Most condominium declarations contain a right of approval. In general terms, they typically state no sale, lease or other transfer of a unit is permitted without prior written approval of the Association. But most declarations do not specify the grounds, if any, upon which denial is permitted. Most are very open-ended; for example, “grounds for disapproval include but are not limited to the account being delinquent.” Thus, what is the limit of the association’s authority to approve or disapprove, or what grounds may be used to disapprove the transfer? For example, can approval be denied because of a) poor credit history, b) an arrest with no conviction, such as for domestic violence or a DUI, or c) a history of objectionable behavior (such as loud parties) at a prior residence?
In all such cases, it is my opinion that if the presence of the buyer will not create an objective violation of the stated use restrictions, then the Association must approve the sale. For example, if there is a restriction against commercial vehicles, pets, boat trailers, or the like, then a buyer with a commercial truck, boat trailer or a dog will be in violation as soon as he takes possession of the unit. However, no violation is created merely because a buyer has a history of holding loud parties, or a criminal charge that was dropped — the Association does not know that such conduct will be repeated after the buyer takes possession, and that personal conduct in the past requires the association to make very subjective conclusions. Remember, denying approval of the buyer also means denying the seller of his right to sell his property. For this reason, it is my opinion that a right of approval that does not contain specific grounds for disapproval is not enforceable because it violates the seller’s “right of alienation” of his property and allows the Association to act in an arbitrary and capricious manner, or as a pretext to discriminate. To be enforceable, a Declaration without specific grounds for disapproval should state that if a purchaser is denied (where his presence does not create an objective violation of a restriction), the Association must provide an alternate purchaser willing to buy on the same terms and conditions as in the Seller’s contract. This is necessary to avoid trampling on the Seller’s right to sell his property. The foregoing conclusion is supported by the result in Aquarian Foundation vs. Shalom House, Inc, a case decided by Florida’s Third District Court of Appeal in 1984.
As always, every case turns on its own facts and circumstances. Whenever you have a legal question, be sure to consult with an experienced attorney.
Dated: March 2, 2015,Share