Live in a home governed by a condominium, co-op orhomeowner's association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers.
Question: Our condominium had an owner who was seriously delinquent on their dues. In addition, that same owner sued our association in a matter unrelated to the aforementioned delinquency — an arbitration with the state's Department of Business and Professional Regulation. The association lost the arbitration and, in lieu of appealing, the board elected to settle with the owner. As part of the settlement, the board applied a full credit to the unit owner's delinquent account, bringing it down to a zero balance.
Is the board legally allowed to commingle
two totally unrelated matters and credit a dues account that is delinquent in order to settle a separate dispute? That doesn’t seem right. Signed, J.T.
Dear J.T.,
It’s not uncommon to combine multiple unrelated legal disputes into a global settlement. However, whether the way it was done is legal may depend on how the settlement agreement was written, and whether the owner was entitled to damages because of the arbitration victory.
The primary issue here is a limitation found in the Condominium Act. The Act, atSection 718.116, Fla. Stat., provides that “a unit owner may not be excused from payment of the unit owner’s share of common expenses unless all other unit owners are likewise proportionately excluded from payment…”. So, the risk here is that the zeroing of the debt is viewed as that owner being excused from payment of those fees, entitling all the other unit owners to the same exclusion.
Now, let’s assume that the arbitration was over an issue that caused actual monetary damage to the unit owner (including the recovery of attorney fees if they were represented by counsel).
If the amounts owed to the owner were equal to or greater than the amounts that owner owed to the association, I would not view the zeroing of their account as excusing that owner from paying the assessment. Instead, the association owed the owner money, and the owner owed the association money, and in the end, they zeroed out. It’s the same outcome as if the association paid the owner what it owed them, and then the owner paid the delinquent assessments directly back to the association. This just cuts out a step.
But if the dispute was not the kind of dispute where the owner was entitled to damages, then I’d be concerned. Just because the owner won an arbitration does not mean that they were automatically entitled to money.
Question: If an HOA has rules and regulations that indicate the board may fine someone for an infraction, but it fails to do so, what is then considered enforcement? Signed, A.G.
Dear A.G.,
A community association has several available tools to enforce its governing documents and rules. The first, and simplest, is to notify the violator of the infraction and see if they correct it. In a lot of cases people are ignorant of the rules, or they made an accidental mistake. I’d say that in at least 50% of cases people correct violations on a simple phone call from management, without any further action. After that, a more formal letter from the association or even a demand from the lawyer may do the trick. But ultimately, most disagreements can be solved before any significant action is taken.
The next option is for the board to promulgate fines against the violator, or to suspend their right to use common property. Suspension of use rights can be particularly effective when an owner is violating the governing documents by renting out their unit as a vacation rental—you can imagine that travelers won’t be happy to show up to a condominium and be told that they are not allowed to use the pool or exercise room. Both fines and suspensions are subject to statutory procedures that vary slightly between different types of associations, but in all cases require that the person to be fined or suspended be provided with an opportunity for a hearing in front of an independent committee that has a right to approve or reject the penalty.
Finally, and regardless of whether it has pursued the first two options, an association can sue the violator and ask a court to prohibit the violation (or future violations). This often requires sending a pre-suit demand letter and either sending the matter to arbitration or sending a mandatory demand for pre-suit mediation. But, once that process is complete, the association can bring a lawsuit and, if it prevails in court, it’s entitled to recover its costs and a significant portion of its attorney fees.
So overall there are many ways for an association to enforce its documents and rules. Of course, some do none of this at all; and while you could theoretically ask a court to force the association to take enforcement action, it would make a lot more sense to use the political process to replace the board with members who are more dedicated to your rules.
Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of "New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living." Email your questions to condocolumn@gmail.com. Please be sure to include your location.
This article originally appeared on Palm Beach Post: Can a condo board wipe away a neighbor's debt to settle a lawsuit?
