Community Update

Association Records That Are Not Available for Inspection

By: Florence King

Most people who live in Florida live in some form of a residential development that is typically managed by a community association that governs, maintains, and administers the development. In Florida, community associations are regulated by Florida Statutes, which have increasingly emphasized transparency in recent years, particularly with regard to records that are made and maintained by community associations.

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What to Expect – Pre-Suit Mediation Edition

By: Brandon R. McDowell

Both Chapter 718 and Chapter 720, Florida Statutes, encourage, recommend and in some situations even require pre-suit mediation. But what is mediation? Legally speaking, mediation is a type of Alternative Dispute Resolution (a/k/a ADR). Practically speaking, mediation is a supervised and confidential settlement negotiation. Pre-suit mediation is a process by which parties attempt to resolve disputes without the need for litigation. But what does that mean and what should the Board expect?

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A New Framework for Derivative Lawsuits Against Community Association Boards

By: Bryony G. Swift

Florida House Bill 797 (2026) creates a comprehensive statutory framework governing derivative actions under newly created Sections 617.0741 through 617.0747 of the Florida Nonprofit Corporations Act. Because most Florida condominium, cooperative, and homeowners’ associations are organized as nonprofit corporations under Chapter 617, these provisions will have direct consequences for community associations throughout the state.

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Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Cos., 110 So.3d 399 (Fla. 2013)

By: Joseph Markovich

Whether Florida’s economic loss rule barred a condominium association’s tort claims against its insurance broker, where the parties were in contractual privity and the association sought solely economic damages, is the issue addressed by THIS CASE. The economic loss rule is a judicially created doctrine that historically limited tort recovery for certain economic losses, particularly where contract or warranty principles supplied the appropriate remedy. Tiara Condominium Association (“Tiara”) retained Marsh & McLennan (“Marsh”) to procure condominium insurance coverage. After Hurricanes Frances and Jeanne damaged the condominium in 2004, Tiara alleged that it undertook more expensive remediation in reliance on Marsh’s assurance that its nearly $50 million windstorm policy limit applied per occurrence rather than in the aggregate. When Citizens Property Insurance Corporation (“Citizens”) took the contrary position, Tiara settled its coverage claim for less than its remediation cost and pursued, among other claims, negligence and breach of fiduciary duty against Marsh.

Before THIS CASE, Florida’s economic loss rule had two principal applications. The rule originated in products liability, where it generally prevented recovery in tort for purely economic losses when a defective product damaged only itself. Over time, however, Florida courts also applied a contractual-privity version of the rule. Under that version, a party to a contract could be barred from seeking tort damages for economic loss arising from the contractual relationship, on the rationale that the parties’ agreement had allocated the relevant risks and remedies. The rule’s expansion beyond products liability – and the resulting uncertainty over its proper application – provided the context for the question certified in THIS CASE.

The Florida Supreme Court answered the certified question in the negative, holding that the economic loss rule applies only in products liability case and receding from prior decisions to the extent they applied the rule elsewhere. The Court concluded that the contractual-privity version of the rule no longer barred Tiara’s negligence and fiduciary-duty claims merely because Tiara and Marsh had a contract and Tiara sought economic losses. The Eleventh Circuit consequently vacated summary judgment on those claims and remanded them for reconsideration.

The lesson from THIS CASE is that contractual privity and economic damages, standing alone, do not invoke the economic loss rule outside products liability. Florida courts, however, have since questioned the application and effects of the rule in particular circumstances, and the scope of the independent-tort requirement remains unsettled. Justice Pariente explained in concurrence that a plaintiff must still establish a tort independent of the alleged breach of contract, and subsequent decisions have treated the boundaries of that requirement as developing. Because the viability of a tort claim may depend on the parties’ agreement, the source of the alleged duty, and the specific conduct and damages at issue, associations and other parties should obtain qualified legal counsel before asserting or evaluating claims affected by THIS CASE.