By Betsy Barbieux, CAM, CFCAM / Published January 2018
Have you ever asked these questions? “Did the developer and its attorney intend to create documents that are vague?” “Why can’t legislators write what they intend in plain and simple English with normal sentence structure?” Do developers intentionally create documents with vagueness to favor themselves, legislators, and attorneys for job protection?
Several years ago, there seemed to be a slight awareness among legislators that the words used in the statutes are not used by the average Floridian. This was apparent when they changed some of the words in the statutes such as “shall” to “must.” Wow.
Even the definition of our three types of Florida communities could leave readers scratching their heads.
Section 718.102(11), Florida Statutes, states: “Condominium” means that form of ownership of real property created pursuant to this chapter, which is comprised entirely of units that may be owned by one or more persons, and in which there is, appurtenant to each unit, an undivided share in common elements.
Very simply said, a condominium is a Florida corporation where all its members/owners own an undivided share in the condominium corporation. So, if there are 32 owners, they each own 1/32 of the drywall, studs, exteriors, roofs, clubhouse, swimming pool and other amenities, and roadways. All the owners own the common elements jointly. There is no deed in the name of the association; it owns nothing, but is responsible for the insurance and maintenance of the common elements.
Each member (unit owner) owns anything inside his air space; that is, anything inside the floor covering, ceiling covering, and wall coverings. The unit owner receives a warranty deed that specifies his unit number as well as an undivided share (1/32) in all the common elements of the association.
In essence, unit owners own stacked air and 1/32 of everything else tangible outside their airspace! In addition to this, the unit owner may have the exclusive use of the balcony, private elevator or patio connected to a unit, an assigned parking space, storage unit, or boat slip. These common elements are called “limited” because they are limited in use to that specific owner and his guests.
Section 719.103(12), Florida Statutes, states: “Cooperative” means that form of ownership of real property wherein legal title is vested in a corporation or other entity and the beneficial use is evidenced by an ownership interest in the association and a lease or other muniment of title or possession granted by the association as the owner of all the cooperative property.
Very simply said, a cooperative is a Florida corporation. Title to all the real estate is owned by the cooperative corporation; there is one warranty deed. Unit owners who wish to become shareholders buy in to the cooperative by making a capital contribution. Each shareholder receives a Shareholder’s Certificate as evidence of their capital contribution to the corporation. Their share entitles them to sign a Proprietary Lease with the corporation for the exclusive use of the air space for their unit or, in the case of a mobile home, their pad. The document indicating the individual’s share in the corporation looks similar to a stock certificate. The individual’s share can be sold, mortgaged, and devised similar to real estate.
In essence, each shareholder owns anything inside his air space; that is, anything inside the floor covering, ceiling covering, and wall coverings. In the case of a mobile home shareholder, anything within the airspace of their pad or lot. In addition to this, the shareholder may have the exclusive use of the balcony, private elevator or patio connected to a unit, an assigned parking space, storage unit, or boat slip. These common areas are called “limited” because they are limited in use to that specific owner and his guests.
Section 720.301(9), Florida Statutes, states: “Homeowners association” or “association” means a Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. The term “homeowners association” does not include a community development district or other similar special taxing district created pursuant to statute.
Very simply said, a homeowners association is a Florida corporation that owns the land on which the amenities such as the clubhouse, pool, shuffleboard court, roadways, and gate sit. This land is called common property. The association has a warranty deed or deeds evidencing its ownership in all the common property.
The parcel owners own the land on which their homes sit (or will sit). Parcel owners receive deeds to their lots. Everything on that lot or parcel is owned by the parcel owner, inside and out of the dwelling.
In a homeowners association, there is no common property that is limited in use like in a condominium or cooperative corporation.
Section 718.112(2)(b)(2) and Section 719.(1)(b)(2), Florida Statutes: General proxies may be used for other matters for which limited proxies are not required, and may be used in voting for non substantive changes to items for which a limited proxy is required and given.
What the heck is a non substantive change? And given the language that preceded, it appears all voting in a condominium or cooperative must be on a limited proxy except for elections when owners must use the 2-envelope system.
Some documents indicate the common elements or common areas must be maintained in a uniform and harmonious manner according to the scheme and design of the developer. And add to this the statute’s mention of material alteration or substantial addition with no definition or explanation, and you have Vague-ry.
Some community documents may have architectural guidelines for individual homes or units, but may not specifically address the color of the exterior of the common element or common areas buildings, materials for the walkways, make and model of street lighting, pool deck surfaces, etc. This leaves wide open the possibility of disagreement and lawsuits over changing the exterior color of the paint on the building. One association fought for more than a year about upgrading the condominium lobby from the 1980s shag carpet, mirrored walls, and disco chandelier to tile flooring, wall paneling, and a timeless chandelier.
When faced with vague-ry in your documents, associations can amend them to be more specific. When amendments seem unattainable, boards could consider creating resolutions to define and clarify some of the vague parts of their documents so they can move forward. While these board resolutions are not as strong legally as a document amendment, it gives the board the ability to make decisions and move forward. Of course, future boards can undo those resolutions, so a document amendment is preferred.
But as always, when confronted with vague-ry, consult your attorney. Then pray for the legislators to come down to earth with their grammar and sentence structure!
Betsy Barbieux, CAM, CFCAM
Florida CAM Schools
Betsy Barbieux, CAM, CFCAM, guides managers, board members, and service providers in handling daily operations of their communities while at the same time dealing with different communication styles, difficult personalities, and conflict. Effective communication and efficient management are her goals. Since 1999, Betsy has educated thousands of managers, directors, and service providers. She is your trainer for life! Betsy is the author of Boardmanship, a columnist in the Florida Community Association Journal, and a member of the Regulatory Council for Community Association Managers. For more information, contact Betsy@FloridaCAMSchools.com, (352) 326-8365, or www.FloridaCAMSchools.com.