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Condominium association appeal turns setbacks into success in dispute with City of West Palm Beach and hotel developer

Uncategorized May 29, 2018
post about Condominium association appeal turns setbacks into success in dispute with City of West Palm Beach and hotel developer

Condominium association appeal turns setbacks into success in dispute with City of West Palm Beach and hotel developer – by Robert Hauser 

The Waterview Towers condominium in downtown West Palm Beach is a unique mixed-use condominium.  It includes a 23-story waterfront residential tower, a marina for luxury yachts, and additional undeveloped land on the Intracoastal Waterway that is slated for the future construction of a commercial building.  The entire parcel is owned by the City of West Palm Beach, but was leased away in 1979 to the original developer for 99 years.

Under the Waterview Towers Declaration of Condominium, the future commercial building is restricted to a maximum height of 75 feet and no more than approximately 100 feet of frontage.  The Declaration further indicates that the commercial lot may be used and improved in accordance with the developer’s Lease with the City.  The Lease, which is defined as one of the “Condominium Documents” with which all unit owners must comply, limits the potential structure to no more than four stories.  The Lease was approved by the City Commission along with Site Plan No. 7, limiting the structure to 20,000 square feet.

In 2014, the commercial unit owner applied to the City of West Palm Beach for authorization to construct an eight-story hotel.  The proposed structure exceeded the stated limits on number of stories, height, square footage, and frontage.   The residential unit owners and the condominium’s governing Association objected.  The Association and unit owners sought to be heard at City Commission meetings to point out that the project was not allowed under the Condominium Documents, but they were not able to convince the City Commission.  The City Commission passed the measure.  The City issued development orders for construction of the hotel.

The Association and a few unit owners challenged the project in Palm Beach Circuit Court.  The Association requested a judicial determination that the proposed commercial structure was not permitted under the Condominium Documents.  Any commercial structure could not exceed 75 feet, 100 foot width, four stories, and 20,000 square feet.  These restrictions were in the nature of covenants running with the land.

Both the City and the commercial unit Developer fought the lawsuit.   A one-day trial was held.  The trial court ruled against the Association and the unit owners, without explanation.  In addition, the Developer would recover attorneys’ fees and costs.

To confront this difficult situation, the Association and unit owners consulted with Board Certified appellate specialist Robert J. Hauser of Pankauski Hauser PLLC in West Palm Beach.  As an appellate expert, Mr. Hauser’s services are commonly sought for the first time after an unfavorable trial result.

Mr. Hauser initiated appeals of both the underlying judgment and the award of attorneys’ fees, urging that both were erroneous.

The parties briefed the declaratory judgment appeal throughout 2017.  On September 26, 2017, the case was argued live by Mr. Hauser before a three-judge panel of the Fourth District Court of Appeal in West Palm Beach.  The City and the commercial unit owner argued that the City could unilaterally change the restrictions in the Lease at any time, and without notice to the residential unit owners or the Association.

On November 1, 2017 the Fourth District issued a 2-1 decision in favor of the Association and the unit owners. The appellate court ruled that the plaintiffs were entitled to a declaratory judgment. Furthermore, the plaintiffs had standing to invoke the restrictions on construction found not only in the Declaration of Condominium, but restrictions found in the Lease.  In other words, the Lease and the Declaration of Condominium both contained interlocking restrictions which were in the nature of covenants running with the land.  They could be enforced by the Association or residential unit owners against the commercial unit owner.   The decision also means that the Developer will not recover attorneys’ fees.

The decision may be found here:  https://edca.4dca.org/DCADocs/2016/2858/162858_1709_11012017_09070203_i.pdf

The Waterview appeal is a case study in the importance of the right of appeal.  The City’s and commercial unit owner’s original victory in the trial court was meaningless because it could not be sustained on appeal.  The contract and property rights held by the Association and residential unit owners were ultimately vindicated.  Where the legal interpretation of a complex series of documents is concerned, an unfavorable result in the trial court is not the last word.  As a result, appellate counsel can quite plausibly achieve a completely different result on appeal.

For additional press on this case, see http://www.mypalmbeachpost.com/news/story-hotel-rejected-second-big-win-for-waterfront-view-residents/dMucFnNMOaPSI5TF5If1BN/ and https://therealdeal.com/miami/2017/11/05/court-rejects-hotel-proposal-in-downtown-west-palm-beach 

Case Update: Further review was sought in the Supreme Court of Florida and the petition was denied on July 3, 2018.