Under the case law that has developed over the years, a legal theory has evolved which says that bad people do not necessarily have the right to live wherever they want and if the members of a neighborhood or condominium association do not want to have bad people living next door to them, the members can keep the bad people out if they follow proper procedures. A community does not have to allow convicted murders, rapists, pedophiles, spouse abusers, drug dealers or scam artists to move in. The community can legally discriminate against such bad people and keep them out.
In order to do so, first an association needs to have approval procedures provided for in their declaration of covenants or declaration of condominium which set fourth in detail the procedures a prospective new owner or new tenant must follow in order to obtain unit or lot transfer approval from the board of directors of the association prior to the anticipated closing or move-in date. Usually, a transfer application must be completed and a processing fee paid to the association at least 20 to 30 days before closing or the commencement of a lease term. Under current law, if provided in the association's governing documents, a condominium association can charge up to $100 as a transfer processing fee and a homeowners' association can charge a reasonable fee.
The application will ask the prospective new member to provide information such as date of birth, Social Security number, description of vehicles to be on property, number and names of residents, and bank and personal references. With this information, if necessary, the association can have a civil and criminal background check run on the applicant to see if the applicant has traits of a bad person.
The majority of the time, the application will be filled out correctly, reference checks will come back fine and, if necessary, an interview of the applicant will raise no red flags and the application can be approved. However, sometimes an applicant will balk at filling out the application or not properly fill out the application. References called may say "no comment" or have not good things to say about the applicant.
When these red flags are raised, a thorough background check may be called for. When the check is run, it may be found that the applicant has a bad person history. What are the kind of bad things an applicant has done that could legally qualify for a legal denial of the transfer?
The following list is examples of bad person traits that Florida courts have held are appropriate for denying an applicant from moving into a community:
The person seeking approval has been convicted of a felony involving violence to persons or property, a felony involving possession or sale of a controlled substance, or a felony demonstrating dishonesty or moral turpitude;
The person seeking approval has a record of financial irresponsibility, including without limitation prior bankruptcies, foreclosures or bad debts;
The person seeking approval gives the board reasonable cause to believe that person intends to conduct himself in a manner inconsistent with the covenants and restrictions applicable to the condominium or neighborhood;
The person seeking approval has a history of disruptive behavior or has evidenced an attitude of disregard for association rules or the rights or property of others, by his or her past conduct;
The person seeking approval has failed to provide the information, fees or interviews required to process the application in a timely manner, or provided false information during the application process.
Assume a background check is run and one or more of the above traits are discovered about the application. This does not mean a board of directors must disapprove the applicant. The bad person traits could have been long ago or mitigated with good explanation or subsequent acts. Under such circumstances, there is no reason the board cannot give the rehabilitated applicant a second chance.
In fact, disapproval based on prior history should never be done lightly and a board of directors should never disapprove an applicant unless and until it has gone over its reasons with competent legal counsel to determine if there are enough bad person traits to withstand legal challenge.
Whenever a sale or lease transfer is denied, there will probably be at least two parties unhappy with the board of directors; the owner of the unit and the prospective purchaser and prospective tenant and one or more of them may try to legally challenge the association. Therefore, the board must be confident that legal counsel has advised that there are sufficient legal grounds to deny the application to withstand a legal challenge.
Just as many gated communities are designed to keep out transient bad elements, well-worded governing documents with appropriate transfer approval procedures and the following of same can keep out bad element residents before it's too late (after they have already moved in). Once the bad people have moved in, it will then be extremely difficult to legally get rid of them.
Rob Samouce, a principal in the Naples law firm of Samouce, Murrell & Gal P.A., concentrates his practice in the areas of community associations, including condominium, cooperative and homeowners' associations, real estate transactions, general business law, estate planning, construction defect litigation and general civil litigation. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time. Those persons interested in specific legal advice on topics discussed in this column should consult competent legal counsel.