STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF FLORIDA LAND SALES ) AND CONDOMINIUMS, )

)

Petitioner, )

)

vs. ) CASE NO. 80-836

) SUNTIDE CONDOMINIUM ASSOCIATION, ) INC., )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was held on the above matter by H. E. Smithers on July 14, 1980, at West Palm Beach, Florida. The Petitioner was represented by Lawrence A. Farese, and the Respondant by F. Shields McManus.

This cause was commenced by the filing of a Condominium Complaint Affidavit by John L. Murphy with Petitioner Division of Florida Land Sales and Condominiums (Petitioner or FLSC). Mr. Murphy charred that Respondent Suntide Condominium Association, Inc. was assessing for expenses for repair or maintenance of common elements at 1.25 percent per unit as provided in the Declaration of Condominium rather than according to the percentage of ownership as required by law. The Complaint requested the Division to institute a court action to reform the Declaration to comport with the law. Alternatively, Complainant suggested that the Division issue a cease and desist order so as to require the Respondent's Board to assess expenses for the common elements according to law. The Division took the latter course of action and requested this hearing before DOAH.

The issue is whether the Petitioner may require a change in the method the Respondent uses to assess for expenses involving the common elements.

The record consists of the Respondent's answers to interrogatories together with exhibits, Respondent's admissions, Petitioner's Exhibits 1-7, Respondent's Exhibits 1-9, and Proposed Orders. Petitioner presented the Complainant and a witness sponsoring various computations contained in Petitioner's Exhibits 3-6; Respondent presented the testimony of four other unit owners.

Proposed findings of the parties not included below were legal conclusions, irrelevant or immaterial.

FINDINGS OF FACT

1. In 1974 the developer of Suntide Condominiums commenced marketing its

   80 condominium units. The prospectus included the charter of the association (incorporated not for profit on October 22, 1974) and the proposed Declaration of Condominiums (executed June 24, 1975 and recorded July 30, 1975). These documents were given to purchasers at the time the contract to purchase was

   signed, with either party having the right to cancel the contract within 15 days. Two units were sold in the Spring of 1975, with closing occurring in August of that year. In the interim 711.14, Florida Statutes, 1973, was amended effective July 1, 1975, to change the method that may be used far assessing for common expenses from "according to the declaration" to "percent of ownership." Chapter 75-224, Laws of Florida, 1975. Subsequently all the units were sold and the control of the Association was transferred from the developer to the unit owners in March of 1977.

   
   

2. The declaration has always provided that expenses involving the common elements be prorated at 1.25 percent for each unit. However, the percent of ownership of the common elements is based on the size of the owner's unit and varies from .9508 percent to 1.68444 percent. Of the owners of the 80 units in the condominium, 49 (61.25 percent) own less than 1.25 percent of the common elements, and 31 (38.75 percent) own more than 1.25 percent. Seventy-five percent of the unit owners are required to vote for a change in the method of assessing common expenses. Association attempts to conform the declaration to the law have failed.

   
   

   CONCLUSIONS

   
   

3. The Petitioner in its show cause requests an order requiring the Respondent to cease and desist the present method of assessing common expenses and to change the method of assessing common expenses, and any other affirmative relief that might be appropriate; the request for imposition of a civil penalty was withdrawn at the conclusion of the hearing. Petitioner's enforcement powers are found in Section 718.501 Florida Statutes (1979), which reads in pertinent part:

   
   

   1. The Division ... in addition to ... Chapter 478 ... [I]n performing its duties... shall have the following powers and duties:

      (b) Notwithstanding any other remedies

      ... the division may institute enforcement proceedings in its own name against any ... association ... as follows:

      1. The division may issue cease and desist orders pursuant to Section 478.171.

      2. The division may bring an action in circuit court for declaratory relief, in- junctive relief, or restitution on behalf of a class of unit owners or lessees.

      
      

4. Respecting the cease and desist request, Section 478.171 [now found In Section 498.061, Florida Statutes (1979)] deals with the subject of: fraudulent practices in advertising, promoting or selling land; making substantial changes in registered subdivided lands without approval; or selling subdivided land which is not registered. There were no allegations of this type of impropriety in this case, therefore, cease and desist is not an appropriate remedy.

   
   

5. The only other recommendation that can be made is that the Division proceed in the Circuit Court as requested by the Complainant. See also Peck Plaza Condominium v. Division of Florida Land Sales and Condominiums, 371 So.2d 152 (1 DCA Fla. 1979)

It is therefore, RECOMMENDED:

That the petition of the Division of Florida Land Sales and Condominiums be dismissed for lack of jurisdiction.

DONE and ORDERED this 12th day of September, 1980, in Tallahassee, Florida.

HAROLD E. SMITHERS

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Lawrence A. Farese, Esquire Special Counsel

Department of Business Regulation 726 South Bronough Street

The Johns Building Tallahassee, Florida 32301

1. Shields McManus, Esquire River Oak Center

   401 Osceola Street Stuart, Florida 33494

   
   

   ================================================================= AGENCY FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA

   DIVISION OF ADMINISTRATIVE HEARINGS

   
   

   DIVISION OF FLORIDA LAND SALES AND CONDOMINIUMS,

   
   

   Petitioner,

   
   

   vs. CASE NO. 80-836

   
   

   SUNTIDE CONDOMINIUM ASSOCIATION, INC.,

   
   

   Respondent.

   /

   FINAL ORDER

   
   

   An administrative hearing was held on the above matter by H.E. Smithers on July 14, 1980, at West Palm Beach, Florida. The Petitioner was represented by Lawrence A. Farese, and the Respondent by F. Shields McManus.

   
   

   This cause was commenced by the filing of a Condominium Complaint Affidavit by John L. Murphy with Petitioner Division of Florida Land Sales and Condominiums (Petitioner or FLSC). Mr. Murphy charged that Respondent Suntide Condominium Association, Inc. was assessing for expenses for repair or maintenance of common elements at 1.25% per unit as provided in the Declaration of Condominium rather than according to the percentage of ownership as required by law. The Complaint requested the Division to institute a court action to reform the Declaration to comport with the law. Alternatively, Complainant suggested that the Division issue a cease and desist order so as to require the Respondent's Board to asess expenses for the common elements according to law.

   The Division took the latter course of action and requested this hearing before DOAH.

   
   

   The issue is whether the Petitioner may require a change in the method that Respondent uses to assess for expenses involving the common elements.

   
   

   The record consists of the Respondent's answers to interrogatories together with exhibits, Respondent's admissions, Petitioner's Exhibits 1-7, Respondent's Exhibits 1-9, and Proposed Orders. Petitioner presented the Complainant and a witness sponsoring various computations contained in Petitioner's Exhibits 3-6; Respondent presented the testimony of four other unit owners.

   
   

   Proposed findings of the parties not included below were considered by the hearing officer to be legal conclusions, irrelevant or immaterial.

   
   

   FINDINGS OF FACT

   
   

   In 1974 the developer of Suntide Condominiums commenced marketing its 80 condominium units. The prospectus included the charter of the association (incorporated not for profit on October 22, 1974) and the proposed Declaration of condominiums (executed June 24, 1975 and recorded July 30, 1975). These documents were given to purchasers at the time the contract to purchase was signed, with either party having the right to cancel the contract within 15 days. Two units were sold in the Spring of 1975, with closing occurring in August of that year. In the interim Section 711.14, Florida Statutes, 1973, was amended effective July 1, 1975, to change the method that may be used for assessing for common expenses from "according to the declaration" to "percent of ownership." Chapter 75-224, Laws of Florida, 1975. Subsequently all the units were sold and the control of the Association was transferred from the developer to the unit owners in March of 1977.

   
   

   The declaration has always provided that expenses involving the common elements be prorated at 1.25% for each unit. However, the percent of ownership of the common elements is based on the size of the owner's unit and varies from

   .0508% to 1.68444%. Of the owners of the 80 units in the condominium, 49 (61.25%) own less than 1.25% of the common elements, and 31 (38.75%) own more than 1.25%. Seventy-five percent of the unit owners are required to vote for a change in the method of assessing common expenses. Association attempts to conform the declaration to the law have failed.

   CONCLUSIONS OF LAW

   
   

   The Petitioner in its show cause requests that an order requiring the Respondent to cease and desist the present method of assessing common expenses, and any other affirmative relief that might be appropriate; the request for imposition of a civil penalty was withdrawn at the conclusion of the hearing.

   Petitioner's enforcement powers are found in Section 718.501, Florida Statutes (1979), which reads in pertinent part:

   
   

   1. The Division . . . in addition to . . . Chapter 478 . . . (I)n performing its duties

   . . . shall have the following powers and duties:

   * * *

   (b) Notwithstanding any other remedies

   . . . the division may institute enforcement proceedings in its own name against an . . . association . . . as follows:

   1. The division may issue cease and desist orders pursuant to Section 478.171.

   2. The division may bring an action in circuit court for declaratory relief, injunctive relief, or restitution on behalf of a class of unit owners or lessees.

   
   

   Florida's Land Sales Act sets forth the authority and procedure for issuing a Cease and Desist Order with Notice, as well as an Emergency Cease and Desist Order, under Chapter 718, Florida's Condominium Act.

   
   

   Section 478.171, Florida Statutes, now found in Section 498.051, Florida Statutes (1979) authorizes the Division, pursuant to that section, to " . . . issue an order requiring the person to cease and desist from the unlawful practice and take such affirmative action as in the judgment of the Division will carry out the purpose of this chapter."

   
   

   Pursuant to Section 718.115(2), Florida Statutes, the Suntide Condominium Association is required to assess common element expenses according to the precentage of unit ownership, as set forth in its Declaration.

   
   

   ORDER

   
   

   Based upon the findings of fact and the conclusions of law, the Director of the Division of Florida Land Sales and Condominiums hereby orders the Suntide Condominium Association to immediately cease and desist from any assessments for the repair or maintenance of common elements which are calculated in any manner other than by the percentage of unit ownership as contained in the Declaration, and required by Section 718.115(2), Florida Statutes.

   DONE AND ORDERED this 3rd day of October, 1980, in Tallahassee, Florida.

   
   

   1. JAMES KEARNEY Director

      Division of Florida Land Sales and Condominiums

      Department of Business Regulation State of Florida

      
      

      COPIES FURNISHED:

      
      

      Richard E. Gentry Staff Attorney

      Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

      
      

   2. Shields McManus, Esquire River Oak Center

401 Osceola Street Stuart, Florida 33494

Docket for Case No: 80-000836

Orders for Case No: 80-000836