What do you do if your community association passes an assessment which you know is going to be used for something wrong? Do you think you can withhold payment of the assessment? Think again.

In Gerecitano v. Barrwood Homeowners Association, Inc., 29 Fla. L. Weekly D1909 (Fla. 4^th DCA, August 18, 2004), a Florida appellate court recently held a homeowner could not refuse to pay a validly passed assessment even if the assessment was for an improper purpose. Barrwood Homeowners Association increased its monthly assessment at an annual membership meeting by $10.00 per month per unit, in part, to pay salaries to Barrwood’s officers. A homeowner, who refused to pay the increased assessment, underpaid his monthly assessments by $10.00 per month. The association sued the homeowner to foreclose its lien.

The homeowner argued the increased assessment was not enforceable because the assessment was for an improper purpose pursuant to Fla. Stat. §468.432. Section 468.432 requires community association managers to be licensed. Community association management is defined as any practice "requiring substantial specialized knowledge, judgment, and managerial skill when done for remuneration." The trial court agreed with the homeowner and held that the assessment was improper; thus, the homeowner did not have to pay the increased assessment.

On appeal, the court explained that the statute’s purpose was to provide for discipline and regulation of community association management. The statute did not grant private enforcement rights to individual unit owners or allow owners to refuse to pay a validly adopted assessment based upon a violation of the statute. "While persons violating these statutes may be subject to disciplinary proceedings or criminal sanctions, there is nothing in the statute to allow a violation of the statute to be a defense to an otherwise lawful assessment," the court wrote.

This decision is important because it points out that even if an association levies an assessment for improper purposes, the owner must still pay the assessment. It should be noted, however, this does not prevent an owner from challenging the assessment as procedurally improper. In other words, an owner can raise the argument that the assessment was not in compliance with the governing documents or for a purpose not allowed by the documents. The owner may also bring claims against the directors if the directors intentionally undertook wrongful conduct.

COVENANTS: DEED RESTRICTIONS CANNOT BE CANCELED TO ALLOW A MEDICAL BUILDING

What happens if you purchase a lot in a community with deed restrictions but you want to build something different? You may try to claim the area surrounding your lot has changed substantially to justify your change. However, eliminating the restrictions after you obtain title may prove to be a difficult task.

A recent Florida appellate court decision ruled that deed restrictions on lots purchased by a doctor to build a medical building could not be voided. In Marco Island Civic Association, Inc. v. Mazzino, 29 Fla. L. Weekly D1964 (Fla. 2^nd DCA, August 27, 2004), a doctor purchased three lots in a subdivision bordered by an office building to the west, a day care center to the east and residential lots to the rear. The deeds restricted the development of the lots to one detached single-family dwelling. The doctor filed a declaratory action seeking to void the deed restrictions on the ground the surrounding area had become commercialized.

Several nearby homeowners opposed the action. They argued that the character of the subdivision had increased rather than decreased because more homes had been built in the subdivision after the doctor purchased his lots. The homeowner located immediately to the rear of the existing medical center testified that another medical building would further deter potential purchasers of his home. Despite this evidence, the trial court concluded there had been many changes in the character of the surrounding neighborhood that materially affected the restricted land. The trial court decided to cancel the restrictive covenants on the doctor’s lots to allow him to build and operate his medical building.

The bottom line is, if you are purchasing property, know what restrictions are on the property before you buy. Unless you can establish that enforcement of a deed restriction would no longer benefit the community, a court is unlikely to cancel restrictive covenants.

In observance of Veteran’s Day, the firms’s offices will be closed Thursday, November 11, 2004 and in observance of Thanksgiving, the firm’s offices will be closed Thursday, November 25 and Friday, November 26, 2004.

Happy Thanksgiving!!!!