STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF FLORIDA ) LAND SALES, CONDOMINIUMS AND ) MOBILE HOMES, )

)

Petitioner, )

)

vs. ) CASE NO. 88-2549

) JAMES BROWN AND BIANCA BROWN ) d/b/a CAREFREE COVE CLUB, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Don W. Davis, on September 8, 1988 in West Palm Beach, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Debra Roberts, Esquire

The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondents: Alan S. Zangen, Esquire

1601 Belvedere Road, Suite 112 West Palm Beach, Florida 33406

BACKGROUND

This matter began when Petitioner issued a Notice To Show Cause charging Respondents with certain violations of Chapter 723, Florida Statutes.

Respondents were alleged to have failed to give residents of the Carefree Cove Club, a mobile home park, a 90 day notice of reduction in services prior to locking the facility's clubhouse; to have assessed homeowners in the park for ad valorem taxes without proper disclosure; and to have arbitrarily increased lot rentals through the assessment to homeowners of ad valorem taxes on vacant property not within the park. Respondents requested a formal administrative hearing and this proceeding ensued.

At the final hearing, Petitioner presented testimony of four witnesses and three evidentiary exhibits. Respondent presented one evidentiary exhibit.

Based upon all of the evidence, including the demeanor and candor of the witnesses who testified, the following findings of fact are determined:

FINDINGS OF FACT

1. Respondents are James Brown and Bianca Brown, his wife. At all times pertinent to these proceedings, Respondents were owners of the mobile home park known as "Carefree Cove Club" located in Hypoluxo, Florida. They have owned the park since 1957.

   
   

2. On or about December 28, 1984, Respondents, as operators of the park, filed a prospectus with Petitioner as required by Section 723.011, Florida Statutes. Petitioner approved the prospectus on March 27, 1985. At that time,

   195 lots were being offered in the park for lease or rent. The number of lots and approximate sizes were set forth in the prospectus. The prospectus was delivered by Respondents to tenants shortly after notice of approval was received from Petitioner.

   
   

3. On or about June 5, 1986, Respondents, pursuant to Chapter 723, Florida Statutes, sent a notice of eviction to tenants residing in the park. The park took no new tenants and was virtually closed after January 1, 1987. Most of the tenants had voluntarily vacated the park with exception of four residents by December 1, 1987.

   
   

4. On December 16, 1987, Respondents forwarded notices to the remaining four tenants of an intent to impose "pass through" charges resulting from the park's increased real property taxes. Provision for "pass through" of such charges is made in the prospectus. The taxes which were the subject of the "pass through" were levied on three parcels of property belonging to Respondents. All of the parcels are contiguous. Two of the parcels are divided into lots and are a part of the park as described in the prospectus. The record is unclear as to whether the third parcel was completely or partially platted into lots, but it is established that this property, while not explicitly described in the prospectus, was used for recreational purposes by tenants and parking of recreational vehicles. Further, the property was landscaped and is found to be a part of the park.

   
   

5. Respondents' intention to pass the increase in property taxes on to the tenants was consistent with the prospectus and Respondents' previous practice in 1986, when a refund was given to park tenants as the result of a property tax reduction. Respondents' subsequently abandoned their intention, however, and no "pass through" charges were collected from the tenants. Currently, no mobile home tenants reside in the park.

   
   

6. Items, including real estate taxes, normally considered as "pass through" charges were customarily included in rental charges to tenants prior to June 4, 1984, as "operating expenses" and not otherwise denominated on rental documents. After the legislative enactment creating Chapter 723, Florida Statutes, Respondent prepared the prospectus which sets forth separate "pass through" charges.

   
   

7. Respondents experienced periodic episodes of vandalism of the facilities of the park as the number of residents decreased in 1987. The tenants maintained alternate residences in the northern part of the United States and none were in residence at the park in the summer of 1987, when Respondents locked the clubhouse to prevent vandalism of the facility. As the tenants returned, each of them were informed that a key and access to the clubhouse was available upon request. A written notice dated March 24, 1988, codifying this policy, was sent to club members by Respondents. Closure of the facility by Respondents was in accordance with the prospectus previously

   distributed to the tenants. The prospectus notes that the facility's hours are from 9:00 a.m. to 9:30 p.m., and that it may be closed earlier if there are no activities. Use of the facility for all activities and all meetings requires advance reservation and written approval of the club management.

   
   

8. It is the position of Petitioner that Section 723.002, Florida Statutes, requires the application of the provisions of Chapter 723 to Respondents' park although less than 10 lots were rented or available for rent at the time of Respondents' alleged offenses. Petitioner's policy is that mobile home parks operating under provisions of Chapter 723, Florida Statutes, and having 10 or more lots offered for rent or lease when the tenancy is created, continue to be governed under those statutory provisions as to that tenancy even when the total number of tenants becomes less than the statute's threshold of 10 tenancies. Petitioner's policy also consistently holds that tenancies created prior to the enactment of Chapter 723 in June of 1984, and consequently prior to the requirement of an approved prospectus, continue to be governed for the remainder of the term of that tenancy by the previous understanding or custom established by the rental agreement between tenant and landlord and applicable provisions of law existing at the inception of the agreement.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding, and the parties thereto, pursuant to subsection 120.57(1), Florida Statutes.

   
   

10. Petitioner has charged Respondents with a violation of Section 723.037(1), Florida Statutes, as a result of locking the park's clubhouse in October, 1987, without providing tenants with a 90 day advance notice of that action. The pertinent portion of that statute reads as follows:

    
    

    A park owner shall give written notice to each affected mobile home owner and the board of directors of the homeowners association, if one has been formed, at least 90 days prior to any increase in lot rental amount or reduction in services or utilities provided by the park owner or change in rules or regulations.

    
    

11. While Respondents did not give notice 90 days in advance to tenants of the park, none of the tenants alleged to have been affected offered testimony regarding a reduction in service or utilities as a result of the closure of the facility. Further, Respondents' action was taken in accordance with provisions of the prospectus authorizing closure in the absence of activities. The prospectus requires that the facility be open for use during certain hours, but use for any activity requires advance approval. The proof fails to establish that any tenant possessing such approval was denied use of the clubhouse during the hours set forth in the prospectus. Respondents are not guilty of this violation.

    
    

12. Petitioner also charges Respondents with a failure to disclose to tenants that property taxes would be passed on to them, a violation of Section 723.031(6), Florida Statutes. The basis for this charge is Respondents' notice dated December 16, 1987, to the four remaining tenants informing them that an increase in such taxes would be charged to them. Petitioner's position that the

    charges were not disclosed prior to establishment of any of the four tenancies was not supported by testimony of any tenant at hearing. While the record is devoid of any direct testimony as to when the tenancies were created, the prospectus disclosed the possibility of such "pass through" charges to tenants entering the park after the effective date of the prospectus in 1985, as required by the statute. Further, the testimony at hearing established that such amounts had been included as a matter of custom in rental charges for those tenants whose residence in the park began prior to enactment of Chapter 723 and Petitioner's approval of the prospectus. The 1986 tax refund to tenants notably illustrates the existence of such a custom. Also, the abandonment by Respondents of their intention to impose the additional charges effectively negates the effect of any possible lack of disclosure, regardless of whether the tenancy was governed by custom or a prospectus. Guilt of a technical violation of the statute's prohibition of a failure to disclose in the instant case requires proof that the rental arrangement for an existing tenancy created prior to enactment of Chapter 723, Florida Statutes, did not include such a provision or custom; or that the prospectus did not address the subject for an affected tenancy established after prospectus approval in 1985. Neither of these elements are established by the evidence. Respondents are not guilty of this violation.

    
    

13. Petitioner also charges Respondents with a violation of Section 723.031(5), Florida Statutes, on the basis that the December 16, 1987 notice constituted an arbitrary increase in the lot rental of each of the four tenants, because some of the property from which the tax increase inured is not within the park property and some of the property is used for recreational vehicles. The evidence does not establish that a rent increase actually occurred. Again, the abandonment of intention by Respondents to impose the increased charges failed to result in any rental increase. Therefore, in the absence of proof of such an increase, the issue of whether such an increase is violative of this statutory section no longer exists. Respondents are not guilty of this violation.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the charges set forth

in the Notice To Show Cause.

DONE AND ENTERED this 11th day of October, 1988, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of October, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2549

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties.

PETITIONER'S PROPOSED FINDINGS

1.-3. Addressed with the exception of the last sentence of finding number three, which is unnecessary to conclusion reached.

4.-5. Addressed.

1. Addressed in part, remainder unnecessary to result reached.

2. Addressed.

3. Addressed in part, remainder unnecessary to result.

4. Addressed.

10 Addressed.

RESPONDENTS' PROPOSED FINDINGS

Respondents' findings consisted of five unnumbered paragraphs. Numbers 1 through 5 have been assigned to those paragraphs and they are treated as follows:

1.-2. Addressed.

1. Addressed in part. Remainder unnecessary.

2. Addressed.

3. Addressed.

COPIES FURNISHED:

Debra Roberts, Esquire Department of Business Regulation

725 South Bronough Street Tallahassee, Florida 32399-1007

Alan S. Zangen, Esquire

1601 Belvedere Road, Suite 112 West Palm Beach, Florida 33406

Joseph A. Sole, Esquire General Counsel

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

E. James Kearney Director

Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Van B. Poole Secretary

Department of Business Regulation The Johns Building

725 South Bronough Street Tallahassee, Florida 32399-1000

Docket for Case No: 88-002549

Orders for Case No: 88-002549