The Issue Whether Respondent, Palm Frond Condominium Association, discriminated against Petitioner, Hugo M. Villagra, in violation of the Florida Fair Housing Act.
Recommendation Based on Petitioner’s Notice of Voluntary Dismissal, it is RECOMMENDED that a final order be entered by the Florida Commission on Human Relations dismissing the Petition for Relief filed by Petitioner. DONE AND ENTERED this 15th day of September, 2015, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 15th day of September, 2015.
Findings Of Fact At all times relevant hereto Susanne Bennington was licensed as a real estate broker and active firm member of Bennington & Associates, Inc., a corporate real estate broker; and Kathleen P. Archangeli was licensed as a real estate salesman in this firm. Susanne Bennington, while working as a broker/salesman for another real estate broker in 1979, sold Margaret S. Purvance a condominium at La Concha Condominium. She also negotiated the sale of land on which Beach Cottage Condominiums were subsequently built, and thereafter opened her own office of Bennington & Associates, Inc., the corporate respondent herein. Bennington & Associates became the sales agents for Beach Cottage Condominiums. Following the sale of the condominium to Purvance in 1979, Bennington and Purvance saw each other frequently, as Bennington owned the condominium next to the one she had sold to Purvance. When the sale of Reservations to Purchase Beach Cottage Condominiums was commenced, Bennington told Purvance about the project and that she thought it would be one of the better condominium projects on the Gulf Coast. During the summer of 1930 Purvance worked at the Bennington office for one week as a receptionist. She met the developer of Beach Cottage Condominiums and became aware of the enthusiasm displayed in the Bennington real estate office regarding this project. She also became aware that Bennington and Archangeli were sufficiently impressed with the potential of Beach Cottage Codominiums as an investment that both bought reservations and expected to make a profit before the time came to complete the transaction by going through the closing. On November 1, 1980, Purvance executed a Reservation Deposit (Exhibit 1) to reserve Unit 1109 A for purchase upon completion at a purchase price of $191,900 and gave Respondent Archangeli $5,000 to deposit in escrow. This contract provided that the $5,000 deposit would be applied to the purchase price at closing, that upon receipt of condominium documents, purchase agreements, and other papers, the buyer had fifteen (15) days to review the condominium documents and accept or the option to cancel the Reservation Agreement and get the full deposit returned. Construction on Beach Cottage Condominiums was commenced after the developer arranged his financing. Thereafter, Purvance, on August 31, 1981, executed a contract dated August 8, 1981, to purchase Condominium 1109 A in the Beach Cottage Condominiums for the total purchase price of $191,900 (Exhibit 4) and made an additional deposit of $14,190 which was to be held in escrow until closing at which time the balance of $172,7l0 was due from buyer. This contract provided the contract was voidable by buyer giving seller written notice to cancel within 15 days of signing the contract or receipt of all condominium documents. Upon cancellation all deposits were refundable to buyer. Purvance is a widow whose husband died in 1968 leaving her a home in Countryside free and clear, bank accounts, and a widow's portion of his pension from U.S. Steel Corporation. Although not wealthy by many standards, Purvance has sufficient income (approximately $1 ,800 per month) to live comfortably. The condominium she purchased at La Concha at a price of $135,000 with $80,000 down had obviously turned out to be a good investment and a tax shelter prior to the signing of the contract to purchase Condominium 1109 A, Beach Cottage Condominiums. Purvance read all of the documents she signed, employed an accountant to prepare her taxes, had purchased the La Concha condominium from information received from her attorney, saw this attorney socially and took him to an open house at Beach Cottage Condominiums, executed the contract to purchase in her broker's office where the contract was witnessed and the $14,190 check was written, was told by her broker that the condominium was not a wise investment; but now contends that she relied on the representations of the Respondents that the Beach Cottage Condominiums was a good investment, that she could double her money, that she would not have to close, but could sell her contract before closing, and that she believed the statements rather than the written contract provisions. Ms. Purvance actually believed the Beach Cottage Condominiums development was a good investment and that she was privileged to be in on this condominium project. She was fully aware of her option to cancel the contract to purchase within 15 days after she executed the contract. Before executing the contract, she discussed the purchase with her accountant and showed him the financing figures she had received. Her accountant inquired of her about taxes and advertising costs to operate the condominium as rental property. Purvance was aware in April, 1982, before the final contract was executed, that she could lease the condominium to the developer as a model for $1,500 pear month. She was also aware, before she executed the contract on August 31, 1933, that she could not qualify for conventional financing. This contract had been forwarded to Purvance in mid-July, 1982, with instructions that she had only 15 days in which to execute or reject the contract. She did not execute the contract at the end of that 15-day period but waited until August 31, 1982. To keep within this 15-day period she dated the contract August 8, 1982. In her testimony Purvance acknowledged that her purchase was motivated by the fact that she expected to make a lot of money out of her Beach Cottage condominium. When she ended up losing money, she complained to the Real Estate Commission and brought civil suit against the developer and the Respondents herein. She characterized her complaint as she lost a lost of money relying on Respondents' false representations that Beach Cottage Condominiums could be sold before closing, that she did not feel Respondents should make false promises, and that Respondents had a duty to keep a buyer away from a improvident investment. Respondents never saw a financial statement on Purvance. They only knew that she owned a home in a well-to-do neighborhood, that she had purchased a condominium at La Concha, that she had been audited by the IRS, that she was interested in acquiring another condominium, and that she appeared financially capable of purchasing the Beach Cottage condominium. Both of these Respondents purchased a Reservation to Buy a condominium at Beach Cottage Condominium, neither could qualify for financing, one executed a contract and lost her additional deposit of $15,000, one never got to the contract stage and had to wait until the unit sold before her initial deposit was refunded. Both categorically denied they ever told Purvance that she could make $20,000 in one year on the project, that either told her that she would never have to close, or that under no circumstances would she ever lose her deposit. Neither Respondent had any reason to believe that Purvance did not know what she was doing when she signed the reservation form and when she signed the contract to purchase.
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.
