Condo Owner Blocks Association from Collecting Assessment
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.