The heavy cost of condominiums failing to follow their governing documents

Community associations such as homeowners and condominium associations are endowed with various powers under their by-laws, declarations, and Florida Statutes to compel compliance by the unit owners with their governing rules and regulations. However, the reverse is also true. Under Chapter 718 of the Florida Statutes, unit owners have the ability to force condominium associations to adhere to their contractual or statutory obligations, but it is fairly uncommon for unit owners to exercise that right. The recent case of Amelio v. Marilyn Pines Unit II Condominium Association, Inc., 40 Fla. L. Weekly D1612 (Fla. 2d DCA July 15, 2015) is a stark warning to association boards about the adverse effects of failing to promptly address water intrusion issues or otherwise fulfill their contractual and statutory obligations.

MANDATORY INJUNCTIONS IN GENERAL

In the Amelio case, the unit owners filed a motion for a mandatory injunction against the condominium association arising out of the association’s alleged failure to properly maintain the concrete slab in the unit. There are two types of injunctions: (1) prohibitory and (2) mandatory. While injunctions in general are described by the courts as extraordinary forms of relief, prohibitory injunctions are much more common and require a party to cease engaging in certain defined types of conduct. Conversely, a mandatory injunction is an order from the court requiring a party to perform certain duties or obligations usually pursuant to a contract or statute.

In the Amelio case, the court noted three essential elements to obtain a mandatory injunction: (1) demonstrate that a clear legal right has been violated, (2) establish that irreparable harm is threatened, and (3) show that there is no adequate remedy at law. The Amelio court overruled the trial court and found that all three elements for a mandatory injunction had been established by the unit owners.

SUMMARY OF THE FACTS

The Amelios owned a ground floor condominium unit that had experienced excessive moisture dating back to 2010. After the Amelios reported the issue, the association retained a contractor to investigate. In December 2010, the contractor performed tests and concluded that the moisture emanated from the concrete floor slab. About three months later, the association retained an engineering firm to inspect the concrete slab, which recommended the installation of both a moisture barrier on the slab and an exterior drainage system.

Shortly thereafter, the association’s own attorney sent a letter to the board of directors advising that the association was responsible for repairing the concrete slab. Approximately eight months later in December 2011, the association retained a different engineering firm to draw up plans for an exterior drainage system, which was not installed until nearly a year later in early 2013.

The association then rehired the original engineering firm to re-inspect the unit and slab. In a report dated April 2013, the engineering firm again recommended the installation of a moisture barrier. Eventually, a company retained by the association applied a moisture barrier to the slab, but it was not installed in accordance with the engineering firm’s specifications. The Amelios contended that the barrier was inadequate to resolve the moisture intrusion, which continued to cause their unit to be uninhabitable. Accordingly, the Amelios moved for a mandatory injunction to compel the association to repair the slab.

THE COURT’S APPLICATION OF THE FACTS TO THE ELEMENTS FOR MANDATORY INJUNCTION

On appeal, the Second DCA began its analysis by noting that section 718.303(1) of the Florida Statutes authorized injunctive relief as a remedy for a unit owner against the condominium association arising out of the latter’s failure to perform obligations under the governing documents.

Turning to the three elements of a mandatory injunction, the court found that the Amelios had established a violation by the association of a clear legal right because the declaration of condominium required the association to maintain, repair, and replace the floor slabs. The declaration also prohibited the Amelios from making any “changes or alterations” to the concrete slabs without the approval of the other unit owners in the building and the association.

The court also found that the Amelios had satisfied the irreparable harm requirement for mandatory injunctions because the association violated both Chapter 718 as well as its governing documents by failing to promptly and successfully maintain and repair the slab.

As for the final element, the existence of an adequate remedy at law (e.g. monetary damages) will preclude the entry of a mandatory injunction. The Second DCA overruled the trial court’s finding that the Amelios had an adequate remedy at law that precluded the imposition of a mandatory injunction. Although the record was devoid of any specific findings on this issue, the Second DCA presumed that the trial court found the harm sustained by the Amelios could be remedied with money damages; however, the Second DCA found that the evidence did not support this finding. Most notably, the exclusive right and obligation to perform the repairs to the slab rested with the association, and until such repairs had been made, moisture would continue to seep into the unit causing damages and making it uninhabitable.

CONCLUSION

Condominium associations can learn a number of lessons from the Amelio case. The tropical climate in Florida lends itself to water intrusion and mold claims. Associations must investigate and address such claims seriously and swiftly. Although the Amelio opinion does not shed light on the type or extent of damage sustained to the unit and its contents, it is not difficult to imagine significant damage over the course of five years of failed attempts to address the issue. Ultimately, failure to promptly address water intrusion issues may lead to further damage to both the common elements and the contents of the units, the possibility of personal injury claims by the unit owners, increased litigation expenses (including the possibility of an adverse judgment for prevailing party attorneys’ fees), higher insurance premiums, and general discontent within the community.

Failure to adhere to the advice of attorneys and contractors without justification can be a recipe for disaster for an association in subsequent litigation. In the Amelio case, the association’s own attorney warned the board of directors of the association’s obligation to repair the Amelios’ slab, but four years later, the association had yet to fulfill its contractual obligations. Additionally, the engineering firm originally retained by the association recommended the installation of a moisture barrier, but the association did not act upon such advice until more than two years later. That is not to say an association must blindly follow the advice of its attorneys and contractors. On the contrary, under certain circumstances it may be advisable to retain another expert or professional for a second opinion before choosing a course of action. Where a board of directors deviates from the opinion, advice, or recommendation of an expert or professional, it is advisable to keep a written record of the rationale supporting such decisions.

Members of the board of directors must familiarize themselves with the association’s governing documents. Having a general understanding of the division of responsibility between the unit owners and the association to maintain, repair, and replace various aspects of property within the community is helpful to establish a well-run community and to stave off unnecessary, costly litigation. Failure of an association to fulfill its obligations under the declaration may result in litigation with the unit owners, and as seen in the Amelio case, even the imposition of a mandatory injunction compelling the association to perform its obligations.