June 11, 2020
RETROACTIVITY OF NEWLY-ENACTED LAWS IN THE CONDOMINIUM CONTEXT

In Florida, Homeowners (HOA) and Condominium Owners (COA) Associations are governed by Chapters 718 and 720, Florida Statutes as well as their recorded declarations and other governing documents. From time to time, the Legislature will make amendments to Chapters 718 and 720, Florida Statutes. An important question arises when the legislature amends these chapters that govern HOAs and COAs. Namely, whether these amendments will retroactively change the rights of the Association and/or its members.

Oftentimes, HOAs and COAs may be operating under governing documents which were drafted at a time when Chapter 718 and 720 were different than they are today. In fact, certain HOAs and COAs are acting under documents that were recorded before the first version of Chapter 718 and 720 were even passed by the Legislature. Thus, any changes to Chapters 718 and 720 could materially affect the rights and remedies available to both Associations and property owners.

Generally speaking, most laws are considered prospective i.e. they apply to future conduct and do not apply to past conduct.  On rare occasions, the legislature will pass a retroactive law i.e. it applies to prior conduct. In Florida, these laws are extremely rare and must meet a very stringent set of requirements.

The Florida Supreme Court has instituted a two-prong test to determine whether new laws or constitutional amendments can apply retroactively: First, the legislature must clearly and unambiguously express intent that the law should apply retroactively;[1] and, second, the retroactive application of the new law cannot violate any constitutional principles.[2]

The plain language of Chapters 718 and 720 do not show express intent by the legislature that the entire chapter should apply retroactively. Thus, in order to determine whether the intent of the legislature was that the law apply retroactively, one must look to the legislative history and the purpose behind enacting each specific statutory provision. This inquiry will be different for each section of Chapters 718 and 720. Typically, courts will look at the actual language of the statute as well as the notes and other legislative materials associated with the pertinent section to determine whether the legislature had the intent that the newly enacted law apply retroactively.

The second prong of the test is where the analysis can become more complex. Under the second prong, retroactive application of a new law is only permissible if it does not violate a constitutionally protected right.[3] For instance, Article I, Section 10 of the Florida Constitution prohibits the enactment of any “law impairing the obligation of contracts.” Regardless of whether the legislature intends for retroactivity as required by the first prong of the test, statutes that impair contractual rights and obligations are unconstitutional and fail the second prong of the test. 

One example of a newly enacted statute conflicting with a COA contractual agreement is in the Florida Supreme Court case of Cohn v. Grand Condo. Ass’n, Inc.[4] In this case, a provision of Chapter 718 that was enacted after the condominium’s governing documents came into effect stated a new requirement for mixed-use condominiums with fifty percent or greater residential composition. Chapter 718, as amended, required that the residential unit owners must be entitled to vote for a majority of seats on the board of directors. However, the requirements in the condominium’s declaration conflicted with this new statutory provision. The condominium’s declaration stated that the retail and commercial unit owners, collectively, would have majority vote control over the board of the directors. Consequently, the Florida Supreme Court struck down as unconstitutional that provision of Chapter 718 although it clearly showed legislative intent for retroactivity. Although the first prong was met (clear legislative intent for retroactivity), the court found that the provision unconstitutionally impaired the right to contract under the second prong. Thus, the provision of retroactivity was unconstitutional and invalid.

COAs and HOAs must be careful in applying current law. Where a new law does not contradict with something stated in the COA/HOA governing documents, the new law will likely apply. However, where a new law contradicts with something stated in the COA/HOA governing documents, the above test must be applied to determine whether the newly enacted law applies.

Notwithstanding the analysis above, HOA/COAs can, through their documents, submit themselves to the newly enacted versions of Chapter 718 and 720. More specifically, newly enacted versions of Chapter 718 and 720 will apply if the documents specifically state that the HOA or COA shall be governed by chapter 718 or 720 “as amended from time to time.” [5] If the HOA/COA documents utilize this language, then the newest versions of Chapters 718 and 720 most likely apply.

When the legislature amends Chapter 718 and 720, it can have an important impact on both Associations and homeowners. Determining whether changes to these laws have affected an Association or homeowner’s rights requires a careful analysis. The attorneys at the Boatman Law Firm have experience representing both homeowners and Associations. If you have a question regarding your rights under Florida Law and your HOA/COA governing documents, contact the Boatman Law Firm for assistance at 239-330-1494.

[1] See Metro. Dade Cty. v. Chase Fed. Hous. Corp., 737 So. 2d 494, 499 (Fla. 1999).

[2] Id.

[3] See Campus Commc’ns, Inc. v. Earnhardt, 821 So. 2d 388, 396 (Fla. 5th DCA 2002). 

[4] Cohn v. Grand Condo. Ass’n, Inc., 62 So. 3d 1120 (Fla. 2011).

[5] See Angora Enters., Inc. v. Condo. Ass’n of Lakeside Vill., 796 F.2d 384, 386 (11th Cir.1986).

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THIS BLOG IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. IT DOES NOT CONSTITUTE LEGAL ADVICE. THE READER SHOULD CONSULT WITH KNOWLEDGEABLE LEGAL COUNSEL TO DETERMINE HOW APPLICABLE LAWS APPLY TO SPECIFIC FACTS AND SITUATIONS. BLOG POSTS ARE BASED ON THE MOST CURRENT INFORMATION AT THE TIME THEY ARE WRITTEN. SINCE IT IS POSSIBLE THAT THE LAWS OR OTHER CIRCUMSTANCES MAY HAVE CHANGED SINCE PUBLICATION, PLEASE CALL US TO DISCUSS ANY ACTION YOU MAY BE CONSIDERING AS A RESULT OF READING THIS BLOG.

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Published: June 11, 2020
Author: The Boatman Law Firm
Categories : Uncategorized