A condominium association’s completion of an alteration project does not moot a challenge to the special assessment funding the project as determined the day before yesterday by Florida’s Fourth District Court of Appeal in Smulders v. Thirty-Three Sixty Cd’m Ass’n, Inc., Case No. 4D17-1138 (Fla. 4th DCA, April 25, 2018).
The Condominium Association approved a $350,000.00 special assessment to maintain and renovate lobbies. Two unit owners sought injunctive and declaratory relief claiming that the Association violated the Declaration of Condominium. After the Association commenced the project the owners sought a temporary injunction which was denied. The owners in “a prudent act,” paid the assessment. By the time each of the parties’ summary judgment motions were heard, the project was completed and the owners of all the Condominium’s units having paid their share of the special assessment.
At the hearing on the parties’ summary judgment, the court questioned whether there was anything to enjoin noting that “it’s over.” The trial court granted the Association’s Motion for Summary Judgment.
Reversing, the appellate court stated that the mootness finding “is contrary to the system of self-government created by the Condominium Act. Section 718.303(1).”
Nothing is more central to condominium governance than the manner in which a board raises money from unit owners and then spends it. Given the glacial pace of litigation, a board would almost always be able to pass a special assessment, collect it, and spend it on a project before a challenge to the assessment came to trial. If the spending of an assessment always rendered moot a challenge to its legality, then the self-governance contemplated by the Condominium Act would be severely undermined; a board would have little check on its handling of money.
The owners’ claim for reimbursement of the assessment remained if a violation of the Declaration is proven, presumably as part of the declaratory judgment count. Further, if the owners prevail, the owners are entitled to the pro rata amount of assessments funding the litigation and their attorneys’ fees pursuant to §718.303(1) Fla. Stat. (2017).
The decision provides a practical reinforcement that there does not necessarily have to be a race to court before work is completed, at least as to monetary remedies. Presumably, the concept that completed work does not moot a challenge to the authority to undertake work would equally apply to a challenge by an association against an owner’s alteration. Interestingly, the appellate court outlined monetary remedies being available pointedly not disagreeing with the trial court’s determination that an injunction to reinstate the lobby before the work was inappropriate. When a case is moot, the opinion provides guidance on the method of disposition which should be a dismissal, not final judgment.
Concerning assessment payments, the appellate court provides support to two significant strategy issues. First, noting that payment of assessments while in the dispute is normally “prudent” to avoid an assessment lien foreclosure action. Second, that there is no Condominium Act provision allowing for the deposit of disputed funds in the court registry, unlike the provision for deposit of rents in the Landlord Tenant Act §83.60(2) Fla. Stat. (2017). (In this regard, the same lack of authority appears to apply to the Homeowners’ Association Act)
It is interesting to note that this opinion was issued almost ten years after an opinion by the same author in D & T Properties v. Marina Grande Association, 985 So.2d 43 Fla. 4th DCA (2008) in which Judge Gross’ opinion held in part that “… like electricity, internet access is becoming a necessity of modern life.” Id. at 50, rejecting a buyer’s challenge to a developer’s addition of internet service as part of a “multimedia” package was a material alteration or modification of an offering allowing a buyer to cancel a contract.
Michael J. Gelfand
Real Property, Probate and Trust Law Section of The Florida Bar
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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section
© 2018 Michael J. Gelfand
Michael J. Gelfand
Florida Bar Board Certified Real Estate Attorney
Florida Supreme Court Certified Mediator:
Civil Circuit Court & Civil County Court
Fellow, American College of Real Estate Attorneys