By Jeffrey A. Rembaum, Esq. / Published February 2021
If your homeowners association has not adopted leasing restrictions or wants to amend existing leasing restrictions, and you want any new restrictions to be effective against 100 percent of the members, then the board should consider taking steps to amend the declaration of covenants, right now! Well, in any event, prior to the date the proposed legislation may, if approved by the legislature and governor, become law, which is typically July 1, 2021. As discussed in greater detail below, if the Florida Legislature adopts leasing legislation into Chapter 720, the Homeowners Association Act, similar to that which is currently in Chapter 718, the Condominium Act, you will want to be sure that your HOA has properly approved and recorded any desired leasing amendments into your community’s declaration to ensure equal enforceability against all owners in the community.
We are aware that some homeowners associations have leasing restrictions only set forth in the board-made rules. In our opinion, having leasing restrictions only set out in the rules make such rules far more vulnerable to a successful legal challenge than if such restrictions were set out in the declaration. This is because the authority to adopt such rules must be readily identifiable from the authority set out in the declaration. If you have leasing restrictions in your association’s rules, then it is recommended that you have them reviewed by legal counsel to provide further guidance on their enforceability.
By way of background, in 2004 the Florida Legislature substantially revised the ability of a condominium association to enact and otherwise amend leasing restrictions by enacting §718.110(13), Florida Statutes, which, having been since amended, presently provides the following:
An amendment prohibiting unit owners from renting their units or altering the duration of the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment. [emphasis added]
So, after this legislation became effective, if a condominium association had not yet adopted leasing covenants or desired to amend existing rules that
specified period of time,
such amendments were required to be set out in the declaration of condominium and would only be enforceable against those who voted in favor of adopting the amendment and those owners who took title to their unit after the amendment had passed and taken effect.
Another important consideration, albeit at times mildly confusing, is the effect of having Kaufman language in the declaration. To understand this concept, it is important to first understand what the term Kaufman language means and how to identify it. When Kaufman language is included in a declaration, in the simplest of terms, it means that all new legislation applies to that entire declaration even if it changes existing substantive rights. An example of Kaufman language follows: “This Declaration is subject to Chapter 718, Florida Statutes, as it is amended from time to time.”
(The Kaufman language is the latter emphasized phrase.) Of course, a declaration associated with a homeowners association would reference Chapter 720, Florida Statutes.
If the declaration for your homeowners association includes Kaufman language, then if the proposed legislation is enacted into law, having leasing restrictions that were amended into the declaration might be problematic and subject to challenge unless the new legislation makes it crystal clear that it only applies in the future or prospectively, which is a concept that has to be balanced against the standard of statutory interpretation that legislation is not applied retroactively unless the legislation expressly provides for such retroactive interpretation. In other words, including Kaufman language in the declaration may allow a member to assert that their association’s prior leasing amendments that had applied to all members are now only enforceable against those members who voted in favor of it, as required by the new legislation (assuming it is actually signed into law). Whether such an argument would prevail in a court of law is difficult to predict. In any event, hopefully, this concern will be alleviated in the legislation.
As an aside, by inclusion of Kaufman language in the declaration, then all of the changes to the Florida Statutes, including changes to substantive rights, will apply to the declaration without regard to whether the changes are beneficial or detrimental to the association and its unit owners. However, Kaufman language can also be inserted into a declaration on a provision-by-provision basis, such as for fining and lender assessment obligations upon taking title to a home through foreclosure, which is far superior in that only certain substantive legislative amendments will apply as compared against each and every legislative change.
What does all of this mean? At a minimum, it is patently clear that the leasing legislation will apply to all homeowners associations. For those homeowners associations without Kaufman language in their declaration, then the legislation would apply prospectively, meaning it would only apply against those who voted in favor of the leasing restrictions until title to the home changes. If, however, Kaufman language exists in the declaration, providing for retroactive application of the new legislation, and the new legislation does not clarify it is only effective prospectively, then upon member challenge the association may have the burden of proving which members did and which members did not vote in favor of the previously enacted leasing restrictions.
The bottom line is, if your homeowners association has not yet adopted leasing restrictions into the declaration, then consider doing so ASAP. If the declaration contains Kaufman language, then to avoid possible retroactive application of the proposed leasing legislation, the Kaufman language can also be amended at that time. Please consult with your association’s legal counsel to review your current declaration and rules regarding any leasing restrictions before taking any action to proceed with leasing amendments, as this information is intended as summary only, and there are additional considerations to take into account as well.
Partner, Kaye Bender Rembaum
Attorney Jeffrey Rembaum has considerable experience representing countless community associations that include condominium, homeowner, commercial, and cooperative associations throughout Florida. Every year since 2012, Mr. Rembaum has been inducted into the Florida Super Lawyers. Together with his partners, attorneys Robert Kaye and Michael Bender, their law firm, Kaye Bender Rembaum, is devoted to the representation of community and commercial associations throughout Florida. Kaye Bender Rembaum, with offices in Palm Beach, Broward, and Hillsborough Counties (and Miami by appointment), provides their clients with an unparalleled level of personalized and professional service. For more information, visit kbrlegal.com.