In short: It can when the declaration gives the board the last word. In Risman v. Seaside Villas Condominium Association, the Third District held on February 15, 2023 that a declaration clause making the board’s interpretation binding, and conclusive when backed by counsel’s opinion, defeated owners’ claim that a Fisher Island teardown and a lease of common elements needed a declaration amendment. The court reversed on the separate conflict-of-interest claim because the trial court never stated its reasons, as the summary judgment rule now requires.
The Facts
In 2018, 159 Fisher Island Holdings, LLC bought Building 9, one of nine buildings in the Seaside Villas condominium on Fisher Island. With the board’s approval, it demolished the building to build a large single-family home. The association also leased it about 960 square feet of common elements or limited common elements for 99 years, subject to renewal, for a one-time payment of $381,046.
The three-member board approved the demolition and construction plan 3-0 on October 10, 2018, and the lease 2-0 on May 30, 2019. The owners alleged that the third director, Brian Neff, recused from the lease vote because he was an owner of Holdings. The association’s counsel, board-certified in condominium law, advised that no declaration amendment or owner ratification was needed. Director Archie Drury, who had been Holdings’s real estate agent and received a commission on its purchase of Building 9, voted for both without disclosing that or recusing.
Two owners in a neighboring building, Robert G. Risman as trustee and Betty Rae Sherman for the Estate of George Sherman, sued. The trial court granted final summary judgment for Holdings on September 14, 2021. The case was argued on January 31, 2023. The points below are what the lawyers argued.
- The owners argued the declaration is the condominium’s constitution, that the new structure and the lease made the recorded declaration and its Exhibit C survey inaccurate, and that only an amendment approved by unit owners could do that.
- They argued Drury’s undisclosed conflict tainted the lease vote and that without him there was no quorum.
- Holdings argued the declaration gives the board alone the power to approve unit alterations, that its approval is irrevocable, and that section 25.3 makes the board’s interpretation binding. It said the owners’ own units had been altered with board approval only.
- On the conflict, Holdings argued section 718.3027, enacted in 2018, did not apply to this association, that the owners offered no proof the lease was unfair, and that their remedy was against the director.
The Decision
The Third District affirmed in part and reversed in part in an authored opinion filed February 15, 2023. On the amendment claim it did not decide whether the owners’ reading of the alteration and amendment provisions was right. It relied on section 25.3 of the declaration: the board interprets the declaration, its interpretation binds everyone unless wholly unreasonable, and an opinion of counsel that the interpretation is not unreasonable conclusively establishes its validity. The board read the declaration to allow the project and the lease without an amendment, counsel agreed, and the owners never challenged section 25.3 itself. So the drafters gave the association ‘the last word.’
On the conflict claim, the trial court’s order said only that it granted summary judgment ‘for the reasons stated on the record,’ and the appellate court could not find the reasons in the order or the hearing transcript. Florida’s summary judgment rule now requires the court to state its reasons on the record, so the Third District reversed that part and remanded, expressly taking no position on the merits.
The court also granted each side appellate attorney’s fees in part: the appellees on the amendment issue, and the owners on the lease-validity issue, conditioned on their ultimately prevailing below. Rehearing was denied March 20, 2023.
The Law
The Condominium Act controls material alterations to common elements. Under section 718.113(2)(a), there may be no material alteration or substantial addition to the common elements except as the declaration provides; if the declaration is silent on the procedure, 75 percent of the total voting interests must approve. That is why the declaration’s own terms decided Risman. The video title refers to section 718.110, the amendment statute, which the panel asked about at argument; the opinion did not rest on it.
Director conflicts are addressed in section 718.3027. The opinion quoted the 2018 version of subsection (4), which requires a director with an interest in an activity to leave the meeting during discussion and to recuse from the vote. The appellate court did not decide whether it applied.
Since May 1, 2021, rule 1.510(a) requires trial judges to state on the record the reasons for granting or denying summary judgment. Risman shows that a bare ‘for the reasons stated on the record’ can lead to reversal when no reasons can be found.
Lessons
- Read the whole declaration, including the interpretation clause. A provision like section 25.3 can decide a dispute before the alteration provisions are ever reached.
- Owners who want to challenge a board’s interpretation should consider attacking the interpretation clause or its application directly, which the Risman owners did not do.
- Directors with a financial tie to a transaction should disclose it and step out of the vote.
- Lawyers on either side of a summary judgment should make sure the order or the transcript states the court’s reasons.
Source: Risman v. Seaside Villas Condominium Association, Inc. (Fisher Island), No. 3D21-1963 (Fla. 3d DCA Feb. 15, 2023) (affirmed in part, reversed in part); ACIS docket, No. 3D2021-1963.
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
🏢 Board Vote or Owner Vote? When a Condo Alteration Needs a Declaration Amendment | §718.110
Read the Law on FloridaRules.net
The statutes and court rules discussed in this article, free to read on FloridaRules.net:
Go Deeper
- Can You Sue Condo Board Members Personally for Bad Faith? (Dobal v. Villas at South Beach)
- Who Owns the Spa and Lobby? Condo-Hotel Rights on Appeal (North Carillon v. Z Capital)
- Florida Condo Owners' Rights: Special Assessments, Records, and Disputes With the Association
Frequently Asked Questions
Does a condo board need an owner vote to approve a material alteration?
It depends on the declaration. Section 718.113(2)(a) says material alterations to common elements must follow the procedure in the declaration, and if the declaration has none, 75 percent of the voting interests must approve. In Risman, the board’s approval stood because of the declaration’s interpretation clause.
Can a condo board's interpretation of the declaration be binding on owners?
Yes, if the declaration says so. The Seaside Villas declaration made the board’s interpretation binding unless wholly unreasonable and conclusive when counsel opined it was not unreasonable, and the Third District enforced that clause.
Can a condo board member vote on a deal he has a conflict on?
Section 718.3027 requires directors to disclose possible conflicts and, under the version quoted in Risman, to recuse from the vote. The Third District sent the owners’ conflict claim back to the trial court without deciding it.
Does a Florida judge have to explain a summary judgment ruling?
Yes. Since May 1, 2021, rule 1.510(a) requires the court to state on the record its reasons for granting or denying summary judgment. In Risman the Third District reversed part of a judgment because the reasons could not be found.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
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