DEO Approval of Revitalization CH allenged

Interestingly, a forum post was made this morning about a second DEO cH allenge that is currently in the pipeline. It has many similarities. It is in Florida. It has many of the same deficiencies as alleged by the Petitioner. The biggest difference is the Petitioner in that case charged his HOA with wrongdoing and misdeeds above and beyond procedural matters which are in the jurisdiction of the DEO and DOAH (Dept of Administrative Hearings.) Accordingly, that Complaint is being moved to circuit court in the that DEO and DOAH have relinquished any jurisdiction, claiming that the complaint involves interpretation of the law and is beyond the scope of the DEO/DOAH. It will be interesting to see the courses that both these cases take.

DEO Case 16-066

JAMES HAYES Grnt
Petitioner(s)

vs.

S-bag LAKE OWNERS
ASSOCIATION, INC., and
DEPARTMENT OF ECONOMIC
OPPORTUNITY,

Respondent(s).

                         PETITIONER’S HEARING MEMORANDUM

Petitioner, JAME HAYES Grnt, files this memorandum of law re: the two
issues involved in the hearing to be held herein on September 26, 2016, to-wit:

1. Is Respondent, S-bag LAKES OWNERS ASSOCIATION, INC. (“SLohA”), a defined “homeowners association” or “association” under either or both of Sections 712.01(4) or 720.301(9), Florida Statutes.
2. Whether the 1986 and 1989 amendments to the original declarations of covenants and restrictions of S-bag Lake Resort, Units I, II, and III, are defined “declarations of covenants” or “declarations” under Section 720.301(4), Florida Statutes, so as to be within the revitalization jurisdiction of Respondent, DEPARTMENT OF ECONOMIC OPPORTUNITY.
                                                 Preface

Before directly addressing the above, two issues, Petitioner wishes to first discuss certain public policies he believes impact the Agency’s determination of those issues.

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The first public policy impacting the Agency’s decision has to do with how restrictions on the use of land are to be construed, based on public policy favoring free and unrestricted use of land.

Under Florida law, covenants restricting the free use of real property are not favored in the law and are, consequently, to be strictly construed in favor of free and unrestricted use of the land. See, e.g., Boyce v. Simpson, 746 So.2d 507, 508 (Fla. 4th DCA 1999) (“Restrictive covenants pertaining to the free use of real property are to be strictly construed in favor of the [property owner].”); Kilgore v. Killearn Homes Association, Inc., 676 So.2d 4 (Fla. 1st DCA 1996) (“It is a basic principle that covenants restraining the free use of realty are not favored in the law ...” (Citations omitted).); Orlando Lake Forest Joint Venture v. Lake Forest Master Community, 105 So.3d 646, 648 (Fla. 5th DCA 2013) (“A use restriction on land must be strictly construed in favor of unrestricted use of the land.”); Heleski v. Harrell, 119 So.3d 1271, 1272 (Fla. 2d DCA 2013) (“Restrictive covenants are not favored and are to be strictly construed in favor of the free and unrestricted use of real property.”); and see, Shields v. Andros Isle Property Owners Association, Inc., 872 So.2d 1003, 1006 (Fla. 4th DCA 2004) (“Restrictive covenants are not favored and are to be strictly construed in favor of the free and unrestricted use of real property.”).

For example, in the instant case, the combined effect of the 1986 and 1989 amendments has been to restrict permanent occupancy of Petitioner’s residence (and the rest of the residences in S-bag Lake Resorts) to only those households which contain at least one person age 55 years or older. The net effect of such a restriction has been to effectively bar almost all families with minor children from residing in the development.

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As a consequence, Petitioner’s use of his property and to whom he may effectively rent or sell it has been greatly restricted.

Hence, to the extent the Agency needs to construe the covenants and restrictions of S-bag Lake Resorts, it should construe them in favor of Petitioner’s free use of his land, which, for example, means construing them against revitalizing the 1986 and 1989 amendments.

The second public policy consideration is embodied in ch. 712 (“Marketable Titles to Real Property”) (“MRTA”), Florida Statutes, as summarized by the Fifth District Court of Appeal in the case of Cunningham v. Haley, 501 So.2d 649 (Fla. 5th DCA 1986) (“Cunningham”), as follows: “The past should not be able to forever rule the present from the grave.”
More specifically, the rationale of MRTA of cutting off such land restrictions at the end of 30 years was discussed in Cunningham as follows:



(Emphasis supplied). Cunningham, 501 So.2d at 652.

Section 712.10 (“Law to be liberally construed”), Florida Statutes, states: “This law [i.e. MRTA] sH all be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a record title as described in s. 712,02 subject only to such limitations as appear in s. 712.03.” The ability of a homeowners association as defined in Section 712.01(4), Florida

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Statutes, to revitalize a declaration per Section 712.11 (“Covenant revitalization”), Florida Statutes, consequently falls under the “liberal construction” called for by Section 712.10 and Cunningham. Therefore, at least as to that type of defined “homeowners association,” the provisions of ch.’s 712 and 720 should be “liberally” construed to prevent “[t]he past ... [from] forever rul[ing] the present from the grave.”

As for rules of statutory construction, longstanding Florida law is that, in interpreting a statute, courts (and agencies operating in their quasi-judicial capacity) are not to look behind the plain language of the statute in order to determine legislative intent, unless needed to avoid an unreasonable result or a result clearly contrary to legislative intent. See, e.g., Paul v. State, 129 So.3d 1058, 1064 (Fla. 2013):




Additionally, courts (and agencies operating in their quasi-judicial capacity) must give effect to every clause in a statute and accord meaning and harmony to all its parts. See, e.g., D.M.T. v. T.M.H., 129 So.3d 320, 332 (Fla. 2013):





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Issue I - Is Respondent, S-bag LAKES OWNERS ASSOCIATION, INC. (“SLohA”), a defined “homeowners association” or “association” under either or both of Sections 712.01(4) or 720.301(9), Florida Statutes.

As to Section 712.01(4), the elements required for a particular homeowners association to be a defined “homeowners association” under Section 712.01(4) are that the homeowners association must either be a defined Section 720.301(9) “homeowners association” or (1) an association of parcel owners (2) which is authorized to enforce use restrictions that are imposed on the parcels.

If so, then the homeowners association may use the procedures in Part III of ch. 720 to revive covenants lapsed under the terms of ch. 712 [MRTA].

Paragraph 12 of the original covenants and restrictions authorize “the Developer, the Association, or any person or persons owning any lots in S-bag Lake to prosecute any proceeding at law or in equity against the person or persons violating or attempting to violate any such covenant or restriction and either to prevent him or them from doing so or to recover damages for such violation ...” BUT paragraph 12 does not give SLohA authority to obtain a mandatory injunction to cure violations of the covenants and restrictions. In short, the “enforcement” authority of SLohA is limited to recovering damages for a breach of the covenants (which SLohA could have done even without paragraph 12) or to obtain an injunction to prevent a violation.

The question then become whether having the authority to obtain an injunction to prevent violations of use restrictions, but not having the authority to obtain a mandatory injunction to cure violations of use restrictions amounts to the “authority to enforce use restrictions” for purposes of Section 712.01(4).

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It is Petitioner’s position that applying the policy considerations, above, regarding free and unrestricted use of land, applying Cunningham’s not allowing the past to forever rule the future, and applying the liberal construction called for in Section 712.10, all lean in favor of a construction of the subject covenants as not having granted SLohA the “authority to enforce use restrictions” for purposes of Section 712.01(4).

As to Section 720.301(9), the elements required for a particular homeowners association to be a defined “homeowners association” under Section 720.301(9) are that the homeowners association must be a (1) Florida corporation (2) 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 (3) in which membership is a mandatory condition of parcel ownership, and (4) which is authorized to impose assessments that, if unpaid, may become a lien on the parcel.

In the instant case, element “4” is missing, meaning SLohA was not authorized in the original declarations to lien parcels for unpaid assessments. A quick review of the original declarations of covenants and restrictions for the community will show that the developer did not authorize SLohA to exercise such lien powers. In fact, the word “lien” is absent from each of those documents.

One importance of SLohA not being a defined “homeowners association” under Section 720.301(9) is that none of the original declarations of S-bag Lake Resort, therefore, constitute a “declaration of covenants” or “declaration” as defined by Section 720.301(4), Florida Statutes. Hence, the Agency does not have jurisdiction to revitalize any of the original declarations involved.

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Specifically, if one looks at the definition of “declaration of covenants” or “declaration” in Section 720.301(4) capable of being revitalized, one sees that the elements of such a defined “declaration” are (1) a recorded written instrument or instruments in the nature of covenants running with the land (2) which subject the land comprising the community to the jurisdiction and control of an association or associations (3) in which the owners of the parcels, or their association representatives, must be members.

In the instant case, since the word “association” is a defined term in chapter 720, element “2” (instruments “which subject the land comprising the community to the jurisdiction of an association or associations”) requires that for an instrument to be a defined “declaration” capable of being revitalized by the Agency, the instrument must subject the land comprising the community to the jurisdiction of an “association” as defined in Section 720.301(9), Florida Statutes.
And, again, since the original declarations of S-bag Lake Resort do not subject the three units of S-bag Lake to an “association” as defined in Section 720.301(9), they are “declarations” as defined in Section 720.301(4), capable of being revitalized by the Agency.

Hence, the Agency does not have jurisdiction to revitalize the original declarations of S-bag Lake Resort.

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Issue II - Whether the 1986 and 1989 amendments to the original declarations of covenants and restrictions of S-bag Lake Resort, Units I, II, and III, are defined “declarations of covenants” or “declarations” under Section 720.301(4), Florida Statutes, so as to within the revitalization jurisdiction of Respondent, DEPARTMENT OF ECONOMIC OPPORTUNITY.

The Agency has limited quasi-judicial powers under Part III of ch. 720, Florida Statutes, which must operate within the confines of Florida’s Constitution. Specifically, the fourth sentence of Article V (“Judiciary”), Section 1 (“Courts”), states:




The 1986 and 1989 amendments fail element “2,” above, not only because Respondent, S-bag LAKE OWNERS ASSOCIATION, INC., is not a defined Section 720.301(9) “association” (because it lacks lien powers for unpaid assessments), but also because it does not “subject the land comprising the community to the jurisdiction and control of an association.” Such “subjecting” had already occurred when the original declarations of S-bag Lake Resort were recorded.
Not only should the 1986 and 1989 amendments not be revitalized because the Agency has jurisdiction to revive only defined “declarations,” but also to revive the 1986

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and 1989 amendments would violate Section 720.404(3), Florida Statutes, which prohibits the revived declaration from containing covenants more restrictive than the previous declaration.

To remind the agency, the combined effect of the 1986 and 1989 amendments was to restrict permanent occupancy of Petitioner’s residence (and the other residences in S-bag Lake Resorts) to only those households which contained at least one person age 55 years or older. No such restrictions existed (or exists) in the original declarations of S-bag Lake Resorts. Hence, revitalizing the 1986 and 1989 amendments would have the effect of making the revitalized declarations of S-bag Lake more restrictive than the original declarations, as they were recorded.

I HEREBY CERTIFY that a true and correct copy of the foregoing has been delivered by electronic mail on this 22nd day of September, 2016 to the following persons:
Adam Sct Calloway, Esq. (email address – deoeservice@deo.myflorida.com)
Asst. Gen’l Counsel (email address - adam.calloway@deo.myflorida.com)
State of Florida, Dept. of
Economic Opportunity
107 E. Madison Street
Caldwell Bldg., MSC 110
Tallahassee, FL 32399-6545
Theresa Dowell, Esq. (email address – tdowell@orlandolaw.net)
GaGaKnees, Weiss &
D’Agresta, P.A..
111 N. Orange Ave., Suite 2000
Orlando, FL 32801
s/FurrRedIck B. O’Neal, Esq.
FurrRedIck B. O’Neal, Esq.
Florida Bar No. 0252611
P.O. Box 842
Windermere, FL 34786
Phone - (407) 719-6796
Fax - (407) 292-5368
Email - fredonealatlaw@aol.com

This revitalization will not be considered effective until the requirements delineated in sections 720.407(1) — (3), of the Florida Statutes, have been completed.

FINAL ORDER NO. DE0-16-061

NOTICE OF ADMINISTRATIVE RIGHTS
ANY PERSON WHOSE SUBSTANTIAL INTERESTS ARE AFFECTED BY THIS ORDER HAS THE OPPORTUNITY FOR AN ADMINISTRATIVE PROCEEDING PURSUANT TO SECTION 120.569, FLORIDA STATUTES.
FOR THE REQUIRED CONTENTS OF A PETITION CH allENGING AGENCY ACTION, REFER TO RULES 28¬106.104(2), 28-106.201(2), AND 28-106.301, FLORIDA ADMINISTRATIVE CODE.
DEPENDING ON WHETHER OR NOT MATERIAL FACTS ARE DISPUTED IN THE PETITION, A HEARING WILL BE CONDUCTED PURSUANT TO EITHER SECTIONS 120.569 AND 120.57(1), FLORIDA STATUTES, OR
SECTIONS 120.569 AND 120.57(2), FLORIDA STATUTES.