Case Study: Was This Association Not Collecting Assessments for Combined Units?
PeytonBolin's Nataly Gutierrez successfully represented a condo association in a case regarding combined units and owner assessments. Learn how the governing documents played a major role in the owners dropping their charges.
A condo association faced a lawsuit from unit owners who claimed they were improperly assessed.
Other owners had combined multiple units into one, and were only assessed for one unit instead of the original multiple units.
PeytonBolin argued that the Florida statute and governing documents did not require the association to assess owners for the multiple units.
Condominium associations issue assessments and special assessments to cover the costs of association-related services the owners receive. A key component of assessments is how they're outlined in the governing documents as pro rata shares in addition to state law.
PeytonBolin's Nataly Gutierrez recently represented a condominium association after a lawsuit was brought against it by several unit owners. These owners claimed the association was improperly assessing them, alleging some owners were allowed to combine multiple units into a single unit and were only assessed for one unit instead of fees for the original multiple units.
Improper assessments is a common issue owners bring up, but the association was within its rights to assess the combined units as one unit.
This case study outlines how this issue started, how the firm created a case for the condo association, and what led to the final outcome.
The history of the assessment problem
The core issue in the lawsuit was whether the association should charge multiple assessments for multiple units that had been combined into one. Upset unit owners thought it unfair that owners who combined multiple units were only assessed for the one new unit, and not all the original units.
The issue was largely financial for the owners. They claimed the association's assessment practice led to higher overall assessments for them, since assessments were divided among owners, and the combination of units led to fewer units and higher fees for everyone. The owners involved in the lawsuit did not have combined units.
Although the owners of the newly combined units amended the declaration so multiple units legally became one, the other owners wanted the association to treat those initially separate units as if they were still separate. The owners of the combined units had to pay for all units they joined, and argued that the governing documents for the association didn't allow such a combination of assessments.
Researching and litigating the case
PeytonBolin first conducted research to understand the issue and create a case for the association. This involved researching the relevant Florida statute and the association's Declaration of Condominium, which governs the association and its owners. The attorneys reviewed the governing documents to look for provisions regarding combining units, making amendments to the declaration and assessing fees based on existing units. The team also studied previous cases, relevant case law, and legal opinions on relevant cases.
After all of this research, the firm crafted an argument that, under the Florida statute and the association's declaration documents, the Declaration of Condominium legally creates the individual units. If an owner follows the correct procedure to amend the declaration to combine multiple units into one unit, only the unit now reflected in the amended declaration exists. So, the association can assess fees based on that amendment and the updated number of units. This is exactly what the association had done that caused the issue.
Additionally, there were no provisions in the governing documents for the condo association that stipulated the association must treat combined units as separate units regarding assessments, which further strengthened the association's case.
After the research process, PeytonBolin attorneys began the legal process: responding to complaints, conducting discovery and gathering evidence, creating depositions and testimonies, creating motions for summary judgment, and navigating hearings, negotiations, and mediation. After significant litigation, the owners ended up dismissing their claim.
Lessons learned for condo owners and associations
The lawsuit filed by the unit owners exemplifies just how important it is for the board to properly amend the Declaration of Condominium as indicated by the relevant legal requirements. It's also important to fully understand Florida's statutes related to condo associations and their governing documents.
This case could have had a much different outcome if the Declaration of Condominium included language regarding combined units and how they're assessed. It's crucial to talk to an attorney who can thoroughly review the governing documents because document language matters.
Talk to an expert attorney at PeytonBolin if your association is facing issues with unit owners or if you have questions about your governing documents. Our team will help you understand your rights, update your contract language, and find the best way forward to resolve the matter.
Contact us to set up a consultation today.