Community Update

What Should Be Included in a Community Association Budget?

By: Florence King

Every community association must prepare an annual budget and use that budget to determine the assessments to be collected for that year. The budget projects income and expenses, and since the budget is only an estimate of future expenses, unexpected events may occur that may prompt the board to make changes to the budget.

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Condominium Reserves

By: Allison L. Hertz and Bryony G. Swift

For several years, the Florida Legislature has made condominium reserve issues a priority, continuously revising laws to address and clarify the requirements. With House Bill 913, which has now been in effect for a few months, new reserve mandates and options have been introduced for condominium associations.

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How to Effectively Communicate With Your Association Attorney

By: Mary R. Hawk

As we all know, time is money. That is especially true when seeking legal advice for your community association. A lawyer’s time and advice are their stock in trade. Often, community association communications are lacking in details and factual content necessary for your attorney to render timely and thorough legal advice. This creates the need for significant back and forth before the attorney can give the advice, which translates into unnecessary time delays and fees.

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Hyde Park Condominium Ass’n v. Estero Island Real Estate, Inc.
486 So.2d 1 (Fla. 2d DCA 1986)

By: Joseph Markovich

In the realm of condominium law, what constitutes a “unit” is pivotal, as it determines whether owners of undeveloped parcels within a condominium must pay their share of common expenses, even if no building has yet been constructed on their property. THIS CASE serves as an example of this legal issue. The association sought to recover unpaid assessments for the maintenance of common areas from the owners of several unimproved lots. The lot owner argued that, because the lots were not yet developed into apartments or units, they were not subject to assessment under the declaration of condominium or the Condominium Act in effect at the time.

The trial court initially sided with the lot owner, finding that the unimproved parcels were not units as contemplated by the statute and the governing documents, and therefore not liable for assessments. On appeal, however, the Second District Court of Appeal reversed. The appellate court closely examined the statutory definitions in the 1969 Condominium Act and the declaration, and found that the only form of private ownership recognized within a condominium is a unit, and that a unit was defined as that part of the condominium property which is to be subject to private ownership. The court reasoned that the statutory scheme and the declaration did not require a unit to be improved or built out before it became subject to assessment. To hold otherwise, the court explained, would create a class of property ownership within the condominium that was not contemplated by the legislature or the declaration.

THIS CASE has continued relevance, particularly when compared to later cases. For example, in a 1988 appellate decision, the issue turned on whether certain properties, described as “condominium parcels” in the declaration, were subject to assessments. However, the Fourth Distrct Court of Appeal found that the term “condominium parcel” as used in the declaration referred specifically to an apartment or “individual private dwelling,” and not to raw, unimproved land. As a result, the court reasoned that the declaration intentionally limited assessments to parcels containing private dwellings, and that raw, unimproved land was not included within the definition of “condominium parcel” for assessment purposes.

THIS CASE is significant for condominium associations and their members because it shows the importance of the specific language used in the declaration of condominium. The association in the 1988 appellate decision may have intended to limit assessments to individual private dwellings, whereas in THIS CASE, the broader statutory definition and the declaration subjected all units, including unimproved land, to assessment. Legal challenges can arise over the interpretation of governing documents, and associations would be wise to seek legal counsel when questions about assessments or the status of parcels emerge.