CAN A CONDO PREVENT OWNERSHIP OF MORE THAN ONE UNIT?

By Eric Glazer, Esq.   

Published September 23, 2024

 

Often times, condominium associations amend their documents in an attempt to prevent an owner from owning more than one condominium unit.  The question is, can that legally be done?

 

The case of Tropicana Condominium Ass'n, Inc. v. Tropical Condominium, LLC, 208 So.3d 755, 759 (Fla.App. 3 Dist., 2016) truly lays out many tests that courts must follow.

 

The court held that The Condominium Act allows a Declaration to establish restrictions on the transfer of units. § 718.104(5), Fla. Stat. (2013). Courts have acknowledged that condominium associations may impose restrictions on unit owners' ability to transfer their units, either by lease or sale. Woodside Vill. Condo. Ass'n, Inc. v. Jahren, 806 So.2d 452 (Fla.2002); White Egret Condo., Inc. v. Franklin, 379 So.2d 346 (Fla.1979). Due to the uniqueness of condominium living, condominium associations have a degree of control over the ownership of units and, concomitantly, individual owners tolerate a degree of intrusion into their property ownership. Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180 (Fla. 4th DCA 1975). While a restriction on alienation of a conminium might be permissible, it still must be reasonable. Id. at 182; Seagate Condo. Ass'n, Inc. v. Duffy, 330 So.2d 484, 486 (Fla. 4th DCA 1976) (“The test which our courts have adopted and applied with respect to restraints on alienation and use is reasonableness.”). Properly enacted condominium Declaration restrictions are presumed valid, and the challenger of such restrictions has the burden to establish arbitrariness, unreasonableness or violation of law. Woodside Vill. Condo. Ass'n, Inc., 806 So.2d at 457.

 

The court continued by stating that in terms of the amendment limiting ownership to only two units, the court disagreed with the trial court's determination that the owner met its burden of establishing that the ownership restriction is unreasonable. The record reflects that the majority of unit owners approved the restriction after a fellow owner, who owned six units in the building, allowed all six units to go into foreclosure. Given the relatively small size of Tropicana—forty-eight units—multiple foreclosures caused by a single owner's financial circumstances, could have a significant, detrimental financial impact on the Association.

 

An additional and important consideration in our evaluation of the Association's limit of not more than two units per owner is whether such a restriction impedes the improvement or marketability of a property. Aquarian Found., Inc. v. Sholom House, Inc., 448 So.2d 1166, 1168 (Fla. 3d DCA 1984) (citing Iglehart v. Phillips, 383 So.2d 610 (Fla.1980)).

 

Again, given the relatively small size of the Tropicana Condominium, in an area of Sunny Isles Beach that in recent decades has seen abundant development of large condominium buildings, the restriction will have a negligible effect on marketability. Tropicana unit owners are free to sell their units to the public at large (subject to the ordinary condominium association approval process), and are excluded only from selling to a tiny, almost inappreciable class of persons who already own two Tropicana units.

 

Before you rush to make the amendment, suppose the unit is bought in the name of the other spouse, a different corporation or LLC, a child?  That’s when enforcement gets confusing.

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About HOA & Condo Blog

Eric Glazer

Eric Glazer graduated from the University of Miami School of Law in 1992 after receiving a B.A. from NYU. He has practiced community association law for three decades and is the owner of Glazer and Sachs, P.A. a five attorney law firm with offices in Fort Lauderdale and Orlando.

 

Eric is Board Certified by The Florida Bar in Condominium and Planned Development Law.

Since 2009, Eric has been the host of Condo Craze and HOAs, a weekly one-hour show airing at 7 p.m. each Thursday on YouTube. This show allows viewers to engage in live chats with Eric and other participants but also enables a broader audience to access free advice, making valuable insights more widely available.

See: www.condocrazeandhoas.com

   

Eric is the first attorney in the State of Florida that designed a course that certifies condominium and HOA residents as eligible to serve on a Board of Directors and has now certified more than 20,000 Floridians all across the state. He is certified as a Circuit Court Mediator by The Florida Supreme Court and has mediated dozens of disputes between associations and unit owners. Eric also devotes significant time to advancing legislation in the best interest of Florida community association members.



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