Bessemer v. Gersten
| Decision Date | 28 February 1980 |
| Docket Number | No. 52264,52264 |
| Parties | A. D. BESSEMER, etc., et al., Petitioners, v. Robert B. GERSTEN, et ux., Respondents. |
| Court | Florida Supreme Court |
This Court's opinion of February 8, 1979 is withdrawn.
This cause is before the Court on petition for certiorari supported by the district court's certification that its decision passed upon a question of great public interest. Gersten v. Bessemer, 352 So.2d 68 (Fla. 4th DCA 1977). We have jurisdiction. Art. V, § 3(b)(3), Fla.Const.
The issues are whether a developer can impose upon lots in a subdivision encumbrances creating affirmative duties to make cash payments for recreational purposes, to be enforced against a buyer through the mechanism of a foreclosable lien, and whether, where the only act of the buyer showing intent to pledge the property as security is the acceptance of a deed embodying the covenant and lien provisions, the lien arising from nonpayment will prevail over the buyer's homestead right, where homestead attached at the time of the buyer's taking title by deed. We answer these questions in the affirmative.
On February 25, 1969, Robert and Dina Gersten contracted with Behring Corporation for the purchase of a residential house and lot in The Mainland of Tamarac Lakes, Tenth Section, a subdivision then being developed by Behring. The purchase and sale agreement contained the following two pertinent provisions:
The first provision above shows an agreement by the Gerstens to pay the recreational facility charge. The second shows that they were put on notice that restrictions of record would not be warranted against by the seller when the time came for conveyance. The purchase and sale agreement did not, however, provide that the duty to pay would be secured by lien.
On January 8, 1970, Behring Corporation filed in the public records a "declaration of restrictions" pertaining to the subdivision in which the lot the Gerstens had agreed to buy is located. Section 8 of this document, entitled "Recreation Land Lease; Liability For; Assignment Lien, Etc.," declared that each lot owner would be responsible for a share of the rent to be paid for a certain described parcel of land upon which the developer planned to construct recreational facilities for the exclusive use of the residents of the subdivision.
The declaration provided that each lot owner's share of the rental obligation would be $10.00 per month, or 1/476 of the total monthly rent of $4760.00. It stated the developer's intention to enter into a long-term lease of the specified land and to pledge to the prospective lessor the right to receive the payments from lot owners as security for the rent. The declaration provided that the monthly rental obligation would commence in the month following the developer's recording of a certificate to the effect that the construction of the recreational facilities had been completed. It was further declared that
each owner hereby agrees that Behring Corporation, its successors or assigns, shall have a lien upon such owner's lot for the aforesaid amount of $10.00 per month until such amount is paid, and that such lien, where the same remains unpaid for a period of thirty days or more, may be foreclosed in equity in the same manner as is provided for the foreclosure of mortgages upon real property.
Finally, section 8 of the declaration stated that its provisions "shall be considered and construed as covenant restrictions, reservations and servitudes running with the land."
On April 9, 1970, the contemplated lease of the land described as the recreation land in the declaration of restrictions was entered into and recorded. The parties to the lease were July Investment Corporation as lessor and Behring Corporation as lessee. The lease restricted the use of the premises to the recreational purposes of the subdivision. Paragraph 10 of the lease, entitled "Assignment of Lien Rights," gave the lessor the right, as security for the payment of rent, to enforce the liens which Behring Corporation "may acquire by reason of the terms . . . of Paragraph 8 of . . . (the) Declaration of Restrictions." Thus it was envisioned that the lessor of the recreation land could apply any sums received through enforcement of the liens against the lot owners' property to the rent owed by Behring under the lease. But Behring Corporation reserved to itself the right to enforce the liens also.
On August 26, 1970, the developer recorded a certificate to the effect that the planned recreational facilities had been constructed. Then, on November 27, 1970, the developer executed and delivered, and the Gerstens accepted, a deed conveying to them the house and lot which they had contracted to purchase.
On December 11, 1975, the executor and trustees of the Estate of Mary A. Bessemer, as successors in interest to the Behring Corporation, brought suit to foreclose the lien against the Gerstens' property for nonpayment of their share of the recreation land rent in the amount of $52.91.
The defendants responded with a motion to dismiss. They argued that since the developer, as owner of the lot in question, was not obligated to make payments to itself prior to the time when the lot was conveyed to the Gerstens, the notion of the lien as a preexisting encumbrance is conceptually faulty. Although the buyers agreed to pay the recreation facility charge and had notice of this encumbrance through the declaration of restrictions, yet the lien, it was argued, was only to arise, and could only arise, upon nonpayment. Therefore the lien came into existence only after the Gerstens had taken possession of the premises as their homestead. The Gerstens argued further that the developer had not alleged facts showing that the lien should nevertheless be enforceable on the ground that it was an obligation "contracted for the purchase, improvement or repair" of the homestead property. Art. X, § 4, Fla.Const. Following the denial of their motion to dismiss, the defendants filed an answer which did not dispute the facts alleged showing constructive notice of the affirmative covenant and lien. The trial court entered a final judgment of foreclosure.
The district court of appeal reversed. It correctly stated that liens on real property can be created only by contract and by operation of law. It found that there was no mention of a lien in the contract for purchase and sale, so the agreement there could have given rise to no lien. It held that the declaration of restrictions could not have created a lien because of its unilateral nature. It declined to find that the circumstances justified the imposition of an equitable lien. The court found, rather, that a lien was created contractually when the purchasers accepted the deed incorporating by reference the declaration of restrictions. Thus the court concluded that the lien came into existence at the time of the closing. But since the homestead status of the premises was established at that time also, it was held that the lien could not be enforced. 1
A developer, in carrying out a uniform plan of development for a residential subdivision, may arrange for the provision of services to the subdivision or for the maintenance of facilities devoted to common use, and may bind the purchasers of homes there to pay for them. 2 In this case, all of the elements of an affirmative covenant running with the land have been established. 3 Of course, we are not directly concerned with whether the covenant to make the payment runs with the burdened land since the party sought to be charged is the actual covenantor. 4
The respondents do not dispute their promise to pay the recreational facility charge, but argue that there is no enforceable lien. There was no agreement on their part, they contend, manifesting an intent to pledge or charge...
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