A recent opinion out of Florida’s Third District Court of Appeal stresses the importance to read, understand, and follow community association governing documents before initiating any amendments that alter the substantive rights of the association’s members, especially one as critical as the required vote to terminate an association altogether.
The failure to properly follow the governing documents could result in litigation and the non-enforcement of the proposed amendment.
Such is the case in Avila v. Biscayne 21 Condominium, Inc., No. 3D23-1616 (Mar. 13, 2024) (not yet final). The case concerned the attempted termination of a 13-story, 192-unit waterfront condominium in the Edgewater neighborhood in Miami, Florida.
The condominium association passed a termination plan to terminate the condominium with less than 100% approval of the unit owners. However, a group of unit owners filed suit to stop the termination to preserve the condominium structure, claiming that the original condo declaration governance required 100% approval.
The association obtained the approval of only 80% and believed it had properly amended its governing documents to lower the required approval for termination from 100% to 80%. But the Third District Court of Appeal held that the purported amendment would not be enforced where the governing documents required unanimous consent to terminate the condominium.
The Court ruled that the proposed amendment would substantively alter the rights of all unit owners, as the governing documents as originally written grant each unit owner an effective veto over termination. Therefore, the Court reversed the denial of the unit owner’s request for a temporary injunction, finding that the unit owners have shown a substantial likelihood of success on the merits of their claims.
The Court specifically wrote in its opinion:
The change to the termination vote threshold materially altered unit owners’ voting rights. By requiring a unanimous vote for termination, the declaration originally gave every unit owner an effective veto over any termination plan, which would be lost if the amendments at issue here were enforced. (See Tropicana Condo. Ass’n, Inc. v. Tropical Condo., LLC, 208 So. 3d 755, 759 (Fla. 3d DCA 2016).
The case referenced by the Court found that non-unanimous amendments to a declaration reducing the vote threshold for termination of a condominium could not be applied where the declaration expressly required a unanimous vote to amend the termination provision and the “amendment, if retroactively applied, would eviscerate the [unit owners’] contractually bestowed veto rights.” Id. at 759.
It is critical to be familiar with your community association’s governing documents – such as bylaws, CC&Rs (Covenants, Conditions, and Restrictions), rules, and articles of incorporation. And if there are any questions on these documents or they include ambiguous or unclear terms, it is important to seek counsel before making any decisions.
These governing documents establish how an association formally operates. They also set expectations and legal requirements for all parties involved.
About Our Author
Andrew McBride has a diverse Florida-based litigation and transactional practice focused on community association litigation and advice, construction, and real estate transactions, as well as banking, commercial, bankruptcy, foreclosure, and creditors’ rights matters. Basded in Tampa, McBride is also a member of the firm’s financial services team, advising banks and other distressed debt purchasers, and also documenting, negotiating, and closing complex commercial real estate and loan transactions, construction loan transactions, and workouts. He also litigates contracts, real property, and complex commercial law matters, as well as adversary proceedings in bankruptcy court. Andrew counsels property-owner clients to help them sort through a myriad of concerns, including statutory compliance and other regulatory matters. He also represents property owners in Fair Housing Act and state and federal law discrimination claims, landlord-tenant disputes and evictions and administrative investigations and actions.