STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 85-0278

)

67 BOCA DEL MAR ASSOCIATION, ) LTD., d/b/a LA RESIDENCE, A ) CONDOMINIUM, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, James E. Bradwell, held a public hearing in this case on February 6, 1987 in Fort Lauderdale, Florida. The parties were granted leave through February 16, 1987 to submit proposed recommended orders. Petitioner has submitted a proposed recommended order which is incorporated in this Recommended Order.

APPEARANCES

For Petitioner: Robin H. Conner, Esquire

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

For Respondent: James R. Rudd, Esquire1

HATCH & HASEY

Suite 203

6261 Northwest 6th Way

Fort Lauderdale, Florida 33309 ISSUE

The issue presented for decision herein is whether or not Respondent failed to furnish and provide certain documentation to the Division and to provide purchasers of condominiums with certain assurances as is more particularly set forth in the Notice to Show Cause filed herein.

FINDINGS OF FACT

Based upon the pleadings and responses thereto, an Order imposing sanctions for Respondent's failure to submit discovery as required by the undersigned dated October 15, 1986 and the entire record compiled herein, I hereby make the following relevant factual findings.

1. Respondent is the developer of a condominium known as La Residence. As Presently developed, La Residence consists of sixty units. La Residence is located in Boca Raton, Florida.

   
   

2. Respondent failed to meet the completion date for the subsequent phases of La Residence as is described in the declaration of condominium of La Residence.

   
   

3. According to the Declaration of Condominiums for La Residence, the scheduled dates listed for construction of the subsequent phases of La Residence were June, 1982 for phase II; February, 1983 for phase III, and November, 1983 for phase IV.

   
   

4. Amendments to the Declaration of Condominium of La Residence were recorded on June 30, 1981, March 22, 1982 and August 2, 1984. Respondent did not furnish the Division with copies of the above-referred amendments. Additionally, Respondent failed to provide purchasers of units within La Residence, copies of the above-referred amendments.

   
   

5. Respondent failed to hold annual members meeting for the years 1981, 1982, 1983 and 1984.

   
   

6. Respondent failed to call a members meeting to allow non-developer unit owners to elect a director after fifteen percent of the available units had been conveyed.

   
   

7. Respondent failed to mail to unit owners, copies of the proposed annual budget for the years 1982, 1983, and 1984.

   
   

8. Respondent failed to include the statutory reserves and the proposed annual budget as required for the years 1982, 1983 and 1984.

   
   

9. Respondent failed to fund reserve accounts for the years 1982, 1983 and 1984.

   
   

10. Respondent failed to provide unit owners with financial reports for fiscal years 1982, 1983 and 1984.

    
    

11. Respondent failed to pay the developer's share of assessments due to be paid by the developer after June 30, 1982.

    
    

12. The Declaration of Condominium for La Residence was recorded in the public records of Palm Beach County in 1981.

    
    

13. Control of the Condominium Association was turned over to non-developer unit owners on February 16, 1985.

    
    

14. No "turnover report" was prepared by a certified public accountant nor was such a report ever furnished to the Condominium Association by Respondent.

    
    

15. Respondent has not provided the Condominium Association copies of all canceled checks and bank statements for the time period dating from the recordation in 1981 to January 31 1984.

    
    

16. Respondent, or a representative on its behalf, did not appear at the hearing to refute or otherwise contest the alleged violations set forth in the Notice to Show Cause filed herein.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

18. The parties were duly noticed pursuant to the notice provisions of chapter 120, Florida Statutes.

    
    

19. The authority of the Petitioner is derived from chapter 718, Florida Statutes. Section 718.403(1), Florida Statutes, provides in pertinent part:

    
    

    (1) Notwithstanding the provision of S. 718.110, a developer may develop a condominium in phases, if the original declaration of condominiums submitting the initial phase to condominium ownership provides for . . . the time period . . . within which all phases must be added to the

    condominium and comply with the requirements of this section and at the end of which the right to add additional phases expires.

    
    

20. Respondent's failure to meet the completion date for phases II, III and IV constitutes proscribed conduct within the purview of section 718.403(1), Florida Statutes.

    
    

21. Rule 7D-17.06(2), Florida Administrative Code, provides as follows:

    
    

    Every developer of a condominium who holds a unit for sale in a condominium shall submit to the Division any amendments and documents or items on file with the Division and deliver to the purchaser pursuant to rule 7D-18.01, all amendments prior to closing, but in no event, later than 10 days after the amendment. When all units in the condominium have been conveyed, the developer shall so notify the Division in writing.

    
    

22. Based on Respondent's failure to furnish the Division copies of amendments and his failure to provide purchasers of units with copies of such amendments, Respondent engaged in proscribed conduct within the purview of rule 7D- 17.06(2), Florida Administrative Code.

    
    

23. Section 718.112(2)(d), Florida Statutes, provides in part as follows:

(D) Unit owner meeting.-

1. There shall be an annual meeting of the unit owners.

1. Respondent's failure to hold annual members meetings for the years 1981 through 1984 constitutes proscribed conduct within the purview of Section 718.112(2)(d), Florida Statutes.

   
   

2. Section 718.301, Florida Statutes provides in part as follows:

   
   

   1. When unit owners other than the developer own fifteen percent or more of the units of the condominium that will be operated ultimately by an 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 administration of the association.

   2. Within sixty days after the unit owners other than the developer are entitled to elect a member or members of the board of administration, the association shall call, and give not less than 30 day's or more than 40 day's notice of, a meeting of the unit owners to elect the members of the board of administration .

   
   

3. Respondent's failure to call a members' meeting to allow the non-developer owners to elect a director constitutes proscribed conduct within the purview of section 718.301, Florida Statutes.

   
   

4. Section 718.112(2)(f), Florida Statutes (1983) provides as follows:

   
   

   (f) The board of administration shall mail out a meeting notice and copies of the proposed annual budget of common expenses to the unit owners not less than 30 days prior to the meeting at which the budget will be considered.

   
   

5. This provision was amended in 1984 and renumbered as Section 718.112(2)(e), Florida Statutes (Supp. 1984) to provide as follows:

   
   

   (e) Budget meeting.- The Board of administration shall mail a meeting notice and copies . . . to the unit owner not less than 14 days prior to the meeting at which the budget will be considered .

   
   

6. Respondent's failure to mail to unit owners no less than 30 day's in advance of meetings at which the budget would be considered, proposed annual budgets for the years 1982, 1983 and 1984 constitutes proscribed conduct within the purview of Section 718.112(2)(f), Florida Statutes (1983) and 718.112(2)(e), Florida Statutes (Supp. 1984).

   
   

7. Based on Respondent's failure to include in its budget reserve accounts and funds for those statutory reserves for the years 1982, 1983 and 1984 constitutes proscribed conduct within the purview of Section 718.112(2)(k), Florida Statutes (1983)and 718.111(2)(f), Florida Statutes (Supp. 1984).

   
   

8. Respondent's failure to provide unit owners with financial reports for fiscal years 1982, 1983 and 1984 constitutes proscribed conduct within the purview of Section 718.111(13), Florida Statutes (Supp. 1984).

   
   

9. Respondent's failure to pay its share of assessments after June 30, 1982 constitutes proscribed conduct within the purview of Sections 718.116(8)(b), Florida Statutes (1983) and 718.116(8)(a)2, Florida Statutes (Supp. 1984).

   
   

10. Respondent's failure to submit a turnover review of La Residence to the association by a certified public accountant constitutes proscribed conduct within the purview of Section 718.301(4)(c), Florida Statutes (Supp 1984).

    
    

11. A condominium, such as La Residence, is strictly a creature of statute. Suntide Condominium Association Inc.

    v. Division of Florida Land Sales, Condominiums, Department of Business Regulation, 463 So. 2d 314 (Florida 1st DCA 1984), Rehearing denied 469 So. 2d 750 (Florida 1985). Accordingly, the developer is required to comply with Chapter 718, Florida Statutes, The Condominium Act.

    
    

12. Section 718.501(1)(d)4, Florida Statutes, entitles the Division to impose civil penalties against a developer for any violation of The Condominium Act. Such penalties may be

imposed not to exceed $5000 for each offense. Respondent has committed no less than 27 offenses, since each violation of the-statute constitutes a separate offense.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions, of a Law, it is hereby RECOMMENDED

1. Respondent pay to the Division, within thirty (30) days of issuance of the Division's Final Order, a civil penalty in the amount of ten thousand dollars ($10,000).

   
   

2. Respondent secure the services of an independent certified public accountant who shall review the condominium records and submit a turnover review in accordance with the provisions of Section 718.301(4)(c), Florida Statutes (1985) and rule 7B-23.03(4)(5) and (6), Florida Administrative Code.

   
   

3. Within thirty days of the Division's Final Order, it is recommended that the Division issue guidelines to Respondent to ensure that the condominium records are

reviewed in accordance with the above-referenced statutory and rule provisions. Provided that monies are found to be due and owing the association based on the review, Respondent shall be directed to remit such amounts to La Residence of Boca Del Mar Condominium Association.

Recommended this 23rd day of March, 1987, in Tallahassee, Florida.

JAMES E. BRADWELL, 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 23rd day of March, 1987.

ENDNOTE

1/ James Rudd appeared specially on behalf of Arthur Radice in Radice's capacity only as an individual.

COPIES FURNISHED:

Robin H. Conner, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Teymour Siahpoosh Ocean Ridge Yacht Club 600 N. Ocean Boulevard Ocean Ridge, Florida

Arthur Radice

1617 N. Flager Drive

West Palm Beach, Florida 33407

Ira C. Hatch, Jr.

67 Development Corporation

500 East Broward Blvd. Suite 1500

Ft. Lauderdale, Florida 33301

Docket for Case No: 85-000278

Orders for Case No: 85-000278