Victory for Homeowners! No Deed Restrictions!

Yesterday was a good day for the homeowners who scored a victory in their fight over deed restrictions in Bayhead Landings.  It was a tough battle with me, being the only attorney with my firm handling HOA cases, against Becker & Poliakoff.  For those of you who do not know B&P, they are the biggest association law firm in Florida.  

This battle was over deed restrictions which included a specific expiration date without any of the usual automatic renewals.  In order to extend the deed restrictions, 75% of the owners and mortgagees had to vote to amend the expiration date.

The issue in this case was the method for obtaining the approval.   For this community it meant just one method -- voting in person or by proxy at a meeting.  This was the method provided for in the bylaws. Additionally, Fla. Stat. 720.306(1)(a) states "Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained."

The HOA didn't follow these rules and instead collected ballots door-to-door.  Their argument was one we see a lot.  Fla. Stat. 617.0701, governing not-for-profit corporations, allows voting by written consent.  The problem is this conflicts with Fla. Stat. 720.306 and Fla. Stat. 617.1703 states in the event of a conflict with Chapter 720, Chapter 720 will prevail.

The funny thing is this case was not about not wanting deed restrictions.  My clients actually supported keeping the deed restrictions.  What they could not support was the way the HOA went about doing it.  It's pretty much a safe bet to say that if a HOA doesn't follow the rules and procedures for one issue, they tend to ignore the rules and procedures for dealing with other issues.  This wasn't about not wanting deed restrictions, but about playing by the rules.

How To Tell If You Bought Into A "Bad" HOA (Or Condo Association)

When potential clients tell me they think they made a mistake and bought into a "bad" HOA or COA, if it's a condo association, I tell them right away, without hearing their issues, they have a 95% chance they are thinking correctly.

So how do you tell if your association is "bad?"  Most of the time you can't tell until it's too late, but here are a few signs:

1.  The Declarations are more than 20 pages (sign of over regulation by the association);

2.  The Rules and Regulations have more restrictions than the Declarations (sign you have contracted away any constitutional property rights you think you have);

3. The association owns its own maintenance company, landscaping company, rental company, security company, or any other for-profit company (sign of corruption and/or fraud);

4. A board member is the community association manager (CAM), a.k.a. property manager, or any other paid position (sign of corruption and/or fraud plus harassment and bullying);

5. The board members' homes look nicer than everyone else's (sign the board are getting freebies from contractors, such as free landscaping);

6. Board decisions are made on an issue by simply voting with no discussion of the issue at the board meeting (sign the board is conducting business by closed meetings -- most likely email, which is a violation of Florida law);

7. Your board tells you that you will do as they say, when they say it (sign the board has a really nasty law firm representing them and you life as you know it is over. Welcome to Hell. This is otherwise referred to as a dictatorship if you could convince the State of Florida these really are quasi-governments. At this point items 1 - 5 probably apply.);

8. You're welcome to the neighborhood is loaded with F-bombs (I should have sold my home and moved then, which was three days after my move-in date). Oh yeah, this is a sign your board is made up of people who failed miserably at their careers and they get an ego boost by thinking they can intimidate you.