain roads and canals. How the community looks is a matter of interest to all associations whatever their type.

A number of appellate decisions have addressed covenant enforcement. This Memorandum addresses a new and growing problem for many associations.

Many associations, directors, members and managers, assume that each association has authority to enforce its community=s covenants. While that conclusion may appear logical, that conclusion is not always correct. Just because a real property use restriction is recorded in a county=s public records does not mean that an association can enforce the restriction.

The danger of automatically assuming that an association has enforcement authority was demonstrated in a series of three decisions issued over the last year. The earliest decision was Isle of Catalina H.O.A., Inc. v. Pardee, 739 So. 2d 664 (Fla. 5th DCA 1999). The decision described how Ms. Pardee replaced the fence which surrounded her lot from the time she purchased the lot. The new and different fence was constructed without first obtaining the Isle of Catalina Homeowners Association=s (AICHA@) approval.

Ms. Pardee questioned whether the ICHA had authority to enforce the claimed fence approval requirements. When the community=s Declaration of Covenants was originally recorded in 1958, lot improvements had to be approved by the community=s developer or the developer=s successors. Amendments to the covenants had to be the developer or its successor absent unanimous unit owner approval.

Twenty-two years later, in 1980, a corporate association known as the ACRIA@ recorded covenants requiring owners to seek approval for improvements from the CRIA. The amendments did not have unanimous owner approval. The new CRIA covenants did not mention the ICHA. Twelve years thereafter, in 1992 the CRIA reincorporated as the ICHA.

The appellate court affirmed the denial of injunctive relief and invalidation of amendments. The Declaration, recorded in 1958, stated that it was binding for twenty-five years and could not be amended by anyone other than the developer or its successor absent unanimous unit owner approval. The 1980 amendments did not receive unanimous approval; thus, those amendments, purportedly adopted within the twenty-five year period were not enforceable. Alternatively, the CRIA was not the developer=s successor. In essence, there was not a direct chain, or link, of approval rights from the developer to the suing association.

The second decision, Hernandez v. Trout Creek Dev. Corp., 25 Fla. L. Weekly D437 (Fla. 2nd DCA February 16, 2000), dealt with a very unusual claim. Normally we read of owners who state that they do not desire to be in an association. In Hernandez, lot purchasers sued the developer for not creating a homeowners= association to enforce covenants!

Instead of creating a homeowners= association, the developer created the AMeadow Pointe Community Development District.@ The District, created pursuant to Florida Statutes Chapter 190 was allegedly endowed with authority to enforce the covenants. Thereafter, the developer created a voluntary homeowners= association purportedly assigning the voluntary association enforcement authority.

The appellate court=s analysis divided the dispute into two separate issues. First, the court noted that the Declaration of Covenants provided the developer the right to enforce the covenants. The developer assigned this right to the voluntary association. Thus, the voluntary association would have the right to enforce the covenants. Second, the court noted that a special taxing district created under Chapter 190 does not have authority by statute to enforce covenants.

The third and final decision was just recently released. In Cudjoe Gardens Prop. Owners Ass=n, Inc. v. Payne, 25 Fla. L. Weekly D2305 (Fla. 3rd DCA September 27, 2000), the Association in a very roundabout way was found to have authority to enforce covenants. The Paynes did not dispute that their home was constructed in violation of setback requirements. The Paynes defended their efforts noting that the Association did not have authority in the documents to enforce the covenants.

The appellate court noted that as lot owner, the Association could enforce the covenants as any other owner. Unlike most associations which do not own lots, because of Cudjoe Garden=s unique circumstances the Association was able to pull the proverbial Abunny out of the hat@ and enforce the covenants.

To the extent there is a Amoral to the story@ it is to ensure that the Association has authority to enforce covenants before action is taken. Recent legislative enactments such as '718.303(1) and '617.305(1), now '720.305(1) Fla. Stat. may provide authority for associations to enforce covenants; however, those statutes may be held to not retroactively apply to associations created before the statute was enacted. In that circumstance, associations will desire to be extra careful before filing suit.

CELLULAR TOWER ALERT

Cellular phones + location = association income? Many associations, particularly condominium associations in the right Alocation@ have been approached to provide leases or easements for the installation of cellular towers and antennas. These installations raise numerous issues. Issues include whether the compensation to be paid is appropriate, and what risks are created for the association and members. Other issues include the alteration of property and the approval necessary for the alteration. Many times the installer seeks advance consent to begin permitting. Associations are urged to carefully consider cellular telephone agreements before executing or making representations indicating any agreements.

FIRM NOTES

We hope that clients find the firm=s new font and layout more readable. With the acceptance of Times New Roman font, particularly in the appellate courts, most of the firm=s work will be in this new font.

Please note that the firm=s offices will be closed for the observance of Veteran=s Day, Friday, November 10, and for Thanksgiving Day and the Friday thereafter, November 23 and 24, 2000. We wish all of our clients a healthy holiday.

This information is provided for public information purposes only and is provided without obligation or fee. It is distributed to the firm's association clients to provide a general notice of recent legal changes. This information is not to be considered as legal advice. The changes in the law may not have been reviewed by Florida courts and may be subject to further challenge. Before taking any action you are urged to consult with counsel to ensure that your legal rights are protected.

8 2000 by Gelfand & Arpe, P.A.