The brief is in support of residents of a community in litigation they brought successfully challenging the developer's attempt to use community assessments to secure a perpetual, lien-enforceable profit. The assessment at issue was not only in excess of community expenses, it was imposed through means intended to deprive residents of any association, vote, or input over its amount or duration. The residents won a judgment in the trial court holding the additional assessment, called a Club Membership Fee, was in violation of the Florida Homeowners' Association Act and requiring the developer to pay back the fees collected since April 2013.
The developer has appealed the judgment, and it has enlisted a proposed amicus brief from the Florida Home Builders Association. Both the developer's brief and the FHBA's amicus brief argue that imposing assessments for profit on developer-owned property without any community input is lawful. And the FHBA has relied heavily on CAI statistics to suggest that prohibiting developers from doing this would have a widespread and negative impact on builders—even though it acknowledged that it has no statistics at all on the number of builders attempting to impose this particular scheme.
The Developer has raised two issues on appeal. In the first issue, the Developer contends that the Club Membership Fee assessment is permitted under chapter 720 or generally by law. In the second issue, the Developer contends the residents are estopped from challenging the legality of the Club Membership Fee either because they “voluntarily" paid it, or because of the provision in the Club Plan that prohibits a resident from challenging the validity of the plan. The residents' answer brief will explain: (1) The Club Membership Fee violates section 720.308, Florida Statutes because it is an assessment in excess of a resident's proportionate share of expenses; (2) the whole text of chapter 720 confirms the Club Membership Fee is unlawful; (3) the residents' payment of the assessments was not voluntary and so does not estop them from challenging the legality of those payments; and (4) the provision in the Club Plan purporting to prohibit residents from challenging the legality of the plan is unenforceable.
This appeal presents critical issues regarding (1) a community's self-governance and (2) a developer's ability to try to immunize itself for violations of the homeowners' act. If the appellate court were to issue an opinion that permits the Developer's scheme to stand, developers will have every incentive to copy it in every development because it provides a developer a perpetual and guaranteed profit. Developers would then be free to keep title and control over important aspects of every community development; impose lien-enforceable assessments to pay all of the costs and operating expenses for the developer's assets and to also provide the developer a guaranteed, perpetual profit stream; and yet deprive homeowners of any association or vote over the amount or use of the assessments or the assets. The residents' rights to self-governance regarding their community and the assessments they are required to pay for it would be severely limited.
Amicus Brief
Sixth District Court of Appeal, State of Florida, Opinion
Supreme Court declined jurisdiction
Court: Second District Court of Appeal, State of Florida
Topic: Developer imposed assessments
Brief Author: Lisa Magill, and Shawn Brown of Kaye Bender Rembaum, Florida
Filed: October 5, 2022
CAI Amicus Review Panel: Mr. Robert Diamond, Esq., Mr. Stephen Marcus, Esq., Ms. Gabriella Comstock, Esq., CCAL (IL), Mr. J. David Ramsey, Esq., CCAL (NJ), Mr. Tiago Bezerra, Esq. (VA), Ms. Joan Lewis-Heard, Esq. (CA), Mr. William Ward, Esq. (CT)Sixth District Court of Appeal, State of Florida, Opinion