03-003208 Department Of Business And Professional Regulation, Division Of Florida Land Sales, Condominiums, And Mobile Homes vs. Clarcona Resort Condominium Association, Inc. Status: Closed Recommended Order on Monday, February 16, 2004.

Summary: The minutes of a meeting are "records" and must be transcribed to permit access. Recommend that failure to provide access to records warrants a fine of $7,500.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF FLORIDA LAND SALES, )

CONDOMINIUMS, AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) Case Nos. 03 - 3208

) 03 - 3209

CLARCONA RESORT CONDOMINIUM )

ASSOCIATION, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

On December 19, 2003, an administrative hearing in these

consolidated cases was held in Orlando, Florida, before

William F. Qu attlebaum, Administrative Law Judge, Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Joseph S. Garwood, Esquire

Department of Business and

Professional Regulation

The Augusta Bui lding, Suite 100

8685 Northwest 53rd Terrace

Miami, Florida 33166

For Respondent: Robert L. Taylor, Esquire

Taylor & Carls, P.A.

850 Concourse Parkway, South

Suit e 105

Maitland, Florida 32751

STATEMENT OF THE ISSUES

The issues in the case are whether the allegations set

forth in two separate Notices to Show Cause are correct, and, if

so, what penalty, if any, should be imposed.

PRELIMINARY STAT EMENT

By Notice to Show Cause dated April 1, 2003 (DOAH Case No.

03 - 3209, DBPR Case No. 2003040435), the Department of Business

and Professional Regulation, Division of Florida Land Sales,

Condominiums, and Mobile Homes (Petitioner), alleges that

Clarcona Resort Condominium Association, Inc. (Respondent or

Association), failed to provide a unit owner with timely access

to requested association records. The Notice alleges that

pursuant to Subsection 718.111(12)(b), Florida Statutes (2003),

association recor ds are to be made available within five working

days after receipt of a written request. The Notice alleges

that the Respondent received unit owner Mike Sims' request on

February 13, 2002, and that the records were not made available

to Mr. Sims' represen tative, Curtis Faulk, until February 23,

2002, eight working days after the request. The Notice also

alleges that the Respondent further violated Subsections

718.111(12)(b) and (c), Florida Statutes (2003), by failing

during the February 23 meeting to pro vide Mr. Faulk with access

to certain "accounts receivable" records or to a "reserve fund

study."

By Notice to Show Cause dated July 16, 2003 (DOAH Case No.

03 - 3208, DBPR Docket No. 2003056262), the Petitioner alleges

that the Respondent violated Subsecti ons 718.111(12)(b) and (c),

Florida Statutes (2003), by failing to provide access to the

minutes of the Association's annual meeting to unit owner Ansel

Wood when Mr. Wood arrived, pursuant to a prior written request,

to review records on February 26, 2003 . The Notice further

alleges that Mr. Wood renewed his request on March 4, 2003, and

that the access to the requested records was never provided to

Mr. Wood.

By Petitions for Hearing, the Respondent challenged the

allegations of the Notices to Show Caus e. The Petitions were

forwarded on September 8, 2003, to the Division of

Administrative Hearings, which consolidated the cases and

scheduled the matter for a November 14, 2003, hearing. The

hearing was continued at the joint request of the parties and

re scheduled for December 19, 2003.

At the hearing, the Petitioner presented the testimony of

three witnesses, and had Exhibits numbered 1 and 2 admitted into

evidence. The Respondent presented the testimony of three

witnesses, and had Exhibits numbered 1 through 6 admitted into

evidence. Subsequent to the hearing, the Petitioner filed the

deposition testimony of a fourth witness.

No transcript of the hearing was filed. By stipulation of

the parties, the Proposed Recommended Orders were filed prior to

January 25, 2004.

FINDINGS OF FACT

1. The Respondent is the association governing the

Clarcona Condominium in Apopka, Florida. The Clarcona

Condominium is comprised of a total of 946 units.

2. The Respondent has an office located on the Clarcona

pro perty where available records of the association are located.

Notice to Show Cause dated April 1, 2003

(DOAH Case No 03 - 3209, DBPR Docket No. 2003040435)

3. By letter hand delivered to the Respondent's office on

February 13, 2002, Mike Sims, a Clarcona unit owner, asked to

review the Respondent's financial records, including accounts

receivable and a "reserve study."

4. Mr. Sims previously requested information and records

from the association, and apparently received the information on

a timely basi s.

5. Subsequent to the February 13 request, Mr. Sims

designated another resident, Curtis Faulk, to represent him in

his records request.

6. The Association manager made an appointment with

Mr. Faulk for February 23, 2002, to review the requested

records. During the appointment, Mr. Faulk reviewed some of the

requested information.

7. As of the February 13 request and, apparently,

continuing through at least February 23, the Respondent's

accounts receivable records were being converted from one t ype

of software system to another. There was concern by the

Association manager that the Association's accounts receivable

records were not accurate. The only reserve study apparently

available was a "draft" that had been prepared for review by an

accoun tant for the Association manager.

8. Because the Respondent was concerned about the accuracy

of the accounts receivable records and the draft reserve study,

the Respondent did not provide the accounts receivable or the

draft reserve study for Mr. Faulk' s review.

9. The evidence establishes that the requested accounts

receivable and reserve study information were not provided

within five working days of the Respondent's receipt of Mr.

Sims' request.

Notice to Show Cause dated July 16, 2003

(DOAH Case No 03 - 3208, DBPR Docket No. 2003056262)

10. By letter received on February 19, 2003, Clarcona unit

owner Ansel Wood sought to review certain association records

including the "unapproved minutes of the most recent meeting" of

the Association membership. Mr . Wood and the Association

manager set an appointment for February 26, 2003, to review the

requested records.

11. At the appointed time, Mr. Wood received access to

some of the requested records, but not to the "unapproved

minutes of the most recent meeti ng." At the time of the

review by Mr. Wood, the meeting minutes had not been typed.

12. The meeting referenced in Mr. Wood's letter of request

occurred in January 2003.

13. The evidence establishes that the requested minutes of

the January 2003 meeti ng were not provided within five working

days of the Respondent's receipt of Mr. Wood's request.

14. Mr. Wood sold his unit sometime in May 2003.

15. The minutes of the meeting were not typed until

June 4, 2003. Mr. Wood did not receive access to the meeting

minutes prior to the sale of his unit.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. § 120.57(1), Fla. Stat. (2003).

17. The Petitioner has the burden of proving the

allegations in the Notices to Show Cause by a preponderance of

the evidence. Florida Department of Transportation v. J.W.C.

Company, Inc. , 396 So. 2d 778 (Fla. 1st DCA 1981). In this

case, the burden has been met.

18. In relevant part, S ection 718.111, Florida Statutes

(2003), provides as follows:

(12) OFFICIAL RECORDS. --

(a) From the inception of the association,

the association shall maintain each of the

following items, when applicable, which

shall constitute the official records of the

association:

1. A copy of the plans, permits,

warranties, and other items provided by the

developer pursuant to s. 718.301 (4).

2. A photocopy of the recorded declaration

of condominium of each condominium operated

by the association and of each am endment to

each declaration.

3. A photocopy of the recorded bylaws of

the association and of each amendment to the

bylaws.

4. A certified copy of the articles of

incorporation of the association, or other

documents creating the association, and of

each amendment thereto.

5. A copy of the current rules of the

association.

6. A book or books which contain the

minutes of all meetings of the association,

of the board of directors, and of unit

owners , which minutes shall be retained for

a period of not l ess than 7 years.

7. A current roster of all unit owners and

their mailing addresses, unit

identifications, voting certifications, and,

if known, telephone numbers. The

association shall also maintain the

electronic mailing addresses and the numbers

des ignated by unit owners for receiving

notice sent by electronic transmission of

those unit owners consenting to receive

notice by electronic transmission. The

electronic mailing addresses and numbers

provided by unit owners to receive notice by

electronic transmission shall be removed

from association records when consent to

receive notice by electronic transmission is

revoked. However, the association is not

liable for an erroneous disclosure of the

electronic mail address or the number for

receiving elec tronic transmission of

notices.

8. All current insurance policies of the

association and condominiums operated by the

association.

9. A current copy of any management

agreement, lease, or other contract to which

the association is a party or under whic h

the association or the unit owners have an

obligation or responsibility.

10. Bills of sale or transfer for all

property owned by the association.

11. Accounting records for the association

and separate accounting records for each

condominium which th e association operates.

All accounting records shall be maintained

for a period of not less than 7 years. The

accounting records shall include, but are

not limited to:

a. Accurate, itemized, and detailed records

of all receipts and expenditures.

b. A current account and a monthly,

bimonthly, or quarterly statement of the

account for each unit designating the name

of the unit owner, the due date and amount

of each assessment, the amount paid upon the

account, and the balance due.

c. All audits, revie ws, accounting

statements, and financial reports of the

association or condominium.

d. All contracts for work to be performed.

Bids for work to be performed shall also be

considered official records and shall be

maintained for a period of 1 year.

12. B allots, sign - in sheets, voting

proxies, and all other papers relating to

voting by unit owners, which shall be

maintained for a period of 1 year from the

date of the election, vote, or meeting to

which the document relates.

13. All rental records, when t he

association is acting as agent for the

rental of condominium units.

14. A copy of the current question and

answer sheet as described by s. 718.504.

15. All other records of the association

not specifically included in the foregoing

which are related to the operation of the

association.

(b) The official records of the association

shall be maintained within the state. The

records of the association shall be made

available to a unit owner within 5 working

days after receipt of written request by the

board or its designee. This paragraph may

be complied with by having a copy of the

official records of the association

available for inspection or copying on the

condominium property or association

property. (emphasis supplied)

19. As to Mr. Sims' reco rds request, the evidence

establishes that the Respondent failed to timely provide

requested records to Mr. Sims or to Mr. Faulk. The statute

clearly provides that such records are to be provided within

five working days of the Association's receipt of a written

request. The statute provides no exception to this requirement.

20. The Respondent asserts that the requirement is

complied with by the fact that the records were located in the

Association's office on the condominium property. The statute

req uires that the records be available for inspection within

five working days after receipt of the request. The mere

presence of the records on condominium property is insufficient

to comply with the requirement of timely availability. The

evidence establi shes that some of the records were located on

the property, but they were not made available to Mr. Sims or

Mr. Faulk until after more than five working days had passed.

21. The evidence further establishes that even after the

initial delay in making t he records available, the accounts

receivable records were not made available for review at the

appointed time. The Respondent's assertion that the records

were not accurate and were accordingly not made available, is

not persuasive. The Association is r equired to maintain

accurate records, and make them available according to the time

frames set forth in the statute. As to the "draft" reserve

study, once the accountant had completed the study and turned it

over to the Association’s management, the study should have been

available for review upon request of an owner. There is no

credible explanation as to why a study prepared by an accountant

employed by the Association would require review by the

Association manager before it could be made available to owners.

22. The evidence also establishes that Mr. Wood was not

permitted timely review of the minutes of an association

meeting. Mr. Wood requested on February 19, 2003, to review the

minutes of a January 2003 meeting. The Respondent asserts that

the minutes were unavailable because they were not typed.

23. The statute provides that the official records of an

association include a "book" which contain the "minutes of all

meetings of the association." Such a requirement indicates that

the minutes o f all association meetings must be typed within a

time frame sufficient to permit an association member to request

and review the written material according to the time frames set

forth in the statute. In other words, if a written request to

review the mi nutes is made on the day after an annual meeting,

the minutes should be transcribed and available for review

within five working days of the request as required by the

statute. More than four months passed after Mr. Wood's request

before the minutes were placed in a typed form and made

available for resident inspection.

24. Florida Administrative Code Rule 61B - 21.003 sets forth

the methodology utilized to determine a penalty appropriate to

the facts of this case. Pursuant to Florida Administrative Code

Rule 61B - 21.003(7)(a), the violations here are defined as

"minor," and the Rule provides that the Petitioner shall impose

a penalty of between one dollar and five dollars per unit for

each minor violation. The Rule provides that the penalty shall

be asse ssed in the middle of the range and adjusted up or down

based on the existence of mitigating factors, and that in no

event shall a penalty of more than $2,500 be imposed for a

single violation. There are no mitigating or aggravating

factors sufficient to warrant adjustment of the penalty from the

middle of the range, which is three dollars. There are 946

units in the Clarcona Condominium, which would result in a

penalty of $2838, but for the maximum penalty of $2,500 per

single violation. There are thr ee counts set forth in the

Notices to Show Cause, resulting in a total penalty of $7,500.

25. Although the Notices to Show Cause in these cases also

cite Subsection 718.111(12)(c), Florida Statutes (2003), as

additional grounds for discipline in this case , the cited

section does not appear to provide grounds for enforcement by

the Petitioner of the requirement that records be made available

to the association members on a timely basis, but rather

provides a private civil remedy available to individual

asso ciation members who are denied timely access to association

records.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and Professional

Regulation, Division of Florida Land S ales, Condominiums, and

Mobile Homes, enter a Final Order finding that the Respondent has

violated Subsection 718.111(12)(b), Florida Statutes (2003), as

set forth herein and assessing a penalty of $7,500.

DONE AND ENTERED this 16th day of February, 2004, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUN COM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of February, 2004.

COPIES FURNISHED :

Joseph S. Garwood, Esquire

Department of Business and

Professional Regulati on

The Augusta Building, Suite 100

8685 Northwest 53rd Terrace

Miami, Florida 33166

Robert L. Taylor, Esquire

Taylor & Carls, P.A.

850 Concourse Parkway, South

Suite 105

Maitland, Florida 32751

Nancy Campiglia, General Counsel

Department of Business a nd

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Ross Fleetwood, Division Director

Division of Florida Land Sales,

Condominiums, and Mobile Homes

Department of Business and

Professional Regulatio n

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Rec ommended Order should be filed with the agency that

will issue the Final Order in this case.