A discussion of routine & complex issues which confront all types of shared ownership communities.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.
This blog covers every topic under the sun related to condominiums, cooperatives, HOAs, timeshares and mobile home communities from the unique perspective of attorney Donna DiMaggio Berger.

Tuesday, April 20, 2010

Florida cases that address the issue of what is or is not a material alteration.

Is your board planning to repaint the condominium corridors, change the carpeted areas to tile or tear down a large tree in the common area park? Were you planning to seek membership approval before doing so?

There are scores of decisions and even appellate cases dealing with the extremely contentious issue of what constitutes a material alteration of the common elements and therefore requires membership approval. The primary definition is any change that “palpably or perceptively [changes the building] in such a manner as to appreciably affect or influence its function, use, or appearance.” This definition was laid down by one appellate court over 35 years ago, and frankly, in my view, is absurd as it could be read to suggest almost anything needs an owner vote. The case is Sterling Village Condominium, Inc. v. Breitenbach, found in the law books (or these days on computer legal search engines) at 251 So.2d 685 (Fla. 4th DCA 1971).

In apparent recognition that the above definition is perhaps too broad, or required owner votes in too many instances, courts and arbitrators through the decades have carved out various exceptions to the membership approval requirement. One such exception is that “In addition, if there has been a technological advance since the material that was originally used, the association can take advantage of the newer, better material and a material alteration vote would not be triggered.” That general exception evolved from what has become known as the “necessary maintenance doctrine.” In short, allowing associations to use their business judgment to determine (subject to the arbitrator or judge agreeing if someone challenges) that if the project (or change) was necessary to prevent further damage to the common elements, or perhaps even to preserve the common elements for a longer period of time, the Association could make the decision to change the common elements without owner approval. This principle was first enunciated in Tiffany Plaza Condominium Association, Inc. v. Spencer, et al., 416 So.2d 823 (Fla. 2d DCA 1982). In Tiffany, the condominium association found that the construction of a rock revetment was necessary to protect the beachfront, a common element, from erosion and damage. That court held that condominium unit owners could be assessed for the cost of the rock revetment (an obvious material change) without their consent, and an owner vote was not necessary.

If one were to type into the legal search engines the words “material alteration” and include decisions rendered by the Division of Condominiums, over 200 cases would come back. For this reason, boards would be well advised to consult their association attorney before embarking on a particular project for an opinion as to whether or not the project constitutes a material alteration requiring membership approval.

Here are some significant material alteration cases:

Cottrell v. Thornton, 449 So.2d 1291, 1292 (Fla. 2d DCA 1984)—Permitting the canals to be drained, scraped, demucked and lined with sea bags to make the seawalls secure.
George v. Beach Club Villas Condominium Ass’n, 833 So.2d 816 (Fla. 3d DCA 2002)—-refusing to allow a change from cedar shingles to terra-cotta tiles on roof mansards without owner approval.

Islandia Condominium Assoc., Inc. v. Braun, 501 So. 2d 741 (Fla. 4th DCA 1987). A change in the color scheme of the exterior of a condominium is a material alteration of the common elements requiring owner approval.

A.N. Inc. v. Seaplace Association Inc., Arb. Case No. 98-4251, Summary Final Order, (October 29, 1998) is probably the most often cited decision out of the state, as many projects were at issue. The arbitrator ruled in favor of the Association on one, and held that replacement of damaged windows with an upgraded version of windows was within the board’s business judgment and did not need an owner vote. The arbitrator went further and actually stated that the Board can and “should take advantage of changes in technology,…and improved designs…” However, the arbitrator in that same case refused to allow the tennis court and clubhouse projects to proceed without unit owner approval. The arbitrator found that the primary purpose of the tennis court project was to change it from asphalt to clay, and that required owner approval. Similarly, the arbitrator found the clubhouse project was not an upgrade or necessary to maintain it, and prevented the Board from continuing without owner approval.

Loveland v. Harbor Towers and Marina Condominium Association, Inc., (Arb Case No. 03-08-0632). Arbitrator relied on the above decision and determined that “replacement [garage] doors” that “varied substantially in design and color from the original” were permitted because the exact original doors were no longer available or code compliant and the new doors were of galvanized steel, code compliant, and of better quality. Thus, the arbitrator permitted the color change.

Wolfenson v. Huntington Lakes Section Three Association, Inc., Arb. Case No. 97-2446 Summary Final Order (May 22, 1998)— The arbitrator permitted resurfacing a pool deck when doing so returned the deck to the condition it was originally in when the condominium was constructed, even though the completed project was a material change to what existed now. In other words, if a prior board improperly performed a material alteration that should have required owner vote, but did not receive it, a future board can restore the area without an owner vote.

Not all of the results above are truly consistent, which makes it just as frustrating for lawyers as it does for boards. That being said, a clear pattern can be ascertained from the decisions. Specifically, most changes are material changes requiring an owner vote UNLESS you can make a cogent argument that 1) the common element at issue is in need of repair (i.e its not just an aesthetic change or a change made due to perceived desire of the community or the Board with regard to an area), and 2) the change is necessary due to either the code, to protect the common elements, or is a substantially superior product than what was once there before, meaning that the common elements will last longer and not need to be replaced as quickly. Alternatively, if the “change” is not truly a change, but the correction of a prior improper material alteration that was performed without owner vote, no vote will likely be needed. Otherwise, odds are any change is going to be considered material and require an owner vote.

2 comments:

ted said...

Perhaps my comment is too simplistic but the "material alteration" clause is troublesome and should be stricken from the Declaration or Bylaws, wherever found. Alternatively, governance of any "alteration" could be changed to allow due process through an architectural committee and the Board. This protocol would reflect the current mood or thoughts of the ownership and avoid unnecessary litigation and dissension. Ted Salgado, Principal of Reserve Advisors, Inc.

david said...

Now throw in that some documents have restrictions where they cannot make a material alteration costing over $500.00 or up to 25,000.00 w/o a unit owner vote. Then when you have multi condos with a master and the documents state members are the presidents of each individual association which make up the master association make it even more confusing. I believe its in our best interests not to have our legislators change them as they make things more difficult for us every year.

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