YOU SIGNED A CONTRACT -- BLA-BLA-BLA!

An Opinion By Jan Bergemann
President, Cyber Citizens For Justice, Inc.

Published July 19, 2011

CONTRACT LAW seems to be the "Holy Grail" for some attorneys and judges. Every time some owner claims that things are not done the way it was stated in his original contract (CC&Rs), some attorney tells him/her to sit down and shut up: "You signed a contract..."

Rumor has it, spread by some attorneys and a certain trade organization, that contract law even trumps the US and Florida constitutions. Not everybody agrees [See: ASSOCIATION FINES ARE UNCONSTITUTIONAL] and especially the SUPERIOR COURT OF Rhode Island absolutely disagreed [See: JAMES FOLEY v. OSBORNE COURT CONDOMINIUM, ET AL.].

But here in Florida THE POWERS THAT BE still allow fines levied by untrained and often incompetent people, who are allowed to function as accusers, judge, jury and executioners. (Our founding fathers would turn in their graves if they knew.)

We all know that these HOA "contracts" are actually adhesion contracts.

LEGAL DEFINITION OF ADHESION CONTRACT

An adhesion contract is a contract balanced in favor of one party over the other that one can assume it was not entered into on equal bargaining grounds. Adhesion contracts are usually formed when one person is in a superior bargaining position and pressures the other party into a contract with unfair or oppressive terms.

We all know as well that most people don't even get the chance to read these "contracts." It's customary that purchasers at the closing are handed the Rules and Regulations (often hundreds of pages) and are being told: "Initial here that you received them."

And then comes the "choice" argument -- another ridiculous argument we hear often from HOA proponents. Let's face it: What choice? In many areas here in Florida there is no choice if you want to buy a home less than 10 (ten) years old -- or even an empty lot. There is absolutely nothing available that is not inside an association.

Let's get back to the contract laws and rights and: "You should have read the contract before you signed on the dotted line."

That's plainly some more bogus argument, because these adhesion contracts are permanently changed if if The Powers That Be feel so inclined. And our legislators, who seem to be more interested in filling their campaign coffers -- or maybe even other pockets -- instead of serving their constituents according to their oath of office, don't mind passing bills that TRAMPLE UPON THE RIGHTS OF HOMEOWNERS.

How would you feel about this protection by contract?

Look at this example -- just one of many.

In 2003 a family is looking to purchase a nice home. But the many horror stories about dictatorial boards you can read daily in the media warned them and they did their homework. They obtained the deed restrictions for a community where they liked a home and read -- through all the 250 pages. No mention of the association having the right to fine its owners for any violation. They even looked up the Florida statutes and found out that fines can only be levied "If the governing documents so provide..."

(2003) FS 720.305(2) If the governing documents so provide, an association may suspend, for a reasonable period of time, the rights of a member or a member's tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines, not to exceed $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied on the basis of each day of a continuing violation, with a single notice and opportunity for hearing, except that no such fine shall exceed $1,000 in the aggregate unless otherwise provided in the governing documents.

(a) A fine or suspension may not be imposed without notice of at least 14 days to the person sought to be fined or suspended and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. If the committee, by majority vote, does not approve a proposed fine or suspension, it may not be imposed.

Protected by contract and Florida statutes, the family bought the home and hoped to live there happily ever after -- without the danger of getting fined by an overeager board.

In 2004 the Florida legislature even added more protection for homeowners, after the HOA Task Force listened to the horror stories of owners that got hit by outrageous fines -- not necessarily because they violated any rules, but because they didn't stand at attention when the board members and their buddies said so. Never forget that fines and liens are a dictatorial tool -- similar to protection money -- if used by power-hungry board members.

This is the language the HOA Task Force created in FS 720.305(2):

(2004) FS 720.305(2) If the governing documents so provide, an association may suspend, for a reasonable period of time, the rights of a member or a member's tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines, not to exceed $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied on the basis of each day of a continuing violation, with a single notice and opportunity for hearing, except that no such fine shall exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine shall not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to collect its reasonable attorney's fees and costs from the nonprevailing party as determined by the court.

Meaning: Even if the governing documents allowed the association to levy fines, the fines could not be enforced by filing liens -- a big money-maker for attorneys.

Despite the fact that The Powers That Be (especially attorneys) made various attempts to amend this provision and overturn the wording created by the HOA Task Force, it took until 2010 before they were able to convince the Florida legislators to make changes to this provision and sneak in language circumventing the protective language created in 2004:

(2010) FS 720.305 (2) If a member is delinquent for more than 90 days in paying a monetary obligation due the association, an association may suspend, until such monetary obligation is paid, the rights of a member or a member’s tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines of up to $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied for each day of a continuing violation, with a single notice and opportunity for hearing, except that a fine may not exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine of less than $1,000 may not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to collect its reasonable attorney’s fees and costs from the nonprevailing party as determined by the court. The provisions regarding the suspension-of-use rights do not apply to the portion of common areas that must be used to provide access to the parcel or utility services provided to the parcel.

Whoever wrote the language made a total mess out of it -- and confused nearly everyone. Not only the important language "If the governing documents so provide" disappeared, but the legislators added as well the dangerous language "A fine of less than $1,000 may not become a lien" -- meaning fines above $1,000 can become a lien -- and many governing documents allow fines above $1,000. The provision as written was ridiculous in itself: Fine a person for not paying "monetary obligations" on top of charging late fees and legal fees?

I sometimes wonder if certain people switch off their brains before writing such ridiculous language. But no matter what, the legislature clearly removed the contractual rights of the family in the example above.

The legislature corrected the language of 2010 -- somebody must have realized that the newly created language was nothing but a joke. But the new language in 2011 again tramples upon the rights of families that relied on their contract rights when buying their home in a HOA in 2003 -- which clearly allowed no fining -- supported by the statutes at that time.

(2011) FS 720.305 (2) The association may levy reasonable fines of up to $100 per violation, against any member or any member's tenant, guest, or invitee for the failure of the owner of the parcel or its occupant, licensee, or invitee to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. A fine may be levied for each day of a continuing violation, with a single notice and opportunity for hearing, except that the fine may not exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine of less than $1,000 may not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to s reasonable attorney's fees and costs from the nonprevailing party as determined by the court.

Abracadabra -- protection is gone, attorneys get more billing hours and dictatorial boards more power to blackmail owners -- no matter what the original contract said. This is just one example of many showing that these so-called contracts aren't worth the paper they are written on. While owners are always being told to remember the contract they signed, our legislators trample upon the contractual rights of homeowners like a bull in a china shop. No wonder that many homeowners living in mandatory homeowners' associations in Florida feel like they are being treated like Third-Class Citizens.

ONLY IN THE USA -- THE LAND OF THE ONCE FREE!

A contract is a legally enforceable agreement between two or more parties with mutual obligations, which may or may not have elements in writing. Contracts can also be formed orally (parol contracts). The remedy at law for breach of contract is usually "damages" or monetary compensation. In equity, the remedy can be specific performance of the contract or an injunction. Both remedies award the damaged party the "benefit of the bargain" or expectation damages, which are greater than mere reliance damages, as in promissory estoppel.