Internet Proposal Handout & Letter

This is the letter to MANBOD:

I hope you are wrong--because it means that I will be wrong about my belief in the innate goodness and generosity of people in community with each other--our fundamental connectedness to each other.  I believe that what happens to ONE of us happens to ALL of us.  And what we do to ONE...we do to ALL.

Another S u e Philosophical Moment

Guest & Owner, That is exactly my feelings. I sure hope we have a lot more people in SLR, that feel the same way. SLR does have a big spending problem. Our Leaders are placing less monies into our Reserves each year since 2010. We do have needs in SLR, but SLR spends a lot of Our Money on Wants, not Needs...
Guest & Owner, Thanks for your post. JA :-)

Guest & Owner:  I am very glad you posted and voiced your position about the internet fee.  I know there are people like you in SLR that see beyond their own interests when making "group" decisions that have impacts on people with many different situations.    Maybe we will not know until the vote just how many people there are out there that believe that an internet assessment is not in the best interest of the community.

You are 100% correct, not to mention the fact that the internet proposal--if you want to call it that, was nothing more than a sob story about why we should all support his business whether or not we want his services and makes reference to personal dire medical issues he has as well as the fact that he felt "gut punched" when NALCREST got the title of "most connected retirement resort in Florida,"--instead of SLR.  I've never seen this kind of crap on any type of professional proposal, and I've seen MANY!
So, what, then--should anyone be allowed to start a business in here, then, just because the BOD wants it, they make everyone pay additional assessments for something else people neither need nor want? When is this B.S. going to STOP? 
On top of all of that, what they are doing is against the law and there has already been case law setting precedence in this state on a similar issue.  

This is some cut 'n paste from an email exchange between myself and my attorney on this issue. 

Anyone who is considering non-payment of any part of an assessment payment should be very careful and seek legal advice. 

Here is my email to him "capsulizing" the situation and asking various questions:

Association has proposed and will reportedly place on ballot in Feb a mandatory assessment fee for internet services and deem it an operating cost to be paid from assessments. The services will be provided by an owner of a privately-owned company (K C N) which has established business equipment on our common property--contrary to the Covenants which prohibit commercial activity.   The owner of the business is also an Owner of SLR property and lives here. The reason given for the proposal to the Association is to "cap the subscribers due to poor health and inability to service a larger subscriber base". (It is my belief that this is a plausible reason but NOT the main one.)

One of the BOD houses transmitting antennas on his roof and purchases equipment to house this company's hardware and is very involved in the business but denies financial involvement. There is a second director that many believe is also involved in the business as an investor. It is rumored that these directors receive "free" internet at the very least.  One director was publicly asked about "financial involvement" and proclaimed that he hasn't profited a dime off K C (not a denial in my book!) and the second one sidestepped the question with a hostile reply "owners are beating a dead horse".

This business was established a couple years ago when the local wireless provider went out of business and an interested and able Owner, who then was sponsoring and administering a Computer Help Club, decided to put up a tower for intra-park internet services using some kind of radio beam (since there was no fiberoptic cable here). At the time, the tower was a benign presence on ONLY his property and the return of internet was a welcome service. Only one remote decrepit tower needed to be replaced on the same ground as the old tower owned by the defunct provider. There was no discussion about expanding the service outside the community.

K C N quickly became the sole provider of internet services in this rural area and demand expanded outside the community. Now, several towers occupy our common property and other sites up to 8 miles distant, the owner has business equipment housed in an exclusive room in one of our common buildings and we supposedly own and insure the towers. The towers house internet dishes leased by third parties (Verizon etc) and the business has towers outside the community and services subscribers outside the park. The main business office is chartered outside the community, but the owner runs the service from his home inside the park, receives payments here etc.

Attempts have been made, via multiple records requests and during BOD meetings, to identify the documents permitting the use of our property for this business but all requests have been stonewalled and BOD insists that there are NO agreements, contracts or documentation of any kind.

A mandatory internet fee was balloted two years ago and failed and now BOD is sponsoring a second effort. People are much more polarized this time because about 400 of the 787 owners already buy the service at a retail rate of $50/mo and the bulk contract proposes a mandatory assessment of $15/mo. Of course, this puts the people who do not want service at a huge disadvantage vote-wise. The proposal has no provision for non-payment of the assessment for hardship cause whatsoever (though 720 does provide for exemptions but it is expected that the BOD will refuse to exempt).

Questions:

Does 720.309 give Association right to levy this NEW non-operating/non-maintenance amenity on owners for services provided by a corporation in which the Association has no equity interest and one which is operating in violation of our governing documents?

Our 1972 governing documents do not contain the "as amended from time to time" language.   Does the 2011 Cohn v Grand Condo make the above a moot question?   If yes, is there a way (short of litigation) to cH allenge BOD that simply ignores the Supreme Court decision?   Should they be put on written notice?

If Cohn v Grand Condo does not (theoretically) invalidate this action, does this new assessment levy overlap in any way my lawsuit and request to partition my non-member costs from consensual member costs?

If the BOD does indeed have the authority to assess on the basis of the 720.309, is the only recourse to attempt to cancel the contract by majority of owners attending the meeting following the execution of the contract?

If yes, by what vehicle are owners required to be notified of the existence of the contract so adequate time is possible for owners to attend the next meeting? And how is the vote to be taken? Who validates and referees the count, if by secret ballot?

Here are excerpts of my attorney replies to these issues; he has given me permission to cut 'n paste any relevant responses on this forum:




I will have some followup questions for F, particularly concerning Joinders to the lawsuit and setting up a court registry for assessment contributions from owners joining the suit.  After I hear back, I'll post.

fredonealletterpost.pdf (150.54 KB)

I will try to shed some light but I am sorry it will not be a quick or easy read.

Cohn v Grand Condo is a 2011 FL Supreme Court decision that said that any laws impairing the obligations or diminishing the value of contracts are constitutionally prohibited.   Seems simple but it is not and I understand only basics which I'll try to offer.

There are several conditions and qualifications that were present in this decision.  First--the suit was brought by a condo owner who wanted to change the way her condos board was composed because of an amended FL condo statute that permitted it.  The Association argued that this legislative amendment was an impairment of its contract with owners and prohibited by the Florida Constitution nor permitted by its Covenants.

The FL Supreme Court upheld the FL Constitution and issued a Declaratory Judgement for the Association (and against the owner).  Of course, there were other underlying rationales for the decision.

The decision was applicable to a condo case-only.  However--and this is a big however--it is nearly universally accepted that the decision is broadly applicable to coops and homeowners associations and that it will eventually be litigated and incorporated into common law governing homeowner associations and coops.

As a result of the decision, HOA's and coop's are in a quiet state of panic--because the business model of condo/hoa/coop private governments depends on legislatures passing money-making laws favorable to special interest groups.  The Supreme Court said to the legislature "You cannot interfere in the contractual (covenants) agreements entered into by homeowners and their governments".  This is a severe smack-down to the consumer-hostile environment in Tallahassee and created all kinds of political chaos.  Lobbyists, lawyers, service providers and property management companies are on notice; they will no longer be able to marginalize the covenants in favor of making laws to enable sweetheart deals.

There are other important variables which affected the outcomes of the case.  One is a "balancing" kind of assessment which asks: was the legislature trying to cure a broad and compelling problem when it enacted the statute---is the new law a brand new law or did it exist in some form at the time the contract was entered into ---does the new legislation have a temporary affect or is it retroactive, permanent and severely impact the contractual relationship?

Another consideration is "is the amended statute procedural or substantive"?  Impairments of substantive rights and duties are much more serious than procedural amendments which generally involve how rules are enforced.

And then, there is the language of the superior document which spells out the contract--does it give legislatures the right to amend it over the years?  In order for future legislative changes to be incorporated into a condo/coop/hoa, the original Declaration must have agreed to these changes "as amended from time to time".  This is called the magical "Kaufman language".  It is magical because, if the document does not contain this provision, the document cannot be altered by changes in statutes that impact substantive rights. 

Said another way for S-bag, whatever statutory provisions existed in FS617 at the time of Declaration was recorded is the promise which exists today and material rights cannot be eroded or amended by changes to FS720.

S-bag's Declarations do not contain the "magic language".  S-bag's developer did not permit itself to be altered by future changes to statutory laws "as amended from time to time".

Here is an example of the an attempted takeover of owner contract/covenants by a legislative decree:  S-bag cannot legally force owners to pay for an internet fee as a cost of operation and maintenance of common property even though FS720 enacted a statute that gave boards the right to enter into communications contracts and levy the cost as an assessment without regard for the governing documents.  The promise in the Declaration was that assessments can only be levied for the operation and maintenance of common property.  Of course, K C N is NOT common property and the levy would be reversed if cH allenged.  It is a substantive right ie that owners only have to pay to maintain common property--not private businesses poaching on common property!

So, the short answer to your question is Yes--in my opinion--a person who wanted to cH allenge SLohA's internet extortion fee would likely be on solid legal ground.

Here is another example:  S-bag cannot force owners to implement an enforcement mechanism that involves fines for violations just because the legislature said that boards were authorized to do that regardless of what the governing documents said.  There is NO provision in S-bag's Declaration for fining homeowners for rules/covenants violations.  That is an important substantive right which the new statute attempts to take away!

So --Baglady was wrong when she stated that the FL statute gave the Association the right to enter into an internet contract, deem it an operating expense and levy an assessment.  Baglady was also underinformed when stating that the FL HOA law permitted SLohA to set up a Violations and Fining vehicle.  FL statutes would only prevail over covenants if the Covenants originally agreed to submit to statutory changes  "as amended from time to time".

Here is an example of the legislature properly overriding the documents which is acceptable under the "balancing" tests:  Our Declaration states that clotheslines are not permitted on any lot; however, the legislature has said the environmental impacts are more important than the cosmetics of clotheslines and permits them.  S-bag is bound by the legislative rule and must permit clotheslines.

This is a start to help you better understand the significance of Cohn v Grand Condo decision.  It took me quite awhile before I felt I "got it". 

And, as usual, my disclaimer.  I am NOT an attorney and you should not rely on any of the statements above.  This post is for educational and informational purposes and you should get an attorney before making a decision to act.

Attachment Deleted

Voting NO on this particular item would also be a vote NO to involve SLohA in a future expensive lawsuit on this issue and possibly the Violations/Fines issue.

Someone in here is going to get mad and seek out a nice young upstart lawyer who doesn't have an expensive fee setup who wants to make a name for themself in the CID (Common Interest Development) bizz! Maybe that is what is needed to send a meaningful message to boards who routinely ignore the law.

Owners should also keep in mind that the board has the power and will special assess you for the attorney fees it has to pay to deal with problems IT creates through ignorance and arrogance.