“The Impact of Cohn v. Grand Condominium – Does your Association evolve with the Florida Condominium Act?”
On March 31, 2011, the Florida Supreme Court issued its opinion in the matter of Cohn v. Grand Condominium. The result of this decision may affect many condominium associations, and quick action may be required in the form of amendments to Condominium Documents to ensure that recent changes of the Florida Condominium Act are indeed applicable in your community. In Cohn v. Grand Condominium, a residential unit owner in a mixed-use condominium sought a change in the voting arrangements for the condominium association’s board of directors citing a 1995 change to the Condominium Act to §718.404(2) wherein the Florida legislature established that in mixed-use condominiums with fifty percent or greater residential composition, the residential unit owners must be entitled to vote for a majority of seats on the board of Directors.
The Declaration for The Grand Condominium, which is composed of 810 residential units, 259 commercial units, and 141 retail units, provided that a seven member board was to be made up of two members each elected by the residential unit owners, commercial unit owners, and retail units owners, with a seventh member elected at large. As a result of this structure, the commercial and retail unit owners collectively have a majority vote and control over the Board. Furthermore, the Declaration, which was filed in 1986, adopted the terms of the condominium Act ” in effect as of the date of recording of this Declaration“, and did not contain any language, such as ” as amended from time to time“, which would subject the Declaration to future statutory changes.
The Florida Supreme Court took the position that the declaration of condominium possesses ” attributes of a covenant running with the land” and operates as a contract among unit owners and the association spelling out mutual rights and obligations. The Court cited Article I, Section 10 of the Florida Constitution which prohibits the enactment of any law impairing the obligations of contracts. The Court concluded that §718.404(2) impaired the obligation of contact as applied to The Grand, in that ” by changing the distribution of voting power, the retroactive application of §718.404(2) would alter the rights of The Grand’s unit owners in contravention of their contractual agreement.”
The question now is how will this apply to your Association? What happens if your Declaration does not contemplate statutory changes in the Condominium Act? Does the Cohn v. The Grand ruling apply solely to voting rights of unit owners, or does it apply to all rights and obligations mentioned in your Declaration? If your Declaration does not include the words ” as amended” when referencing the Condominium Act, do any of the changes in the Condominium Act after the recording of the Declaration of Condominium of your Association apply? For example, can the Board continue to limit access to common areas to those unit owners who are in arrears?
We recommend that you contact your community association legal counsel to request a review of your Declaration so that an opinion as to what should be done in your community can be obtained.
Mr. Andrew Cuevas, Esq., is the President of Cuevas, Garcia & Torres, P.A., and oversees the Community Association Division of the firm. If you have any questions regarding this article or any other questions, you can contact Mr. Cuevas at (305) 461-9500 or at [email protected]
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