Construction defects plague many buildings in Florida, leading to lawsuits against developers and contractors. Seasoned developers have tried placing limits on their liability in a variety of ways, including inserting provisions in associations’ governing documents to limit associations’ and owners’ ability to bring a lawsuit against the developer. While developers have been creative in coming up with ways to limit liability exposure, this article focuses on what developers may not include in the governing documents that govern homeowner and condominium associations.

Governing Documents

To form a condominium or homeowners association, among other things, one must record a declaration in the respective county public records. Fla. Stat. § 718.104. “The declaration of condominium, which is the condominium’s ‘constitution,’ creates the condominium and ‘strictly governs the relationships among the condominium unit owners and the condominium association.’” Neuman, 861 So.2d at 496–97 (quoting Woodside Vill. Condo. Ass’n v. Jahren, 806 So.2d 452, 456 (Fla.2002)). The same applies to declarations for a homeowners association.

These declarations are binding documents and contain covenants, conditions, and restrictions for the community. Such covenants, conditions, and restrictions pertain to a range of topics including, but not limited to, whether pets are allowed; where to store garbage cans; regulation of TV antennas; and the operation of home businesses. The developer drafts these declarations and, while ambiguities are construed against the drafters,[1] developers are still given wide latitude in drafting declarations. Further, restrictions which may be found in a declaration of condominium are clothed with a very strong presumption of validity when challenged. See, e.g., Grove Isle Ass’n, Inc. v. Grove Isle Assocs., LLLP, 137 So. 3d 1081, 1091 (Fla. Dist. Ct. App. 2014) (citing Woodside Vill. Condo. Ass’n, 806 So.2d at 457).

Continue Reading Effectiveness of Suit Limitations in Community Associations’ Governing Documents

Recently, the Oregon Court of Appeals issued a decision that may have far reaching impacts for communities looking at whether a particular project constitutes a “capital improvement” under their Covenants, Conditions and Restrictions (more commonly known as CC&Rs). The case, known as Eagle-Air Estates Homeowners Ass’n, Inc. v. Haphey, 272 Or App 651 (2015), involved whether an assessment levied by a homeowners association to pay for certain attorney fees incurred in a prior litigation constitutes a “capital improvement,” and therefore a “special assessment” under the HOA’s CC&Rs.

Relying on Black’s Law Dictionary, the Court of Appeals found that the term capital improvement “is commonly understood to mean a permanent structural improvement to property.” (Emphasis added). The Court also cited to Webster’s Dictionary’s definition of “capital expenditure,” as further explanation of the phrase, noting that a “capital expenditure” refers to “long-term additions or betterments properly chargeable to a capital assets account.”

After analyzing the above two definitions, along with the language in the HOA’s CC&Rs regarding other types of specific capital improvements, the Court of Appeals held that “[a]n assessment to pay for attorney fees in litigation. . . is not the type of expense that an ordinary person would regard as a ‘capital improvement’.” As a result, the assessment did not constitute a “special assessment” under the HOA’s CC&Rs and was therefore not subject to any temporal limits as to how long the assessment may be issued. Continue Reading Just What Is a Capital Improvement and Does a Judgment Against an HOA Have Preclusive Effect on the HOA’S Directors and Members?

This article was previously published in WSCAI’s newsletter.

Neighbors will never cease finding ways to bother each other and to be bothered. The eternal struggle for community associations is determining when this bothersome behavior rises to the level of a violation of the Association’s rules and/or governing documents, which the board must enforce, and when the Association should let the neighbors handle it among themselves.

Most governing documents include a provision that says something like: “No owners shall engage in noxious or offensive activities, or do anything which may become an annoyance or a nuisance, or in any way interfere with the quiet enjoyment of other owners.” Words like “offensive,” “annoyance,” and “nuisance” are hard to define and can be dependent on the person perceiving the behavior. Regardless of the specific words of your Association’s provision, the goal is to limit the activity of one owner, which negatively impacts another owner. Accordingly, many Associations have resolutions or rules specifically addressing smoking, pets, and noise, which are the biggest areas of “nuisance” for most Associations. Continue Reading Nuisance on the Block