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Article Courtesy of
Bradenton Herold
By Evonne Andris
Published August 21, 2022
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Let’s face it: Condominium associations and HOAs have a fairly ignominious
reputation as a source of strife.
Even the most well-run communities that do an excellent job of achieving and
providing many of the ideals of communal living can experience significant
conflicts over their rules, policies and decisions. Given the complex nature of
managing shared common spaces and amenities, enforcing rules and restrictions,
setting annual budgets, collecting fees, and overseeing vendor contracts, there
are ample grounds for potential conflicts.
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The best boards of
directors are extremely cognizant of the potential for
disagreements that simply comes with the territory of
managing community associations. They understand that they
are governing over the homes of their neighboring owners,
and those residences typically represent many of the owners’
largest and most personal investments.
In such an environment where emotions can run high, boards
of directors and the owners they represent should always
strive to let cooler heads prevail. While in certain
situations litigation is a necessary tool to assist in the
governance of a community, it is a tool that should be used
with the understanding that escalating conflicts into
litigation is almost always detrimental for both sides in
association disputes, including those who eventually prevail
in the matter.
Litigation is a disruptor of community harmony, and it could
lead to very public squabbles that often make the local
news. Such coverage can have long-term negative impacts for
communities with their indefinite online lifespan via
internet searches under a community’s name, making them
potentially detrimental for property values.
Real estate brokers can also become keenly aware of
communities that are rife with conflicts, and they will
steer their clients elsewhere. Some lenders will also
inquire about pending litigation in their loan pre-approval
questionnaires, and they may become reluctant to approve
mortgages for prospective buyers in communities involved in
potentially significant lawsuits, or in those that regularly
attempt to enforce their rules, policies and decisions
through litigation as opposed to other forms of dispute
resolution. |
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“While in certain situations litigation is a
necessary tool to assist in the governance of a community, it is a
tool that should be used with the understanding that escalating
conflicts into litigation is almost always detrimental for both
sides in association disputes, including those who eventually
prevail in the matter.”
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Indeed, the toll suits can take on communities can easily snowball and
become very severe. Such litigation can be very taxing on associations’
finances, and it can occupy a great deal of directors’ attention and perhaps
even cause some good directors to discontinue their board service to the
detriment of the community. Many associations have difficulty filling their
board seats with effective and devoted directors, so early resignations and
retirements of good directors can really set communities back.
In addition, due to the sensitive and confidential nature of some lawsuits,
the details of a case and a community’s legal tactics may not be able to be
disclosed and discussed during the open forum of the regular meetings. The
secretive nature of some cases can create logistical nightmares for
directors and property managers, and the likelihood of a lawsuit stoking the
community rumor mill will almost certainly be high.
For unit owners who sue their association, they should do so with the
understanding that they are ultimately suing themselves and their fellow
unit owners as shareholders of the association. If they prevail and the
damages are not completely covered by the association’s insurance, the costs
will be borne by all the owners. They can also do significant and lasting
damage to their own property value as well as those of their neighbors, and
they are often shocked to learn that they could be on the hook for the
association’s legal costs if they do not prevail with their suit.
For many types of the most common condominium association disputes, Florida
law requires that they first be submitted for arbitration before the
Division of Condominiums under the state’s Department of Business and
Professional Regulation. This is almost always the most efficient mechanism
for the resolution of such clashes, and both sides would usually be very
well advised to let the matter end there.
Most association attorneys typically counsel their clients to resolve the
vast majority of their disputes without resorting to litigation. By heeding
such advice and turning to the state-sponsored proceedings, or other forms
of dispute resolution such as mediations for HOAs, as the final arbiter for
most association cases, directors and unit owners can avoid the potentially
significant risks, costs and disruptions that are inherent to litigation.
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