STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-1832

) NARANJA LAKES Number 1 ASSOCIATION, )

d/b/a NARANJA LAKES Number 1, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on September 21, 1983, in Miami, Florida.

APPEARANCES

For Petitioner: David M. Maloney, Esquire

Department of Business Regulation Tallahassee, Florida

For Respondent: Jeffrey M. Feuer, Esquire

Miami, Florida

Petitioner filed a Notice to Show Cause seeking to enter a cease and desist order and/or impose civil penalties against Respondent. Respondent timely requested a formal hearing on the allegation contained within that Notice to Show Cause. Accordingly, the issues for determination are whether Respondent is guilty of the charges contained in that Notice to Show Cause and, if so, what disciplinary action should be taken, if any.

Petitioner presented the testimony of Jeffrey W. Batts, Larry Schiffer, and Robert B. McFeeters. Schiffer and McFeeters also testified on behalf of the Respondent. Additionally, Petitioner's exhibits numbered 1 through 6, Respondent's exhibits numbered 1 and 2, and Joint Exhibit numbered 1 were admitted in evidence.

Both parties submitted posthearing proposed findings of fact in the form of a proposed recommended order. To the extent that any proposed findings have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence, as having been irrelevant to the issues under consideration herein, or as constituting unsupported argument of counsel or conclusions of law.

FINDINGS OF FACT

1. Respondent is the condominium association of a portion of a residential condominium complex comprised of 450 units and encompassing approximately 800 acres of land.

   
   

2. On April 26, 1982, Respondent's Board of Directors approved the construction of a new parking area containing three parking spaces on a portion of the common-elements lawn and thereafter designated that new parking area as "limited common elements" reserved for use by the owners of the two condominium units for whose benefit it was approved. The parking area was constructed on May 12 and 13, 1982.

   
   

3. Two-thirds of the cost of construction was paid by the owners of the two units benefited. One-third of the cost of construction, $450, was paid by Respondent out of funds collected for common expenses through assessments of all unit owners.

   
   

4. Prior to construction, the Board's authorization of the construction was not ratified by the affirmative vote of a majority of the unit owners.

   
   

5. After Petitioner issued its Notice to Show Cause on May 9, 1983, (a year after the construction of the parking areas) Respondent, for the first time, sought the approval of its unit owners by sending them a newsletter and "Referendum" form on June 3, 1983.

   
   

6. The newsletter/referendum, however, did not request the unit owners to approve or ratify the construction of the parking area, the redesignation of common elements into limited common elements, or the expenditure of common funds for the benefit of an individual unit. Rather, it requested a vote on whether the parking area should be removed at the expense of all unit owners. Further, the form provided that disapproval of the expense involved in returning the parking area to common-elements property could be conveyed by simply not bothering to vote. Approximately 75 percent of the unit owners did not vote on the "referendum." The failure to vote (and the votes against the removal and additional expense) may well have been in response to Respondent's explanation of the issue, such as advising the unit owners that a requirement that the Board remove the parking area might mean that concrete slabs under "dumpsters" would be prohibited and that ". . . dog owners will possibly be required to carry a 'pooper scooper' when they walk their pet on common area."

   
   

7. Respondent's Declaration of Condominium provides that:

   
   

   There shall be no material alterations, door or color changes, enclosing of balconies, or substantial additions to the common elements, except the same are authorized by the Board of Directors, and ratified by the affirmative vote of a majority of the unit owners or as otherwise authorized herein. No unit owner shall block, hamper, or otherwise interfere with the common elements of the property to the operation thereof.

   
   

   Additionally, the approved parking areas for the development are those shown on diagrams attached to and incorporated in the Declaration of Condominium and are part of the recorded plat. Where the Declaration specifically grants authority

   over parking areas to the Board of Directors, it grants the Board discretion to assign parking spaces; nowhere does the Declaration authorize the Board to create parking spaces, pay for same with common funds, or convert common elements into personal parking spaces.

   
   

8. Up to the time of the formal hearing in this cause, Respondent's authorization of the construction of the new parking area and of the use of common funds and of common elements for that construction have never been approved or ratified by the affirmative vote of a majority of the unit owners, and the Board had made no attempt to obtain that approval.

   
   

9. Constructing a parking area where there had been community lawn space is a material alteration to the common elements.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes (1981).

    
    

11. Chapter 718, Florida Statutes, gives Petitioner jurisdiction to enforce and ensure compliance of residential condominium units with the Condominium Act. Section 718.501(1), Florida Statutes.

    
    

12. The Notice to Show Cause filed herein charges Respondent with violating 718.113(2), Florida Statutes, which provides that: "There shall be no material alteration or substantial additions to the common elements except in a manner provided in the declaration[,]" and Section 718.115, Florida Statutes, which provides that:

    
    

    1. Common expenses include the expenses of the operation, maintenance, repair, or replacement of the common elements, costs of carrying out the powers and duties of the association, and any other expenses

       designated as common expense by this chapter, the declaration, the documents creating the condominium, or the bylaws.

    2. Funds for the payment of common expenses shall be collected by assessments against

       unit owners in the proportions or percentages provided in the declaration. In a residential condominium, unit owners' shares of common expenses shall be in the same proportions as their ownership interest in the common elements.

    3. Common surplus is owned by unit owners in the same shares as their ownership interest in the common elements.

       
       

13. Petitioner has met its burden of proving that Respondent made a material alteration by converting a portion of the lawn (common elements) into a private parking area (limited common elements) without the approval of a majority of unit owners and by using common funds for construction which was not a common expense. The size of the parking area and the expense involved are not relevant, legally or logically. Likewise, Respondent's argument that the discretion to assign implies the discretion to create is without merit.

14. In its proposed recommended order, Petitioner has recommended that a civil penalty of $2,500 be imposed against Respondent and that Respondent be ordered to cease and desist from materially altering or substantially adding to the common elements of the condominium except in the manner provided for in its Declaration of Condominium. That recommendation is appropriate under the facts of this case; however, it falls short of dealing with the parking area which still exists and which has decreased the ownership interest of every unit in the common elements of the condominium. Accordingly, Respondent should be afforded a reasonable time in which to obtain approval of the construction of the parking area from the requisite number of unit owners, in accordance with its Declaration and subject to Petitioner's approval as to compliance with both that Declaration and the Condominium Act. Should Respondent fail to obtain approval within a reasonable time to be established by Petitioner, then Respondent should be required to remove the parking area and restore that portion of the common elements to its preconstruction appearance and usage.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered:

1. Finding Respondent guilty of the allegations contained in the Notice to Show Cause;

   
   

2. Imposing a civil penalty of $2,500 against Respondent to be paid by a date certain;

   
   

3. Ordering Respondent to cease and desist from materially altering or substantially adding to the common elements of the condominium in any manner other than as provided in its Declaration of Condominium;

   
   

4. Affording Respondent a reasonable time in which to obtain approval of the subject construction from the unit owners, subject to Petitioner's approval as to compliance with Respondent's Declaration of Condominium and the Condominium Act; and

   
   

5. Requiring the immediate removal of the subject parking area and the restoration of that space to its preconstruction appearance and usage if Respondent fails to obtain approval of the construction within a reasonable time from either the unit owners or from Petitioner.

DONE AND RECOMMENDED this 6th day of January 1984 in Tallahassee, Leon County, Florida.

LINDA M. RIGOT

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 6th day of January 1984.

COPIES FURNISHED:

David M. Maloney, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Jeffrey M. Feuer, Esquire 20466 South Dixie Highway Miami, Florida 33189

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

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION

DIVISION OF FLORIDA LAND SALES AND CONDOMINIUMS

DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES

AND CONDOMINIUMS,

Petitioner,

vs. DOAH CASE NO. 83-1832

DOCKET NO. 83098MVC

NARANJA LAKES NUMBER 1 ASSOCIATION, d/b/a NARANJA LAKES NUMBER 1,

Respondent.

/

FINAL ORDER

A formal hearing pursuant to Section 120.57(1), Florida Statutes, was conducted in this matter on September 21, 1983, in Miami, Florida before Hearing Officer Linda M. Rigot, the Hearing Officer assigned by the Division of Administrative Hearings. On January 6, 1984, the Respondent submitted "Exceptions to the Recommended Order and Exceptions to Findings of Fact." The undersigned, as Director of the Division of Florida Land Sales and Condominiums, hereby enters this Final Order.

1. The exceptions filed by Respondent are ruled on as follows:

   
   

   1. The Petitioner accepts the exceptions contained in paragraph 1 of the exceptions. Since Respondent states, however, that it will not contest the findings of fact that the construction of the parking area in question was a material alteration of the common elements, (see exception No. 3), whether the parking spaces in question were designated limited common elements or not is irrelevant.

      
      

   2. Exception No. 2 is not truly an exception because Respondent concedes that "paragraph 3 under Findings of Fact is apparently an accurate finding." In exception No. 2 Respondent simply states something that Respondent expects to happen in the future. The exception, therefore, need not be ruled upon.

      
      

   3. The Division accepts Respondent's exception No. 3 to the extent that it agrees that the size of the parking area and the expense involved may be relevant, legally or logically, to a determination of whether an alteration or addition to the common elements is material or substantial.

      
      

   4. The Division rejects exception No. 4. Respondent has been shown to have violated the Condominium Act as stated in the Recommended Order and the

   Division considers the civil penalty, which is in the statutory range for penalties, (see Section 718.501(1)(d)4., Florida Statutes) to be appropriate.

   
   

2. The Recommended Order of the Hearing Officer, attached, except to the extent inconsistent with paragraph 1 above, is accepted and incorporated herein.

   
   

3. Therefore Respondent is found to have violated the Condominium Act as alleged in the Notice to Show Cause; Respondent is given 15 days from today's date to remit the civil penalty of $2,500 to the Division, payable by certified check to the Division of Florida Land Sales and Condominiums Condominium Trust Fund; Respondent is ordered to cease and desist from materially altering or substantially adding to the common elements of the condominium in any manner other than as provided in the Declaration of Condominium; Respondent is given 90 days from the date of this order in which to obtain approval of the subject construction from the unit owners in compliance with Respondent's Declaration of Condominium and the Condominium Act and, absent such valid approval within 90 days of today's date, the parking area shall be removed and the space which it occupies shall be restored to its preconstruction appearance and usage.

DONE AND ORDERED this 28th day of February 1984.

F. J. KEARNEY, DIRECTOR Division of Florida Land Sales

and Condominiums

725 South Bronough Street Tallahassee, Florida 32301

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was furnished by U. S. Mail to ANTHONY A. KALLICHE, ESQUIRE, 9300 South Dadeland Boulevard, Suite 408, Miami, Florida 33156, this 28th day of February 1984.

Connie Campbell, Clerk

Docket for Case No: 83-001832

Orders for Case No: 83-001832