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Florida appellate court determines that F.S. 718.302 not applicable to lease entered into by association and developer in December 1976.

January 1, 2010
Jupiter Ocean & Racquet Club Condominium Association, Inc. v. Courtside Properties of Palm Beach, Inc., No. 4D08-3753 (4th DCA - September 2, 2009)

Faced with the issue of whether F.S. 718.302 can be applied to the lease that was entered into by the Developer, Jupiter Ocean & Racquet Club, and the Association, Jupiter Ocean & Racquet Club Condominium Association, in December 1976, the 4th DCA determined that "[s]tatutes are presumed to be prospective in application unless the Legislature manifests an intention to the contrary." Citing Fleeman v. Case, 342 So.2d 815, 817 (Fla. 1976). Even if the Legislature intends for the statute to apply retroactively, it cannot be applied where it impairs "the obligation of contract under Article I, Section 10 of both the U.S. and Florida Constitutions." Because the lease at issue was entered in December 1976 and F.S. 718.302 became effective in 1977, applying it to the lease would be impermissibly retroactive. The Association conceded that the lease predated the statute but argued that because five of the eleven condominiums in the development were formed after the statute's enactment, the statute is not being applied retroactively. See Hovnanian Fla., Inc. v. Div. of Fla. Land Sales & Condos, et al., 401 So.2d 851 (Fla. 1st DCA 1981). The 4th DCA found the Hovnanian case factually distinguishable because in the instant case the entire association sought to cancel the entire lease as to all condominiums, even those that were formed prior to the effective date of the statute. Whereas, in Hovnanian, one of multiple condominiums sought to prevent application of a lease provision against a single condominium created after the statute's effective date. The court concluded that to apply the cancellation right in F.S. 718.302 to a lease entered into prior to its enactment would be retroactive and would impermissibly impair the obligation of the contract. Because Section 718.302 cannot be applied retroactively, the association never had the right to cancel the contract pursuant to the statute. Section 718.302, Fla. Stat. (2009), provides in part: "(1) Any grant or reservation made by a declaration, lease, or other document, and any contract made by an Association prior to assumption of control of the association by unit owners other than the developer, that provides for the operation, maintenance, or management of a condominium association or property serving the unit owners of a condominium shall be fair and reasonable, and such grant, reservation, or contract may be canceled by unit owners other than the developer: (a) . . . the cancellation shall be by concurrence of the owners of not less than 75 percent of the voting interests other than the voting interests owned by the developer. . . "

Case Law Alert - 1st Qtr 2010

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