The attorney explains, “In effect, the owner is giving the association, at the time the notice or sale or lease documents are received, an opportunity to purchase or lease of the owner’s unit. The documents require the association to respond to the offer, in conformance with state statutes, within 30 days of receipt of the notice or copy of the proposed purchase agreement or lease. Some counties require the response be made earlier.” The attorney resumes the seminar. “Let’s assume that the association, as is typical, has no desire to purchase (or lease) the unit but the board decides that they don’t want the applicant. On which legal grounds can it legally reject an applicant?” He explains that judges and juries may disagree on an attorney’s opinion as to what constitutes legal grounds to reject an applicant. He advises that, “The right of property owners to alienate or dispose of their property has been a cornerstone of property law for centuries and that owners are often resistant to a person or entity seeking to exercise restraint on that right. Courts are typically diligent in assuring that any constraint on the right of an owner to alienate an owner’s property is legal.” The attorney goes on to say that “An attorney and a judge may differ in their interpretation of the law as applied to a specific case. Juries can disagree with both the judge and the attorney in arriving at a verdict. It’s possible that a verdict could be rendered against the association resulting in a judgement of financial damages and fees to the prevailing party. That sometimes the best an attorney can do for their association client is inform them of how the courts are currently interpreting the law, and their likelihood of a successful outcome.” amended by-laws prohibiting occupancy by convicted felons, is problematic. ○ Courts have tended to look more favorably at white collar, non-violent criminals than violent criminals and consider whether the felon poses a threat to other residents and the association. ● Applicant #2 : The decision to reject the purchase application of disinherited heir, although based on the amended bylaw requiring net worth of $5,000,000, might also be problematic. ○ A judge (or jury) might conclude that net worth alone, without consideration of credit worthiness and income, is not a fair basis of determining whether an applicant would be able to pay assessments. ○ Or that setting the net worth requirement at $5,000,000 was arbitrary and unreasonable. ○ Or that if the applicant can afford to buy an expensive home in the association, they can afford its maintenance. It is difficult to determine how a judge may rule unless they have a clear pattern of ruling in similar cases. A jury vote is even more difficult to predict. ● Applicant #3 : The decision to reject this purchase application due to the applicant’s advocacy of recreational marijuana is not a legitimate basis for denial. ○ Judges and juries can be very protective of a person’s right to advocate for any cause they may have adopted. ○ What about denying him for breaking the law? The association has a provision in its documents prohibiting illegal acts on the property. But what crime has the applicant committed? Were they in unlawful possession of marijuana? Although a few of counties have replaced arrests with citations, possession of marijuana is illegal in Florida. The applicant could argue that the bong contained oregano and that entering with the pipe in hand was just a form of political theatre. It could be argued that possession of drug paraphernalia is illegal. But for that to stand up in court it must be proved that it was used to ingest an illegal substance. But certainly,
lease of lots shall be subject to the following provisions: Prior to the sale or transfer of any lot, the owner of such lot shall give written notice to the board of directors of the proposed sale or lease. The notice shall include the name and address of the person to whom the proposed sale or lease is to be made, the purchase price in the case of a sale, the terms and conditions of the proposed sale or lease, and such other information as may reasonably be required by the board of directors. The notice shall be accompanied by a true copy of the proposed purchase agreement or lease. The failure of the owner to give such notice and furnish such information shall constitute a breach of the owner’s obligations hereunder, and any sale or lease in contravention of this Article IX shall, at the option of the board of directors, be null and void and no right, title, interest, or estate, shall pass to the intended purchaser or lessee by virtue thereof. The giving of said notice to the board of directors shall constitute an offer by the owner to sell their lot or to lease their lot, to the association or to its designee or assignee upon the same terms and conditions as contained in said notice. Section 2. Additional Provisions Relating to the Sale or Lease of Lots: If the board of directors disapproves any bona fide proposed sale of a lot, such disapproval shall constitute an acceptance by the association of an offer of sale or lease of lots, which the owner is deemed to have made by giving the notice referred to in Section 1 hereof. Other reasons for rejection In the AACA, the following provisions of the documents and rules and regulations, may or may not be challenged by applicants, owners, or court of law, however, on the face of it, it is believed by their attorney that the following bases for rejection would constitute legal grounds: ● There’s a no-pet rule, and the applicant intends to have their pet reside in their unit regardless. ● The applicant was a tenant who now wants to purchase. However, they have a history of violating the rules, they could be rejected. ● The board discovers they’ve made a material misrepresentation on the application. A material misrepresentation is a convincing statement made to induce someone to enter into a contract to which the person or entity would not have agreed without that assertion. ● The application is incomplete or incorrect. ● Provisions in the governing documents can provide a legal basis for denial of an application. ○ Example : An amendment that would likely be upheld by a court would be one that requires an applicant for purchase to meet minimum income and credit score requirements because the association is dependent on its members being able to pay their assessments. Rules denying an application for membership, ownership, lease, or residency must be reasonable. The attorney asked the committee members, “So, who determines reasonableness here? The screening committee, the board of directors, your spouse, or is reasonability in the eye of the beholder.” Attorney continues, “No. It is typically a judge and sometimes a jury, through case law that determines whether a rule or policy is reasonable or not. The committee should consult with their attorney before making any recommendations to the board of directors.” The attorney then attempts to summarize some of the problems with recent applicant approvals and denials: ● Applicant #1 : The decision to reject the lease application of an individual who served a three-year sentence for embezzlement of church funds, although based on the
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