Two property owners were dealing with owner-association problems related to tenants in their units. Learn how Michael Goldstein from PeytonBolin helped these clients avoid severe penalties.

Key takeaways:

• Owner 1 faced an amended complaint from the association which brought up a former complaint related to tenant approvals from years ago.
• PeytonBolin helped the revised complaint get dismissed.
• Owner 2 asked for approval from the board for their tenants, but the board didn't respond according to the guidelines in the governing documents.
• Owner 2 won their motion for summary judgment with the help of PeytonBolin, and revealed additional issues the board would need to address.

Two property owners in Florida recently dealt with issues with their association regarding tenants and renting out their units. PeytonBolin litigation attorney Michael Goldstein stepped in to help both with their cases. Learn what transpired and the outcomes achieved in these owner-association disputes.

Background of the governing documents in these owner-association issues

A Florida condo association recorded an amendment in 2003 prohibiting owners from renting their units, an option which had been allowed in the governing documents before 2003. Anyone who voted in favor of the amendment or who bought a unit after the amendment was recorded is subject to the renting prohibition.

Two owners, who happened to be siblings, owned separate units in the association but faced similar issues related to tenants and this amendment. 

Owner 1's case

Owner 1 had had a previous issue with the association years ago when it was found that this owner had violated the governing documents by not obtaining board approval for a tenant. Owner 1 had then signed a settlement agreement that stated they would not violate the governing documents again.

Owner 1 owned their unit before the 2003 amendment, but this fact was missed by the condo association back then. The amended complaint raised the prior case as well as a violation of the settlement agreement in that prior case. 

However, PeytonBolin argued that those points were outside the scope of the original complaint. The court agreed and dismissed the amended complaint.

Research and legal arguments for Owner 1's owner-association dispute case

Michael from PeytonBolin did all the legal research for this case, and based his approach on the issue of whether the rental restrictions could be applied to an owner who owned their unit before the amendment was recorded. The issues and questions addressed were as follows:

• Issues of selective enforcement: the association cannot enforce rules against one owner but not other owners
• A defect in the certificate of amendment: there was only one signature on the certificate of amendment, but the governing documents require two

Michael had to figure out how the amendment applied to pre-existing owners. After conducting research for Owner 1's case, he argued that it was out of the scope of the amended complaint to raise the issue of the prior complaint and issue.

The association's amended complaint was dismissed with prejudice. Owner 1 has filed a motion for entitlement to attorney fees, and the matter is set for an evidentiary hearing. 

Owner 2's owner-association dispute case

Owner 2 had his relatives occupying the unit he owns. The evidence showed that he had submitted these relatives to the association's board of directors, as the governing documents require. The process outlined in the documents states that the board has 30 days to respond after such a submission is made, otherwise the tenants are considered to be approved. 

The board did not respond within that time frame.

The association board argued against the factual evidence that they had been provided with occupant documentation but had failed to respond. But, PeytonBolin discovered that other owners had experienced similar situations with tenant approvals. Selective enforcement laws prevent the association from enforcing covenants against one owner and not the others when it is aware of the other owners.

Research and legal arguments for Owner 2's case

The same issues mentioned in Owner 1's case were researched for this case, and it was found that selective enforcement was effective for Owner 2's case for the motion for summary judgment. PeytonBolin also conducted research regarding the failure to respond to factual arguments in Florida.

As far as the selective enforcement issue, an association cannot enforce a restriction against one owner without doing so against other similarly situated owners. To prove selective enforcement, the owner must show that the association's board knew about the other owners and failed to act.

PeytonBolin also argued that the amendment that prevents renting wasn't effective until it was recorded in 2021, but the court didn't use that argument in granting the motion for summary judgment for Owner 2.

Owner 2 won his motion for summary judgment. There is a motion for entitlement to attorney fees coming up and, if granted, PeytonBolin would continue to an evidentiary hearing on the amount of attorney fees Owner 2 is entitled to, pursuant to the association's governing documents and statute as the prevailing party. 

Tenant status and potential future actions in these owner-association disputes

In Owner 1's case, the amended complaint was dismissed with prejudice. The association could still be able to refile once the attorney fees issue is resolved, however. It is not known whether the owner has received approval for the tenant in their unit.

For Owner 2, the occupants were approved because of the association's failure to act on the submission for approval regarding the occupants. Owner 2 may have issues finding future tenants if they leave, though, because the amendment that restricts renting does, in fact, apply to this owner. 

The association isn't currently pursuing tenant-related violations for other owners. The association will need to tell all association members that the amendment will be strictly enforced to avoid future allegations of selective enforcement. 

If you need help with an owner-association dispute-related case like this one, PeytonBolin is here to fight for you. Contact our team today to learn more.