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Tropicana Condominium Assoc. v. Tropical Condominium, LLC
208 So. 3d 755
| Fla. Dist. Ct. App. | 2016
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Background

  • Tropicana Condominium (48 units, established 1983) has a Declaration without Kaufman language; section 14.1 required unanimous owner consent to terminate the condominium (section 14.5 protects that unanimity requirement).
  • In 2007 the Florida Legislature amended Fla. Stat. § 718.117 to allow termination with 80% approval provided no more than 10% object; statute declared applicable to condominiums in existence on or after July 1, 2007.
  • The Association sought to rely on the 2007 statute and proposed Declaration amendments (2012–2013) lowering termination thresholds (to 65%, then 80%) but did not obtain unanimous approval required by the Declaration for altering the termination provision.
  • The Association also added section 13.10 (2012) limiting any owner to holding no more than two Tropicana units; a majority of owners approved that amendment.
  • Tropical Condominium, LLC (five owners who oppose termination and represent >10% of owners) sued for declaratory relief. The trial court granted summary judgment invalidating the termination-related amendment and the two-unit ownership restriction; the Association appealed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the 2007 amendment to § 718.117 retroactively applies to override the Declaration’s unanimous-consent termination requirement Retroactive statute applies to condominiums in existence after July 1, 2007 and thus makes the Association’s lower-threshold amendments effective Declaration lacks Kaufman language but Association contends Legislature intended retroactive application; thus unanimous amendment was unnecessary Retroactive application to Tropicana is impermissible because it would impair vested contractual veto rights and cause a severe, permanent change; amendment to section 14.1 is invalid (affirmed)
Whether the two-unit ownership restriction (§ 13.10) unreasonably restrains alienation The restriction is an unreasonable restraint that impedes marketability and lending Restriction is a reasonable, prophylactic rule for a small (48-unit) building to protect financial stability after prior multi-unit owner foreclosure; marketability impact is negligible Restriction is reasonable under the circumstances; trial court’s invalidation reversed and § 13.10 upheld

Key Cases Cited

  • Cohn v. Grand Condo. Ass’n, Inc., 62 So. 3d 1120 (Fla. 2011) (statutory change to condominium voting rights constituted an impairment of contract)
  • Pomponio v. Claridge of Pompano Condo., Inc., 378 So. 2d 774 (Fla. 1979) (adopts three‑prong test for whether retroactive statutory changes to condominium law impair contracts)
  • Woodside Vill. Condo. Ass’n, Inc. v. Jahren, 806 So. 2d 452 (Fla. 2002) (upholding association authority to impose reasonable transfer restrictions)
  • White Egret Condo., Inc. v. Franklin, 379 So. 2d 346 (Fla. 1979) (recognizing permissible condominium transfer restrictions)
  • Hidden Harbour Estates, Inc. v. Norman, 309 So. 2d 180 (Fla. 1975) (condominium owners tolerate intrusion and associations may exercise control over unit ownership)
  • Seagate Condo. Ass’n, Inc. v. Duffy, 330 So. 2d 484 (Fla. 4th DCA 1976) (reasonableness is the test for restraints on alienation)
  • Aquarian Found., Inc. v. Sholom House, Inc., 448 So. 2d 1166 (Fla. 3d DCA 1984) (restrictions evaluated for impact on improvement and marketability)
  • Iglehart v. Phillips, 383 So. 2d 610 (Fla. 1980) (marketability as a consideration in evaluating restraints on alienation)
  • Courvoisier Courts, LLC v. Courvoisier Courts Condo. Ass’n, Inc., 105 So. 3d 579 (Fla. 3d DCA 2012) (summary judgment review of pure questions of law is de novo)
Read the full case

Case Details

Case Name: Tropicana Condominium Assoc. v. Tropical Condominium, LLC
Court Name: District Court of Appeal of Florida
Date Published: Nov 16, 2016
Citation: 208 So. 3d 755
Docket Number: 3D15-2583
Court Abbreviation: Fla. Dist. Ct. App.