Condo Rules-Test for Validity

Many condominium owners like the fact that condominium living is replete with rules. They like structure and place a strong value on orderliness, which is more easily obtained when there are rules addressing a myriad of aspects of condominium life. Others feel the rules are violative of their freedom. Someone used to living in a home on a large lot can have difficulty adjusting to communal living in the condominium setting. That difficulty is compounded by rules. For some, it might be just one rule that is a problem.

When a condominium association attempts to enforce a rule or unit owner wants to challenge a rule, the matter might end up in court. If it does, Florida courts have adopted a clear procedure for determining the validity of condominium rules.

The analytical basis was established in the 1981 case of Hidden Harbour Estates, Inc. v. Basso. That case involved a mobile home condominium in which the Bassos drilled an unauthorized well.

The Bassos filed an application asking the Board of Directors for permission to drill a well on their property, believing permission had to be obtained because of use restrictions under the declaration of condominium. Section 13.1 of the declaration provided that “No temporary or permanent improvements or alterations may be made to any lot, and no lot owner may change the appearance of any portion of the exterior of his mobile home or apartment without the written approval of the Board of Directors.

The Board of Directors denied the application. The Bassos drilled a well anyway. The Association claimed the well was a violation of the use restrictions in the declaration and went to court seeking an injunction. On its way to decision, the appellate court explained a difference between board adopted rules and rules contained in the declaration of condominium itself.

Rules or restrictions in the declaration carry a very strong presumption of validity because each owner purchases a unit knowing of and accepting the recorded restrictions. Rules in a declaration of condominium will not be invalidated unless the challenger can show the rule is wholly arbitrary in application, violates of public policy, or significantly impairs or takes away a constitutional right.

Challenge to rules adopted by a Board of Directors face a lesser burden. A rule adopted by the board must be “reasonable.” These rules are not clothed in the strong presumption of validity of rules in the declaration. A Board of Directors is limited to enacting rules and making decisions that are reasonably related to promotion of the health, happiness and peace of mind of the owners. In other words, the Board must allow activity unless the activity is demonstrably antagonistic to the legitimate objectives of the condominium association. The rule must promote health, happiness and peace of mind of the unit owners.

The court examined reasons the Board of Directors provided for denying the Basso’s request for a well. The reasons were (1) the Board felt the well would increase salinity of deeper wells owned by the Association, (2) the Board believed water pumped from the well posed a threat of staining sidewalks and common areas and (3) the Board felt there would be a lot more wells installed if the Basso’s application was approved.

The court agreed that the Board’s reasoning was valid but found the Board’s concerns were not supported by fact. There was no evidence that the Basso’s well would cause any of the problems the Board used to deny their application.

Courts have continued to apply this bifurcated standard to rules in a Declaration of Condominium. The strong presumption of validity not only applies to the originally recorded declaration of condominium, it also applies to later amendments even when a challenging owner did not vote in favor of the amendment. That was the case in Woodside Village Condominium Association, Inc. v Jahren.

In the Woodside case, investors bought a condominium to use as a rental property. After the purchase, other condominium owners voted to amend the declaration to restrict leasing. The owners argued the rule change violated their property rights. The case went all the way to Florida’s Supreme Court, where the unit owners lost. Florida’s Supreme Court reaffirmed the strong presumption of validity for rules in the declaration even if the rule is a result of an amendment.

Since Board adopted rules are easier to challenge, one might ask what rules have been successfully challenged? One of the most recent rules thrown out by the courts was a rule limiting owners to one request for records review per month. The court explained the rule was too restrictive as it eroded the unit owner’s right to access. The court made particular note of Section 718.111(12)(c )1 Fla. Stat, which mandates condominium records be made available for review by a unit owner within 10 working days after an association receives the owner’s request for review.

In practice, the reasonableness test is not the first issue addressed by courts in rule cases. Courts start analysis by determining if a rule adopted by the Board is within the Board’s authority under the declaration of condominium, articles of incorporation and bylaws of the association. If it is, the next question is does the rule conflict with the declaration, articles, or bylaws? Only if the Board adopted rule passes these two tests does the court even get to the issue of reasonableness. A large percentage of association losses in rule challenge cases is because the rule conflicts with the declaration.

The concept of reasonableness itself often propels these cases forward as each side has a different interpretation of what that means. That difference of opinion coupled with high emotions in condo disputes frequently means there is no room for settlement and a judge has to end the argument. Only one side gets to smile.