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Condo Owner Blocks Association from Collecting Assessment

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Appellate Court Allows Owner to Seek Injunctive Relief and Reverses Award of Attorney’s Fees and Costs. In Mitchell v. Beach Club of Hallandale Condominium Association, Inc., 17 So.3d 1265 (Fla. 4th DCA 2009), the Fourth District Court of Appeal ruled that a condominium owner has the right to proceed with a lawsuit aimed at preventing the association from collecting a special assessment. The association levied an assessment for close to $1.3 million and sought to collect $4,194 from each unit owner.  One of the unit owners objected to the process and filed a lawsuit to prevent the association from collecting the assessment.  The association’s attorney filed a motion to dismiss the case and ultimately convinced the trial court to rule in its favor.  The trial court later awarded the association attorney’s fees and costs as the ‘prevailing party’ in the lawsuit. The appellate court totally disagreed and reversed the trial court ruling.  It found:

  1. Mandatory non-binding arbitration pursuant to Section 718.1255, Florida Statutes was not necessary, as the statute itself excludes any disputes relating to the imposition or collection of an assessment;
  2. The Court had jurisdiction to address the claim even though the amount of the assessment against this particular owner was less than $5,000, since the owner sought injunctive relief, not any monetary relief; and
  3. Injunctive relief was appropriate to prevent or to challenge a violation of the Condominium Act pursuant to Section 718.303, Florida Statutes.

The complaint filed by the owner alleged that the association failed to give proper notice of the meeting, failed to obtain a quorum and it used expired proxies.  Since the special assessment would be invalid if those claims were true, the complaint was sufficient “to warrant a permanent injunction”. This case shows that every association needs to maintain the records necessary to prove it adopted assessments (whether special or annual) properly.  Otherwise it may lose the ability to collect those assessments and create expensive, time consuming and acrimonious legal disputes if some owners pay and others do not.  Thus, records indicating which and how many owners participated in a meeting (in person or by proxy) are important, as is a verifiable registration procedure.  All voting documents, ballots, proxies and sign-in sheets must be retained for at least one (1) year and notices, affidavits or proof of mailing and the minutes of those meetings retained for seven (7) years. Please contact us if your association needs assistance creating a records retention policy or procedures governing unit owner inspection and photocopying of official records.

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  • Rosario Vargas
    June 3, 2010

    Since I moved to my condominium, the association keep requesting yearly assessment and nothing get fix, this is beside the monthly maintenance fees that I paid to the association. I am a single mother and it is very hard to keep paying for stuff that are not fix. For example an assessment fee was collected from each owner to fix all balcony’s, up to this date my balcony has not been fixed, but I paid my assessment , they threat us with a law suit if we did not paid. We have a lot of low income seniors leaving in the building and with the economic been the way it is, it is very hard to come with the additional money. Is there any law that protect home owners from these unscrupulous association and stop the abused of these assessments.

  • Stephen Gabrilove
    October 7, 2010

    If a florida condominium document states a mortgage foreclosure abolishes previous owed assessments do the condo documents prevail over section 718.116(1)(a)?
    RESPONSE: There was an appellate court ruling in the HOA setting that said a lender was not obligated to pay for any of the past delinquency when the governing documents provided lender protection. The same arguments may be made by a lender for a mortgage recorded prior to 1992 if the governing documents so provide. Also, a lender may argue it is not obligated to pay more than 6 months (rather than 12 months) or 1% if its mortgage originated prior to 2010. I am not aware of any rulings on this issue.

  • Howard Shidlowsky
    October 9, 2010

    Good Morning;
    My question: A condo association declares a Special Assessment for roof repairs and past shortfalls due to delinquent units not paying their monthlty fees. This unit owner owes the association $5,000. in regular maintenance fees; and an additional $7,500. for their share of the Special assessment. Thereafter, the bank forecloses on that condo unit that owes the association a total of $12,500. in delinquent fees. The bank’s original mortgage is $200,000. and is required to pay the lower of 1% of the original mortgage, or 12 months maintenance fees. I have previously been told that Special Assessment is are not considered as part of the regular condo fees, and therefore ,the bank is required to pay the lesser of 1% of the original mortgage, plus an additional amount of the Special Assessment still due the association. Please let me know which is correct. Is the bank responsible for a total of their 1%, which includes the Special Assessment, or is the bank obligated to pay the additional Special Assessment, plus the 1% or 12 months or regular maintenance fees.
    Thank you for your response.
    RESPONSE: Unfortunately the mortgagee’s liability does not include liability for special assessment payments that became due prior to acquisition of title. Please read the article in Becker & Poliakoff’s Vol. IX, Community Update (link on right side of blog) about how to schedule special assessment payments.

  • olke
    November 4, 2010

    The condo association of my apartment building was charging us for attorneys fees due to a lawsuit they started against the remodeling balcony company they chose (against owners will) and that lawsuit is over. Since the maintenace is so high due to the board of directors over and over mistakes again, against our will, because they alwys have made their desiions before any meeting with the owners and many times in hiding, (they didn’t even properly notified us), Now my question is can I stop paying those attorney fees and deduct them from the monthly maintenance??
    RESPONSE: Owners do not have the option to “pick and choose” which expenses they will pay. If you feel that the expenses are inappropriate, you must challenge the assessment in the proper forum or control the expenses through changes in leadership. If you simply stop paying the association may file a lien against your property and then foreclose if necessary.

  • Paul Masse
    March 31, 2011

    With barely 3 months into our new 2011 budget, our officers have overspent this budget by more than $90,000.00 by giving out contracts without the APPROVAL OR EVEN KNOWLEDGE OF THE BOARD, refusing to implement the amendments made to the proposed budget before its approval,. requesting the presence of attorneys at every board and special meetings,etc
    Now they want to assess owners for $200,000.00 ”because it appears that the budget is underfunded”
    There are no special unforeseen exoenditure in sight. Can this be done? Is it legal?
    RESPONSE: The budget is only an estimate and often expenses exceed the amounts budgeted for that particular item. It would be very unusual for the governing documents to prohibit the board from amending the budget mid-year. The level of attorney participation is subject to the board’s discretion. Many boards feel under attack and therefore desire to have the attorney present.

  • Bobbie Shepherd
    April 25, 2015

    Question: My association was notified 5 years ago my roof was leaking. Over the years they have hired various “fly by night” contractors to make repairs and I will have replaced or fixed the damages done to my unit myself then 6 months or a years later it will start raining in my unit again and again. I have lost numerous tenants because of the damages to their personal property and currently my out of pocket costs are at $20k. In Sep 2014 they finally hired a real roofer who told us the roof is beyond repair and he added a sealant but would not guarantee the work but if a leakage reoccurs over the next year he will make repairs at no cost to the Association over the next year. The Association was supposed to replace my kitchen wall in Oct 2014 and remove the mold that was present in the unit from the extensive water damage. April 2015 began raining in through the wall destroying half my newly laid hardwood floors and it is continuing to rain in the unit now. My unit has been uninhabitable since Sep of 2014 from water damage and black mold. In the past 5 years I have lost 14 months of rent as a result of their negligence. We have one of the highest maintenance fees in town. We have condos here of equal value/structure generally charge a maintenance fee of $150 to $185 per month. We pay $300 per month and now they have levied an assessment of $500 per owner because they elected to put a new $30k roof on the association club house! but could not be bothered fixing my wall so that further damage would not occur to my unit. I am disabled and live on a fixed income. It is very difficult for me to continue to pay them when my source of income is nonexistent as a result of their negligence. Is their a legal president where I can stop paying these people money when they are not doing their job? I have an attorney who is doing his best but he is not a real estate attorney. They have a group of high priced lawyers who keep dragging this thing out by asking for mediation and then conveniently cancelling and postponing over and over again. If anyone out there can offer some legal advice that would help my situation it would be most appreciated. Thank you.