STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 82-2667

)

MARCO BAY ASSOCIATES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on 18 January 1983, at Naples, Florida.

APPEARANCES

For Petitioner: Helen C. Ellis, Esquire

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

For Respondent: Mark J. Woodward, Esquire

Post Office Box 1

Marco Island, Florida 33937

By Notice to Show Cause dated 14 September 1982, the Department of Business Regulation, Division of Florida Land Sales and Condominiums, Petitioner, seeks to enter a Cease and Desist Order and/or impose an administrative fine on Marco Bay Associates, Respondent. As grounds therefor it is alleged that Respondent made amendments to the condominium documents for Anglers Cove condominium and failed to deliver copies of these amendments to purchasers.

At the hearing the parties stipulated to the facts and seven exhibits were received into evidence. No testimony was presented.

FINDINGS OF FACT

1. The original developer of Anglers Cove condominium was Peel Properties, Anglers Cove of Marco, Inc., who filed the original condominium documents with Petitioner and entered into contracts with 124 purchasers. Before any of these contracts to purchase closed, Respondent purchased the condominium project.

   
   

2. Peel Properties had furnished to each of these purchasers a prospectus containing all of the documents required by Section 718.504, Florida Statutes. This prospectus was contained in a 115-page booklet.

3. At the time of the purchase Petitioner advised Respondent that a change of developer would require a refiling for the condominium (Exhibit 1). In compliance with this directive Respondent filed a new set of documents with Petitioner, which, after some changes, were approved by Petitioner.

   
   

4. Between the time of filing of the Peel Properties condominium documents and the filing by Respondent, several changes in the condominium laws had occurred and Respondent elected to file new documents rather than attempt to amend the existing documents.

   
   

5. After receiving approval from Petitioner, Respondent prepared a new prospectus containing 121 pages and distributed it to existing purchasers along with a letter stating that should the changes be material and adverse to them as purchasers, they would have 15 days in which to rescind and void the contract to purchase. Of the 124 to whom these documents were sent, 64 demanded rescission of their contracts. Numerous lawsuits for rescission have been filed, with the parties disputing the materiality of the changes to the condominium document. That is not an issue in these proceedings.

   
   

6. Petitioner contends that in addition to submitting the prospectus to the 124 purchasers with the letter advising them of their right to rescind the contract to purchase if the changes were material, Respondent should also have provided the purchasers with a detailed list outlining each change between the original condominium documents and the new documents. Respondent contends that by submitting the prospectus containing the new condominium documents to those purchasers who had received the original prospectus, it has complied with the disclosure requirements of the statutes and regulations.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

   
   

8. Section 718.503(2), Florida Statutes, provides in pertinent part:

   
   

   Until such time as the developer has furnished the documents listed below to a person who has entered into a contract to purchase a unit or lease it for more than 5 years, the contract may be voided by that person, entit- ling the person to a refund of any deposit together with interest thereon as provided in s. 718.202. The con- tract may be terminated by written notice from the proposed buyer or lessee delivered to the developer within 15 days after the buyer or lessee receives all of the documents required by this section. The docu- ments to be delivered to the prospec- tive buyer are the prospectus or

   disclosure statement with all exhibits, if the development is subject to the provisions of s. 718.504. . . .

9. There is no dispute that the 124 buyers received the prospectus containing all documents which had been approved by Petitioner.

   
   

10. Rule 7D-17.06, Florida Administrative Code, defines amendment to mean any change to documents and subsection (2) provides in part:

    
    

    (2) Every developer of a condominium who holds a unit for sale in a condomini- um shall submit to the Division any amend-

    ments in documents on file with the Division and deliver to the purchaser pursuant to Rule 7D-18.01, all amendments prior to closing. . .

    
    

11. Rule 7D-18.01, Florida Administrative Code, provides in pertinent part:

    
    

    (3) Prior to closing, a contract for the sale of a unit or a contract for the lease of a unit for an unexpired term of more than five years is voidable by the purchaser or lessee for a period of 15 days after receipt from the developer

    of any amendment which materially alters or modifies the offering in a manner that is adverse to the purchaser.

    (5) At the time amendments are deliv- ered to purchasers or lessees, pursuant to Rule 7D-17.06 the developer shall pro-

    vide to those who have not closed a written statement that if any of the above-ref- renced amendments materially alter or modify the offering in a manner which is adverse to the purchaser, the purchaser

    or lessee shall have a 15-day voidability period.

    
    

12. As noted above the statute requires the developer to submit the prospectus with all exhibits to purchasers. This was done by the original developer. When Respondent purchased the condominium project, it so advised Petitioner and complied with all directives from Petitioner, including the preparation of new condominium documents. All of these new documents were submitted to each purchaser with the required notice of voidability for material change. Neither the statute nor the rule requires the developer to do more.

The fact that the Circuit Court, during discovery proceedings, required Respondent to furnish to the purchasers a specific breakdown of each difference between the original documents and the new documents is not material or relevant to whether Respondent complied with the requirements of the statutes and regulations.

From the foregoing it is concluded that Respondent complied with the statutes and rules respecting notification of amendments to documents of condominium by providing these buyers with the documents containing all these amendments. It is therefore

RECOMMENDED that this Notice to Show Cause be dismissed. ENTERED this 11th day of March, 1983, at Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings 11th day of March, 1983.

COPIES FURNISHED:

Helen C. Ellis, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Mark J. Woodward, Esquire Post Office Box 1

Marco Island, Florida 33937

E. James Kearney, Director Division of Florida Land Sales

and Condominiums

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

Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 82-002667

Orders for Case No: 82-002667