A Collier County Court judge has ordered the Crescent Beach Condominium Association on Marco Island to get rid of its "unreasonable" financial screening practices for new buyers.

The unusual ruling follows a bench trial a few weeks ago for an unusual case brought by a prospective buyer in small claims court.

David Mech sued the association in December after walking away from an all-cash offer to purchase his dream condo at Crescent Beach because he didn't want to comply with its demands to see two years’ worth of his tax returns before approving his application to become part of the community.

"I didn't get to have my ideal condo," he said.

While he loved the condo and its prime waterfront location, Mech said he saw the financial screening requirements as unjustified and just “plain nosy" so he let it go based on principle.

"There's no reason for them to know the total income for people," he said. "No reason."

The association must sign off on a prospective buyer's application before any sale can go through at the high-rise community, unless the purchaser already owns a unit in the building.

Based on principle

Mech, a real estate broker and instructor who’s familiar with condominium law, represented himself in the lawsuit. He said he took action mostly based on principle, not on how much money he might collect.

"To me, I thought I wouldn't just give somebody my tax returns," he said. "Do I really want to live in a building that has that type of board? That's really an issue to me."

After hearing arguments on both sides at a trial in early June, Collier County Court Judge Tamara Nicola sided with Mech, finding the board's blanket policy requiring new buyers to produce personal tax returns "patently unreasonable," striking it down.

Nicola awarded Mech his legal costs, which he estimates at about $500, but he hopes to get a little more money than that to offset other costs related to his failed attempts to buy the condo.

The judgment amount has yet to be decided, so Mech said he's not sure if he'll get any other money awarded to him.

While he canceled his purchase contract in time to get his $10,000 deposit back, Mech said he lost roughly $4,000 when he ended the lease for his apartment in Irvine, California, early before discovering the tax return requirement. He hopes to recover at least some of those break-up fees.Representatives for the board couldn't be reached for comment about the situation.

According to court documents the board added a specific requirement for new buyers to produce their tax returns to its condo documents only after Mech filed his suit. In her ruling, Judge Nicola ordered it removed.

In his suit, Mech argued the condo association had no reason to ask him for his tax returns when he had a perfect credit score and a clean background — and nothing in Crescent Beach's governing documents gave it the authority to require such private and sensitive information from any buyer.

Mech questioned why the association would need to see anyone's tax forms in the first place, as they’re not an indication of current — or future — income.

Representatives for the board couldn't be reached for comment about the situation.

According to court documents the board added a specific requirement for new buyers to produce their tax returns to its condo documents only after Mech filed his suit. In her ruling, Judge Nicola ordered it removed.

Right of the board?

In court documents and at trial the condo association's representatives argued it had the right to ask for tax returns due to its authority to require any information that's "relevant to the application."

Judge Nicola disagreed, finding that such closely guarded information should only be requested under extreme circumstances when there's "good cause" based on negative results from background screenings or credit checks, such as a history of bad behavior that could lead to money problems.

Mech didn't win his suit on all accounts.

The judge denied his request for injunctive relief, saying it was too late to grant it anyway. The purpose for such relief, she said, is to prevent something from happening — and the condo Mech had set his eyes on quickly sold after he walked away from his purchase contract, so it's off the market now.

Since filing the suit Mech has purchased a condo elsewhere on Marco — but he said he's still interested in the possibilty of buying a unit at Crescent Beach, especially if he no longer has to produce his tax returns.

In his suit, Mech also accused the association of "tortious interference" with his attempts to buy the condo, but the judge found no evidence that the board "specifically targeted" him to "defeat his contract," as it required all new buyers to produce tax returns, not just him. The legal term refers to intentional interference from a third party in a business transaction.

FINAL RULING