Adrift in the Amendments Sea: Florida Courts Struggle for Logic and Consistency, Part II

Holiday Pines Property Owners Association, Inc. v. Wetherington was a court case that dealt with changing subdivision rules. The court said that any changes to the rules had to be reasonable and not completely change the original plan for the neighborhood. They didn’t agree with a change that forced everyone to join a homeowners’ association and turned the neighborhood into something like a condo complex. But they did approve a change that set up a group to review new building plans. The court also said that it didn’t matter if the developer or the homeowners wanted the change – if it wasn’t reasonable, it couldn’t happen. In the case of Richardson v. Deerwood Club, the developer closed the original entrance road to a development and moved it to a new location without following the rules in the restrictions. The court ruled that this change was not allowed because it did not fit with the general purposes and standards of the restrictions. The court also suggested that the rules for amendments made by lot owners might not have the same limitations. This decision was confusing and has not been widely used in other cases. In Granuzzo v. Willoughby Golf Club, the court said that changing the rules of the community to make everyone join the country club was not fair. They said that changes to the rules should be reasonable and not ruin the overall plan for the community.

In Klinow v. Island Court at Boca West, the court said that changes to the rules should also be reasonable, meaning they shouldn’t be random or unfair. In simple terms, the court ruled that changes to rules in a housing development cannot ruin the overall plan for how the community is supposed to be. They said that changes that unfairly affect property owners or make the rules inconsistent or unfair are not allowed. They also said that changes that benefit the property owner over the developer are not allowed. So, if a change to the rules does any of these things, it’s not allowed. The court reviewed a rule that transferred responsibility for maintaining a driveway and sidewalk from individual homeowners to the homeowners’ association. The court found this change to be reasonable and beneficial to the homeowners because it would create a more uniform and attractive community. However, the court did not address the potential impact on the relationship among the homeowners or the loss of individual control over their properties. Another case, Flescher v. Oak Run Associates, Ltd., also raised questions about the reasonableness of certain restrictions imposed by a developer. For the first time in Florida court history, the Flescher court used a guideline called the Restatement of the Law to decide on a change to the rules of a development. The guideline says that a developer can’t make a big change to the development without telling buyers about it first. The court said that the change in question didn’t really change the development itself, but it did change who had to pay for certain things. The court decided that it wasn’t fair for the developer to collect money for specific expenses and then use it for something else. So, the court said the developer had to use the extra money they collected for the things they said they would. The court’s decision in the Flescher case was confusing, but it basically said that a developer couldn’t change the rules in a way that would benefit themselves at the expense of the homeowners. The court didn’t really focus on whether the burden on the homeowners changed, but more on whether the change was fair. The court said the amendment was valid, but it couldn’t be applied retroactively. Overall, the decision could have been clearer and simpler. In a court case called Woodside Village, the Florida Supreme Court allowed a condominium association to make stricter rules for leasing out units, even for owners who bought their units before the new rules were made. This was different from a previous case called Holiday Pines, where the court said that making owners join an association went against their right to control their property. So, Woodside Village changed the way Florida courts usually decide on changes to subdivision rules. A court case from 1975 recognized that living in a condominium means giving up some freedom of choice because of shared facilities. This makes condominium living more restrictive compared to other types of housing. The court said that people who buy condos should know about these restrictions when they purchase their property. The court also said that as long as changes to the rules are made properly, they have to be followed by condo owners. However, if a change is unfair or against the law, it can be overturned. The court had to decide if condominium rules could be changed easily by the owners, or if there were limitations set by the law. The court said that changing the rules should be fairly easy, similar to how it is for subdivisions. Another court disagreed, saying that condos and subdivisions are different. But this argument is based on old and wrong ideas about what condos and subdivisions are like. Nowadays, they are more similar than different. In 1963, the legislature officially recognized condominiums as a type of real property ownership, allowing individual ownership of apartments in tall buildings with shared ownership of the structure and amenities. Subdivisions, or planned neighborhoods, also began to change in the 1970s with more rules and restrictions, and mandatory membership in associations with the power to collect fees and maintain shared amenities. This limited the independence of homeowners, making it harder to do what they wanted with their property. Real estate developers and lawyers found new ways to develop properties without having to follow strict condominium laws. They started using homeowners’ associations and zero-lot-line subdivisions to achieve the same goals. This made townhome developments and land condominiums look almost the same as regular condominiums and subdivisions. So, even though they looked different from the outside, they were all subject to the same laws. In simple terms, the court’s decision in Woodside Village was based on the fact that condominiums are created and regulated by state law. This means that the legislature has the power to decide the rules for changing the documents that control how a condominium is run. The court decided not to interfere with this because it’s the legislature’s job to make those rules, not the courts’. This applies to both residential and commercial condominiums. So, the main reason for the court’s decision in Woodside Village is that the law gives the legislature authority over condominiums, and the courts should respect that. The court decisions on changing subdivision rules in Florida are inconsistent. One solution could be to use a more flexible approach to validate changes as long as they are fair and not against the law. The supreme court could consider adopting this approach, but they have spent a lot of time developing the current rules, so it’s unlikely they will change.

Instead, they could adopt the rules from the Restatement (Third) of Property: Servitudes to make the rules for changing subdivision restrictions more coherent. This would also require changes to the laws for communities governed by F.S. Ch. 720.

Overall, adopting these new rules could help make the process for changing subdivision rules more clear and fair for everyone involved. In Florida, there are different rules for changing rules in housing communities. This can be confusing for lawyers and judges. The current rule is based on a decision called Flamingo Ranch, but this decision doesn’t make sense because a similar case was decided differently. It’s time for a new, clear rule for changing rules in housing communities. The Supreme Court probably won’t replace the reasonableness rule with the Woodside Village rule because they’ve put a lot of effort into the reasonableness rule. But they could clarify and update the reasonableness rule to apply to subdivisions better. This could be done by adopting standards from the Restatement of Property. Some cases have shown that certain rules regarding late fees may be considered unfair, but the excessive late fee probably wouldn’t ruin a development’s overall plan. The court found that the assessment amount for the community’s maintenance could change each year, but didn’t say it was tied to the Consumer Price Index. The developer could keep any extra money from the assessments without using it for future expenses. The court’s decision was based on previous cases and legal principles. The government has made laws about how developers can change the rules for subdivisions. The laws say that the changes have to be fair and can’t unfairly affect the people who already live there. There are also rules about changing the overall plan for the subdivision. These laws apply to all changes, not just the ones made by the developers. Before the 1963 Condominium Act in Florida, some common-law condominiums were created, and builders and developers wanted a law that would explicitly allow for this form of ownership. The law initially said that a condominium “may be created” instead of making it mandatory, to avoid affecting existing condominiums. A condominium is a form of real property ownership where each unit can be owned by one or more people, and each unit has a share in common areas. For example, two townhome developments on Longboat Key function similarly, even though one is governed by a condominium declaration and the other by a subdivision declaration. The lot owners in the subdivision live in close proximity to each other, just like the unit owners in the condominium. Both have similar regulations and association powers. Woodside Village is a condo complex where the rules can change. If the majority of owners don’t like a certain type of business, they can make a rule to ban it. This could affect a business owner who runs a bar in the complex. The law says that condo rules can be very specific and detailed. This article talks about laws that apply to homeowners in communities with rules and restrictions. It mentions a specific section of the law and how it applies to subdivisions and condominiums. The author is a lawyer who specializes in real estate and development. They thank someone for helping with research. This article was submitted by a group that focuses on real estate and law.

Source: https://www.floridabar.org/the-florida-bar-journal/adrift-in-the-amendments-sea-florida-courts-struggle-for-logic-and-consistency-part-ii/