Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the pleadings on file, the following relevant facts are found: In the October 1, 1982 edition of the Florida Administrative Weekly, Volume 8, No. 39 at page 2685, notice was published of the respondent's proposed amendment of Rule 12A-1.61, entitled "Rental of Living Quarters, Sleeping or Housekeeping Accommodations." This notice contained the following language: "IF REQUESTED, A HEARING WILL BE HELD AT: TIME AND DATE: 9:00 a.m., October 22, 1982 PLACE: New Capitol, Lower Level" By letter dated October 7, 1982, the respondent received a request for a hearing and notification of an intent to appear at the hearing scheduled for 9:00 a.m. on October 22, 1982, for the purpose of protesting the proposed change in Rule 12A-1.61. This letter was not written by or on behalf of any of the petitioners in this proceeding. The respondent did not acknowledge that it received this request, nor did it schedule or hold the public hearing on October 22, 1982. On October 18 or 19, 1982, the petitioners in this proceeding filed with the respondent a "petition to convene separate proceeding pursuant to 120.54(16), Florida Statutes." Among other allegations, this petition states that: "3. Petitioners are particularly affected by the proposed rule and cannot adequately protect those interests merely by appearing at a public hearing. Petitioners intend to present extensive testimony from their own witnesses and from the staff of DOR. Requiring Petitioners to proceed at a hearing open to the public would so disrupt, hamper and frustrate Petitioners' presentation so as to unfairly restrain Petitioners' ability to adequately oppose adoption of the proposed rule. Petitioners must be afforded an individual proceeding where they would have complete and uninterrupted access to the staff of DOR and be able to present their own witnesses in an adversary-type proceeding, which cannot be done at a standard rule hearing. Only in this manner will Petitioners be afforded a fair hearing on the proposed rule. WHEREFORE Petitioners respectfully request that DOR suspend its rule- making proceedings and convene a separate proceeding under the pro- visions of Section 120.57." The respondent filed a Motion to Dismiss the petition to convene a separate proceeding pursuant to Section 120.54(16) on or about October 25, 1982. In the October 29, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 43, at page 2976, the following announcement appears: "The Department of Revenue announces that the hearing scheduled for October 22, 1982 on Rule 12A-1.61--Rental of Living Quarters, Sleeping or Housekeeping Accommodations, has been deferred for one month. Notice of this Proposed Rule was given in the Florida Administrative Weekly Vol. 8, No. 39, dated October 1, 1982, on pages 2686-2689." By "Final Order Denying Rule-Making Hearing and Draw-out Proceeding" dated November 8, 1982, nunc pro tunc to November 3, 1982, the respondent denied the petitioners' requests for a Section 120.54(3) and a Section 120.54(16) hearing. It was concluded that the requests were filed beyond 14 days from October 1, 1982, the date upon which notice of the proposed rule was published, and thus were untimely. It was found that since no timely request for a Section 120.54(3) hearing had been received by the respondent (a fact which the respondent now admits was erroneous), the respondent was not required to schedule such a hearing and, indeed, had not exercised its option to schedule such a hearing. Therefore, the respondent concluded that there existed no rulemaking proceeding from which to "draw-out" and the petition for a Section 120.54(16) proceeding was therefore moot. No reference was made in the respondent's order to the announcement which had appeared in the October 29, 1982, Florida Administrative Weekly that the October 22, 1982, hearing on Rule 12A-1.61 had been deferred for one month. The respondent's Order also concluded that the request for a draw-out proceeding, even had it been timely filed, was fatally defective for its failure to affirmatively demonstrate that a Section 120.54(3) rulemaking proceeding would not provide adequate opportunity to protect the petitioners' substantial interest. On November 9, 1982, the Governor and Cabinet adopted challenged Rule 12A-1.61, 1/ after receiving comments from the petitioners and counsel for the petitioners in this case. The petitioners received notice that the Governor and Cabinet would take up the proposed rule on November 9, 1982, by way of a telephone call received approximately 24 hours before November ninth. No notice was published in the Florida Administrative Weekly that a public meeting would be held by the Department of Revenue on November 9, 1982, which was the second Tuesday of the month. Notices did appear in the October 8, October 22, and November 5, 1982 editions of the Florida Administrative Weekly that public meetings would be held respectively on October 22, November 3 and November 16, 1982. These notices state that the "Department of Revenue will act on matters duly presented on its Agenda, which may include approval of rules" and other matters. The rules which govern the organization and administration of the Department of Revenue provide that regular public meetings of the Governor and Cabinet to transact the business of the Department of Revenue shall be on the first and third Tuesdays of each month or at such other place or time as may be designated, and that a standard notice of the meeting must be published in the Florida Administrative Weekly at least seven (7) days in advance. Rule 12-1.03, Florida Administrative Code. Any agenda item "deferred must be re-agendaed for the next regularly scheduled meeting of the Governor and Cabinet unless a longer period of deferment is approved by a majority vote of the Governor and Cabinet." Rule 12-1.06, Florida Administrative Code. In summary form, the challenged rule provides, inter alia, that individual condominium units are considered, with certain exceptions, taxable transient rental facilities if rented for periods of less than six months in continuous duration. The rule purports to make owners and/or rental agents for owners of individually-owned condominium units liable for the collection and payment of the applicable sales tax due on the rental. The petitioners in this proceeding are owners and/or rental brokers or agents for owners of individually-owned condominium units in Sarasota, Florida. G & B Properties, Inc. and Sarasota Surf Vacation Rentals, Inc. each had over $1 million in gross rental revenues last year. Many, if not most, of their present leases and rental contracts were entered into prior to the effective date of the challenged rule and the five percent sales, or transient rental, tax was not incorporated into those rental contract terms. The challenged rule has or will cause certain changes in the operations of these petitioners. Additional staff and overtime work are required to notify lessees of the newly imposed tax. New bookkeeping materials are required to account for and handle the tax, and supplies on-hand can no longer be utilized. One real estate agent estimated the expense of changing his bookkeeping system to be $1,500. This agent also opined that a considerable block of renters has been lost due to the increased five percent charge and change in contract terms, and that there has been a loss of goodwill between himself, as a rental agent, and condominium owners and tenants who have entered into lease agreements in years past without the imposition of the tax. Prior to the adoption of the challenged rule, the respondent's rules did not address individual condominium units and a transient rental tax on such units was not collected from tenants, owners or rental agents by the Department of Revenue. The "summary of the estimate of economic impact of the rule" contained in the notice of the amendment of Rule 12A-1.61 appearing in the October 1, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 39, page 2686, provides as follows: "None. The proposal contains amendments to existing rules and is predicated upon legislation enacted. The fiscal impact occurred upon the amendment to 212.03, F.S. by Chapter 97-359, Laws of Florida." The actual Economic Impact Statement prepared for the challenged amendment recites that the cost to the respondent of implementing the amendment is estimated at $15,122, and the "amount of paperwork is substantial." For the "estimated cost or economic benefit to persons directly affected by the proposed action," the Economic Impact Statement notes that the Revenue Estimating Conference has identified the revenue loss as $2,702,000. It lists those classes of persons (tenants) exempted from the tax as persons benefiting from the rule, and further states that the revenue loss of $2,702,000 will be offset by about $200,000 resulting from the taxable status of certain condominium rentals. The Economic Impact Statement provides that the rule "will not place any business at a competitive disadvantage, nor will it have any impact on the open market for employment." In its "statement of data and method used in calculating estimates," the Economic Impact Statement sets forth the basis for the $15,122 agency cost of promulgating and implementing the proposed rule. It then states that the "revenue impact is based on Revenue Estimating Conference consensus estimates." Neither the "Revenue Estimating Conference," its "consensus estimates" nor the basis or methodology utilized in its figures are further identified or explained in the respondent's Economic Impact Statement. According to the respondent's Director of Research, Planning and Budgeting, the Revenue Estimating Conference is an informal body under the Governor's office consisting of the State Economist and two legislative staff directors whose purpose is to develop revenue forecasts, impacts and estimates in a non-political environment. The figures utilized in the Economic Impact Statement for the challenged rule are taken directly from those utilized in connection with the passage of a 1979 amendment to Section 212.03, Florida Statutes, by Chapter 79-359, Laws of Florida. The respondent did not attempt to make its own estimate of revenues or costs or economic benefits to persons directly affected by the proposed rule, nor did the respondent request the Revenue Estimating Conference to revisit its 1979 estimate of economic impact. The instant petition challenging the validity of Rule 12A-1.61 was filed by the petitioners with the Division of Administrative Hearings on December 2, 1982. By Order of Assignment dated December 10, 1982, the undersigned was designated as the Hearing Officer. By letter dated December 14, 1982, the undersigned suggested a final hearing date of January 3, 1983. The undersigned was informed by telephone message from counsel for the petitioners that the parties were going to file a stipulation waiving the requirement that a hearing be held within thirty days. While a written stipulation was never received to this effect, it was the understanding of the undersigned that the parties did not desire to utilize the previously suggested hearing date of January 3, 1983. Through telephone conversations between the offices of the Division of Administrative Hearings and counsel for the petitioner, a hearing date of January 10, 1983, at 4:00 p.m. was originally made available and then was changed to January 14, 1983, because more hours were thought to be necessary to complete the hearing. On January 12, 1983, a notice of appearance as co- counsel for the respondent was filed, as was a Motion to Dismiss or, Alternatively, to Stay Proceeding on the ground that the Division of Administrative Hearings lacked jurisdiction to entertain this rule-challenge proceeding inasmuch as the hearing was not scheduled within the thirty days required by Section 120.56(2), Florida Statutes. Oral argument on this motion was heard prior to the commencement of the final hearing on January 14, 1983. Finding that counsel for the petitioner reasonably believed that respondent's counsel had agreed to waive the thirty-day hearing requirement and that respondent had not demonstrated that it had been prejudiced in any manner whatsoever by the four-day delay in commencing the final hearing, the Motion to Dismiss or Stay was denied.
The Issue On February 27, 1987, petitioner issued a Notice to Show Cause which alleged that respondent had violated various provisions of Chapter 718, Florida Statutes, and Chapter 7D-17 and 7D-23, Florida Administrative Code. On March 20, 1987, respondent served petitioner with a Response to Notice to Show Cause and Request for Formal Hearing. The Notice to Show Cause and response identify the specific violations alleged and issues to be resolved as follows: CHARGE: Respondent, while in control of the association, violated Section 718.116(1)(a) and (8)(a), Florida Statutes (1985), by excusing itself from the payment of its share of common expenses pertaining to assessments on unbuilt developer-owned units in Phase VI and VII of Glenwood Manor by failing to pay assessments on the units until certificates of occupancy were issued; RESPONSE: Respondent denied that it had any liability for assessments on unbuilt developer-owned units in Phases VI and VII of Glenwood Manor Condominiums, and alleged that respondent paid assessments on developer-owned units commencing with the creation of the unit pursuant to Section 718.403, Florida Statutes (1985). CHARGE: Respondent, while in control of the association, violated Section 718.112(2)(k), Florida Statutes (1980 Supp.), Section 718.112(2)(f), Florida Statutes (1985), and Rule 7D- 23.04(2), Florida Administrative Code (1985), by failing to properly waive or fully fund reserve accounts for capital expenditures and deferred maintenance for the years 1981, 1982, 1984, 1985 and 1986; RESPONSE: Respondent denied that reserve accounts were improperly waived or funded as alleged in the notice, asserting that reserves were properly waived for the years 1981, 1982, and 1984, were not waived for the year 1985, and that respondent was without knowledge as to 1986 because the turnover of the condominium took place prior to the 1986 annual meeting. CHARGE: Respondent, while in control of the association, violated Section 718.112(2)(h), Florida Statutes (1982 Supp.), and Section 718.112(2)(g), Florida Statutes (1985), by failing to adopt budgets and make assessments for the fiscal years 1984, 1985 and 1986 in an amount no less than required to provide funds in advance for payment of all anticipated current operating expenses and all of the unpaid expenses previously incurred, in that respondent loaned the association $8,000 from May 19, 1983 to May 19, 1985, to cover operating expense, with repayment plus interest due after turnover; RESPONSE: Respondent denied that it failed to adopt budgets and make assessments for fiscal years 1984, 1985 and 1986 in amounts sufficient to provide funds in advance for payment of anticipated current operating expenses and for all of the unpaid expenses previously incurred. Respondent alleged that it adopted in good faith budgets which the association estimated would be required to meet these expenses. Respondent admitted loaning money to the association to meet the needs of the association. CHARGE: Respondent failed to follow its plan of phase development as stated in the original declaration of condominium or amend the plan of phase development, in violation of Sections 718.403(1), (2)(b), (6) and 718.110(4), Florida Statutes (1983), in that the original declaration describes Phase IV as containing eight units while the amendment adding Phase IV created only seven units; RESPONSE: Respondent denied that it failed to follow its plan of phase development as stated in the original declaration of condominium in that the Declaration of Condominium provided that the developer would have the option of constructing a swimming pool in Phase IV and that the construction of the pool would require a reduction in the number of units contained in Phase IV from eight to seven. CHARGE: Respondent violated Section 718.104(4)(f), Florida Statutes (1985), by creating a condominium in which the aggregate undivided share in the common elements appurtenant to each unit, stated as a percentage, does not equal the whole, in that Glenwood Manor consists of 55 units with each unit owning a 1/56th share of the common elements. RESPONSE: Respondent denied that it created a condominium in which the aggregate undivided shares in the common elements appurtenant to each unit did not equal the whole, and alleged that any reference to a unit owner owning 1/56th undivided share in the common elements is due to a scrivener's error which respondent would be willing to correct to clarify that each unit owner owns 1/55th undivided share in the common element. CHARGE: Respondent offered 33 condominium units for sale, and entered into purchase contracts in Phase II, III, V, VI and VIII of Glenwood Manor prior to filling the subsequent phase documents with the Division of Land Sales, Condominiums, and Mobile Homes (Division) on February 5, 1986, in violation of Section 718.502(2)(a), Florida Statutes (1984 Supp.), and Rule 7D- 17.03(2), Florida Administrative Code; CHARGE: Respondent closed on 33 units prior to obtaining Division approval on February 10, 1986, of subsequent phase documents for Phases II, III, V, VI and VII, in violation of Section 718.502(2)(a), Florida Statutes (1984 Supp.), and Rule 7D- 17.01(3), Florida Administrative Code; RESPONSE TO (6) AND (7): Respondent admitted that due to the death of one of its attorneys, it inadvertently did not file the subsequent phase documents for Phases II, III, V, VI and VII prior to offering some of those units for sale and closing on the sale, but filed the necessary documents with the Division and obtained the necessary approvals upon realizing that the documents had not been filed. CHARGE: Respondent accepted a deposit on the purchase contract for unit 605, Phase V, without filing a fully executed escrow agreement for Venice Realty, Inc., with the Division, in violation of Rule 7D-17.02(6), Florida Administrative Code. RESPONSE: Respondent admitted that due to confusion between respondent and the realtor involved, Venice Realty, Inc. inadvertently accepted a deposit on a contract for the purchase of Unit 605, Phase VI, but that prior to closing on the unit, respondent directed Venice Realty to transfer the deposit to the proper escrow agent which transfer was accomplished. Respondent requested a formal hearing on the issues thus joined, and on April 9, 1987, this matter was forwarded to the Division of Administrative Hearings for further proceedings. At the hearing, petitioner presented the testimony of Glen Turnow, a resident of Glenwood Manor Condominium and association board member; Candy McKinney, Examination Specialist with the Bureau of Condominiums; John Benton, Financial Analyst, Division of Florida Land Sales, Condominiums and Mobile Homes; and Marcel Cloutier, Secretary/Treasurer of Waterside Land Corporation. Petitioner's exhibits 1-8 were admitted into evidence. Petitioner's Exhibit No. 1, Petitioner's First Request for Admissions and responses, and petitioner's Exhibit No. 2, Petitioner's First Set of Interrogatories, were admitted into evidence as late-filed exhibits. Marcel Cloutier, an officer of Waterside Land Corporation, was accepted as the authorized representative for respondent and testified on respondent's behalf. Respondent did not enter any exhibits into evidence. A prehearing stipulation was submitted by the parties prior to the hearing. No transcript of the hearing has been filed. However, both petitioner and respondent have filed proposed findings of fact and conclusions of law, and a ruling on each of the proposed findings of fact is included in the Appendix to this Recommended Order.
Findings Of Fact At all times between October 21, 1981, and February 27, 1987, respondent was the developer, as that term is defined by Section 718.103(14), Florida Statutes (1985), of Glenwood Manor Condominium. Glenwood Manor Condominium is a phased condominium consisting of seven (7) phases with fifty-five (55) units located in Sarasota County, Florida. Between October 21, 1981, and February 17, 1986, respondent was in control of the Board of Directors of Glenwood Manor Owners Association, Inc. (Association). Control of the Board of Directors of the Association was turned over to the unit owners on February 17, 1986. The Declaration of Condominium of Glenwood Manor Condominium was recorded in the public records of Sarasota County, Florida, on October 21, 1981. Paragraph II of the Declaration of Condominium provides, in pertinent part, as follows: Developer does hereby declare the property owned by it and first described above, to be Condominium property under the Condominium Act of the State of Florida, now in force and effect, to be known as: GLENWOOD MANOR CONDOMINIUMS, hereinafter referred to as the CONDOMINIUM??, and does submit said Condominium property to Condominium ownership pursuant to said Act. Developer may, but is not obligated to create additional Phases of Development of GLENWOOD MANOR CONDOMINIUMS ... which said Phases, if any, shall be operated and managed in conjunction with this Condominium through that certain nonprofit corporation known as: GLENWOOD MANOR OWNERS ASSOCIATION, INC., and hereinafter referred to as the "ASSOCIATION." The creation of any such further Phases will merge the common elements of this Condominium with the common elements of such additional Phases. As Developer creates such additional Phases, Developer shall ... record an amendment to this Declaration of Condominium describing the lands and improvements so added and the revised percentage of owner- ship in the common elements of this Condominium as so enlarged. (e.s.) The details of the phase development are set forth on Exhibit B to the Declaration of Condominium, entitled Phase Development Exhibit, which provides as follows: This Condominium is being developed as a Phase Development under Florida Statute 718.403. The first Phase of Development, which is the Phase hereby submitted to Condominium ownership, is designated on the Condominium plat described in paragraph II of the Declaration of Condominium above as Phase I. It consists of 8 Condominium Units numbered 1 through 8. Each Unit owner will own 1/8th of the common elements and share 1/8th of the common expenses and is entitled to 1/8th of common surplus relative to this Condominium. Phase II consists of 8 proposed Condominium Units as depicted on said condominium plat. At such time as Phase II is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the two phases shall then and there be considered as merged. Upon such merger each unit shall be vested with a 1/16th ownership of the common elements of said phases as merged, bear 1/16th of the common expenses of the merged phases and be entitled to 1/16th of the common surplus of the merged phases. At such time as Phase III is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the three phases shall then and there be considered as merged. Upon such mercer each unit shall be vested with a 1/24th ownership of the common elements of said phases as merged, bear 1/24th of the common expenses of the merged phases and be entitled to 1/24th of the common surplus of the merged phases. At such time as Phase IV is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the four phases shall then and there be considered as merged. Upon such merger each unit shall be vested with a 1/32nd ownership of the common expenses of said phases as merged, bear 1/32nd of the common expenses of the merged phases and be entitled to 1/32nd of the common surlus [sic] of the merged phases. At such time as Phase V is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the five phases shall then and there be considered as merged. Upon such merger each unit shall be vested with a 1/40th ownership of the common elements of said phases as merged, bear 1/40th of the common expenses of the merged phases and be entitled to 1/40th of the common surplus of the merged phases. At such time as Phase VI is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the six phases shall then and there be considered as merged. Upon such merger each unit shall be vested with a 1/48th ownership of the common elements of said phases as merged, bear 1/48th of the common expenses of the merged phases and be entitled to 1/48th of the common surplus of the merged phases. At such time as Phase VII is added to this Condominium by appropriate amendment of this Declaration of Condominium, if that be the case, the seven phases shall then and there be considered as merged. Upon such merger each unit shall be vested with a 1/56th ownership of the common elements of said phases as merged, bear 1/56th of the common expenses of the merged phases and be entitled to 1/56th of the common surplus of the merged phases. (e.s.) The units in Phases II - VII were submitted to condominium ownership pursuant to amendments to the Declaration of Condominium filed in the public records of Sarasota County, Florida, on the following dates: First Amendment Phase II November 16, 1981 Second Amendment Phase III June 10, 1983 Third Amendment Phase IV November 3, 1983 Fourth Amendment Phases V, VI and VII April 5, 1984 Each amendment provided for the merger of the common elements of the new phase with the previous phases, listed all units included in the condominium, and indicated the new share of ownership in and expenses for the common elements of the condominium for each unit. For example, the First Amendment of Declaration of Condominium, which added Phase II, consisting of eight units, to the condominium, which initially consisted of eight units, provided: As a result of the addition of the Phase II lands to the Condominium, as set forth above, each unit of Glenwood Manor, Condominiums as amended heretofore and hereby, shall be vested with a 1/16th owner- ship of the common elements of the merged Phases I and II lands and each unit shall bear a 1/16th share of the common expenses and be entitled to a 1/16th share of the common surplus of said merged phases of development. Both the First and Second Amendments added eight units to the condominium in accordance with the Phase Development Exhibit included in the Declaration of Condominium. However, the Third Amendment, adding Phase IV, added only seven units to the condominium, resulting in a total of 31 units. The Third Amendment correctly stated that each unit "shall be vested with a 1/31st ownership of the common elements of the merged Phases I, II, III and IV lands and each unit shall bear a 1/31st share of the common expenses ..." However, when the Fourth Amendment was filed, adding Phases V, VI and VII, each consisting of eight units, the share of ownership in the common elements for each unit was stated as 1/56th, whereas the total number of units included in the condominium was correctly shown as 55. Each amendment to the Declaration of Condominium ratified and confirmed the declaration and plat "[e]xcept as expressly modified" by the amendment. Unit owner and board member Glen Turnow stated that it was his understanding that he owns 1/55th of the common elements and that each unit owner pays 1/55th of the common expenses at Glenwood Manor; however, he has no documents indicating his ownership interest to be other than 1/56th of the common elements. Although the amendment creating the units in Phases VI and VII was filed on April 5, 1984, respondent paid no monthly assessments on developer-owned units in Phases VI and VII until Certificates of Occupancy were issued for those phases. Certificates of Occupancy for Phases VI and VII of Glenwood Manor were issued on October 25, 1985, and November 13, 1985, respectively. The assessment per unit of the condominium per month was $55 from April, 1984, through August, 1985; as of September, 1985, the assessment increased to $70 per unit. For the developer-owned units in Phases VI and VII from the date of amendment until the certificates of occupancy were filed, the assessments would have been $17,182.65. At 18 percent simple interest computed from the end of the year respondent owed for the assessments to the day before turnover of the association to the owners, interest on the assessments totals $2,029.92. Respondent admitted that it paid no assessments on the units in Phase VI and VII until Certificates of Occupancy were issued. Mr. Cloutier testified that respondent did not pay the assessments because it received legal advice that a unit is not in existence until a certificate of occupancy is issued. However, the first assessment was paid on November 4, 1981, and the certificates of occupancy for the first sixteen units were not issued until December 17, 1981. Mr. Cloutier also testified that respondent relied on language in the Declaration of Condominium which excused it from paying such assessments until the certificates of occupancy were issued. However, respondent did not introduce into evidence the portion of the Declaration on which it relied. Further, the Fourth Amendment to the declaration, which added the units in Phases VI and VII to the condominium, clearly provided that each unit would bear a proportionate share of the "common expenses." In the declaration "assessment" is defined as the "share of the funds required for the payment of common expenses." Respondent admitted that it made no guarantee to unit owners at Glenwood Manor Condominium which would excuse it from payment of assessments on developer-owned units other than pursuant to the provisions of Section 718.116(8)(a)1., Florida Statutes (1985), which provides, in pertinent part, as follows: (8)(a) No unit owner may be excused from the payment of his share of the common expense of a condominium unless all unit owners are likewise proportionately excused from payment, except ... in the following cases: If the declaration so provides, a developer or other person who owns 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 condominium. 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 ... The closing of the purchase and sale of the first unit at Glenwood Manor occurred on October 20, 1981. Reserves are monies put aside each month to provide for future replacement or repair of major items. The original budget provided for funding of reserves in the amount of $6.00 per unit per month. Funding of reserves at Glenwood Manor for 1981 was waived at a meeting of unit owners on January 10, 1982; for 1982, on January 10, 1982; for 1983 on January 10, 1983, and for 1984, on August 16, 1985. If the reserves cannot be waived retroactively, the respondent would owe $3,036.55 for reserves that were not properly waived. However, respondent made one deposit to reserves in the amount of $1,800; therefore, respondent's total liability for underfunded reserves would be $1,236.55. Between May 19, 1983, and May 20, 1985, the developer made the following loans to the association: June 19, 1983 $ 500 at 13 percent interest June 3, 1983 $ 500 at 13 percent interest August 6, 1984 $1200 at 12 1/2 percent interest September 7, 1984 $1500 at 12 1/2 percent interest September 28, 1984 $2300 at 12 1/2 percent interest March 2, 1985 $ 600 at 12 1/2 percent interest May 20, 1985 $1400 at 12 percent interest On July 14, 1983, the first two loans were repaid with interest. The loans made from the developer to the association during the years 1983, 1984 and 1985 were necessary to provide operating funds for the association. At a meeting of unit owners on August 25, 1985, it was decided that repayment of these loans would take place after turnover of control of the association to the non-developer owners. On the dates these loans were made, the percentages of units which had been sold by the developer were as follows: August 6, 1984 - 56.4 percent; September 7, 1984 - 56.4 percent; September 28, 1984 - 56.4 percent; March 3, 1985 - 60 percent; and May 20, 1985 - 61.8 percent. If the repayment of the loans were based on the percentage of units owned by the developer vis-a-vis the non- developers on the date of the loan, the developer would owe $2954.80 and the non-developer unit owners would owe $4045.20. Respondent offered 33 condominium units for sale, and entered into purchase contracts for units in Phases II, III, V, VI and VII of Glenwood Manor Condominiums, prior to February 5, 1986. Respondent closed on the sales of 33 units in Phases II, III, V, VI and VII of Glenwood Manor Condominiums prior to February 10, 1986. Respondent first filed subsequent phase documents with the Division of Florida Land Sales, Condominiums and Mobile Homes for Phases II, III, V, VI and VII of Glenwood Manor Condominium on February 5, 1986. On August 11, 1985, Venice Realty accepted a deposit from the Days for the purchase of Unit 605 at Glenwood Manor Condominium. Ms. McKinney testified that the Division's records indicated only that the Law Firm of Rosen, Able and Bryant would serve as escrow agent for sales of units at Glenwood Manor Condominium. In its answer to the charges, respondent admitted that Venice Realty was not the proper escrow agent for respondent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered finding that respondent committed the violations alleged in Charges 1-7, finding that respondent did not commit the violation alleged in Charge 8, and imposing a civil penalty against respondent of Four Thousand, Two Hundred Fifty Dollars ($4,250), assessed as follows: For the violations set forth in the first charge, $1,000; for the violations set forth in the second charge, $1,000; for the violations set forth in the third charge, $1,000; for the violations set forth in charges four and five, $750; and for the violations set forth in charges six and seven, $500. It is further RECOMMENDED that the Final Order require that the respondent take the following affirmative action: Within sixty (60) days of the Final Order, file the appropriate documents in the public records of Sarasota County, Florida, indicating that Glenwood Manor Condominium consists of 55 units, and that each unit's share of the common elements, expenses, and surplus is 1/55th. The filing of such amendments shall comply fully with the provisions of Chapter 718, Florida Statutes, and Rule 7D-17, Florida Administrative Code. Within thirty (30) days of issuance of the Final Order, remit permanently and irretrievably to Glenwood Manor Owners' Association, Inc., the respondent's liability for assessments and reserves in the amount of $19,210.16 for assessments and $1,236.55 for reserves. Accept as full repayment of the loans made by respondent to the association, the sum of $4,045.20. DONE AND ENTERED this 4th day of March, 1988, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS 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 4th day of March, 1988.
The Issue The issues in this matter concern an Administrative Complaint/Notice to Show Cause, which has been brought by the Petitioner against the Respondent charging various violations of Chapter 718, Florida Statutes. Those accusations are more completely described in the conclusions of law.
Findings Of Fact The parties in the person of their counsel entered into a written prehearing stipulation, by which certain facts were agreed to. Those facts are as follows: Stipulated Statement of Facts: The Petitioner herein is the State of Florida, Department of Business Regulation, Division of Florida Land Sales and Condominiums. The Respondent in this matter is Sujac Enterprises, Inc., the developer of a residential condominium known as Ginger Park Condominium located in Jacksonville, Florida. Mr. Jackson M. Jobe is the president of the developer corporation. Transition from developer control of the condominium association occurred pursuant to Section 718.301, Florida Statutes, on November 1, 1983. Prior to this date, Respondent Sujac Enterprises, Inc., was in control of the condominium association. On April 18, 1983, The Division received a condominium complaint from unit owner, Cynthia A. Doallas, filed against Sujac Enterprises, developer of the Ginger Park Condominium. The Division investigation file was opened on April 20 and this investigation was assigned to Janice Snover, specialist and investigator. The Declaration of Condominium was recorded March 12, 1982. The condominium association was incorporated February 16, 1982. Section 8.4 of the declaration of condominium provides for an assessment guarantee for so long as the developer shall own any condominium units within the condominium. At the time of this stipulation, the developer still owns at least one condominium unit within the condominium. The developer controlled association failed to maintain the accounting records provided by Section 718.111(7)(a), (b), Florida Statutes, during the period beginning with the incorporation of the association through at least March 1983. Accounting records were assembled after March of 1983. Mr. Phillip DiStefano was elected to the board of administration in March of 1983 in accordance with Section 718.301(1) , which provides that when unit owners other than the developer own 15 percent or more of the units, 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. Mr. DiStefano was elected by unit owners other than the developer. The developer through its president instituted recall procedures pursuant to the procedure as outlined in Section 718.112(2)(g), Florida Statutes, against board member Phillip DiStefano, by circulating a form entitled "Removal of Director or Directors." Mr. Jobe solicited signatures for the agreement, and further, voted the developer corporation's unsold unit votes in favor of the recall. Mr. DiStefano was recalled, with a sufficient number of unit owners other than the developer voting in favor of recall to approve the recall. The developer controlled condominium association failed to provide to unit owners a financial statement of actual receipts and expenditures for the fiscal/calendar year ending December 21, 1982, within 60 days of the end of the year. This financial statement was, however, provided to unit owners approximately three months after the 60 day time period provided in Section 718.111(13), Florida Statutes, had elapsed. The following additional facts are found based upon the presentation made at the final hearing: At the point of the final hearing, the developer still owned a condominium unit within the condominium. The developer had allowed other persons to take charge of the accounting procedures of the condominium association from the inception of the association through March 1983. Those other persons operated on the basis of a checkbook in which check stubs were maintained and deposit slips kept. Some invoices were also maintained. These records, in addition to not being maintained by the developer when the developer was serving as the association in this period through March 1983, were not in accordance with good accounting practices. Moreover, they did not contain an account for each unit, designating the name and current mailing address for the unit owner, with the amount of each assessment, the dates and the amounts in which the assessments came due and the amount paid upon these individual accounts, with the balance due being reflected. As revealed by an audit which the developer had requested of an accountant which it hired, this audit dating from June 7, 1983, there was a deficit in the reserve account on that date. This discovery was made prior to the transfer of the accounting records from the developer to other condominium unit owners. In effect, on June 7, 1983, the reserve account for capital expenditures and maintenance was insufficiently funded. The exact amount of deficit was not shown in the course of the hearing. Therefore, it has not been demonstrated that the deficit of June 7, 1983, corresponds to the deficit in the reserve account in the amount of $1,186.18, effective December 31, 1983 as found by Petitioner's accountant. Respondent in its efforts to refute responsibility for the reserve deficit has failed to demonstrate, by way of defense, that charges incurred on behalf of other condominium unit owners should reduce the developer's deficit responsibility. This pertains to its reference to prepaid insurance, pest control and construction costs related to a fence. The reserve account for capital expenditures and maintenance is a common expense. The developer, pursuant to Section 8.4 of the declaration of condominium is responsible for the deficit in the reserve account as reflected on June 7, 1983, in keeping with the assessment guarantee set forth in that section. That guarantee continued until the account was tranferred to the other condominium unit owners. Features of the aforementioned guarantee related to responsibility to insure against additional assessments attributable to deficits other than those in the reserve account, i.e. for other forms of common expenses, developer's share, only would occur at the point of sale of the last condominium unit. That contingency had not occurred at the time of the conduct of the final hearing. The developer kept the accounting records from April 1983 until June 1983. Subsequently when the records were turned over to the other condominium unit owners as a part of the transition of association control, the developer failed to have a transitional review conducted by an independent accountant related to financial records of the association.
Recommendation It is recommended that a final order be entered which imposes a penalty in the amount of $2,500 for those violations established pertaining to Count I, IV and V and that Counts II and III be dismissed. DONE AND ORDERED this 3rd day of July 1984, in Tallahassee, Florida. CHARLES C. ADAMS 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 3rd day of July, 1984. COPIES FURNISHED: Karl M. Scheuerman, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Jerry A. Funk, Esquire 1020 Atlantic Bank Building Jacksonville, Florida 32202 E. James Kearney, Director Division of Land Sales and Condominiums The Johns Building 725 South Bronough Street Tallahassee, Florida 32301 Gary Rutledge, Secretary Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32301 =================================================================
Findings Of Fact Based on the stipulations of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at the hearing, I make the following findings of fact. Facts stipulated to by the parties Winston Towers 600 condominium was created by Winston Capital, Inc., which still owns units for sale in the condominium. Control of the association has been relinquished by the creator/developer and turned over by it to the unit owners including joint intervenors. In May of 1983, six Michigan limited partnerships each purchased a number of units in the condominium from Winston Capital, Inc. In March of 1984, four Texas limited partnerships each purchased a number of units in the condominium from Winston Capital, Inc. The joint intervenors consist of the six Michigan limited partnerships and the four Texas limited partnerships. The number of units so purchased gives the joint intervenors, as a block, a controlling interest in the condominium association. The association is controlled by the joint intervenors, who elected two of the three directors of the association. The association hired Hall Management Company, Kent Security Services, Inc., and an unnamed cleaning company. Records of the Secretary of State reveal that among other officers of Hall Management Company are Craig Hall, President and Director, and Christine Erdody, Vice-President. The records of the Secretary of State reveal no entity known as the Hall Real Estate Group. The public records of Dade County, Florida, reveal no fictitious name affidavit for any entity trading as the Hall Real Estate Group. The records of the Division of Florida Land Sales, Condominiums and Mobile Homes reflect that Winston Towers 600 is a residential condominium, located in Dade County, Florida. The joint intervenors are not now offering and have not ever offered condominium units for sale. The joint intervenors are not now offering and have not ever offered condominium units for lease for periods in excess of five years. Winston Towers 600 Condominium Association, Inc., is the non-profit condominium association established to maintain and operate the condominium. In July, 1984, a meeting of the condominium association was held upon instructions of the developer, Winston Capital, Inc. Winston Capital, Inc., scheduled and held the condominium association meeting in July 1984, under the good faith impression and belief that the threshold requirements in Section 718.301 mandating turnover of control of the association board of directors had been met. Joint intervenors, collectively, own more than 50 per cent of the units in the condominium. Joint intervenors, as developers, did not turn over control of the condominium association in July 1984. The declaration of condominium for the condominium and the Florida Statutes grant certain rights and privileges to the developers. The joint intervenors have a substantial economic investment in the condominium. The joint intervenors desire to have the condominium operated and maintained by competent professional management so as to protect and enhance the condominium project. The annual fee being paid to Hall Management Company for management of the condominium is the same fee as had been previously paid by the developer, Winston Capital, Inc., to the prior manager, Keyes Management Company. The names of the board of directors elected to the board of administrators of the association on July 16, 1985, were Ms. Christine Erdody, Mr. James Sherry, and Mr. Joseph Pereira. Ms. Christine Erdody and Mr. James Sherry are general partners in each of the ten limited partnerships. Mr. Craig Hall is President and Ms. Christine Erdody is Vice- President. Other findings based on evidence Adduced at hearing At the turnover meeting in July of 1984, Ms. Erdody cast votes on behalf of each of the ten limited partnerships, voting once for each unit owned by all ten of the limited partnerships. There has never been a meeting of the unit owners in which the limited partnerships turned over control of the association to unit owners other than the ten limited partnerships. The ten limited partnerships have no business ventures or income producing activities other than attempting to offset expenses of operations by leasing the units owned by the limited partnerships and attempting to increase their equity in the condominium units. The units acquired by the joint intervenors were not acquired for their own occupancy. The limited partnerships, while in control of the association, employed Hall Management Company, pursuant to contract, to manage the condominium and to lease the units owned by the limited partnerships. The rental office used by the management company consists of a unit owned by one of the limited partnerships. The contract specifically requires that Hall Management Company attempt to lease those condominiums units owned by the limited partnerships. The limited partnerships have no income producing mechanism other than the disposition of condominium units owned by the listed partnerships pursuant to the contract with the Hall Management Company. A regular, normal, and common activity of each of the ten limited partnerships is to offer to lease and to enter into leases of the condominium units owned by the limited partnerships. They typically engage in this activity through their agent, the Hall Management Company. None of the ten limited partnerships have ever offered any of their units for sale. None of the ten limited partnerships have ever offered any of their condominium units for leases in excess of five years. Ultimately, all of the ten limited partnerships intend to sell all of their condominium units. There is no relationship or affiliation between the creator/developer, Winston Capital, Inc., and any of the joint intervenors. Each of the joint intervenors is a separate limited partnership. However, due to the facts that each of the joint intervenors have a common purpose, each has at least several general partners in common, each has entered into a management contract with a closely related management company, and each has acted in concert with the others in prior matters concerning the condominium facility and the association, for all practical purposes relevant to this case, the joint intervenors may be regarded as a single entity. This is true even though there is no agreement or contract between the joint intervenors requiring them to act collectively in any matter involving or affecting their vote in condominium association matters at Winston Towers 600 Condominium. In all the actions of the joint intervenors in voting their interests at association meetings, they have never thought or acted on the understanding that the joint intervenors were developers of the condominium. The unit owners other than the joint intervenors have selected one-third of the Board of Directors of the Association. The right to vote for a majority of the board of directors of the condominium association is a significant and valuable right which the joint intervenors believed they would be entitled to upon purchasing a majority of the units in the condominium. A substantial number of the purchasers of Florida condominium units are non-residents of Florida. A substantial number of purchasers of condominium units intend to rent their condominiums under leases with a duration of two years or less.
Recommendation On the basis of all of the foregoing, it is recommended that the Division of Florida Land Sales, Condominiums and Mobile Homes issue a declaratory statement to the following effect: That the joint intervenors, individually and collectively, constitute concurrent and successor developers, and that as such concurrent and successor developers who collectively own more than fifty per cent but less than eighty-five per cent of the units, they are entitled to appoint two-thirds of the members of the board of administration of the condominium association. The statement should also note that the joint intervenors should comply with Section 718.3025(1)(e), Florida Statutes, by disclosing any financial or ownership interest which the joint intervenors have, if any, in Hall Management Company That the issue of whether the joint intervenors may have violated the provisions of the declaration of condominium is not a proper subject for a declaratory statement. DONE AND ORDERED this 9th day of April, 1986, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1986. COPIES FURNISHED: Mr. Arnold Belkin Apartment 912 210 - 174 Street Miami, Florida 33160 Thomas A. Bell, Esquire Deputy General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Karl M. Scheuerman, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 323301 Joseph D. Bolton, Esquire Stephen Gillman, Esquire SHUTTS & BOWEN 1500 Edward Ball Building Miami Center 100 Chopin Plaza Miami, Florida 33131 Linda McMullen, Esquire McFARLAIN, BOBO, STERNSTEIN, WILEY & CASSEDY P. O. Box 2174 Tallahassee, Florida 32301 James Kearney, Jr., Acting Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 James Kearney, Jr., Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 APPENDIX The Following are my specific rulings on each of the proposed findings of fact submitted by all of the parties. Rulings on findings proposed by the Division Paragraphs 1 through 23 of the Division's proposed findings are accepted and incorporated into the findings in this Recommended order. Paragraph 24 is rejected as irrelevant and as not supported by persuasive competent substantial evidence. Paragraph 25 is rejected as irrelevant in part and is redundant in part. The substance of paragraph 26 is accepted with the deletion of certain redundant information. The substance of paragraphs 27, 28, 29, 30, 31, 32, and 33 is accepted with some modifications in the interest of clarity and accuracy and with the deletion of certain redundant information. Rulings on findings proposed by the Joint Intervenors Paragraphs 1 through 12 of the Joint Intervenors' proposed findings are accepted and incorporated into the findings in this Recommended Order. Paragraph 13 is rejected as irrelevant, subordinate, and not supported by competent substantial evidence. Paragraphs 14 and 15 are accepted. Paragraphs 16 and 17 are accepted with additional findings for the purpose of clarity and accuracy. The substance of paragraphs 18, 19, 23, and 26 is accepted. Paragraphs 20, 21, 22, 24, 25, and 27 are accepted. Rulings on findings proposed by Petitioner Paragraphs 1, 2, 3, and 4 of Petitioner's proposed findings are accepted in substance. Paragraph 5 is rejected as irrelevant. Paragraphs 6, 7, 8, 9, and 10 are accepted in substance with the deletion of the reference to the Hall Group of real estate limited partnerships. Paragraph 11 is rejected in part because it is subordinate, in part because not supported by competent substantial evidence and in part because it is a conclusion of law. Paragraphs 12, 13, 14, and 15 are accepted in substance. Paragraph 16 is rejected because it is not supported by competent substantial evidence. Paragraph 17 is rejected because it is irrelevant and subordinate. Paragraphs 18, 19, and 20 are accepted in substance. Paragraphs 21 and 22 are rejected because they constitute argument or conclusions of law and are not supported by competent substantial evidence. Paragraph 23 is rejected because it is irrelevant to the issues to be decided in this case and because portions of it are not supported by competent substantial evidence. Paragraph 24 is accepted. Paragraph 25 is rejected because it is irrelevant to the issues to be decided in this case, because portions of it are not supported by competent substantial evidence, and because portions of it constitute argument or conclusions of law. Paragraph 26 is rejected because it is not supported by competent substantial evidence. Paragraph 27 is rejected because it constitutes argument. Paragraph 28 is rejected because it is irrelevant and redundant. Paragraphs 29 and 30 are rejected because they constitute argument or conclusions of law. Paragraphs 31 and 32 are rejected because they are not supported by competent substantial evidence. Paragraph 33 is rejected because it constitutes argument or conclusions of law. Paragraphs 34 and 35 are rejected because they are irrelevant and because they constitute argument.
Findings Of Fact Petitioner is authorized statutorily to license and regulate real estate salesmen and brokers. At all times material to these charges, Donald J. Munch was a licensed real estate salesman holding license number 045938. From December, 1987 through May 30, 1989, Munch was licensed as a salesman with Active One Realty, Inc., Winter Park, Florida. He now holds a broker's license. Sand Dollar Condominium Association was an association of condominium owners who owned apartments in Sand Dollar Condominiums. Owners of apartments in the condominium had entered into agreements with the association to rent out their apartments. This agreement provided that the association would receive 20% of the rents received. Munch was the owner of Four Seasons Properties (Four Seasons), a property management company, which contracted with Sand Dollar Condominium Association (Sand Dollar) from December 13, 1987 until May 30, 1989 to provide various management services, including but not limited to, recruiting, hiring and supervising all personnel; installing and maintaining an electronic bookkeeping system; collecting monthly assessments; maintaining a bank account; preparing and mailing delinquent notices; auditing accounts and records; and collecting delinquencies; negotiating outside contracts for Sand Dollar; and supervising a rental program organization with advertising, printing, electronic bookkeeping, rotation scheduling and mailings. Although not specifically stated, Four Seasons was to collect for the rental of apartments. Four Seasons was to be paid for its management services $2,000.00 per month payable on the first of every month during the duration of the contract. It is uncontroverted that, in addition to this compensation, Four Seasons also received 15% of the 20% of receipts from the rental of apartments which were payable to Sand Dollar by the owners of apartments who participated in the rental program provided by the association and managed by Four Seasons. It is uncontroverted that, when Four Seasons began management of the condominium, the condominium was over $10,000.00 in arrears with regard to money used by the association for upkeep of the condominium which had been taken from the rental escrow accounts. Four Seasons, through its owner Munch, rented apartments for the association, collected fees from owners, rents from lessees, deposited the proceeds into the bank account of Four Seasons maintained in accordance with its contract with the association, and accounted periodically to the association and owners during the period of its management. The Respondent's broker knew of the Respondent's activities and did not expect commissions or deposits to his account from the Respondent. Four Seasons and Munch assert that Sand Dollar owed Four Seasons $7,100.00 when their contract was terminated. Four Seasons provided Sand Dollar a complete financial statement and a check for $10,079.92 to Sand Dollar. Four Seasons retained $7,100.00, the amount which it claimed it was owed by Sand Dollar. Subsequently, Sand Dollar sued Four Seasons over the $7,100.00 claim and Munch paid the money into Sand Dollar's attorney's trust account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Administrative Complaint be dismissed. DONE AND ENTERED this 15th day of August, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of August, 1990. COPIES FURNISHED: Janine A. Bamping, Esq. Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802 Howard Hadley, Esq. 2352 Carolton Road Maitland, FL 32751 Kenneth E. Easley, Esq. General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street P.O. Box 1900 Orlando, FL 32801 ================================================================= AGENCY FINAL ORDERS ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE, Petitioner, vs. CASE NO. 0164284 DOAH NO. 90-0709 DONALD J. MUNCH Respondent. /
The Issue Whether Respondents committed the unlawful housing discrimination practices alleged in the Housing Discrimination Complaint filed with the Florida Commission on Human Relations ("FCHR") and, if so, what relief should Petitioner be granted.
Findings Of Fact Petitioner is an African-American female. Petitioner is a "unit owner" of a condominium located at 210-174th Street #310, Sunny Isles Beach, Florida. Said unit is located in the Winston Towers 600 Condominium ("Condominium"). Respondent, the Association, is a Florida non-profit corporation and the entity responsible for the operation of the Condominium. Respondent, Board of Directors, possesses the powers and duties necessary for the administration of the affairs of the Condominium. Pursuant to the Association By-Laws, the affairs of the Association are to be governed by a board of initially three, and not less than three, nor more than nine directors. Respondent, Jorge Nunez, was the President of the Association's Board of Directors at all times material to the Complaint. During his tenure, Mr. Nunez was also the chairman of the financial committee.4/ Respondent, Monica Zarante, possesses a Florida Community Association Manager ("CAM") license and at all times material was the Association's manager. Condominium Facilities and Services Pursuant to the Condominium prospectus, the following facilities have been constructed in the Condominium, and form a part of the "common elements" of the Condominium and are to be used exclusively by the unit owners, their tenants, and guests: clubroom and entertainment areas (billiard room, library, men's and women's card rooms, meeting room and kitchen, bicycle room, and large screen television room); (b) main lobby; (c) mail room; (d) laundry room and vending machine room; (e) association office; (f) four elevators; (g) recreational facilities (tennis court, recreation pavilion, men and women's health clubs, party room, and sun deck); (h) L-shaped swimming pool; (i) jogging trail; (j) two shuffleboard courts; and (k) an irregularly-shaped reflecting pool. Pursuant to the Condominium prospectus, the following are the delineated utilities and services available to the Condominium: electricity, telephone service, waste disposal, domestic water supply, sanitary sewage, storm drainage, and master antenna service. Association Committees As noted above, Petitioner's Complaint alleges that, "sometime in 2012 she was denied her right to participate on Association committees because of her race." Association By-Law 5.2 addresses committees and provides as follows: Committees. The Board of Directors may designate one or more committees which shall have the powers of the Board of Directors for the management of the affairs and business of the Association to the extent provided in the resolution designating such a committee. Any such committee shall consist of at least three members of the Association, at least one of whom shall be a Director. The committee or committees shall have such name or names as may be determined from time to time by the Board of Directors, and any such committee shall keep regular minutes of its proceedings and report the same to the Board of Directors as required. The foregoing powers shall be exercised by the Board of Directors or its contractor, manager or employees, subject only to approval by Unit Owners when such is specifically required. Respondent Nunez credibly testified that the availability to participate on committees is open to all unit owners. If an owner wishes to be on a committee, he or she simply needs to communicate that desire to the particular committee chairperson. Mr. Nunez, at some point in time, was apparently the chairman of the financial committee. In Petitioner's direct examination of Respondent Nunez, the following exchange occurred: Q. Okay. Did you say, "You sit at this table with us, never?" A. Never. I can't say that. I can't say "never." I cannot reject anybody to belong to any committee. I can't. It's impossible. Q. Okay. A. I like you, I don't like you, you want to be on the committee, you have a right to be on the committee. Petitioner testified that she was denied access to the financial committee to which Mr. Nunez chaired. Petitioner failed, however, to present sufficient evidence for the undersigned to determine whether this alleged denial occurred during the time relevant to the allegations of Petitioner's Complaint. Even if relevant, outside of her bare assertion, which is not credited, Petitioner failed to present sufficient evidence to establish that she was ever denied the right to participate on any Association committee. As a subset, Petitioner argues that she was denied "meaningful participation" on the committees, and thus, in condominium decision-making. In support of this contention, Petitioner references the testimony from Association Board Member Audrey Bekoff. In response to Petitioner's question of "why did the Petitioner point her finger at you?," Ms. Bekoff responded as follows: I haven't got the slightest idea. When you get angry, you pull your hair, you scream, you yell, you wipe the things off Monica's desk. You knock the things off. Everybody knows you on the Board. When you come into the meeting, everybody leaves. Petitioner contends that the "refusal to allow her to participate arose from Respondents' extreme dislike for her, and this extreme dislike was likely based, at least in part, on her race." Petitioner's contention, however, is belied by the record evidence. Indeed, audio recordings of various Association meetings provide multiple examples of Petitioner's robust participation in a variety of condominium issues. Assuming, arguendo, that Petitioner provided evidence to support the position that she is not well-liked, aside from her bald allegation, she failed to present any evidence of discriminatory animus in regards to Association committee participation. Association Records Petitioner claims she was denied access to the Association's financial records (in general) and records related to a particular condominium unit, Unit 2007, on the basis of her race. Petitioner alleges that the records requests were made on July 30, 2012, and November 1, 2012. Monica Zerante testified that the Association's protocol for requesting records from the Association included submitting a request in writing, and, thereafter, the Association provides a copy of the requested document or the requesting party may be given access to find the document. She further explained that the Association's policy is to charge 25 cents per copy; however, that charge is frequently waived. Mr. Nunez provided the further detail that once the Association receives a records request, the Association has ten days to accommodate the request. Although the Association has established rules regarding the frequency and time of record inspections and copying, Mr. Nunez credibly testified that same were not enforced concerning Petitioner. It is undisputed that on at least one occasion, while Petitioner was present in the Association's office for the purpose of inspecting/reviewing Association documents, a conflict arose between Petitioner and Monica Zerante such that Ms. Zerante requested law enforcement assistance. In support of her contention that she was treated differently because of her race, Petitioner testified as follows: Okay. Mr. Nunez, while not on the Board, goes to the office and he gets a monthly statement of the Association operating budget on a monthly basis and he is entitled to that. I go and request the same thing and I'm told I have to pay for it. And if I object to paying for it, then the police is called. * * * Q. You have no evidence that Mr. Nunez, when he was off the Board, did not similarly have to pay for records, correct? A. I have seen with my eyes that he has not. Q. Well, you have no idea if he actually paid for those records separately, do you? A. I've never seen him pay for that. Inconsistently, Petitioner subsequently testified that, at times, like Mr. Nunez, she was also provided documents free of charge. Petitioner failed to present sufficient evidence to establish that any document that the Association was required to maintain (and not prohibited from disclosure) was not, in fact, provided or made available for inspection. Respondents' witnesses credibly testified that Petitioner had access to all available documents, and their testimony was buttressed by the record evidence. Furthermore, a review of the record reveals that Respondents' legal counsel, on multiple occasions, provided written responses to Petitioner's document requests.5/ Even if Petitioner had presented sufficient evidence to establish that she was denied access to the Association's records, Petitioner failed to present sufficient evidence to establish that any such denial was due to any discriminatory animus on the basis of her race.6/ Access to Property Petitioner's Access The original Condominium Rules and Regulations provided that, "[a]utomobiles belonging to residents must at all times bear the identifying garage sticker provided by the Association." On July 27, 2011, Ms. Zarante, on behalf of the Condominium, authored a memorandum to all residents. The contents of the memorandum are as follows: DEAR RESIDENT, PLEASE BE INFORMED THAT AS OF TODAY, YOU MUST DISPLAY THE CAR BARCODE LABEL IN YOUR CARS AT ALL TIMES, WHILE COMING INTO THE BUILDING SO YOU CAN USE THE RESIDENT'S ENTRANCE GATE AND WHILE YOUR CAR IS PARKED IN YOUR ASSIGNED PARKING SPACE. ALSO, THE DRIVER SIDE OF THE CAR'S WINDSHIELD MUST DISPLAY THE WINSTON TOWERS LABEL SHOWING THE SPACE NUMBER. IN CASE YOU DO NOT HAVE THE BARCODE LABEL OR THE WINSTON TOWERS LABEL, PLEASE, STOP BY THE OFFICE IN ORDER TO GET THEM. IF YOU ALREADY HAVE THE CAR BARCODE LABEL DISPLAYED IN YOUR CAR, WE ASK YOU TO PLEASE REFRAIN FROM USING THE VISITOR'S GATE AND TO ALWAYS USE THE RESIDENT'S ENTRANCE GATE. On that same date, Ms. Zarante, on behalf of the Condominium, authored a memorandum to the gate security personnel. Said memorandum set forth the same information as above, and further advised the gate personnel to advise residents without the requisite barcode and label to stop by the office to obtain the same. The memorandum further instructed the security personnel as follows: SHOULD THE RESIDENT WITH A CAR BARCODE LABEL ALREADY PLACED IN THE CAR STILL DECIDES [sic] TO USE THE VISITOR'S GATE, PLEASE TELL THEM THAT YOU WILL ONLY OPEN THAT TIME FOR THEM, THAT IN THE FUTURE THEY MUST USE THE RESIDENT'S ENTRANCE GATE AS YOU WILL NOT OPEN FOR THEM. SHOULD THEY HAVE ANY PROBLEM WITH THE BARCODE LABEL, PLEASE TELL THEM TO STOP BY THE OFFICE. On September 8, 2011, the Board of Directors issued a memorandum to "Residents Using Visitor's Gate" entitled "FINAL NOTICE/RESIDENT BUILDING ACCESS." The memorandum advised the residents as follows: DEAR RESIDENT, PLEASE BE INFORMED THAT YOU MUST DISPLAY THE CAR BARCODE LABEL IN YOUR CARS AT ALL TIMES. YOU MUST USE THE CAR BARCODE LABEL AND USE THE RESIDENT'S ENTRANCE WHEN ENTERING OUR BUILDING. SHOULD YOU CONTINUE USING THE VISITOR'S GATE, WHICH IS FOR VISITORS AND DELIVERIES ONLY, YOU WILL NOT BE ADMITTED. AS AN OWNER/RESIDENT YOU WILL BE PERMITTED TO ENTER; HOWEVER, YOUR AUTOMOBILE WILL NOT. IF YOU LEAVE YOUR AUTOMOBILE IN THE VISITOR'S ENTRANCE THE POLICE WILL BE NOTIFIED AND YOUR AUTOMOBILE WILL BE TOWED. PLEASE, ABIDE BY THE RULES AND REGULATIONS TO AVOID FUTURE PROBLEMS. The Condominium maintained regular office hours of 9:00 a.m. to 5:00 p.m. for residents to obtain the aforementioned barcode/label. On or about September 14, 2011, Petitioner attempted to enter the Condominium using the visitors' gate. Despite being advised of the barcode/label requirement and the admonition against using the visitors' gate, Petitioner had not acquired the barcode/label. After the security officer advised Petitioner that he was not permitted to open the visitors' gate for residents, Petitioner entered the security gate house and opened the gate herself. As a result of her actions, law enforcement was called to the scene, and ultimately Petitioner gained access to the Condominium. Subsequently, as a result of Petitioner's actions, she was advised via correspondence that her actions were improper.7/ After obtaining the requisite barcode/label, there is no evidence that Petitioner experienced any further inconvenience regarding the gate. The undersigned finds that Petitioner was not denied access to her property. The undersigned further finds that Petitioner presented no evidence that any inconvenience regarding the gate was due to her race. Petitioner's Son Visitors of unit owners were required to pay $2.00 to park in the guest parking lot. Unit owners, like Petitioner, for the convenience of their guests, were permitted to pre-pay for a guest if the guest was anticipated to arrive that day. Carlos Devesa, a security guard at the front gate, testified that a special exception was made for Petitioner, wherein she was allowed to accept a deposit for her guests for a longer period of time. Petitioner testified that on one occasion, a security guard, who is not an employee of the Condominium or the Association, delivered a package to Petitioner's son at the front gate. Petitioner extrapolates that benefit into a denial of access to her property: Security was trying to be nice by greeting him off the property with a package that was left on the property for him. Q. Okay. What evidence do you have that was based on race? A. In the case of my son, again, he was denied access to come to the property. It wasn't because of parking, so maybe you should have been asking security what was his motivation. Q. I'm asking you because you made the allegation. A. Well, I believe that he met him out at the street because he wanted to interfere with his right to come on the property. The undersigned finds that Petitioner's son was not denied access to Petitioner's property. The undersigned further finds that Petitioner failed to present any evidence that Petitioner's son's access to Petitioner's property was denied due to her or his race. Lien Between the twelfth and fifteenth day of each month, the Association runs a "delinquency report." If it is determined that a unit owner or resident is delinquent (in maintenance fees, assessments, etc.) an initial letter is issued reminding of the delinquency. If the delinquency is not then satisfied, a thirty (30) day certified letter is issued. Thereafter, if the delinquency is not cured, the Association ceases to be involved and refers the matter to the Association's legal counsel for further handling. It is undisputed that Petitioner became delinquent in maintenance fees. Following the above protocol, a lien was ultimately placed on Petitioner's unit. Thereafter, Petitioner satisfied the maintenance fees; however, she refused to pay the attorneys' fees associated with the legal process. Petitioner contends that she was treated differently in the lien process due to her race. In support of her position, Petitioner believes that Unit 2007 was not subject to the same protocol. The evidence establishes that Unit 2007 was delinquent for a longer period of time than Petitioner's unit prior to being sent to the Association's counsel. Unlike Petitioner's unit, however, Unit 2007 was placed in foreclosure, and was ultimately sold through a foreclosure sale. The undersigned finds that a lien was placed on Petitioner's unit. The undersigned finds that Petitioner presented no evidence to establish that the lien process was initiated due to her race.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 17th day of July, 2014, in Tallahassee, Leon County, Florida. S TODD P. RESAVAGE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 2014.
The Issue Whether Respondent, James Michael Rossi, violated section 468.436(2)(b)2., Florida Statutes (2015),1/ as alleged in the Amended Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency charged with licensing and regulating Community Association Managers (CAMs), pursuant to sections 468.433 and 486.436, Florida Statutes, respectively. At all times material hereto, Respondent was a licensed Florida CAM, having been issued CAM license number 35631. At all times relevant hereto, Respondent was the CAM for Ocean Villa Condominium Association, Inc. (Ocean Villa). At times during Respondent’s tenure as Ocean Villa’s CAM, Respondent provided CAM services to other associations. During the relevant time period, Ocean Villa did not establish a credit card in its name. Respondent’s practice was to purchase goods for Ocean Villa using his personal credit card, and reimburse himself via check from the Ocean Villa checking account. Respondent submitted his credit card statements and some receipts as backup for the reimbursement checks. In December 2016, Ocean Villa obtained a debit card in its name and Respondent ceased the practice of making purchases on behalf of Ocean Villa using his personal credit card. In the Amended Administrative Complaint, the Department alleges as follows: On or about the following dates: May 2014; June 2014; March 2015; May 2015; and September 2015, Respondent wrote checks to himself from the Association’s checking account, for which Respondent failed to maintain and/or provide the corresponding receipts or invoices substantiating the total amount for each of those checks. The parties stipulated to introduction of seven checks Respondent wrote to himself allegedly in reimbursement for expenditures made by him on behalf of Ocean Villa. Check No. 1989 was written on May 13, 2014, in the amount of $519.00. The check stub indicates the payment was made for a “paint striper roll master,” a piece of equipment used in striping parking lots. As backup for the reimbursement, Respondent submitted an email from sales@paintsprayersplus.com to Respondent confirming an order placed May 13, 2014, for “Newstripe Rollmaster 1000 Parking Lot/Warehouse Line Striper” for a charge of $519.00. Under “payment information,” the email reads, “CREDIT (Denied).” The email further reads, “Your Credit Card payment has been denied. If you do not have a customer account, please contact sales@paintsprayersplus.com for assistance.” Respondent also introduced his June 2014 U.S. Bank credit card statement, which includes a charge on May 15, 2014, to Paintsprayersplus in the amount of $519.00. Respondent wrote Check No. 2043 on June 23, 2014, in the amount of $362.98. The check stub describes the purpose as “Reimburse Expenses.” As backup for the reimbursement, Respondent produced his June 2014 U.S. Bank credit card statement. The statement is redacted to exclude personal charges. The statement includes five separate charges at Office Depot, for a total amount of $147.64; a charge of $9.00 for conference call services; the charge of $519.00 from Paintsprayersplus; and a charge of $207.00 from Newstripe, Inc. Respondent testified the Newstripe, Inc. charge was for the paint used to restripe the parking lot at Ocean Villa. The redacted credit card statement contains Respondent’s handwritten note next to the Paintsprayersplus charge of $519.00 “PO 5-13-14 Ck# 1989,” indicating he previously reimbursed himself for that charge via Check No. 1989. The redacted credit card statement also contains Respondent’s handwritten note totaling the unredacted charges to $881.98, subtracting the $519.00 previously reimbursed for the restriper, leaving a remainder of $362.98 to be reimbursed. That amount matches the amount Respondent reimbursed himself via Check No. 2043. Respondent wrote Check No. 2361 on March 6, 2015, in the amount of $108.70. The check stub lists two invoices both dated March 6, 2015: $10.72 for “Phone cord for conference calls,” and $97.98 for “Copy paper and stamps.” As backup for the reimbursement, Respondent produced a receipt from Office Depot dated March 3, 2015, and a receipt from Home Depot dated February 26, 2015. The Home Depot receipt is for a “50’ white phone line cord” at $9.97, for a total of $10.72, after tax. The Office Depot receipt lists three separate charges: one for two boxes of 9 x 11 inch paper at $53.99 each; two quantities of U.S. postage stamps at $49.00 each; and another box of 9 x 11 inch paper at $53.99. All three boxes of paper were discounted $8.00 each, and the total, after tax, for the purchased items was $195.96. Respondent handwrote on the receipt after the total, “/2 97.98 Half to OV & Half to TP.” Respondent testified, credibly, that the supplies were purchased for both Ocean Villa and a second association for which he served as CAM. Respondent wrote Check No. 2371 on March 19, 2015, in the amount of $554.51. The check stub notes the purpose was reimbursement for three separate invoices dated March 19, 2015, for “office supplies.” The amounts corresponding with each invoice are $120.34, $386.28, and $47.89, respectively. As backup for the reimbursement, Respondent introduced his redacted U.S. Bank credit card statements for January and February 2015, as well as an Office Depot receipt dated March 7, 2015. The February 2015 bank statement contains the following unredacted charges: 01/16 Office Depot #2821 $24.48 01/18 Conf. Call Services $9.00 02/03 Office Depot #2821 $83.07 02/09 USPS $3.79 The total of the unredacted charges is $120.34, the same amount as the first invoice for office supplies noted on the check stub for February 10, 2015. The January 2015 bank statement contains the following unredacted charges: 12/10 Office Depot #2821 $28.20 12/11 USPS $134.33 12/15 Office Depot #2821 $49.00 12/24 Conf. Call Services $9.00 01/02 Lowes #02367 $22.00 01/06 Office Depot #2821 $143.75 The charges total $386.28, the same amount as the second invoice for office supplies noted on the check stub for January 12, 2015. The March 7, 2015 receipt from Office Depot lists two charges: No. 8 Envelopes at $36.99, and two of another item (unidentifiable based on the receipt) at $3.99 each for a total of $7.98. The total purchase, after tax, was $47.89, the same amount as the third invoice for office supplies noted on the check stub. Respondent wrote Check No. 2378 on March 20, 2015, in the amount $359.40. The check stub describes the purpose as “Miscellaneous.” As backup documentation for the reimbursement, Respondent introduced his March 2015 U.S. Bank credit card statement, which lists the following unredacted charges: 02/19 Conf. Call Services $9.00 02/24 USPS $12.35 02/25 Amazon Marketplace $113.56 02/27 Amazon Marketplace $176.60 03/07 Office Depot $47.89 Respondent testified, credibly, that the Amazon Marketplace charges were for personalized uniform jackets for Ocean Villa maintenance and security personnel, purchased at the direction of the Board. The unredacted charges total $359.40, the same amount as reimbursement Check No. 2378. Respondent wrote Check No. 2459 in the amount of $2,364.74 on May 22, 2015. The check stub lists nine separate purchases in April and May of 2015, including binders for Ocean Villa’s financial statements, an external hard drive, file folders, sun umbrellas and bases, and postage for certified mail. As backup in support of the reimbursements, Respondent introduced nine receipts from a variety of vendors, including Office Depot, Home Depot, WalMart, Sam’s Club, and USPS. The last check at issue is Check No. 2593 which Respondent wrote on September 24, 2015, in the amount of $471.50. The check stub lists four separate invoices for postage. As backup documentation for the reimbursement, Respondent introduced four separate USPS receipts which match the amount listed on the check stub for each invoice, and which total $471.50. In this case, the Department charges Respondent with two counts pursuant to section 468.436(2)(b)2., which subjects a licensee to discipline for violating any rule adopted by the Department. Count I In Count I of the Amended Administrative Complaint, the Department alleges Respondent violated Florida Administrative Code Rule 61E14-2.001(3)(d), which requires maintenance of the “official records” of an association as required by section 718.111(12), Florida Statutes. Specifically, the Department charges Respondent with failure to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures,” as required by section 718.111(12). The Department introduced the testimony of Dawn Warren, a 16-year licensed CAM, who has been employed as CAM for two separate condominium associations, served as president of a condominium association complex for 15 years, and previously served on the Regulatory Council of Community Association Managers for eight years (three years as Chair). Through Ms. Warren’s testimony, the Department attempted to establish that a CAM must keep vendor receipts of each purchase in order to comply with the statutory requirement to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures.” Ms. Warren testified consistently that the vendor receipt was the only appropriate record of what was purchased by, or on behalf of, the association. The Department admitted, through Ms. Warren’s testimony, that the backup documentation for Check Nos. 2361, 2459,3/ and 2593 were appropriate itemized records of what was purchased on behalf of the association. The Department’s allegations on Count I can be narrowed to whether Respondent failed to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures,” based on the records associated with four checks: 1989, 2043, 2371, and 2378. Ms. Warren’s opinion that itemized receipts for each purchase are required hinges on her interpretation of the statute, summarized as follows: Well, right in 718, it does say itemized receipts and expenditures. So an itemized receipt would be something that’s itemized, which you – which I and anyone that I know that’s a CAM turns in a receipt, and it itemizes what they bought.[4/] Despite Ms. Warren’s depth of experience as a CAM, her testimony was not persuasive. Ms. Warren’s read of the statute is incorrect. It does not read, “itemized receipts,” it reads, “itemized and detailed records of all receipts and expenditures.” Further, Ms. Warren’s opinion that the vendor receipt is required because it is the only record of what was actually purchased, is not credible. With regard to Check No. 2361, Ms. Warren testified that, based on the receipt, she could identify that the three purchases were, in order, envelopes, postage, and paper. The first and third items on the receipt have the exact same product ID and description--196517 PPR,X- 9.11” .10. Yet, Ms. Warren testified that the first charge on the receipt was for No. 10 envelopes, while the last item on the receipt was for paper. She subsequently testified as to the first charge, “I don’t know what it is exactly.” Ms. Warren’s opinion that the vendor’s itemized receipt is the only allowable record of expenditures, because it is “the record of what was purchased,” was undercut by her own inability to identify from the vendor itemized receipt specifically what was purchased on behalf of the association. The Department’s focus on receipts is misplaced. As correctly identified by Respondent, the items purchased by him on behalf of Ocean Villa are expenditures, not receipts. The statute requires Ocean Villa, through its CAM, to maintain “itemized and detailed records of all . . . expenditures.” Respondent testified, credibly, that he maintains copies of all Ocean Villa expenditures organized by both date (month, day, and year) and by vendor, as well as QuickBooks records of all Ocean Villa documents. Further, with the exception of Check Nos. 2043 and 2378, the checkstubs entered into evidence are itemized as to the date of purchase, the amount paid, and a description of the item purchased. These are detailed, itemized records of the expenditures made. The check stub for Check No. 2043 lists an invoice dated June 23, 2014, in the amount of $362.98 to “Reimburse Expenses,” followed up with a redacted credit card statement listing five separate Office Depot charges, a charge from Newstripe, Inc., and a $9.00 charge for conference call services. At hearing, it was established that the $9.00 charge for conference call services was a recurring monthly charge to the association. It was also established that the $200.00 charge to Newstripe, Inc., was for the paint used to restripe the Ocean Villa parking lot. The record does not support a finding of what specifically was purchased at Office Depot for a total of $146.74. The check stub for Check No. 2378 lists one invoice in the amount of $359.40 for “Miscellaneous” expenses, to which Respondent attached his unredacted March 2015 credit card statement. The statement lists unredacted charges of $9.00 for conference call services, $12.35 for postage, $47.89 for purchases at Office Depot, and the Amazon Marketplace charges for uniform jackets totaling $290.16. Respondent introduced the March 7, 2015 Office Depot itemized receipt showing two purchases: one for envelopes at $36.99, and one for an unidentified product5/ at $3.99 each, for a total of $47.89. The record does not support a finding of what specifically was charged at Office Depot for $3.99 x 2. The Department did not prove Respondent failed to maintain “[a]ccurate, itemized, and detailed records of receipts and expenditures.” At most, the Department proved that Respondent reimbursed himself, through Check Nos. 2043 and 2378, for expenditures totaling $154.72 without a written itemized account of what was purchased. Count II In Count II of the Amended Administrative Complaint, the Department alleges Respondent violated rule 61E14- 2.001(2)(c), which requires a CAM to “perform all community association management services . . . to professional standards and to the standards established by Section 468.4334(1), F.S.” The Department argues Respondent failed to meet undefined “professional standards” by reimbursing himself for expenses incurred on behalf of the association without itemized vendor receipts for each expense. Ms. Warren testified repeatedly that Respondent did not submit itemized receipts to support reimbursement checks to himself for purchases made on behalf of Ocean Villa. She expressed her opinion that a CAM’s reimbursement records should include the itemized receipts for purchases for which reimbursement is sought, and that, in her 15 years as an association president, she would never sign a check to reimburse a CAM without the itemized receipt for the purchases made. Ms. Warren’s opinion was based solely on her practice and not on any standards or guidelines established by a professional organization. Ms. Warren’s testimony did not establish that her practice constituted recognized “professional standards,” because she was not able to identify at hearing the specific items purchased based on the Office Depot itemized receipt. Section 468.4334(1) requires, in pertinent part, as follows: A [CAM] and a [CAM] firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees. In an apparent effort to prove Respondent violated the specific professional standards captured in section 468.4334(1), the Department introduced Respondent’s management services contracts with Ocean Villa, and testimony regarding his performance of his duties pursuant to the contracts. The testimony suggested that the checks at issue were reimbursement for expenses Respondent did not have Board approval to incur. For example, Christopher Arnold, who became Ocean Villa President in October 2017, testified that Respondent was limited by the contract to incur expenses for repairs up to $500.00 without Board approval. Mr. Arnold argued that, as none of the expenditures for which Respondent reimbursed himself were for repairs, Respondent did not deal honestly and fairly, or with good faith, in reimbursing himself for the expenses because he did not have Board approval to incur them. Mr. Arnold’s testimony was neither credible nor persuasive. Paragraph 4 of Respondent’s contract in effect beginning in June 2015, titled “Reimbursement of Expenses,” requires the association to reimburse the CAM for costs incurred “in providing services, material, and supplies to, or for the direct benefit of,” the association. Paragraph 4 contains no monetary limit on the amount of costs to be reimbursed. In contrast, paragraph 5.H. of the contract, upon which Mr. Arnold relied, requires the CAM to make repairs and perform other functions in order to “maintain and operate the Association,” and limits expenditures for repairs to $500 without “prior consent from the Board’s representative unless it is a budgeted item.” The Department did not introduce any credible evidence that Respondent’s reimbursements at issue in this case were contrary to any term of Respondent’s contract with Ocean Villa. Moreover, Respondent’s prior contract with Ocean Villa--which preceded the June 2015 contract--required the association to reimburse the CAM “for all reasonable expenses incurred by the [CAM] in the course of its engagement.” The Department did not introduce any evidence that Respondent’s reimbursements were not for “reasonable expenses incurred.” The record established that neither the Ocean Villa Board nor its President in office during 2014 and 2015 ever questioned Respondent’s reimbursements. The Department did not prove Respondent’s reimbursement of expenses by Check Nos. 2361, 2371, 2378, 2459, and 2593,6/ violated any professional standard, including those set forth in section 468.4334(1).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation dismiss DBPR Case No. 2017-043696 against James Michael Rossi. DONE AND ENTERED this 27th day of September, 2018, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of September, 2018.
Findings Of Fact The first issue delineated above has in effect been resolved by the First District Court of Appeal. The Declaratory Statement was issued on June 25, 1980, by the Division, declaring that the Master Association was an "association" as defined in Chapter 718(1), Florida Statutes. The Master Association appealed this Declaratory Statement to the first District Court of Appeal (Exhibit 2). Palm Greens Limited vs. Division of Florida Land Sales and Condominiums, Case No. WW-363. The Respondents filed a petition to stay the Division's proceedings to enforce the rules and the Division denied that petition. The Respondent then filed a petition for review of the denial of the stay in the First District Court of Appeal (Exhibit 5). This petition was denied by the Court. The appellate case was argued in the District Court of on June 2, 1981, and a per curiam affirmance of the declaratory statement was issued on June 4, 1981. That decision has since become final. With regard to the second issue referred to above, there is no question that the Master Association failed to allow the members to view the Master Association's books and records, although the Master Association did offer to allow them to view the books and records upon their agreeing to certain conditions. The agreement could not be reached and therefore the Unit One Association members were never allowed to view the books and records. The President of the Master Association, Mr. Lawrence Sadick, admitted in his testimony that the Master Association had not allowed its members to see the books and records. Similarly, in the Respondent's Amended Formal Response to Notice to Show Cause, the Master Association stated that it "admits that it has denied Number One's request for access to its books and records." The primary dispute to be resolved here is whether the Master Condominium Association, Respondent, increased its 1980 budget assessment over the statutorily prescribed limit of 115 percent of the 1979 assessment. The Respondent, the Master Association, is composed of two members, the Number One Condominium Association and the Number Two Condominium Association. The Number One Association includes those unit owners who purchased units which were constructed in the initial phase of the Palm Greens Condominium development. In 1977, the developer, named above, controlled both the Number One and the Number Two Associations. In 1978, the 678 unit owners in the Number One Association took over control of that sub-association from the developer. The Number Two Association continues to be controlled by the developer. Similarly, the developer controls the Master Association (by control of its Board of Directors) until such time as all the units in the Number Two Association are sold out. In 1977, Palm Greens Limited and Yusem Properties of Del Ray Limited (Developer) maintained a single set of books, records and accounting procedures for all three of these Associations. The Developer did not prepare a separate 1978 budget for the Master Association. When the unit owners of Number One Association assumed control of Number One from the Developer in 1978, the Developer and the Board of Number One entered into an agreement that Number One would continue the budgeting for the recreation area and allocate its cost to Number One and to the Number Two Associations (although statutory responsibility for the budgeting remained with the Master Association). Thus, at that time, the Master Association's primary responsibility was managing the recreation areas which it owned. Although the Developer delegated the budget preparation responsibility for the recreation areas to Number One, it never terminated its ultimate control and authority over the recreation areas and the Master Association. With regard to the authority granted by the Master to Number One to operate the recreation area and to set and collect assessments for the two sub- associations, the Respondent maintains that Number One was required as a condition to the delegation of that authority to keep records of the actual receipts and expenditures during that 1979 budget year and that Number One failed to keep those records. There was no showing, however, that the Master Association, although it delegated the budget preparation responsibility for the recreation areas to Number One, ever informed Number One that it would be required to keep the sole set of books and records of receipts and expenditures for 1979 on behalf of the Master Association. The percentage allocation of the budgetary assessments between Number One and Number Two Associations, of the total Master Association assessment, was based upon the total number of units sold in both associations. As a result, the percentage that each association paid toward the total Master Association assessment changed each year. For example, the total 1979, Master Association assessment was $153,212, of which 73 percent was the percentage contribution of Number One and 27 percent was the percentage contribution of Number Two Association, according to the stipulation entered into between the parties as a result of the pre-hearing conference. The Number One Association Condominium units were essentially sold out at the times pertinent hereto and new sales were continuing in the Number Two Association, such that the percentage contribution between the two associations changed considerably between 1979 and 1980. In effect, Number One Association was paying a smaller portion of the total Master Association assessment and, at the same time, in return for its payment it was sharing a recreation area with many more condominium owners in 1980 than in 1979. Thus, it is not accurate, in determining the percentage amount of change in the total assessment, to compare the amounts each individual unit owner contributed in each year toward the total Master Association assessment. This would in effect, be comparing "apples and oranges" since the total base number of persons paying the Master Association assessment changed considerably from 1979 to 1980 with corresponding changes in the per capita shares of the total assessment paid by each unit owner. The only "similar" assessment which can accurately be used for comparison purposes is the total Master Association assessment for one year against the total Master Association assessment for the succeeding year. Since the Master Association did not prepare a separate budget or assessment for 1979, the $153,212 figures stipulated to by the parties was the figure that the Number One Association extrapolated from its overall budget which included most of the Master Association's recreational facility expenses. At the close of 1979, the Developer which controlled the Master Association asserted and actively assumed its responsibility for the recreation area services and for the first time prepared a Master Association budget and coextensive assessment. The Master Association and the Developer admitted on page 1 of the Amended Formal Response to the Notice to Show Cause that on its face, the 1980 Master Association Recreation budget reflects an increase of more than 115 percent over the 1979 recreation budget prepared by Number One Condominium Association [at the behest of the Master Association." The Master Association also admitted at the hearing that it did not obtain approval for the increase from a majority of the unit owners. The Respondent maintains that the total 1980 Master assessment did not exceed 115 percent of the total 1979 Master assessment if deductions are made for reserves for repairs and replacements (which it maintains were authorized by Section 718.112(2)(f)(k) Florida Statutes [1979]). Thus, the Respondent admitted that on its face the 1900 Master Association budget reflects an increase of more than 115 percent over the 1979 Master Association budget with the qualification that if these reserves for repairs and replacements in the amount of $45,050 are deducted, then the total 1980 Master Association assessment would be within 115 percent of the total Master assessment. The Number One Association is not claiming any excessive payments which the Number Two Association members may have made toward the total Master Association assessment. The Number One Association established that the amount of the increased budgetary assessment over 115 percent for 1980 is $40,784. (See Exhibit 8.) Accordingly, inasmuch as the Number One Association's 1980 share of the 1980 Master Association budget assessment was 59 percent (by agreement of the parties) Number One Association is therefore Paying the pro- rata excessive amount of $24,062.
