Home Owners Association and Condo Association

In Florida, Condominium Associations are governed under Chapter 718 Florida Statutes and Homeowner Associations are governed by Chapter 720. Specifically, the statutes require parties to be advised of their rights, including a preliminary non-binding arbitration. However, parties may voluntarily mediate their dispute. Often times, cases may be settled at mediation or shortly thereafter because the cost of trial is too expensive for all parties involved.

HOA/Condo claims may involve allegations of Malfeasance of Property Managers, breach of contract, breach of fiduciary duty, violation of the bylaws or master deed, violations of the Declaration as well as general principals of negligence and premises liability for dangerous conditions. Claims may also include allegations of wrongful termination, discrimination or workplace harassment and retaliation. We have a dedicated team that focuses on each of these specialty issues.

Florida Statutes, Chapters 718 and 720 additionally provide procedures and requirements for construction defect litigation. The chapters set forth specific requirements prior to an association seeking redress for construction defects against developers, design professionals, general contractors and contractors.

“Breach Of Fiduciary Duty to the Homeowners

There are numerous examples of an Association breaching its fiduciary duty to its members, such as a property manager failing to screen vendors properly or when Association funds are lost and/or misappropriated by the failure of the Property manager to present good choices to the board or if penalties are assessed due to some failure of the manager.

A Property manager should hold the proper license and be educated in the relevant statutes to avoid any financial misdeeds that might occur in that type of setting. Some property management companies have an assistant onsite, who is less educated and not licensed and consequently makes errors. Board members rely on the knowledge, experience and judgment of their property manager when making decisions. Board members also have a fiduciary duty to its members to abide by the Statutes and the governing declarations, bylaws and amendments of their association.

Malfeasance of Property Managers

Suits may arise from a conflict of interest. This may occur when property managers hire companies that they own and do not properly present competing bids for the business of the complex. Licensed managers have to disclose to the board their ownership interest in any vendor that they may recommend. Vendors may allege paying “kickbacks” to the property manager to keep their contracts. In this situation, boards need to produce detailed board meeting minutes to show board’s actions, board’s approval of all vendors, BOD consent to the vendor owned by the property manager. If disclosure occurred, the board meeting minutes will need to support that disclosure. Kickback allegations are extremely difficult to defend. However, the vendors who receive the kickbacks will frequently refuse to testify, making it extremely difficult for Plaintiffs to prove kickbacks occurred.

Defamation – Personality Conflicts.

Personality conflicts between board members and unit owners may lead to clashes that can form the basis of lawsuits. Board members may become so enamored of their position and their title as Board President that they believe that the Rules and By Laws of the HOA do not really apply to them. Often they will build a board with members who vote directly with them without any questions or concerns. Often one board will be voted out en banc and a new board will be elected that has an “agenda”. Personalities are at play as the old board becomes insulted or offended by the campaign materials of the new board members. Defamation claims can run rampant, supported by campaign emails, campaign materials and statements from vendors and/or owners who dislike the new board or the old board.

Negligence

FL Stat. § 718.3025 requires written contracts re: maintenance or management of a condo or property serving the unit owners (this may apply to common areas). The claims involve allegations of negligence of the HOA to property maintain the common areas. Claims may arise from failure to maintain the common parks, non-functioning equipment at the gym, plumbing problems and drainage issues, and failure to maintain a community pool, and/or fencing surrounding the pool. Negligence may give rise to slip and falls, personal injury or even wrongful death claims. We have specialized teams that handle personal injury and catastrophic claims resulting from allegations of negligence.

Breach of Contract

Unit owners/tenants and guests have to comply with the declaration of restrictive covenants. Owners are highly charged people pursuing their most cherished asset: their home and rights to it. Claims may arise when homeowners attempting to make improvements on their property breach rules that specifically prohibited the specific improvements. The problem may stem from either a formal dispute between two private homeowners or a homeowner and their board telling the owner he/she cannot continue to perform a certain act, e.g., paint their home a certain color or display objects on the premises.

Construction Defect Litigation

Associations may be named in a suit for allegations against general contractor for construction defect claims, damages, losses and expenses arising out of or resulting from the performance or nonperformance of the subcontractor’s work. Similarly, Associations can bring lawsuits against developers, architects, designers, general contractors, subcontractors and suppliers involved in construction of the property. Specific pre-suit requirements are detailed in the Statutes for both homeowner associations and condominium associations. Our firm has a dedicated construction defect team that has defended multi-million dollar defect allegations. Our firm has a litany of experts ready to assist those defendants named by an association for construction defects.

Dangerous Conditions

Associations have a non-delegable duty to maintain their common areas in a safe condition. Risks can range from drownings, criminal attacks, slip and falls, public nuisance, animal liability, etc. Our teams are very adept at minimizing risk and minimizing exposure on behalf of associations through risk transfer.

For assistance, Contact Daniel Santaniello.

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