Parrish v. Pier Club Apartments, LLC, 4D03-2458.

• Decision Date: 20 April 2005
• Docket Number: No. 4D03-2458.,4D03-2458.
• Citation: 900 So.2d 683
• Parties: Lori PARRISH, as Broward County Property Appraiser, Appellant, v. PIER CLUB APARTMENTS, LLC, a Florida limited liability company, and Joseph Rosenhagen, as Tax Collector for Broward County, Florida, Appellees.
• Court: Florida District Court of Appeals

900 So.2d 683

Lori PARRISH, as Broward County Property Appraiser, Appellant, v. PIER CLUB APARTMENTS, LLC, a Florida limited liability company, and Joseph Rosenhagen, as Tax Collector for Broward County, Florida, Appellees.

No. 4D03-2458.

District Court of Appeal of Florida, Fourth District.

April 20, 2005.

Gregory Durden of Gregory Durden, P.A., Fort Lauderdale, for appellant.

Jerold I. Budney, Kenneth A. Horky and John L. McManus of Greenberg Traurig, P.A., Fort Lauderdale, for appellee Pier Club Apartments, LLC, etc.

STEVENSON, J.

The issue in this appeal is whether Pier Club Apartments, LLC, was entitled to an affordable housing tax exemption on apartment units that were vacant on January 1st, but which were occupied by low or very low income tenants in the preceding year. Under the particular facts present here, we answer this question in the negative and reverse the order appealed.

The Proceedings Below

In June 1999, Pier Club Apartments, LLC ("Pier Club") purchased a 480-unit apartment complex that provides affordable housing to low and very low income tenants. Pier Club's sole shareholder was a not-for-profit corporation and the purchase was financed through public housing revenue bonds. As a condition of such funding, Pier Club entered into a Land Use Restriction Agreement (LURA) with the Housing Finance Authority of Broward County. The LURA required that, by June 1, 2000, 20% of the units would be occupied by very low income tenants and an additional 55% by low income tenants. The remaining 25% were available for rent to the general public.

In February 2000, Pier Club applied for an affordable housing exemption from ad valorem taxation pursuant to section 196.1978, Florida Statutes (2000). The statute provides that property that is (1) owned by certain types of qualified non-profit entities and (2) used to provide affordable housing for certain statutorily defined "eligible persons"

shall be considered property owned by an exempt entity and used for a charitable purpose, and those portions of the affordable housing property which provide housing to individuals with incomes as defined in s. 420.0004(9) and (14) shall be exempt from ad valorem taxation. . . .

When the property appraiser failed to advise Pier Club of its decision by the July 1st deadline set forth in section 196.193(5), Florida Statutes, Pier Club filed a petition for writ of mandamus.

Nearly simultaneous with service of the petition, Pier Club received a letter denying its application for exemption. The denial prompted Pier Club to amend its petition. Count I was styled a "statutory cause of action to contest the denial of ad valorem tax exemption." Count II sought a declaration that the property appraiser was in violation of section 196.193(5) for failing to either grant or deny the exemption by July 1st and that Pier Club was, in fact, entitled to the section 196.1978 exemption. The property appraiser took the position that the 2000 amendments to section 196.1978 were unconstitutional as they had been enacted in violation of the single subject rule. Alternatively, the property appraiser insisted Pier Club did not qualify for the exemption.

In or around February 2002, the parties reached a settlement, resolving the majority of the issues. The parties agreed Pier Club would receive a tax exemption for all units in which a low or very low income tenant resided on January 1, 2000—approximately 57% of the 480 units. The parties were unable to agree, however, on the tax exempt status of those units that were vacant on January 1, 2000, and this issue was reserved for trial.

Pier Club took the position that if a unit was previously occupied by a low or very low income tenant but vacant on January 1st, it was nonetheless entitled to section 196.1978's exemption. The property appraiser, on the other hand, insisted that January 1st was the only relevant date and that if the property was not occupied by a low or very low income tenant on January 1st, then the property was not being "used" to provide affordable housing. The trial court sided with Pier Club, ruling that "the apartments, designated as and occupied by low or very low income tenants, as defined by Florida Statute 420.0004(9), in the tax year prior to January 1, 2000, but were vacant on January 1, 2000 retain that designation and are still entitled to an ad valorem tax exemption." We cannot agree.

General Principles Regarding Ad Valorem Taxation

Before addressing the specifics of the trial court's ruling and the arguments raised, it is helpful to set forth some general principles regarding ad valorem taxation and the language of section 196.1978. First, "[u]nless expressly exempted" all real property in the state is subject to taxation. § 196.001(1), Fla. Stat. (2004).¹ Second, by statute, real property is assessed "according to its just value" on January 1st of each year. § 192.042(1), Fla. Stat. Third, "[e]very person or organization who, on January 1, has the legal title to real or personal property . . . shall, on or before March 1 of each year, file an application for exemption . . . ." § 196.011(1)(a), Fla. Stat. The failure to apply for the exemption by March 1 generally waives the exemption for that year. Id. Fourth, statutes providing for an exemption from ad valorem tax are to be strictly construed, see Dade County Taxing Auths. v. Cedars of Lebanon Hosp. Corp., 355 So.2d 1202, 1205 (Fla.1978),

and any ambiguity is to be resolved against the taxpayer and against exemption, see Markham v. PPI, Inc., 843 So.2d 922, 925 (Fla. 4th DCA 2003). "The burden is on the claimant to show clearly any entitlement to tax exemption." Volusia County v. Daytona Beach Racing & Recreational Facilities Dist., 341 So.2d 498, 502 (Fla.1976).

The Language of Section 196.1978

Since all real property is subject to ad valorem taxation unless exempted, any analysis of this issue must begin with the language of the statute authorizing the exemption. Section 196.1978 reads in relevant part:

Property used to provide affordable housing serving eligible persons . . . shall be considered property owned by an exempt entity and used for a charitable purpose, and those portions of the affordable housing property which provide housing to individuals with incomes as defined in s. 420.0004(9) and (14) shall be exempt from ad valorem taxation to the extent authorized in s. 196.196. (emphasis added).

Since the parties agreed that 57% of the property's tenants were low and very low income, the Pier Club apartments as a whole must be considered as "used for a charitable purpose." However, only "those portions of the affordable housing property which provide housing to individuals with . . . [low income] and . . . [very low income]" are entitled to exemption from ad valorem taxation. The critical question, then, is whether actual occupancy by a low or very low income tenant on January 1st is required for a unit to be considered a "portion" of the property "which provide[s] housing" to low and very low income individuals.

Actual Occupancy on January 1st

1. The meaning of the word "provide"

Pier Club suggests that the answer to this question is "no," relying upon the dictionary definition of the word "provide." According to Pier Club, since the word "provide" means "to make available," see Webster's Ninth New Collegiate Dictionary 948 (9th ed.1988), section 196.1978's exemption applies to "the portions of the affordable housing property . . . most recently leased to qualified low and very low income tenants," whether or not occupied on January 1 since it is "making those units available to such qualified tenants on January 1." While we do not take issue with Pier Club's definition of the word "provide," we cannot agree that, when applied here, actual occupancy of the unit by a low or very low income tenant on January 1st is not necessary to trigger the exemption.

First, a vacant unit can hardly be said to be providing housing to anyone—low income or otherwise. Second, if the legislature had intended the exemption to apply to any unit that had been utilized to provide housing for low income individuals, it certainly could have written the statute to state that those portions which provide or have provided low or very low income housing are exempt.

Third, despite Pier Club's assertion to the contrary, the evidence in the record before us is insufficient to support a finding that units which were vacant on January 1, but once occupied by low or very low income tenants, will necessarily be made available to low or very low income tenants. The LURA required Pier Club to rent 75% (or 360) of its 480 units to low and very low income tenants by June 1, 2000. According to the parties' settlement, as of January 1, 2000, 272 units were actually occupied by low and very low income tenants. Thus, to meet its 75% requirement, Pier Club was required to lease an additional 88 units to low or very low income tenants by June 1, 2000. There was, however, no evidence regarding the status of the remaining 208 units (480-272 occupied by low/very low income tenants) that were not leased to low or very low income tenants on January 1st. For example, if 120 of the remaining 208 units were already leased to individuals other than low and very low income tenants, then Pier Club would have to rent any units that were vacant on January 1st to low and very low income tenants in order to satisfy its obligations under the LURA. On the other hand, if only 100 of the 208 remaining units were presently leased to tenants other than those with low and very low incomes, then Pier Club has 108 available units, only 88 of which must be leased to low income individuals.

2. Section 196.1978's Internal References

Next, Pier Club contends that any ambiguity as to whether the unit must actually be occupied by a low or very low income tenant on January 1st to qualify for the exemption is resolved by section 196.1978's internal...