The Village of Doral Place, a 331-unit condominium located in Miami-Dade County, Fla., has common areas that include a parcel of land with a swimming pool. The county tax assessor sent the tax bill for this parcel to the complex’s property management company, where it was neither paid nor forwarded to the homeowners association (HOA).
The county then sold a tax certificate for the parcel to a local bank, which resold it to a private company, which in turn bought the property at public sale. The buyers — RU4Real Inc. and For Sale by Owner Realty Inc. — subsequently fenced off the swimming pool, barring condo-unit owners from accessing the pool.
The HOA sued in Village of Doral Place Association Inc. v. RU4Real Inc. et al. At trial, the court refused to set aside the sale and tax deed, citing Florida Statute 194.171(2), which states: "(n)o action shall be brought to contest a tax assessment after 60 days from the date (of) the assessment."
However, the court also ruled that the buyers purchased the property subject to the condominium declaration, so the HOA and buyers would retain the exclusive right to use and obligation to maintain the pool.
Florida’s Third District Court of Appeals reversed the lower court’s ruling upholding the tax sale. First, the court explained, the HOA was not contesting the assessment. Rather, the HOA was contesting the sale. Accordingly, the "no contest" rule of Section 194.171(2) did not apply to bar the HOA’s claim.
Second, Section 718.107 of the Florida Statutes (2003) expressly prohibits any sale of "common elements" of a condominium separate from a condominium unit. Under the statute, "common elements" include "the portions of the condominium property not included in the units." The parcel containing the pool fell within this definition, and so by law could not be sold.
Finally, the court overruled the buyers’ claim that they were entitled to quiet title under 65.081, Florida Statutes (2003): "No defense to the action (to quiet title) or attack upon the tax deed shall be made except the defense that the taxes assessed against the property had been paid by the former owner before issuance of the tax deed."
Citing its responsibility to harmonize conflicting statutes and to avoid absurd results such as the use, maintenance, safety and insurance issues arising from the HOA’s non-ownership of the pool, the court found it "simply beyond belief that the legislature intended such a result."
Accordingly, the court reversed the lower court’s ruling and remanded the case, making it clear that the HOA would be responsible to repay the buyers for the purchase price paid.
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
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