17-005576 Villas Social Club, Inc. vs. Department Of Economic Opportunity Status: Closed Recommended Order on Friday, March 23, 2018.

Summary: Petitioner failed to include required information in revitalization package to owners and DEO. Recommended disapproval of revitalization of expired covenants and "other governing documents."

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VILLAS SOCIAL CLUB, INC.,

Petitioner,

vs. Case No. 17 - 5576

DEPARTMENT OF ECONOMIC

OPPORTUNITY,

Respondent.

_______________________________/

RECOMMENDED ORDER

This case came befo re Administrative Law Judge Darren A.

Schwartz of the Division of Administrative Hearings for final

hearing on February 14, 2018, by video teleconference with sites

in Fort Lauderdale and Tallahassee, Florida.

APPEARANCES

For Petitioner: Thomas Tigh e, Esquire

Tucker & Tighe, P.A.

800 East Broward Boulevard , Suite 710

Fort Lauderdale, Florida 33301

For Respondent: Jon F. Morris, Esquire

Ross Marshman, Esqui re

Department of Economic Opportunity

Caldwell Building, MSC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

STATEMENT OF THE ISSUE

Whether Petitioner, Vi llas Social Club, Inc. ( " Villas " ),

properly revived its expired restrictive covenants and other

governing documents in accordance with sections 720.403 - 720. 407,

Florida Statutes (2017).

PRELIMINARY STATEMENT

On September 5, 2017, Respondent, Department of Economic

Opportunity ( " DEO " ) , denied the proposed revitalization of

Villas ' restrictive covenants " and other governing documents. "

On September 29, 2017, Villas filed with DEO a Petition for

Administrative Proceedings, challenging DEO ' s denial of the

prop osed revitalization. On October 11, 2017, DEO forwarded the

petition to the Division of Administrative Hearings ( " DOAH " ) to

assign an Administrative Law Judge to conduct the final hearing.

On October 18, 2017, the undersigned entered an Order

setting this matter for final hearing on December 18, 2017. On

November 14, 2017, DEO filed an unopposed motion to continue the

final hearing. On November 27, 2017, the undersigned entered an

Order granting the motion and reset the final hearing for

January 22, 2018 . On January 12, 2018, the parties filed their

P re - hearing S tipulation. On January 18, 2018, a status

conference was held with counsel for the parties during which

counsel for DEO moved ore tenus for an order continuing the

hearing. The motion was unopp osed. On January 18, 2018, the

undersigned entered an Order granting the motion and reset the

final hearing for February 14, 2018.

The hearing occurred on February 14, 2018, with both parties

present. Villas presented the testimony of Judy Pritch ard , Jam es

Stansbury , and Rozell McKay . Villas ' Exhibits 1 through 6 were

received in evidence upon stipulation of the parties. DEO also

presented the testimony of Mr. Stansbury and Ms. McKay. DEO ' s

E xhibits 1 through 4 were received in evidence upon stipulatio n

of the parties.

The one - volume final hearing Transcript was filed at DOAH on

March 7, 2018. The parties timely filed proposed recommended

orders, which were considered in the preparation of this

Recommended Order.

The parties ' P re - hearing S tipulation has been incorporated

herein, to the extent indicated below. Unless otherwise

indicated, references to the Florida Statutes are to the 2017

version.

FINDING S OF FACT

1. Villas is a homeowners ' association established pursuant

to restrictive covenants rec orded in 1967, 1968, and 1969.

Originally created as a retirement community, Villas elected to

become a " 55 and over " community pursuant to the 1995 federal

Housing for Older Persons Act. The community consists of

309 parcels upon which s ingle family hom es are located .

2. By operation of the Marketable Record Title Act

( " MRTA " ), chapter 712, Florida Statutes, the restrictive

covenants of Villas expired during the period of 19 9 7 to 1999.

However, Villas has continued to operate since then as a

functio ning " 55 and over " homeowners ' association without

challenge from anyone.

3. Sections 720.403 - 720. 407 provide the mechanism by which

a homeowners ' association, such as Villas, may revitalize its

restrictive covenants because they expired by operation of MRTA.

4. DEO is a state agency statutorily obligated to review

and determine whether an association has satisfied the

requirements of sections 720.403 - 720. 407 in order to revitalize

expired restrictive covenants.

5 . In an effort to revitalize the expir ed restrictive

covenants pursuant to the requirements of sections 720.403 -

720. 407, Villas submitted a revitalization package to DEO on

March 9, 2016.

6 . On May 10, 2016, DEO denied the proposed revitalization

for the following three reasons. First, Vill as failed to timely

submit the revitalization package to DEO pursuant to section

720.406(1) Ï the package was submitted to DEO more than 60 days

after the last verified vote approving the revived covenants was

signed. Second, Villas failed to provide DEO wi th the original

bylaws pursuant to section 720.406(1)(b), which states that " a

verified copy of the previous declaration of covenants and other

previous governing documents for the community . . . " must be

included in the submission to DEO. Third, the 200 2 and 2004

bylaws submitted to DEO were more restrictive on the parcel

owners in violation of section 720.405(4)(d).

7 . DEO ' s denial letter provided Villas a clear point of

entry to challenge DEO ' s proposed decision and request a formal

administrative h earing by filing a petition with the agency clerk

of DEO within 21 days of receipt of the denial letter. However,

Villas did not file a petitio n to challenge the proposed decision

and r equest a hearing . I nstead, Villas re - submitted another

revitalization package to the parcel owners and DEO in 2017 in an

effort to revitalize the expired restrictive covenants . The

agency action subject to review in this proceeding is DEO ' s

letter dated September 5, 2017, denying approval of Villas '

request for revitalizat ion.

8 . The revitalization package sent to the parcel owners in

2017 failed to include the address and telephone number of each

member of the revitalization organizing committee.

9 . Nyoka Stewart, one of the members of the organizing

committee for the revitalization, has owned her home at Villas

located at 5140 N orthwest 43rd Court, Lauderdale Lakes, F lorida

33319 , at all pertinent times. The " 5410 " N orthwest 43rd Court,

Lauderdale Lakes, F lorida 33319 , address listed for her in the

revitalization pack age was a typographical error.

10 . Eslyn Williams, one of the members of the organizing

committee for the revitalization, has owned her home at Villas

located at 4051 N orthwest 43rd Court, Lauderdale Lakes, F lorida

33319 , at all pertinent times. The " 504 1 " N orthwest 43rd Court,

Lauderdale Lakes, F lorida 33319 , address listed for her in the

revitalization package was a typographical error.

1 1 . The revitalization package sent to the parcel owners in

2017 included the telephone number (954 - 473 - 4733) of th e

management company for Villa s, Alliance Property Systems .

Alliance Property Systems does not own a parcel in the community,

and it is not a member of the organization committee.

1 2 . One of the organizing committee members identified in

the package , R enee Dichren, was not an owner at Villas on July 5,

2017, when the revitalization package was submitted to the parcel

owners and DEO, because she was deceased .

1 3 . By failing to provide the address and telephone number

of each revitalization member, Villa s failed to comply with

section 720.405(1).

1 4 . The revitalization package sent to DEO in 2017 included

the full text of the proposed revived declaration of covenants

and articles of incorporation and bylaws of Villas. However,

Villas failed to include the original bylaws. The original

bylaws of Villas have been lost. The most recent version of

Villas ' bylaws from 1 990 were included in the revitalization

package sent to DEO.

1 5 . By failing to include the original bylaws in the

revitalization package sent to DEO, Villas failed to comply with

section 720.406(1)(b).

1 6 . A majority of the parcel owners did not vote to approve

the proposed revived declaration and other governing documents

submitted by Villas in 2017 . Not all of the 162 votes were to

ap prove the proposed revived declaration and other governing

documents submitted by Villas in 2017 . In fact, there was only

one vote from a parcel owner on the proposed revised governing

documents. All of the other votes were dated 2015 and 2016 ,

prior to Villas ' submission of its initial revitalization package

to DEO in 2016 .

1 7 . By failing to obtain a majority vote of the parcel

owners to approve the proposed revived declaration and other

governing documents submitted in 2017, Villas failed to comply

wit h section 720.405(6).

CONCLUSIONS OF LAW

1 8 . DOAH has jurisdiction over the parties to and subject

matter of this proceeding pursuant to sections 120.569 and

120.57(1), Florida Statutes.

1 9 . Villas has the burden of proving its claims by a

preponderance of the evidence. Fla. Dep ' t of Transp. v. J.W.C.,

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

20 . The Florida Legislature enacted MRTA over 50 years ago

in order to simplify and facilitate land transactions. Matissek

v. Waller , 51 So. 3d 625, 628 (Fla. 5t h DCA 2011). Notably,

section 712.10, Florida Statutes, expressly provides that MRTA:

shall be liberally construed to effect the

legislative purpose of simplifying and

facilitating land title transactions by

allowing persons to rely on a record title as

d escribed in s. 712.02 subject only to such

limitations as appear in s. 712.03.

2 1 . Section 712.02 provides, in pertinent part:

Any person having the legal capacity to own

land in this state, who, alone or together

with her or his predecessors in title, has

been vested with any estate in land of record

for 30 years or more, shall have a marketable

record title to such estate in said land,

which shall be free and clear of all claims

except the matters set forth as exceptions to

marketability in s. 712.03.

2 2 . In essence, restrictive covenants cease to be effective

as to lots governed by the restrictive covenants 30 years after

said restrictive covenants have been referenced in a deed that

burdens each lot.

2 3 . Villas concedes that its restrictive covenan ts expired

by operation of MRTA and were not timely preserved pursuant to

MRTA.

2 4 . If MRTA extinguishes a community ' s restrictive

covenants, Villas may attempt to utilize the procedures set forth

in chapter 720, part III (sections 720.403 - 720. 407), to re vive

the expired restrictive covenants.

2 5 . To effectuate this legislative purpose, section 720.403

provides:

(1) Consistent with required and optional

elements of local comprehensive plans and

other applicable provisions of the Community

Planning Act, homeowners are encouraged to

preserve existing residential communities,

promote available and affordable housing,

protect structural and aesthetic elements of

their residential community, and, as

applicable, maintain roads and streets,

easements, water and sewer systems,

utilities, drainage improvements,

conservation and open areas, recreational

amenities, and other infrastructure and

common areas that serve and support the

residential community by the revival of a

previous declaration of covenants and othe r

governing documents that may have ceased to

govern some or all parcels in the community.

(2) In order to preserve a residential

community and the associated infrastructure

and common areas for the purposes described

in this section, the parcel owners in a

community that was previously subject to a

declaration of covenants that has ceased to

govern one or more parcels in the community

may revive the declaration and the

homeowners ' association for the community

upon approval by the parcel owners to be

go verned thereby as provided in this act, and

upon approval of the declaration and the

other governing documents for the association

by the Department of Economic Opportunity in

a manner consistent with this act.

2 6 . Section 720.404 further provides as fo llows:

720.404 Eligible residential communities;

requirements for revival of declaration. Ï

Parcel owners in a community are eligible to

seek approval from the Department of Economic

Opportunity to revive a declaration of

covenants under this act if all of the

following requirements are met:

(1) All parcels to be governed by the

revived declaration must have been once

governed by a previous declaration that has

ceased to govern some or all of the parcels

in the community;

(2) The revived declaration mu st be approved

in the manner provided in s. 720.405(6); and

(3) The revived declaration may not contain

covenants that are more restrictive on the

parcel owners than the covenants contained in

the previous declaration, except that the

declaration may:

(a) Have an effective term of longer

duration than the term of the previous

declaration;

(b) Omit restrictions contained in the

previous declaration;

(c) Govern fewer than all of the parcels

governed by the previous declaration;

(d) Provide for amendments to the

declaration and other governing documents;

and

(e) Contain provisions required by this

chapter for new declarations that were not

contained in the previous declaration.

2 7 . Section 720.405 describes the procedure and documents

require d to be provided to the parcel owners in order to obtain

parcel owner approval with respect to the revival of expired

restrictive covenants. Section 720.405 provides as follows:

720.405 Organizing committee; parcel owner

approval. Ï

(1) The proposal to revive a declaration of

covenants and a homeowners ' association for a

community under the terms of this act shall

be initiated by an organizing committee

consisting of not less than three parcel

owners located in the community that is

proposed to be gover ned by the revived

declaration. The name, address, and

telephone number of each member of the

organizing committee must be included in any

notice or other document provided by the

committee to parcel owners to be affected by

the proposed revived declarati on.

(2) The organizing committee shall prepare

or cause to be prepared the complete text of

the proposed revised declaration of covenants

to be submitted to the parcel owners for

approval. The proposed revived documents

must identify each parcel that is to be

subject to the governing documents by its

legal description, and by the name of the

parcel owner or the person in whose name the

parcel is assessed on the last completed tax

assessment roll of the county at the time

when the proposed revived decla ration is

submitted for approval by the parcel owners.

(3) The organizing committee shall prepare

the full text of the proposed articles of

incorporation and bylaws of the revived

homeowners ' association to be submitted to

the parcel owners for approval , unless the

association is then an existing corporation,

in which case the organizing committee shall

prepare the existing articles of

incorporation and bylaws to be submitted to

the parcel owners.

(4) The proposed revived declaration and

other governi ng documents for the community

shall:

(a) Provide that the voting interest of each

parcel owner shall be the same as the voting

interest of the parcel owner under the

previous governing documents;

(b) Provide that the proportional - assessment

obligati ons of each parcel owner shall be the

same as proportional - assessment obligations

of the parcel owner under the previous

governing documents;

(c) Contain the same respective amendment

provisions as the previous governing

documents or, if there were no a mendment

provisions in the previous governing

document, amendment provisions that require

approval of not less than two - thirds of the

affected parcel owners;

(d) Contain no covenants that are more

restrictive on the affected parcel owners

than the coven ants contained in the previous

governing documents, except as permitted

under s. 720.404(3); and

(e) Comply with the other requirements for a

declaration of covenants and other governing

documents as specified in this chapter.

(5) A copy of the compl ete text of the

proposed revived declaration of covenants,

the proposed new or existing articles of

incorporation and bylaws of the homeowners '

association, and a graphic depiction of the

property to be governed by the revived

declaration shall be presente d to all of the

affected parcel owners by mail or hand

delivery not less than 14 days before the

time that the consent of the affected parcel

owners to the proposed governing documents is

sought by the organizing committee.

(6) A majority of the affecte d parcel owners

must agree in writing to the revived

declaration of covenants and governing

documents of the homeowners ' association or

approve the revived declaration and governing

documents by a vote at a meeting of the

affected parcel owners noticed and conducted

in the manner prescribed by s. 720.306.

Proof of notice of the meeting to all

affected owners of the meeting and the

minutes of the meeting recording the votes of

the property owners shall be certified by a

court reporter or an attorney license d to

practice in this state.

2 8 . Section 720.406 describes the procedure and documents

required to be submitted to DEO in order to revive expired

restrictive covenants. Section 720.406 provides as follows:

720.406 Department of Economic Opportunity;

submission; review and determination. Ï

(1) No later than 60 days after the date the

proposed revived declaration and other

governing documents are approved by the

affected parcel owners, the organizing

committee or it s designee must submit the

proposed revived governing documents and

supporting materials to the Department of

Economic Opportunity to review and determine

whether to approve or disapprove of the

proposal to preserve the residential

community. The submissi on to the department

must include:

(a) The full text of the proposed revived

declaration of covenants and articles of

incorporation and bylaws of the homeowners '

association;

(b) A verified copy of the previous

declaration of covenants and other previo us

governing documents for the community,

including any amendments thereto;

(c) The legal description of each parcel to

be subject to the revived declaration and

other governing documents and a plat or other

graphic depiction of the affected properties

i n the community;

(d) A verified copy of the written consents

of the requisite number of the affected

parcel owners approving the revived

declaration and other governing documents or,

if approval was obtained by a vote at a

meeting of affected parcel owne rs, verified

copies of the notice of the meeting,

attendance, and voting results;

(e) An affidavit by a current or former

officer of the association or by a member of

the organizing committee verifying that the

requirements for the revived declaration se t

forth in s. 720.404 have been satisfied; and

(f) Such other documentation that the

organizing committee belie ves is supportive

of the policy of preserving the residential

community and operating, managing, and

maintaining the infrastructure, aesthetic

character, and common areas serving the

residential community.

(2) No later than 60 days after receiving

the su bmission, the department must determine

whether the proposed revived declaration of

covenants and other governing documents

comply with the requirements of this act.

(a) If the department determines that the

proposed revived declaration and other

governi ng documents comply with the act and

have been approved by the parcel owners as

required by this act, the department shall

notify the organizing committee in writing of

its approval.

(b) If the department determines that the

proposed revived declaration and other

governing documents do not comply with this

act or have not been approved as required by

this act, the department shall notify the

organizing committee in writing that it does

not approve the governing documents and shall

state the reasons for th e disapproval.

2 9 . The relevant statutory provisions are clear and

unambiguous. Section 720.405(1) expressly requires that: " [ t]he

name, address, and telephone number of each member of the

organizing committee must be included in any notice or other

do cument provided by the committee to parcel owners to be

affected by the proposed revived declaration. " Section

720.406(1)(b) expressly requires that the submission to DEO must

include a verified copy of the previous declaration of covenants

and other prev ious governing documents for the community,

including any amendments thereto. The phrase " governing

documents " means :

(a) The recorded declaration of covenants

for a community and all duly adopted and

recorded amendments, supplements, and

recorded exhibi ts thereto;

(b) The articles of incorporation and bylaws

of the homeowners ' association and any duly

adopted amendments thereto; and

(c) Rules and regulations adopted under the

authority of the recorded declaration,

articles of incorporation, or bylaws and duly

adopted amendments thereto.

§ 720.301(8)(a) - (c), Fla. Stat.

30 . Section 720.405(6) expressly requires that " [a]

majority of the affected parcel owners must agree in writing to

the revived declaration of covenants and governing documents of

the homeowners ' association or approve the revived declaration

and governing documents by a vote at a meeting of the affected

parcel owners noticed and conducted in the manner prescribed by

s. 720.306. "

3 1 . As detailed above, Villas failed to comply with

sect ion 720.405(1) by failing to provide the address and

telephone number of each revitalization committee member. In

addition, Villas failed to comply with section 72 0.406(1)(b)

by not including the original bylaws i n the revitalization

package sent to DEO. Villas also failed to comply with

section 720.405(6) by not obtaining a majority vote of the parcel

owners to approve the proposed revived declaration and other

governing documents submitted by Villas.

3 2 . It is not the prerogative of the undersigned to

construe the unambiguous language of statutes differently from

the plain language of the words employed. Nor is the wisdom of

the statutes within the ambit of the undersigned ' s authority.

Wright v. City of Miami Gardens , 200 So. 3d 765, 773 - 774 (Fla.

201 6). An administrative agency simply cannot interpret a

statute in a fashion which would result in the provision being

voided by administrative fiat. Dep ' t of Educ. v. Educ. Charter

Found. of Fla. Inc. , 177 So. 3d 1036, 1039 (Fla. 1st DCA 2015).

To excus e Villas ' actions in this case , in failing to submit all

of the required documents in the revitalization package and DEO

package and not including all of the required information, would

amount to an administrative waiver of the statutory requirements.

RECO MMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Economic

Opportunity enter a f inal o rder disapproving the revitalization

of Villas ' expired restrictive covenants and other governing

docume nts.

D ONE AND ENTERED this 23rd day of March , 2018 , in

Tallahassee, Leon County, Florida.

S

DARREN A. SCHWARTZ

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallah assee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 23rd day of March , 2018 .

COPIES FURNISHED:

Stephanie Chatham, Agency Clerk

Department of Econ omic Opportunity

Caldwell Building, M SC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Thomas Tighe, Esquire

Tucker & Tighe, P.A.

800 East Broward Boulevard , Suite 710

Fort Lauderdale, Florida 33301

(eServed)

Jon F. Morris, Esqui re

Ross Marshman, Esquire

Department of Economic Opportunity

Caldwell Building, MSC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Cissy Proctor, Executive Director

Department of Economic Opportunity

Caldwell Building

107 East Mad ison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Peter Penrod, General Counsel

Department of Economic Opportunity

Caldwell Building, MSC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

A ll parties have the right to submit written exceptions within

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.