Can an amendment to a homeowners’ association’s declaration of covenants (or “declaration of condominium” for all of you condo dwellers) go too far? Is there a “line in the sand” that cannot be crossed when amending the governing documents? Can an amendment be so noxious that, even if properly adopted, a court will strike it down? Well, the answer depends…
In testing the boundaries of an amendment, the gravamen question is this: who passed the amendment? Was it the owner controlled association that voted in favor of it, or was the amendment enacted by a developer’s unilateral power to amend the declaration during the period of developer control?
Generally speaking, a community has a wide berth to adopt amendments, desired by the members, when it is the members themselves who vote in favor of the change. For example, in 1976, in Seagate Condominium Ass’n, Inc. v. Duffy, the Fourth District Court of Appeal upheld a vote of the owners amending their declaration of condominium prohibiting leasing of any units, except for limited periods in cases of hardship. The Court also ruled that the amendment was retroactive in that it even applied to owners who purchased their units before the amendment was adopted. As often repeated, and as initially penned in 1981 by the Fourth District Court of Appeal in Hidden Harbour Estates, Inc. v. Basso, courts recognize that restrictions found in a declaration “are clothed with a very strong presumption of validity which arises from the fact that each individual unit owner purchases his unit knowing of and accepting the restrictions to be imposed.” This includes the possibility that the members may vote to change things up from time to time. Thus, there is broad authority for a member controlled community association to vote in favor of amending, deleting, or even adding new restrictions. Think of it this way… When you choose to live in a community association governed by a declaration, you know (or you should by now know) that you’re giving up a certain sense of control in that the “majority rules.”
Is a developer’s unilaterally adopted amendment provided the same “presumption of validity” similar to an amendment adopted by the owners? Generally, even unilateral developer amendments are given a broad berth of presumptive validity, too. Nevertheless, there are times when the courts have held that a developer’s unilaterally adopted amendment to a declaration goes too far. Most especially, this occurs when the developer’s amendment changes the “general scheme of the community.” For example, in 2009, in Ironhorse v. Chismark, just before turnover, the developer adopted a unilateral amendment to the HOA declaration. The amendment required membership in a country club where such membership was previously voluntary. Requiring the HOA members to join the country club through a unilateral developer’s amendment to the declaration was struck down by the Fourth District Court of Appeal because such a requirement changed the “general scheme of the community.” In a very recent 2013 case, Flescher v. Oak Run Associates, the Fifth District Court of Appeals struck down a developer’s unilateral amendment to the community’s declaration that would have permitted the developer to pocket any surplus leftover from the members’ dues.
On the one hand, a developer has a right to amend the restrictive covenants so long as such right is reserved and change is reasonable. On the other hand, the developer’s power to amend must be exercised in a reasonable manner so as to not destroy the “general scheme of the community.” The bottom line is this: while a unilateral developer enacted amendment may disappoint a homeowner’s expectations, if it does not change the general character of the community or the burdens between the grantor and grantee, then the amendment is likely to withstand judicial challenge. Amendments properly and lawfully adopted by the members are even more likely to withstand judicial challenge.