Although it is rarely welcomed by the owners, condo associations are permitted by Florida statute to impose special assessments for necessary and routine maintenance. There are a lot of considerations that come into play in deciding whether special assessments for necessary maintenance are required, both procedural and substantive considerations. For example, a condo association may be required to call for a vote of approval by unit owners to approve special assessments for maintenance under certain circumstances, most notably if the assessment is being put toward a material alteration of common elements. So long as proper procedures are followed, assessments may be imposed on all unit owners, even those that may not support imposition of the assessment. This blog post will explore just some of the issues associated with special assessments for routine maintenance.
Authority To Impose Special Assessments On Condominium Owners
The following provisions provide that a condo association may impose special assessments for maintenance purposes. Under Chapter 718 F.S., an assessment is defined as “a share of the funds which are required for the payment of common expenses, which from time to time is assessed against the unit owner.” 718.103(1). Common expenses are defined as “all expenses properly incurred by the association in the performance of its duties.” 718.103(9). Further, pursuant to F.S. 718.115(1)(a), common expenses include “the expenses of the operation, maintenance, repair, replacement, or protection of the common elements and association property.” Lastly, common elements are defined as “portions of the condominium property not included in the units.”
Not only does Florida statute provide for the authority of a condo association to impose special assessments, it establishes that condo associations are obligated to maintain the common elements of condo property. Specifically, F.S. 718.113 declares that “[m]aintenance of the common elements is the responsibility of the association.” In addition, an association has discretion to allocate costs of maintenance for limited common elements to those units that are exclusively entitled to access the limited common elements.
Material Alteration Exception
Despite the broad grant of statutory authority to impose special assessments for maintenance purposes, an association may not have discretion to do so without approval of unit owners if a maintenance project amounts to a “material alteration” or “substantial addition.” F.S. 718.113(2)(a). The Fourth DCA interpreted material alteration as “to palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance.” Sterling Village Condominium, Inc. v. Breitenbach, 251 So.2d 685 (Fla. 4th DCA 1971). Typically, the procedures for approval of material alterations to common elements are set out in a condominium’s Declaration Provisions. If not, then Florida statute requires that 75 percent of the total voting interests of an association must approve a material alteration. F.S. 718.113(2)(a). However, Florida case law sets forth some guidance as to when necessary maintenance of the COA provides basis for a special assessment.
Resolving The Exception’s Application To Association Powers
The above two sections establish that condo associations are granted broad powers to impose special assessments for maintenance purposes; although, if a material alteration or substantial addition is being proposed, these powers often cannot be exercised absent overwhelming approval by condo unit owners. Accordingly, assessments spent towards routine maintenance generally fall within an association’s statutorily granted discretion. On the other hand, however, it is not always clear whether an assessment for necessary maintenance may be imposed without calling for a separate approval process. This is because much necessary maintenance often involves improvements needed to comply with new building codes or to protect against environmental threats.
The Second DCA addressed a related issue in Tiffany Plaza Condominium Association, Inc. v. Spencer, 416 So. 2d 823 (Fla. 2d DCA 1982). At issue in this case was whether the construction of a rock revetment to prevent erosion could be funded by a special assessment on all condo unit owners. The court did not directly take up the issue of whether the revetment amounted to a material alteration, since the association had called for a vote that approved the project. The issue of the rock revetment being necessary for maintenance purposes arose because the unit owners who opposed the project objected to paying for any portion of the rock revetment.
The condo association thus argued that the construction was necessary in order to assess all unit owners for the construction of the revetment – even those that had voted against the project. The Second DCA considered the association’s declaration, bylaws, and Florida statutes “as a whole” in making its determination. The court concluded:
If, in the good business judgment of the association, such alteration or improvement is necessary or beneficial in the maintenance, repair or replacement of the common elements, all unit owners should equally bear the cost as provided in the declaration, bylaws and statutes. The trial court erred when it concluded that objecting owners should be relieved from the initial costs thereof even when the alteration or improvement was for the purpose of maintenance of the common elements.
The court in Tiffany Plaza did not directly address whether the particular project (construction of the rock revetment) was in fact necessary for maintenance purposes. In Cottrell v. Thornton, 449 So.2d 1291 (Fla. 2d DCA 1984), however, the Second DCA established whether a particular project is necessary for maintenance purposes is a question of fact for trial courts. Further, Ralph v. Envoy Point, 455 So. 2d 454 (Fla. 2d DCA 1984) declared that some alterations and even improvements may be considered necessary for maintenance purposes. Id. at 455.
Alternatively, George v. Beach Club Villas Condominium Assoc., 833 So.2d 816 (Fla. 3d DCA (2002) suggests that assessments for maintenance purposes may be invalidated under the material alteration exception if a particular renovation, albeit necessary, represents a change in appearance (or even a diminishment in the quality) of the common elements. For example, the Third DCA invalidated an assessment for the replacement of roof shingles in George. What is notable from this case is that the Third DCA upheld the determination that the replacement of cedar shingles with barrel tiles was an invalid exercise of association authority, even though the cedar shingles were worn and the barrel tiles significantly less expensive than alternatives. Subsequent courts have continued to make these determinations in an ad hoc manner.
What this case law means for condo associations is that, depending on their own declarations and bylaws, associations may bear the burden of proving that a given project is necessary (1) in order to avoid application of the material alteration exception and its requirement of a vote of approval, and (2) in order to impose a special assessment on all unit owners – even those objecting to a particular project. Further, Florida statute and case law suggests special assessments may be imposed for improvements that are truly necessary for maintenance purposes; and, conversely, the material alteration exception may also apply to necessary renovations that are cheap and substandard. Imposing special assessments on a community is a complicated decision, wrought with procedural and substantive peril. Any community association contemplating specially assessing its owners should seek the advice of competent community association counsel.
Charles B. Jimerson, Esq.
Carter F. Smith, JD Candidate