CopyCited 4 times | Published | Florida 2nd District Court of Appeal | 2013 WL 163651
structural components of a building.” See also §
720.308(1), Fla. Stat. (2011) (authorizing the Association
CopyCited 1 times | Published | Florida 5th District Court of Appeal | 2016 Fla. App. LEXIS 18789
...The MacKenzies
seek a declaration that Centex failed to meet its obligation to make capital contributions
to the HOA’s reserve accounts when it controlled the HOA 1 along with $993,988 in
resulting damages. The lower court entered summary final judgment in favor of Centex
after it found that section
720.308(1)(b), Florida Statutes (2015), excused Centex from
funding the reserve while it funded the deficit in the HOA’s current operating expenses.
We disagree with the court’s interpretations of section
720.308 and find that section
720.303(6), Florida Statutes (2015), required Centex to continue funding the reserve
accounts once they were established....
...monies owed to the HOA, an excuse from contributing “operating expenses and
assessments” must include more than just the operating expenses—it must excuse the
developer from paying the reserve contributions as well because reserve funds are
monies owed to the HOA. 5 Yet reading section
720.308(1)(b) to exhaust Centex’s funding
requirements creates a direct conflict with section
720.303(6), which requires reserve
accounts be funded once established or defunded according to a regular procedure with
specific notice to the homeowners....
...must be made available to all homeowners pursuant to section
720.303(7)—evidences
an intent to keep homeowners aware of the state of reserve finances and to avoid allowing
developers and boards to surprise homeowners with unexpected special assessments.
Reading section
720.308(1)(b) not to address the reserve accounts—leaving the
original obligation to fund reserves in place—avoids a conflict with section
720.303(6) and
ensures that the purposes of the sections are met, given that section
720.303(6) w...
...procedures for operating homeowners’ associations, and [] protect[s] the rights of
association members without unduly impairing the ability of such associations to perform
their functions.” §
720.302(1), Fla. Stat. (2015). Centex argues that section
720.308(1)(b)
excused it from funding the HOA’s reserve accounts. Section
720.308(1)(b) provides a
developer the right to avoid paying its share of “operating expenses and assessments”
on the lots the developer controls when it controls the board and elects to fund the
difference between the assessments received from the lot owners and the “operating
expenses incurred that exceed the assessments receivable.” §
720.308(1)(b), Fla....
...No. 12-
19056-BKC-AJC,
2016 WL 6157437 at *10 (Bankr. S.D. Fla. Oct. 21, 2016). Centex
argues that by deficit funding the HOA, it was excused from any obligation to fund the
reserve accounts.
Centex’s argument depends on an ambiguity in section
720.308(1)(b)—the
subsection excuses a developer from paying its share of “operating expenses and
assessments” if the developer funds the deficit in operating expenses. §
720.308(1)(b),
5
Fla....
...monies owed to the HOA, an excuse from contributing “operating expenses and
assessments” must include more than just the operating expenses—it must excuse the
developer from paying the reserve contributions as well because reserve funds are
monies owed to the HOA. 5 Yet reading section
720.308(1)(b) to exhaust Centex’s funding
requirements creates a direct conflict with section
720.303(6), which requires reserve
accounts be funded once established or defunded according to a regular procedure with
specific notice to the homeowners....
...must be made available to all homeowners pursuant to section
720.303(7)—evidences
an intent to keep homeowners aware of the state of reserve finances and to avoid allowing
developers and boards to surprise homeowners with unexpected special assessments.
Reading section
720.308(1)(b) not to address the reserve accounts—leaving the
original obligation to fund reserves in place—avoids a conflict with section
720.303(6) and
ensures that the purposes of the sections are met, given that section
720.303(6) w...
...ners if it fails to fund the reserve
accounts established in the budget. See §
720.303(6)(c)(2.), Fla. Stat.
Mindful of this Court’s duty to construe statutory provisions as a whole where the
plain language is ambiguous, we conclude that section
720.308(1)(b) should not be read
to excuse a developer’s otherwise valid obligation to fund reserves while it controls the
HOA....
CopyPublished | United States Bankruptcy Court, S.D. Florida. | 26 Fla. L. Weekly Fed. B 179, 2016 Bankr. LEXIS 3797
...Deñcit Funding While D.R. Horton controlled the Master Association, it was obligated to fund the minimum financial contributions necessary to sustain Master Association operations, which is termed “deficit funding”. See Master Declaration at Section 6.4; Section 720.308, Florida Statutes....
...on from the members before turnover and from its board of directors after turnover; 5. Manipulating the Master Association financial statements so as to re-categorize hundreds of thousands of dollars of required developer deficit funding pursuant to Section 720.308 from *851 homeowner’s equity to a liability due to the developer without any board of directors’ minutes or notice to the Master Association....
...COUNT III: Declaratory Relief In Count III, Plaintiff seeks several declarations, which the Court addresses in turn. First, the Court concludes that the funds D.R. Horton contributed to the Master Association were deficit funding obligations pursuant to the Master Declaration and Section 720.308(l)(b), Florida Statutes....
CopyPublished | Florida 4th District Court of Appeal
...he unpaid 2019
association expense deficit. The association asserted that the language of
declaration section 22.22 exempting the developer from payment of
assessments on its own properties after turnover was unenforceable
because it conflicted with section 720.308, Florida Statutes (2019),
governing the proportional allocation of assessments among members.
The trial court granted summary judgment in the association’s favor,
resulting in the cross-appeal.
Appellate Analysis
The trial court granted the association’s motion for summary judgment
after concluding that declaration section 22.22 conflicts with section
720.308, Florida Statutes (2019), and is unenforceable to the extent the
declaration section exempts the developer from payment of assessments
post-turnover.
Our review of the grant of summary judgment, as well as statutory and
association document interpretation, is de novo....
...developer’s entitlement to an ongoing exemption from payment of
assessments post-turnover.
Because the governing documents of a homeowners’ association must
comport with statutory requirements, our analysis of the developer’s
obligation to pay assessments begins with section 720.308(1), Florida
Statutes (2019), which provides the authority for associations to levy
assessments for the payment of community expenses:
Assessments.--For any community created after October 1,
1995, the governing documents...
...s
for any period of time for which the developer has, in the
declaration, obligated itself to pay any operating expenses
incurred that exceed the assessments receivable from other
members and other income of the association.
§ 720.308(1), Fla. Stat. (2019) (emphasis added).
4
Importantly, section 720.308(1)(a) contemplates that every member of
the association must pay a proportional share of the association’s
expenses. Section 720.308(1)(b) allows a developer to be “excused” from
paying its proportional share for developer-owned parcels while the
developer controls the association, but no provision excuses the developer
from payment post-turnover. Id. Section 720.308(1)(a), in contrast,
applies both pre-turnover and post-turnover and allows the developer to
pay a different proportional share than other parcel owners, but only if the
governing documents create a “class[] of parcels” treating the developer’s
lots differently....
...Notably, while Vitalia’s governing documents designate
classes of association members pre-turnover, the documents do not
explicitly designate different “classes of parcels” based on the development
of the parcel, levels of service provided, “or other relevant factors.”
Declaration section 22.9 mirrors section 720.308(1)(b)’s “excusal” of the
developer from paying assessments by providing the developer with the
option, prior to turnover, of either paying monthly assessments for its
parcels or funding the deficits in association expenses....
...as set forth in Section 22.9 of this Declaration.
The association argued below and on cross-appeal that declaration
section 22.22’s purported exemption of the developer from payment of
assessments after turnover conflicts with the language of section
720.308(1), which authorizes the developer to be excused from payment of
assessments prior to turnover, as the statute does not “excuse” or
“exempt” the developer post-turnover....
...More specifically, the association,
citing Valencia Reserve, argues that to the extent declaration section 22.22
was intended to exempt the developer from payment of assessments post-
5
turnover, the provision conflicts with section 720.308(1) and is therefore
unenforceable.
The developer argued below and on cross-appeal that the section 22.22
exemption is valid post-turnover because (1) section 720.308(1) allows
association governing documents to control the determination of the
proportional share of assessments payable by the members, (2) Vitalia’s
governing documents clearly provide that only “Owners” (defined in the
declara...
...establish the developer’s proportional share of assessments as zero and
exempt the developer from paying assessments post-turnover fails for
three reasons.
First, the governing documents did not clearly create specific “classes
of parcels” as section 720.308(1)(a) contemplates. Without the developer’s
parcels all falling into classes identified as paying a differing share, section
720.308(1)(a) requires the developer’s post-turnover share would be the
same as other members. See § 720.308(1)(a), Fla....
...shares of assessments can never be zero “by definition” under the
declaration.
Although we have not adopted a substantial portion of the trial court’s
reasoning in granting summary judgment, we conclude the trial court
correctly determined, after considering section 720.308(1) and the
governing association documents, that (1) the developer’s excusal from
paying assessments applied while the developer controlled the association;
and (2) after turnover, the developer no longer qualified for excusal from
paying assessments. Thus, the purported grant of an exemption from
payment of assessments post-turnover provided in declaration section
22.22 was unenforceable because it conflicted with section 720.308(1).
See Valencia Reserve, 278 So....
CopyPublished | Florida 4th District Court of Appeal | 2013 WL 6636854, 2013 Fla. App. LEXIS 19954
...A “parcel” subject to assessments is a platted or un-platted piece of real property within a community, “as described in the declaration,” and “capable of separate conveyance.” §
720.301(11), Fla. Stat. (2007). “Assessments ... must be in the member’s proportional share of expenses.” §
720.308(l)(a), Fla....
CopyPublished | Florida 4th District Court of Appeal
...over to the members other than the developer, and that
provides for the operation, maintenance, or management of
the association or common areas, must be fair and
reasonable.
With regard to a developer’s financial obligation to an HOA before
turnover, Section 720.308(1)(b), Florida Statutes (2018), provides:
While the developer is in control of the homeowners’
association, it may be excused from payment of its share of
the operating expenses and assessments related to its parc...
...for any period of time for which the developer has, in the
declaration, obligated itself to pay any operating expenses
incurred that exceed the assessments receivable from other
members and other income of the association.
Thus, Section 720.308(1)(b) allows a developer to forego paying HOA
assessments on lots which it owns provided that the developer agrees “to
pay any operating expenses incurred that exceed the assessments
receivable from other members and other income of the association.” Id.
If a developer chooses to rely upon Section 720.308(1)(b), the
developer’s potential financial obligation to the HOA is calculated using a
formula outlined in Section 720.308(5), Florida Statutes (2018). Section
720.308(5) provides:
The guarantor’s total financial obligation to the association at
the end of the guarantee period shall be determined on the
accrual basis using the following formula: the guarantor shall
pay any...
...s, or to recreational facilities and
other properties serving the parcels by the owners of one or more parcels
as authorized in the governing documents, which if not paid by the owner
of a parcel, can result in a lien against the parcel.” Further, Section
720.308(1) and (1)(a), Florida Statutes (2018), provides that “the governing
documents must describe the manner in which expenses are shared and
specify the member’s proportional share thereof” and “assessments levied
pursuant to the annual budget or special assessment must be in the
member’s proportional share of expenses as described in the governing
document.” Notably, Sections 720.308(6) and 720.308(4)(b), Florida
Statutes (2018), prohibit the developer from using “[a]ny portion of the
parcel assessment which is budgeted for designated capital contributions
of the association” to pay for operating expenses.
If an HOA declaration’s terms contravene a governing statute, the term
is deemed invalid....
...2d 637,
639 (Fla. 4th DCA 1981).
ANALYSIS
The issue before this Court is whether the Developer’s use of the
working fund contributions to offset its deficit obligation is prohibited by
Chapter 720 and, in particular, Section 720.308....
...e working fund contributions
to offset its deficit obligation was “fair and reasonable” as required by
Section
720.309(1).
Second, the Developer’s use of the working fund contributions to pay
for operating expenses did not violate Sections
720.308(4)(b) and
720.308(6)....
...Under these sections, a developer may not pay for operating
expenses using lot assessments which have been budgeted for designated
capital contributions. Here, the working fund contributions were not
budgeted for designated capital contributions, thus, Sections
720.308(4)(b) and 720.308(6) do not apply.
Third, we agree with the circuit court’s conclusion that the working
fund contributions qualified as regular periodic assessments for the
purpose of calculating the Developer’s final deficit obligation under Section
720.308(5)....
