OTHER LAWSUIT ISSUES

We all know that the condo and HOA statutes contain differences that often times don’t make any sense.  Let’s review two more instances of there being no real justification for differences among the statutes.

In an HOA, before the Board files suit, there is a statute they need to consider:

720.303(1): Before commencing litigation against any party in the name of the association involving amounts in controversy in excess of $100,000, the association must obtain the affirmative approval of a majority of the voting interests at a meeting of the membership at which a quorum has been attained.

So, let’s say there is a lawsuit contemplated against the developer involving amounts in excess of $100,000.00.  The statute clearly states that a vote of the owners is required before commencing litigation.

 

Interestingly enough, there is no similar provision in the condominium statute.  Why?  Why does the board have the power to file suit in one type of community but not in another type of community?

In a condominium, after a lawsuit is filed against an association, the association may have the following responsibility:

718.119(3) In any legal action in which the association may be exposed to liability in excess of insurance coverage protecting it and the unit owners, the association shall give notice of the exposure within a reasonable time to all unit owners, and they shall have the right to intervene and defend.

As I’m sure you guessed by now, there is no similar provision in the HOA statute.  Why do owners in a condo deserve to be told there may not be enough insurance, but HOA owners don’t get the same courtesy?

Finally, 718.501 regarding condominiums states:

(2)(a) Each condominium association which operates more than two units shall pay to the division an annual fee in the amount of $4 for each residential unit in condominiums operated by the association. If the fee is not paid by March 1, the association shall be assessed a penalty of 10 percent of the amount due, and the association will not have standing to maintain or defend any action in the courts of this state until the amount due, plus any penalty, is paid.

Because HOAs are not regulated by the DBPR, HOAs are under no obligation to pay a $4.00 per unit fee.  Condos that don’t however, are barred from the courthouse unless they do.

It’s like the more you dig, the more you see differences in condominium and HOA law that simply cannot be explained.  I’m starting to think that it may be time for one “community association” statute rather than the often times silly differences that currently exist between the various community association statutes.  What are your thoughts?

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