Findings Of Fact Respondent, Camino Real Village, is the joint venture and developer of a sixty-four unit condominium project known as Camino Real Village V (project) in Boca Raton, Florida. The project consists of two buildings (5751 and 5801) with thirty-two units each. Respondent, B&S Ventures, Inc. (B&S), a Florida corporation, is a partner in the joint venture. The other partner, Middlesex Development Corporation, a California corporation, was not named a respondent in this cause. Although the development consists of at least four separate condominium projects known as Camino Real Villages II, III, IV and V, only Camino Real Village V is in issue in this proceeding. Respondents, as the developer and partner of the joint venture, are subject to the regulatory requirements of petitioner, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Division). They are charged with violating various provisions of Chapter 718, Florida Statutes (1985), as set forth in greater detail in the Division's notice to show cause issued on July 17, 1986. The Camino Real project is considered to be a multi-condominium project. This means the development includes more than one condominium project but that all are operated by a common association. The parties agree that the project is not a phase condominium project. Under Division rules and applicable statutes, the developer of a multi-condominium project is required to file with the Division a set of "creating" documents at the inception of the project. The creating documents include, among other things, a prospectus, declaration of condominium, plans and survey, legal description, percentages of common ownership, surplus and expenses, articles of incorporation, by- laws, site plan, restrictions (if any), and the estimated operating budget for the first year. Such documents must be submitted for each condominium within the project. However, where the documents are identical to those submitted for another condominium, the developer may file a "certificate of identical documents" wherein the developer certifies that all disclosure items are identical with items for another condominium within the project which has been previously filed with the Division. After the creating documents are filed, the developer must thereafter file additional documents as new condominiums are constructed and completed. This is generally accomplished by filing an amendment to the original declaration for condominium. The amendment includes a surveyor's certificate attesting that the construction on the project has been completed. The purpose of the later filing is to inform the Division that construction on the new condominium has been substantially completed. On an undisclosed date in 1979, respondents filed their creating documents for certain condominiums in Camino Real Village. On November 19, 1980, they submitted their filing for the creation of Camino Real Village V. These documents were accepted as to "form" on December 11, 1980. They included a certificate of identical document signed by B&S' president which certified certain documents were identical to those previously submitted for Camino Real Village IV, a legal description of the property on which the condominium sits, sketches of the types of units to be built, a typical floor plan for Buildings 5751 and 5801, an estimated operating budget based on sixty-four units and common ownership percentages for each unit in the two buildings. Under Division requirements and state law, the documents should have contained a statement reflecting that the condominium was not substantially completed. 3/ However, they did not, and this omission was not detected by the Division when it reviewed and approved the initial filing. On October 23, 1984 respondents filed the declaration of condominium for Camino Real Village V in the local public records. The documents have been received in evidence as petitioner's composite exhibit 1. They reflected that the percentage of ownership in the common elements for both buildings equaled one hundred percent. Section 3(b) of the declaration provided for the creation of a condominium consisting of two buildings (5751 and 5801) containing thirty- two units each. The documents included a surveyor's certification that Building 5751 was substantially completed. However, as to Building 5801, which was not completed at that time, no statement reflecting its state of completion was filed. It is also noted that the declaration was not filed with the Division as required by law, and the Division did not learn of its existence until sometime later. Since the filing of the declaration, respondents have operated Camino Real Village V as a condominium. On October 23, 1984, respondents executed the closing documents on the sale of the first unit (Unit No. 106 in Building 5751) in Camino Real Village V. The warranty deed was later recorded in the local public records on November 1, 1984, and it is found this is the appropriate date on which the sale of the first unit occurred. This is consistent with the standard practice of parties executing documents prior to closing but not considering a unit sold until the money is actually transferred from the buyer to the seller. This date is significant since it may bear directly upon the date when the developer must begin paying common expenses on developer-owned units. On or about October 24, 1985 a "First Amendment to the Declaration of Camino Real Village V" was recorded by respondents in the local public records. It amended the declaration previously executed on October 23, 1984 and included, among other things, a surveyor's certificate reflecting that Building 5801 had been substantially completed. It also attempted to submit Building 5801 to condominium ownership. Although the amendment and attached documents should have been filed with the Division, respondents neglected to do so. The Division first learned that the documents existed during the course of this proceeding. According to paragraph 15 of the declaration, common expenses can only be assessed by the Association against "each condominium parcel." A condominium parcel is defined in paragraph 4(c) as "the condominium unit, together with an undivided share in the common elements appurtenant thereto." A condominium unit in turn is defined in paragraph 4(a) as "the unit being a unit of space, designated 'condominium unit' on the sketch of survey and plans attached hereto and marked as Exhibit B." The latter exhibit, which is attached to the declaration, contains the plans and survey of the project, the surveyor's certification of substantial completion, and a graphic description of each finished unit within the project. Therefore, the above definitions evidenced an intent that common expenses could be assessed only against completed units. Pursuant to Subsections 718.116(1) and (8), Florida Statutes (1985), a developer is responsible for paying his pro- rata share of common expenses on all developer-owned units. The same law permits the declaration to provide that the developer is relieved of this per-unit obligation until the expiration of a ninety-day period after the first unit is sold. In this case, the declaration had such a provision in paragraph 14. It provided in part as follows: . . . for such time as the Developer continues to be a Unit Owner, but not exceeding ninety (90) days subsequent to the closing of the first condominium unit, the Developer shall only be required to contribute such sums to the common expenses of the Condominium, in addition to the total monthly common expense assessments paid by all other Unit Owners, as may be required for the Condominium Association to maintain the condominium as provided in said Declaration of Exhibits . . . Developer hereby reserves the option to guarantee the level of assessments to unit owners for a specified time interval and thereby limit its obligations to contribute to condominium maintenance in accordance with the provisions of Chapter 718.116(8), Florida Statutes. The parties agree that the monthly assessments for common expenses during the period relevant to this proceeding were as follows: Type A Units $135.20 Type B Units 138.64 Type C Units 163.96 The declaration also provides that ten percent interest must be added to any liability owed. The record reflects, and respondents concede, that such assessments were not paid on any units in Building 5801 until the following dates: Units 100-107 ----------- August 28, 1985 Units 200-207 ----------- September 5, 1985 Units 300-307 ----------- September 10, 1985 Units 400-407 ----------- September 18, 1985 The above dates are exactly ninety days after certificates of occupancy were issued for each of the four floors of Building 5801. Even though assessments were not paid by respondents until those dates, beginning on January 31, 1985 and continuing until such assessments were paid, other unit owners were charged and paid assessments based upon a budget for sixty-four units. As it turned out, the difference between the budget and annual common expenses actually incurred by the project was approximately $32,100, or the amount the Division contends respondents owe. In 1982-84, petitioner conducted an investigation of Camino Real Villages II, III and IV based upon complaints received from a certain unit owner. The complaint concerned allegations that access to association books was denied, that the declaration contained a developer guarantee, that maintenance expenses were not properly paid, and that improper assessments were levied on unit owners. The file was closed in November, 1984 after the Division's enforcement supervisor concluded that the allegations were either "unfounded" or could be resolved through voluntary compliance by the Association. As to the fourth issue, which was an allegation that the developer- controlled Association had improperly assessed unit owners from November, 1980 to January, 1982, the investigative report noted that the developer was "allocating them based on the completed units versus the total units filed for the entire community." The enforcement supervisor concluded that this was "the method chosen by the Association," and "absent specifics in the documents, we lack jurisdiction . . . to question this practice." There is no mention of the term "certificate of occupancy" in the report. However, uncontradicted testimony by respondents reflects that its use of the date of issuance of the certificate of occupancy to determine when assessments became due was the focus of the investigation, and that respondents relied upon those statements in continuing their practice of not paying assessments until ninety days after a certificate of occupancy was issued on a unit. They did so, at least in part, on the theory that the Association did not assume responsibility for expenses until that time. Respondents point out that the filing documents submitted to the Division in November, 1980 were defective in that the surveyor's certificate was incorrect. They go on to suggest that, because of this deficiency, the filing might be invalidated by a court and therefore the statutory assessment provision would not apply. However, no person has ever challenged the validity of the filing, and the general law contains a curative provision for any initial filing errors. They also assert that, if any liability is in fact owed, they are entitled to set-offs for expenses incurred by the developer while the project was being constructed. These include payments for real estate taxes, utility bills, Boca Del Mar Improvement Association, Inc. fees, trash removal, insurance, security service, assessments and maintenance and are itemized in attachments to respondents' exhibit 1. However, there is no rule or statutory provision which authorizes this type of set-off to be applied against common expenses. Therefore, the expenses itemized in respondents' exhibit 1 are deemed to be irrelevant.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the respondents be found guilty of violating Section 718.116, Florida Statutes (1985), as charged in the notice to show cause, and that they be required to pay the Association for past due common expenses on developer-owned units in Building 5801 as set forth in paragraph 8 of the conclusions of law plus ten percent interest to and including the date of payment. DONE AND ORDERED this 30th day of March, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 30th day of March, 1988.
The Issue Whether Respondent committed the violation alleged in the Amended Notice to Show Cause and, if so, what penalty should be imposed.
Findings Of Fact Respondent is a corporate condominium association operating Vantage View Condominium, a 175-unit condominium subject to the provisions of Chapter 718, Florida Statutes. At all times material to the allegations at issue, the Respondent maintained “building block diagrams” which identified unit owners, their unit number, their telephone number, and their assigned parking space. The block diagrams were utilized by condominium personnel in order to contact unit owners as need dictated. Such diagrams were kept in the regular course of the condominium business but were not always given to unit owners. If distributed, the block diagram might be abridged to delete information unrelated to an inquiry or information which the association did not release such as the telephone numbers of residents. Written requests for information were processed through the condominium office located within the condominium complex. At all times material to the allegations of this case, Mr. Salkin was a unit owner at Vantage View Condominium who resided at the property. On more than one occasion, Mr. Salkin made written requests for the block diagrams described above. On no occasion did the Respondent release the complete and unabridged document to Mr. Salkin. Upon notice of the dispute, the Petitioner’s agent investigated the matter and directed the Respondent to release the complete block diagram to Mr. Salkin. Despite the directive, the Respondent again refused to release the document to the unit owner. Thereafter, the Petitioner and Mr. Salkin discovered another document, known by Respondent as its “unit owner roster” which also contained the unit owner names, addresses, and telephone numbers. On or about June 30, 1997, Mr. Salkin made a written request for the unit owner roster maintained by Respondent. Again, the Respondent refused to make an unedited version of the unit owner roster available to Mr. Salkin. The Petitioner directed Respondent to make the roster available to Mr. Salkin but it has failed to do so. While some of the information on the roster and block diagrams might be available through other sources, unit owners are not required by law to research public records for information routinely kept by a condominium association. Although the Respondent cooperated fully with the investigation in this case and was cordial and open with regard to its unwillingness to produce the documents requested by Mr. Salkin, it presented no legal basis for its refusal to make complete copies of the documents available to the unit owner. The Petitioner is in the process of promulgating enforcement guidelines to set the ranges for penalties in cases of this nature. It has determined that failure to provide access to official records warrants an administrative fine from one dollar to five dollars per unit. Accordingly, it seeks a fine in the amount of $875.00.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, enter a Final Order sustaining the Amended Notice to Show Cause, determining the Respondent has willfully and intentionally failed to make its official records available to a unit owner after written request for same, and imposing an administrative fine in the amount of $875. DONE AND ENTERED this 6th day of April, 1998, in Tallahassee, Leon County, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850)488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 1998. COPIES FURNISHED: Robert H. Ellzey, Jr., Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1030 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1030 Robin L. Suarez, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1030 Irv Goldfarb, President Vantage View, Inc. 2842 North Ocean Boulevard Fort Lauderdale, Florida 33308
The Issue Whether Respondent, a condominium association, violated Section 718.112(2)(c), Florida Statutes; by holding board meetings on January 2, 7, and 16 or 17, 1985, which were not open to all unit owners and for which notice was not posted; If so, what sanctions should be imposed.
Findings Of Fact Petitioner, the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, is the state agency charged with the duty of enforcing Chapter 718, Florida Statutes, the Florida Condominium Law. Respondent, Windsor Park Condominium Association, Inc., is the condominium association responsible for a 64-unit residential condominium known as the Windsor Park North Condominium ("Condominium") located at 120 Wettaw Lane, North Palm Beach, Florida. In their Prehearing Stipulations, the parties agreed that the disputed issues are whether the Association, contrary to law, held condominium board meetings on January 2, 6 and 16 and 17, 1985, which were not open to all unit owners and for which notice was not posted. The Association contends that if such meetings were, in fact, held, they were "emergency" meetings for which notice was not required under the statute. In December 1984, a five-member board of administration was elected by the members of the Association to run the condominium association in 1985; Muriel Siebern was elected President. Until November 1984, Respondent had contracted with a professional management company known as First Columbia Management to manage the Condominium. Norma Calhoun carried out those management duties on behalf of the company. When the contract expired in November 1984, Harry Christie (then President of the Association) signed a new one-year contract, on behalf of the Association, with Florida Management Professionals, Inc., a newly formed management company which was owned by Norma Calhoun. Until November 1984, the First Columbia Management hired, fired, and supervised employees, maintenance personnel and repairmen billed and collected assessments of common expenses paid Association bills prepared the annual budget and year-end financial statements communicated with the Association's attorney and, attended unit owner meetings. From November until early January, 1985, these functions continued to be performed by Norma Calhoun, on behalf of her newly formed management company. But in early January 1985, the newly elected board of administration terminated the Association's contract with Ms. Calhoun's company and began performing the management duties of the Association without the assistance of a professional management company. II. The newly elected board of administration of the Association held four meetings between January 2 and January 17, 1985. Advance notice of these meetings was not posted on the Condominium property; and no unit owners other than members of the present (or past) board attended. The first meeting was held on January 2, 1985, at the former management company's offices in North Palm Beach. Four members of the board (a quorum) were present: Muriel Siebern, President; Sue Day, Vice President; Fred Kelly, Treasurer; and Lori Powers, Member-at-Large. Ms. Calhoun, and Harry Christie, President of the outgoing board, were also present. One purpose of this meeting was to affect a turn-over of the Association's records to the new board. Mr. Christie, outgoing president, presented the key to the locker room, financial statements for the Association from January through October 1984, the book of minutes, a history of the names and addresses of all unit owners, and the results of the vote taken at the December 1984 annual meeting. The board, however, also discussed with Ms. Calhoun the nature and performance of her management duties, reviewed various contracts, and discussed with her a pending court hearing in a lawsuit in which the Association was a party. No emergency conditions surrounded this meeting which would have precluded the posting of notice at least 48 hours in advance. Ms. Siebern had called Ms. Calhoun five days before the meeting to ask her to attend. III. On January 7, 1985, Ms. Siebern and two other members of the board (a quorum) met in the offices of Richard Breithart (the attorney who now represents the Association) to discuss the management contract which Mr. Christie had signed with Florida Management Professionals, Inc., in November 1984. (The board members had discussed the contract on the way to attorney Breithart's offices and felt it was not binding.) After Mr. Breithart concurred, the board decided to fire Ms. Calhoun and terminate the contract with her management company. After polling the two absent board members (by telephone) and obtaining their concurrence, the three board members met with Ms. Calhoun that same day at First Columbia Management's offices, and informed her of their decisions. They asked that she turn over to them all of the Association's records, including all financial statements. Some of those records were not immediately available since they were kept at the former management company's offices in Clearwater. Ms. Calhoun responded that she would retrieve the material, but that it would take several weeks to receive it. The board members asked her to call them when it was received. No one told Ms. Calhoun that an emergency existed or that there was an urgent or pressing need for the records. The board members also asked that the Association's checkbook be returned. Although the Association asserts that these were emergency meetings which excuse their failure to post 48 hours notices, no emergency has been shown. Prior to their January 7 meeting, the individual board members were given at least 24 hours notice. The ostensible "emergency" was based on the need to obtain the Association's complete records from Ms. Calhoun, but Mrs. Siebern and other members of the board became aware of the need to obtain the Association's records as early as December 1984. Moreover, the board members, thereafter, did not articulate a need to obtain the records on an emergency basis, which precluded 48 hours notice. (See letter of Ms. Siebern to Mr. Cassels, dated February 12, 1984, attached to Petitioner's Exhibit No. 2). The Association's answers to the Division's interrogatories also fail to mention the existence of an emergency. (Petitioner's Exhibit No. 3) Finally, the Association has not shown any likelihood of injury if it had delayed its January 7 meeting an additional 24 hours in order to post 48-hour notices to all unit owners. Although the board encountered delay in obtaining the Association's complete records from Ms. Calhoun, no injury was shown. There is no evidence or even allegation that Ms. Calhoun was guilty of misappropriation of funds or that the Condominium's bills were not being timely paid. IV. On January 16 or 17, 1985, three board members, including Ms. Siebern, met again at the offices of attorney Breithart. After obtaining concurrence (by telephone) of the two absent board members, the board decided to dispense with the services of attorney Levine, who had been representing the Association in the pending lawsuit, and hire attorney Breithart in his place. The Association asserts that an emergency existed (precluding the need to post notice in advance of the meeting) since a hearing in the pending lawsuit was imminent. This emergency, however, was self-induced even if it existed, it was brought about by the board's failure to timely act. (The board members were dissatisfied with attorney Levine as early as December 1984, when he advised the members at the annual meeting of the Association that they would not prevail on the merits of the pending lawsuit. The board members were aware--then--that a hearing would be scheduled in the lawsuit during the next several weeks.) Another reason for firing attorney Levine was his alleged charging of expensive fees. But it has not been shown why action could not be taken to resolve this concern after giving 48 hours notice, as required by the Condominium Law.
Recommendation Accordingly, based on the foregoing, it is RECOMMENDED: That the Association be found guilty of four violations of Section 718.112(2)(c), Florida Statutes; that it be required to submit a certified check for $4,000 to the Division; and that it be ordered to henceforth conduct all board meetings in accordance with the notice and open meeting requirements of the Condominium Law. DONE and ORDERED this 26th day of February, 1986, in Tallahassee, Florida. R. L. CALEEN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1986. COPIES FURNISHED: Karl M. Scheuerman, Esq. 725 S. Bronough St. Tallahassee, FL 32301 Richard O. Breithart, Esq. 818 U.S. Highway One, Suite 8 North Palm Beach, FL 33408 APPENDIX RULINGS ON PETITIONER'S PROPOSED FINDINGS OF FACT 1-7. Approved, in substance. 8. Adopted, except the last nine lines are rejected as not supported by a preponderance of the evidence. 9-31. Adopted, in substance. RULINGS ON RESPONDENT'S PROPOSED FINDINGS OF FACT 1-2. Adopted, in substance. 3a-d; 4-7. Rejected as not supported by a preponderance of the evidence.
The Issue The issue in this case is whether Respondents, The Fourth Bayshore Condominium Association, Inc. (“Bayshore”), Karl Stemmler (“Stemmler”), and/or Richard Grove (“Grove”), discriminated against Petitioner, Robert Pagano (“Pagano"), on the basis of his physical handicap in violation of the Florida Fair Housing Act.
Findings Of Fact Pagano is a Caucasian male who is handicapped by virtue of medical complications which resulted in the amputation of his left leg in March 2008. He has been confined to a wheelchair since that time. At all times relevant hereto, Pagano was renting a condominium unit at Bayshore. In January 2012, Pagano saw another unit at Bayshore advertised for rent. He called Grove, listed as the owner of the unit, and inquired about renting the property. Grove told Pagano that a key to the unit would be left under a mat between the screen door and front door on January 19, 2012. On that day, Pagano went to inspect the unit, accompanied by a friend, Philip Saglimebene. Upon arrival at the unit, Pagano and his friend began looking for the hidden key, but could not find it. They apparently made some noise while searching for the key, because they were confronted by Stemmler. According to Pagano, Stemmler began asking them in unfriendly terms who they were and what they were doing at the unit. The friend then told Stemmler they were looking for a key so they could go in and inspect the unit as Pagano was interested in renting it from Grove. Stemmler, supposedly identifying himself as a “building representative,” said there was no key to be found. He also reputedly told Pagano and his friend that they would not need a key anyway, “because you are not moving in.” When the friend explained that the unit was for Pagano, not him, Stemmler allegedly said that Pagano was not moving in either because he was an “undesirable.” When asked to explain that comment, Stemmler purportedly said, “He just is; that’s all you need to know.” (None of Stemmler’s comments were verified by competent evidence and, without verification or support, cannot be relied upon to make a finding of fact in this case.) Pagano believes Stemmler’s purported comments were based on the fact that he (Pagano) has long hair and a beard and does not fit into the conventional norm at Bayshore. He also believes that his handicap served as a basis for Stemmler’s alleged comments. There was no credible evidence presented at final hearing to substantiate Pagano’s suppositions. Grove had put his condominium unit up for rent at the beginning of the year. When Pagano called to inquire about it, Grove – who lives out-of-state – notified a friend to leave a key under the mat, as described above. That friend simply forgot to leave a key at the unit on the designated date. Grove knew nothing about Pagano’s interaction with Stemmler. Grove had not spoken to Stemmler prior to the day he and Pagano had their interaction. Stemmler had no authority to speak for Grove or to make a decision concerning to whom Grove would rent his condominium unit. Subsequent to the day Pagano visited the unit, Grove took the unit off the rental market because his wife decided to use the unit to house family and friends rather than renting it out to someone else. It took several weeks for the rental advertisement for the unit to be removed from a locked bulletin board at Bayshore. Grove said that if the unit ever went back on the market, he would call Pagano first about renting it, i.e., Grove had no opposition whatsoever to Pagano’s being a tenant. Van Buren, president of Bayshore, explained that the condominium association utilizes the support of voluntary building representatives to assist with security and minor maintenance at Bayshore. The volunteers, who are generally seasonal residents at Bayshore, do not hold keys to individual units and have no authority to grant or deny an applicant’s request to rent a unit. Stemmler is one of many building representatives who resides part-time at Bayshore. Pagano does not know of any non-handicapped individual who was allowed to rent a unit at Bayshore to the exclusion of himself or any other handicapped person. In fact, Pagano currently resides in another unit at Bayshore; he is already a resident there.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Commission on Human Relations dismissing the Petition for Relief filed by Robert Pagano in its entirety. DONE AND ENTERED this 5th day of September, 2012, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 5th day of September, 2012.
Findings Of Fact The following findings of fact are made upon the stipulation of the parties in the Prehearing Stipulation and in the course of the hearing: Respondents are developers of a condominium as defined by Section 718.103(14), Florida Statutes. Respondents are developers of The Somerset, a condominium located in Naples, Florida. The declaration of condominium for The Somerset was recorded in the public records of Collier County on or about August 27, 1979. No turnover review as prescribed by Section 718.301(4)(c), Florida Statutes (1985), was provided by the developer to the association within 60 days after the date of transfer of control of the association to non-developer unit owners, or has yet been provided to the association. On or about January 29, 1985, unit owners other than the developer had elected a majority of the members of the board of administration for The Somerset condominium. Letters of annual financial reports of actual receipts and expenditures were not furnished to unit owners following the end of the calendar years 1980, 1981, 1982, 1983, and 1984. No vote of the unit owners was taken to waive reserve accounts for capital expenditures and deferred maintenance for each of the years 1980, 1981, 1982, 1983 and 1984. The following findings of fact are made upon the evidence adduced at hearing. The turnover review and report mandated by Section 718.301(4)(c), Florida Statutes, must be prepared by a certified public accountant. Respondents sought the necessary review from the firm of Rogers, Hill and Moon, which had done the association's accounting prior to the turnover. However, Rogers- Hill was unable to perform the review in the required time. Respondents consulted with two other accounting firms, but neither could provide the turnover report. Respondents suggested to the President of the association that they would pay $1,000 to the association in lieu of the turnover report. The association accepted the offer. Respondents paid $1,000 to the association and gave the association all of Respondents' books, ledgers and receipts. Respondents did not promulgate and mail to unit owners proposed budgets of common expenses for the fiscal years 1982, 1983 and 1984. Respondents guaranteed that the assessments for common expenses imposed upon each unit owner would not exceed $75.00 per month from the date of recording the declaration of condominium until the date of turnover of control of the association. There were no meetings of unit owners of The Somerset condominium until time of the turnover. According to the original proposed budget, the items designated as reserve items were roof replacement, resurfacing, and painting. While Respondents maintain that they properly waived the funding of the reserve account for 1980, 1981, 1982, 1983, and 1984, the only evidence offered to support their testimony is the minutes of the annual meeting for each year. However, the credibility of these documents is suspect. The minutes were admittedly all prepared by Respondents in 1985, well after the supposed annual meetings. For the years 1982, 1983 and 1984, David Davis II was a director. His name appears on the minutes as offered by Respondents. Yet, Davis says he did not attend an annual director's meeting in those 3 years. Davis also says that he never attended a director's meeting at which the funding of reserves was waived. In fact, Davis never attended a director's meeting at which a proposed budget was adopted. The minutes are inherently unreliable because they were created much later in time and appear to directly conflict with the testimony of Davis. The minutes are also self-serving. Accordingly, it is found that Respondents did not properly waive the funding of the reserve account for the years 1980, 1981, 1982, 1983, and 1984. Respondents never disclosed to the unit owners that reserves were not funded. The reserve liability is $8,890.00, calculated at $8.75 per month per unit in Phase I (eight units) from August 31, 1979, and in Phase II (12 units) from November 13, 1981, plus all twenty units for the first quarter of 1985. The original budget allocates $8.75 of the assessments to reserves and the original documents (Section 8.2) specify that assessments are to be paid quarterly on January 1, April 1, July 1, and October 1. Since the turnover occurred on January 29, 1985, the assessments for the first quarter had already been paid to Respondents. Respondents expended money for reserve-type expenses. Their Exhibit 5 shows reserve-type expenditures totalling $8,164.78. However, certain of these expenditures do not qualify as reserve-type expenses and must be excluded. Specifically, payments of $485.00 to David Chalfant for repairs to leaking windows, of $560.00 to Roy Hutchinson for repairs to doors which rotted out from the rain, and of $470 Bayside Sandblasting to repair steel doors and to sandblast stains on the sidewalk, are not reserve items (roof replacement, resurfacing and painting). Therefore, Respondents established that they paid $6,649.78 for reserve-type expenses. Petitioner argues that other items should be eliminated because they are not reserve-type expenses or because they were paid after turnover. These arguments are rejected and it is found that $6,649.78 for reserve-type expenses is accurate and should be offset against the reserve liability. Respondents owe the Association $2,240.22 in reserve funds. Paragraph 8.3 of the declaration of condominium for The Somerset provides: The Board shall, in accordance with Bylaws of the Association, establish an annual budget in advance for each fiscal year, which shall correspond to the calendar year, which shall estimate all expenses for the forthcoming year required for the proper operation, management and maintenance of the condominium. . . . Upon adoption of each annual budget by the Board, copies thereof shall be delivered to each unit owner, and the assessment for each year shall be based upon such budget. . . The unit owners were not notified of any Board of Directors meeting at which a proposed annual budget would be considered or adopted. Further no unit owner received copies of proposed annual budgets, except for the budget set forth in the prospectus with the original condominium documents. In fact, no formal meeting of the Board was held to adopt an annual budget.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business Regulation, Division of Florida Land Sales, Condominium and Mobile Homes, enter a Final Order and therein order Respondents to take the following actions: Obtain and furnish to the Association a turnover review as required by Section 718.301(4)(c), Florida Statutes (1985). Pay to the Association the sum of $2,240.22 for Respondents' liability for reserves. Pay to the Petitioner a civil penalty of $5,000.00, pursuant to Section 718.501(1)(d)4, Florida Statutes. DONE and ORDERED this 10th day of December, 1986, in Tallahassee, Florida. DIANE K. KIESLING 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 10th day of December, 1986.
The Issue Whether Respondent, the developer of Hidden Banyan Condominium, violated provisions of Chapter 718, Florida Statutes, and implementing rules by failing to timely call a meeting to allow unit owners, other than the developer, to elect one-third of the members of the board of directors; by failing to include reserve accounts in the condominium association's 1982 and 1983 budgets; by failing to call an annual meeting in 1981, 1982 and 1983; and by failing to pay its share of common expenses.
Findings Of Fact Respondent is the developer of Hidden Banyan Condominium, a 24-unit condominium located in Lantana, Florida. This condominium was created, in law, on March 6, 1980, with the filing of a Declaration of Condominium, and construction was completed soon thereafter. Under the Declaration of Condominium, Hidden Banyan Condominium Association, Inc., a Florida not-for- profit corporation, was responsible for the operation of the condominium. Respondent sold the first condominium units on April 18, 1980, May 15, 1980, July 1, 1980, and two units on August 1, 1980. Consequently on August 1, 1980, unit owners other than Respondent owned more than 15 percent of the condominium units. Respondent controlled the condominium association until September 26, 1983, when a duly noticed condominium association meeting was held. Four non- developer unit owners were elected to the five seats on the governing board. Sam Seppala, a contractor and president of the Respondent corporation, was formerly director of the condominium association's governing board. Although several informal meetings of unit owners were held, no duly noticed annual meeting was held in 1982 or in February, 1983. 1/ As Mr. Seppala explained, he was "too busy" and unaware of the February annual meeting date designated by the Declaration. Respondent admits that, during the time it controlled the association, it failed to call a meeting of the unit owners within sixty days of August 1, 1980, to allow unit owners (other than the developer) to elect one-third of the membership of the governing board. The budgets for the condominium association during 1982 and 1983, when the association was controlled by the developer, contained reserve accounts but did not separately designate or "line itemize" reserve accounts for roof replacement, building painting, and pavement resurfacing. Both before and after July 1, 1980, 2/ - until August 5, 1983, when the Notice to Show Cause was issued - Respondent paid no monthly common expense assessments for the units which it owned. It did, however, pay all of the condominium association's budgetary deficits during that period, and no net amount is now owed by it to the association. There is no evidence that the condominium association suffered any monetary loss from Respondent's failure to itemize reserve accounts for roof replacement, building painting, and pavement resurfacing, or from its failure to pay common expenses otherwise due for the units which it owns. Beginning in March, 1982, the Division notified Respondent - on four separate occasions - of the alleged violations which later became the subject of its Notice to Show Cause, resulting in this proceeding. Respondent was given ample opportunity to voluntarily comply with the statute, yet did not do so until September 1, 1983.
Recommendation Based on the foregoing, it is RECOMMENDED: That respondent be fined $3000 for multiple violations of Ch. 718, Florida Statutes. DONE and ENTERED this 5th day of June, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of June, 1984.
