Judges: R. L. CALEEN, JR.
Agency: Department of Business and Professional Regulation
Latest Update: Jul. 30, 1984
Summary: Whether Respondent, the developer of Hidden Banyan Condominium, violated provisions of Chapter 718, Florida Statutes, and implementing rules by failing to timely call a meeting to allow unit owners, other than the developer, to elect one-third of the members of the board of directors; by failing to include reserve accounts in the condominium association's 1982 and 1983 budgets; by failing to call an annual meeting in 1981, 1982 and 1983; and by failing to pay its share of common expenses.Respond
Summary: Whether Respondent, the developer of Hidden Banyan Condominium, violated provisions of Chapter 718, Florida Statutes, and implementing rules by failing to timely call a meeting to allow unit owners, other than the developer, to elect one-third of the members of the board of directors; by failing to include reserve accounts in the condominium association's 1982 and 1983 budgets; by failing to call an annual meeting in 1981, 1982 and 1983; and by failing to pay its share of common expenses.Respondent did not call condominium association meeting and did not allow residents to elect one-third of board and did not pay share of fund. $3000 fine recommended.
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83-2775STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES AND ) CONDOMINIUMS, )
)
Petitioner, )
)
vs. ) CASE NO. 83-2775
) NINE-EIGHT CORPORATION, d/b/a ) HIDDEN BANYAN CONDOMINIUM, )
)
Respondent. )
)
RECOMMENDED ORDER
This case was heard by R. L. Caleen, Jr., Hearing Officer with the Division of Administrative Hearings, on February 2, 1984, in West Palm Beach, Florida.
APPEARANCES
For Petitioner: Sandra P. Stockwell, Esquire
Department of Business Regulation 725 S. Bronough Street Tallahassee, FL 32301
For Respondent: Patrick O'Hara, Esquire
701 U.S. Highway One
North Palm Beach, FL 33408
and
Kenneth B. Crenshaw, Esquire Plaza 10, Suite 200
2925 Tenth Avenue North Lake Worth, Florida 33461
ISSUE
Whether Respondent, the developer of Hidden Banyan Condominium, violated provisions of Chapter 718, Florida Statutes, and implementing rules by failing to timely call a meeting to allow unit owners, other than the developer, to elect one-third of the members of the board of directors; by failing to include reserve accounts in the condominium association's 1982 and 1983 budgets; by failing to call an annual meeting in 1981, 1982 and 1983; and by failing to pay its share of common expenses.
BACKGROUND
On August 5, 1983, the Department of Business Regulation, Division of Florida Land Sales and Condominiums ("Division"), issued a Notice to Show Cause charging Respondent Nine-Eight Corporation d/b/a Hidden Banyan Condominium ("Respondent") with four violations of Chapter 718, Florida Statutes, and
Division rules. Specifically, the notice alleged that Respondent "failed to call a meeting within sixty days of August 1, 1980 to allow unit owners other than the developer to elect one-third of the members of The Board of Directors, in violation of Section 718.301, Florida Statutes; ...failed to properly include reserve accounts in the budgets for 1982 and 1983, in violation of Section 718.112(2)(k), Florida Statutes, and Chapter 7D-18.05, Florida Administrative Code; ...failed to call an annual meeting in 1981, 1982 and 1983 in violation of Section 718.112(2)(d), Florida Statutes; [and]...failed to pay his [its] share of time and expenses in violation of Section 718.115(2) and Section 718.116(8), Florida Statutes."
Respondent requested a hearing on the charges and this case was then forwarded to the Division of Administrative Hearings for assignment of a Hearing Officer. Hearing was thereafter set for February 2, 1984.
At hearing, the Division presented the testimony of Edwin Seppala, Valerie Stephenson and Richard Coates. The Respondent presented the testimony of Samuel Seppala and Stephen Renza. Division Exhibit nos. 1 through 5 and Respondent Exhibit nos. 1 through 5, together with joint Exhibit no. 1, were received into evidence.
The parties filed proposed findings of fact by February 14, 1984. No transcript of hearing has been filed.
Based on the evidence presented, the following facts are determined:
FINDINGS OF FACT
Respondent is the developer of Hidden Banyan Condominium, a 24-unit condominium located in Lantana, Florida. This condominium was created, in law, on March 6, 1980, with the filing of a Declaration of Condominium, and construction was completed soon thereafter. Under the Declaration of Condominium, Hidden Banyan Condominium Association, Inc., a Florida not-for- profit corporation, was responsible for the operation of the condominium.
Respondent sold the first condominium units on April 18, 1980, May 15, 1980, July 1, 1980, and two units on August 1, 1980. Consequently on August 1, 1980, unit owners other than Respondent owned more than 15 percent of the condominium units.
Respondent controlled the condominium association until September 26, 1983, when a duly noticed condominium association meeting was held. Four non- developer unit owners were elected to the five seats on the governing board.
Sam Seppala, a contractor and president of the Respondent corporation, was formerly director of the condominium association's governing board. Although several informal meetings of unit owners were held, no duly noticed annual meeting was held in 1982 or in February, 1983. 1/ As Mr. Seppala explained, he was "too busy" and unaware of the February annual meeting date designated by the Declaration.
Respondent admits that, during the time it controlled the association, it failed to call a meeting of the unit owners within sixty days of August 1, 1980, to allow unit owners (other than the developer) to elect one-third of the membership of the governing board.
The budgets for the condominium association during 1982 and 1983, when the association was controlled by the developer, contained reserve accounts but did not separately designate or "line itemize" reserve accounts for roof replacement, building painting, and pavement resurfacing.
Both before and after July 1, 1980, 2/ - until August 5, 1983, when the Notice to Show Cause was issued - Respondent paid no monthly common expense assessments for the units which it owned. It did, however, pay all of the condominium association's budgetary deficits during that period, and no net amount is now owed by it to the association.
There is no evidence that the condominium association suffered any monetary loss from Respondent's failure to itemize reserve accounts for roof replacement, building painting, and pavement resurfacing, or from its failure to pay common expenses otherwise due for the units which it owns.
Beginning in March, 1982, the Division notified Respondent - on four separate occasions - of the alleged violations which later became the subject of its Notice to Show Cause, resulting in this proceeding. Respondent was given ample opportunity to voluntarily comply with the statute, yet did not do so until September 1, 1983.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1983).
The Division is charged with enforcing Chapter 718 and, to that end, is authorized to impose civil penalties for violations, not to exceed $5,000 for each offense. Section 718.501(1)(d) and (4), Florida Statutes.
The evidence demonstrates that Respondent violated Sections 718.301(1) and 718.301(2), Florida Statutes, which provide, in part:
When unit owners other than the developer own 15 percent or more or the units in a condo minium that will be operated ultimately by association, the unit owners other than the developer shall be entitled to elect no less than one-third of the members of the board
of administrative of the association....
* * *
Within sixty days after the unit owners other than the developer are entitled to elect a member or members of the board of administration of an association, the association shall call and give not less than thirty days or more than forty days notice of a meeting of the unit owners to elect the members of the board of adminis- tration.
Respondent did not call the association meeting and allow unit owners to elect at least one-third of the membership of the governing board until more than three years after the date required by the statute.
By failing to include reserve accounts for roof replacement, building painting and pavement resurfacing in the 1982 and 1983 condominium budgets, Respondent also violated Section 718.112 (2)(k) , Florida Statutes, which provides:
The proposed annual budget of common expenses shall be detailed and shall show the amounts budgeted by accounts and expenses classifi cations .... In addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include, but not be limited to, roof replacement, building painting and pavement resurfacing.
By failing to call an annual meeting in 1982, 3/ Respondent violated Section 718.112(2)(d) , Florida Statutes, which provides:
There shall be an annual meeting of the unit owners.... Written notice shall be given
to each unit owner and shall be posted in a conspicuous place on the condominium property at least 14 days prior to the annual meeting.
By failing to pay monthly assessments after July 1, 1980, Respondent violated Sections 718.115(2) and 718.116(8) which provide, in cart:
715.115(2)
Funds for the payment of common expenses shall be collected by assessments against unit owners in the proportion or percentages provided in the declaration....
* * *
715.116 (8)
No unit owner may be excused from the payment of his share of the common expenses of the condominium unless all unit owners are likewise proportionately excused from
payment, except as provided in subsection (6) [mortgage liability] and in the following cases: (a) if the declaration so provides, a developer or other person owning condo minium units offered for sale may be excused from the payment of the share of the common expenses and assessments related to those units for a stated period of time subsequent to the recording of the declaration of condo minium. The period must terminate
no later than the first day of the fourth calendar month following the month in which the closing of the purchase and sale of the first condominium unit occurs. However, the developer must pay the portion of common expenses incurred during that period which exceed the amount accessed against other unit owners.
Penalty. For more than three years, Respondent was dilatory in providing other unit owners an opportunity to elect some or all of the membership of the condominium association's governing board. This extended failure to comply with the statute has not been satisfactorily excused or explained by Respondent. Accordingly, it is recommended that a civil penalty of
$3,000 be imposed for this statutory violation, in combination with the other violations of a less serious nature.
The parties' proposed findings of fact are adopted to the extent they are incorporated in this Recommended Order. Otherwise, they are rejected as unsupported by the evidence or unnecessary to resolution of the issued presented.
RECOMMENDATION
Based on the foregoing, it is RECOMMENDED:
That respondent be fined $3000 for multiple violations of Ch. 718, Florida Statutes.
DONE and ENTERED this 5th day of June, 1984, in Tallahassee, Florida.
R. L. CALEEN, JR. 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 this 5th day of June, 1984.
ENDNOTES
1/ Article III of the Declaration of Condominium designated the first Tuesday in February of each year as the date for the annual meeting of the condominium unit owners.
2/ This is the first day of the fourth month after the recording of the Declaration. After this date, Article XXVIII of the Declaration no longer allows the developer to be excused from paying common maintenance expenses otherwise due for the units which it owns.
3/ The alleged failure to hold an annual meeting in 1981 was not proven.
COPIES FURNISHED:
Sandra P. Stockwell, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Patrick O'Hara, Esquire 701 U.S. Highway One
North Palm Beach, Florida 33408
Kenneth B. Crenshaw, Esquire Plaza 10, Suite 200
2925 Tenth Avenue North Lake Worth, Florida 33461
Gary Rutledge, Secretary The Johns Building
725 South Bronough Street Tallahassee, Florida 32301
E. James Kearney, Director Department of Business Regulation Division of Florida Land Sales and
Condominiums
The Johns Building
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. CASE NO. 83-2775
DOCKET NO. 83159MVC
NINE EIGHT CORPORATION,
d/b/a HIDDEN BANYAN CONDOMINIUM,
Respondent.
/
FINAL ORDER
This cause is before the Division on recommended order of the hearing officer, R. L. Caleen, Jr., and no written exceptions to the recommended order being received within the time allowed the Division finds:
FINDINGS OF FACT
Respondent is the developer of Hidden Banyan Condominium, a 24 unit condominium located in Lantana, Florida. This condominium was created in law on March 6, 1980 with the filing of a declaration of condominium and construction was completed soon thereafter. Under the declaration of condominium, Hidden Banyan Condominium Association, Inc., a Florida not for profit corporation was responsible for the operation of the condominium.
Respondent sold the first condominium units on April 18, 1980, May 15, 1980, July 1, 1980, and two units on August 1, 1980. Consequently, on August 1, 1980, unit owners other than the Respondent owned more than 15 percent of the condominium units.
Respondent controlled the condominium association until September 26, 1983 when a duly noticed condominium association meeting was held. Four non- developer unit owners were erected to the five seats on the governing board.
Sam Seppala, a contractor and president of the Respondent corporation, was formerly director of the condominium association's governing board. Although several informal meetings of unit owners were held, no duly noticed annual meeting was held in 1982 or in February, 1983. Article III of the declaration of condominium designated the first Tuesday in February of each year as the date for the annual meeting of the condominium unit owners. As Mr. Seppala explained, he was "too busy" and unaware of the February annual meeting date designated by the declaration.
Respondent admits that during the time it controlled the association it failed to call any meeting of the unit owners within 60 days of August 1, 1980 to allow unit owners (other than the developer) to elect 1/3 of the membership of the governing board.
The budgets for the condominium association during 1982 and 1983 when the association was controlled by the developer contained reserve accounts but did not separately designate or "line itemize" reserve accounts for roof replacement, building painting and pavement resurfacing.
Both before and after July 1, 1980, until August 5, 1983 when the Notice to Show Cause was issued Respondent paid no monthly common expense assessments for the units which it owned. July 1, 1980 is the first day of the fourth month after the recording of the declaration. After this date, article XXVIII of the declaration no longer allows the developer to be excused from paying common maintenance expenses otherwise due for the units which it owns. It did however pay all of the condominium association's budgetary deficits during that period. No net amount is now owed by it to the association.
There is no evidence that the condominium association suffered any monetary loss from Respondent's failure to itemize reserve accounts for roof replacement, building painting and pavement resurfacing or from its failure to pay common expenses otherwise due for the units which it owns.
Beginning in March 1982 the Division notified Respondent - on four separate occasions - of the alleged violations which later became the subject of its Notice to Show Cause resulting in this proceeding. Respondent was given ample opportunity to voluntarily comply with the statute yet did not do so until September 1, 1983.
From the foregoing, the Division concludes:
CONCLUSIONS OF LAW
The Division of Administrative Hearings had jurisdiction over the parties and the subject matter of the proceedings held before it. Section 120.57(1), Florida Statutes (1983).
The Division of Florida Land Sales and Condominiums is charged with enforcing Chapter 718 and to that end is authorized to impose civil penalties for violations not to exceed $5,000.00 for each offense. Section 718.501(1)(d) and (4), Florida Statutes.
The evidence demonstrates that Respondent violated Section 718.301(1) and 718.301(2), Florida Statutes, which provide in part:
When unit owners other than the developer own 15 percent or more of the units in a condominium that will be operated ultimately by the association, the unit owners other than the developer shall
be entitled to elect no less than 1/3 of the members of the board of adminis- tration of the association....
* * *
Within 60 days after the unit owners other than the developer are entitled to elect a member or members of the board of administration of an association the association shall call and give not less than 30 days or more than 40 days notice of a meeting of the unit owners to elect
the members of the board of administration.
Respondent did not call the association meeting and allow unit owners to elect at least 1/3 of the membership of the governing board until more than 3 years after the date required by statute.
By failing to include reserve accounts for roof replacement, building painting and pavement resurfacing in the 1982 and 1983 condominium budgets Respondent also violated Section 718.112 (2)(k) Florida Statutes which provides:
The proposed annual budget of common expenses shall be detailed and shall show the amounts budgeted by accounts and expenses classifications. In
addition to annual operating expenses, the budget shall include reserve accounts for capital expenditures and deferred maintenance. These accounts shall include but not be limited to
roof replacement, building painting and pavement resurfacing.
By failing to call an annual meeting in 1982, Respondent violated Section 718.112(2)(d), Florida Statutes, which provides:
There shall be an annual meeting of the unit owners.... Written notice shall be given to each unit owner and shall be posted in a conspicuous place on the condominium property at least 14 days prior to the annual meeting.
The alleged failure to hold an annual meeting in 1981 was not proven.
By failing to pay monthly assessments after July 1, 1980, Respondent violated Section 718.115(2) and 718.116(8) which provide in part:
Section 718.115(2)
Funds for the payment of common expenses shall be collected by assessments against unit owners in the proportion or percen- tages provided in the declaration....
* * * Section 718.116(8)
No unit owner may be excused from the payment of his share of common expenses of a condominium unless all unit owners are likewise proportionately excused from payment except as provided in ss.(6) [mortgage liability] and in the following case: (a) if the declara tion so provides, a developer of other person owning condominium units offered for sale may be excused from the payment of the share of the common expenses and assessments related to those units for
a stated period of time subsequent to the recording of the declaration of condo minium. The period must terminate no later than the first day of the fourth calendar month following the month in which the closing of the purchase and
sale of the first condominium unit occurs. However, the developer must pay the por tion of common expenses incurred during that period which exceed the amount assessed against other unit owners.
For more than three years Respondent was dilatory in providing other unit owners an opportunity to elect some or all of the membership of the condominium association's governing board. This extended failure to comply with the statute has not been satisfactorily excused or explained by Respondent.
The proposed findings of fact are adopted to the extent they are incorporated herein, otherwise they are rejected as unsupported by the evidence or unnecessary to the resolution of the issues presented.
It is therefore
ORDERED AND ADJUDGED that Respondent pay a civil penalty of $3,000.00 for its violations of Chapter 718, Florida statutes.
DONE AND ORDERED this 26th day of July, 1984, in Tallahassee, Florida.
E. JAMES KEARNEY, DIRECTOR Division of Florida Land Sales and Condominium
725 South Bronough Street Tallahassee, Florida 32301
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the fore- going has been furnished by U.S. Mail to: SANDRA P. STOCKWELL, STAFF ATTORNEY, Department of Business Regulation, 725 South Bronough Street, Tallahassee, Florida 32301 and PATRICK O'HARA, 701 U.S. Highway 1, North Palm Beach, Florida 33408; KENNETH
B. CRENSHAW, Plaza 10, Suite 200, 2925 Tenth Avenue North, Lake Worth, Florida 33461; and R. L. CALEEN, JR., HEARING OFFICER, Division of Administrative Hearings, The Oakland Building, 2009 Apalachee Parkway, Tallahassee, Florida 32301, this 26th day of July, 1984.
CONNIE B. CAMBELL, CLERK
Docket for Case No: 83-002775
Orders for Case No: 83-002775
| Issue Date |
Document |
Summary |
|
Jul. 26, 1984 |
Agency Final Order
|
|
|
Jun. 05, 1984 |
Recommended Order
|
Respondent did not call condominium association meeting and did not allow residents to elect one-third of board and did not pay share of fund. $3000 fine recommended.
|
