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New Laws Don’t Always Apply

Q: I read your recent column which gave your opinion that the new condominium law on board member term limits is not retroactive. With so many changes to the law every year, how are we supposed to know which new laws apply to us and which ones don’t? (L.S. via email.)

A: That is a very good question and one which is not easy to answer. Even attorneys who practice in this area of law often disagree on a particular issue. The starting point is the long standing legal rule of statutory interpretation that an act of the legislature is presumed to have prospective effect (not be retroactive), unless there is a clear legislative expression of a contrary intent.

Using the board member term limit amendment to the condominium statute as an example, there was no statement of legislative intent to apply the law retroactively. On the other hand, there are provisions in the statute, such as the insurance section and the section on material alterations, which states that the law applies to all condominiums in the state, regardless of the date of their creation.

There is one exception to this rule that deals with “procedural” changes. For example, if the law was changed to provide that associations had to give a minimum of 30 days’ notice for annual meetings (the current law requires 14 days’ minimum), I think that change would apply to all associations for future meetings, even without a statement of retroactive intent. Many changes to the statutes fall under this exception.

If there is a change that was intended to be retroactive and it is more than procedural, a much more complicated legal analysis must take place. This review generally surrounds the limitations in both the state and federal constitutions which prohibit state legislatures from impairing existing contract rights. Many rights in the governing documents for an association are contract rights. In fact, one court has said that the law that exists when a community is created by the recording of its declaration “is as though engrafted onto the declaration.”

If the association’s documents incorporate future changes to the statute, the inquiry stops here. The statutory changes apply. If the association’s documents do not incorporate future changes to the statute, the analysis is a bit more complicated. If the change to the statute is “remedial,” it can be retroactively applied. If the change is “substantive,” it can generally not be retroactively applied, although some court cases on point suggest that a “balancing test” can be used in certain circumstances.

To put this legalese in some context, let’s look at a few examples. In a recent case, a Florida appellate court held that the recent changes to the law on “termination” of condominiums would impair vested contract rights and could not be retroactively applied. In a case from the Florida Supreme Court a few years ago, the court held that a legislative change in the allocation of voting rights between residential and commercial owners in mixed use condominiums was unconstitutional. Several courts have ruled that changes to the “safe harbor” laws (how much a mortgage holder must pay in association assessments after a foreclosure) cannot be applied retroactively.

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