Covenant Enforcement | Rembaum's Association Roundup

June 30, 2022June 30, 2022

Violation Remedies: Self-Help vs. Injunction | Which to Use

Violation Remedies: Self Help vs. Injunction

Which to Use

Imagine this scenario: you are on the board of directors of your association. The association has repeatedly requested that an owner pressure wash their dirty roof to bring it into compliance with the community standards, but the owner refuses to do so. The association has already sent a number of demand letters and even levied a fine and perhaps a suspension of use rights, too, but the owner still will not comply. What is the association’s next step?

Is it time to file a lawsuit to compel compliance? Chapters 718 (governing condominiums), 719 (governing cooperatives), a 720 (governing homeowners associations), Florida Statutes, authorize the association to bring an action at law or in equity to enforce the provisions of the declaration against the owner.

Is it time for the association to use its “self-help” remedy? In fact, many declarations contain such “self-help” language, which authorizes the association to cure the violation on behalf of an owner and even, at times, assess the owner for the costs of doing so. These “self-help” provisions generally contain permissive language, meaning that the association may, but is not “obligated” to, cure the violation.

Assume that the association’s declaration contains both the permissive “self-help” remedy and the right to seek an injunction from the court that orders the owner to clean their roof or else be in contempt of court. Thus, it would appear the association has a decision to make: (i) go to court to seek the injunction; or (ii) enter onto the owner’s property, pressure clean the roof, and assess the costs to the owner. Not so fast! Recent case law from Florida’s Second District Court of Appeal affirmed a complication to what should be a simple decision, discussed in greater detail below.

In two cases decided 10 years apart, Florida’s Second District Court of Appeal decided that an association did not have the right to seek an injunction to compel an owner to comply with the declaration if the declaration provided the association the authority to engage in “self-help” to remedy the violation. Prior to a discussion of the cases, a brief explanation of legal and equitable remedies is necessary.

There is a general legal principle that, if a claimant has a remedy at law (e.g., the ability to recover money damages under a contract), then it lacks the legal basis to pursue a remedy in equity (e.g., an action for injunctive relief). In the association context, a legal remedy would be to exercise the “self-help” authority granted in the association’s declaration. An equitable remedy would be to bring an action seeking an injunction to compel an owner to take action to comply with the declaration (e.g., compelling the owner to pressure wash their roof). A court will typically only award an equitable remedy when a legal remedy (such as “self-help”) is unavailable, insufficient, or inadequate.

This distinction is first illustrated in Alorda v. Sutton Place Homeowners Association, Inc., 82 So. 3d 1077 (Fla. 2d DCA 2012). In Alorda, the owners failed to provide the association with proof of insurance coverage as required by the declaration. The association sent multiple demand letters to the owners, but they failed to comply. The declaration provided, in pertinent part, that “[t]he owner shall furnish proof of such insurance to the Association at the time of purchase of a lot and shall furnish proof of renewal of such insurance on each anniversary date. If the owner fails to provide such insurance the Association may obtain such insurance and shall assess the owner for the cost of the same in accordance with the provisions of this Declaration” (emphasis added). In accordance with the foregoing, the association had the option to purchase the insurance on behalf of the owners and assess them for the costs of same.

However, the association chose instead to file a complaint against the owners seeking the equitable remedy of injunctive relief, asking the court to enter a permanent mandatory injunction requiring the owners to obtain the required insurance coverage. The owners then filed a motion to dismiss the suit arguing that even though they had violated a provision of the declaration, the equitable remedy of an injunction is not available because the association had an adequate remedy at law. In other words, the owners argued that, because the association could have, pursuant to the declaration, undertaken the ”self-help” option by purchasing the required insurance and assessing it against the owners, they had an available legal remedy and, therefore, the equitable remedy sought (a mandatory injunction) was not available to the association. The court, citing to a different case, Shaw v. Tampa Electric Company, 949 So.2d 1006 (Fla. 2d DCA 2007), explained that a mandatory injunction is proper only where a clear right has been violated, irreparable harm has been threatened, and there is a lack of an adequate remedy at law. As the association had an adequate remedy at law (the authority to purchase the insurance on behalf of the owners), the third requirement was not met. Therefore, the court held that the association failed to state a cause of action and dismissed the case. (This case might be decided differently today as it appears the insurance marketplace will not permit an association to purchase insurance for a unit that it does not own, so the legal remedy presumed available to the association would be inadequate).

Similarly, in the recent case of Mauriello v. The Property Owners Association of Lake Parker Estates, Inc., Case No. 2D21-500 (Fla. 2d DCA 2022), Florida’s Second District Court of Appeal considered the award of attorneys’ fees after the dismissal of the association’s action for an injunction. Ultimately, the court held that the owners were the prevailing party as the association could not seek an injunction because the association had an adequate remedy at law. In Mauriello, the owners failed to maintain their lawn and landscaping in good condition as required by the declaration. As such, the association filed a complaint seeking a mandatory injunction ordering the owners to maintain the lawn and landscaping in a “neat condition.” The association’s declaration contained similar language to the declaration at issue in Alorda. The declaration provided that, if an owner failed to perform any maintenance required by the declaration, the association, after written notice, “may have such work performed, and the cost thereof shall be specifically assessed against such Lot which assessment shall be secured by the lien set forth in Section 9 of this Article VI” (emphasis added). In other words, the association had the permissive “self-help” authority pursuant to the declaration.

The facts of this case were complicated by the sale of the home in the middle of the suit. The new owners voluntarily brought the home into compliance with the declaration, and the case became moot. However, the parties continued to fight over who was entitled to prevailing party attorneys’ fees. The association argued it was entitled to prevailing party attorneys’ fees because the voluntary compliance was only obtained after the association was forced to commence legal action. The owners, citing Alorda, argued that they were entitled to prevailing party attorneys’ fees as the association’s complaint never stated a cause of action in the first place. They argued that the complaint should have been dismissed at the outset because the association sought an equitable remedy (mandatory injunction) when a legal remedy was available to the association (exercise of “self-help” authority).

Florida’s Second District Court of Appeal agreed with the owners that Alorda was controlling. The Court explained that, as in Alorda, “the association’s declaration gave it the option of remedying the alleged violation itself, assessing the owner for the cost, and if the owner failed to pay, placing a lien on the property and foreclosing if it remained unpaid.” As such, the association had an adequate remedy at law and could not seek the equitable remedy of an injunction, which was initially sought by the association. Because the mandatory injunction was not available to the association, the association’s complaint failed to state a proper cause of action and, thus, should have been dismissed by the trial court at the outset. Therefore, the association was not entitled to its sought-after prevailing party attorneys’ fee award, which is otherwise granted if a party comes into compliance after the lawsuit is served.

Sections 718.303 (as to condominiums), 719.303 (as to cooperatives), and 720.305 (as to homeowners associations), Florida Statutes, contain similar language that specifically authorizes the association to bring actions at law or in equity, or both, in the event an owner fails to comply with the governing documents of the association. However, neither the Court in Alorda nor the Court in Mauriello addressed the association’s statutory authority to bring an injunction against an owner who fails to comply with the requirements of the declaration, but rather found that the association must use the “self-help” remedy since it was available to cure the violation.

Notwithstanding the Alorda and Mauriello decisions rendered by Florida’s Second District Court of Appeal, past appellate court decisions from other appellate jurisdictions in Florida have permitted community associations to pursue claims for injunctive relief against violating owners so long as a violation of the restrictive covenant is alleged in the complaint. As such, the Alorda and Mauriello cases appear to be departures from the established principle. Additionally, as both decisions came from Florida’s Second District Court of Appeal, the decisions are certainly binding on those associations within the jurisdiction of the Second District, but there has been no indication that other districts will follow suit. However, there is risk that other appellate district courts may be persuaded by the holdings of Alorda and Mauriello.

As such, if your association’s declaration contains a “self-help” provision, and your association chooses to seek an injunction against an owner rather than pursue “self-help,” the board should definitely discuss the issue in greater detail with the association’s legal counsel prior to proceeding.

Reprinted with permission | This article written by Jeffrey A. Rembaum, Esq., BCS will/appears in the July 2022 edition of the Florida Community Association Journal.

October 2, 2020October 13, 2021

Political Events & Political Yard Signs | Prohibitions and Enforcement

Can a Florida community association adopt rules prohibiting use of the clubhouse for political events? Generally speaking, the board can adopt such a rule, but there are statutory exceptions which provide for the right of the members to peaceably assemble and which allow for the invitation of public officers and candidates for public office to speak in common areas. More specifically, §720.304(1), Fla. Stat. (i.e., the Homeowners Association Act), provides the following:

All common areas and recreational facilities serving any homeowners association shall be available to parcel owners in the homeowners association served thereby and their invited guests for the use intended for such common areas and recreational facilities. The entity or entities responsible for the operation of the common areas and recreational facilities may adopt reasonable rules and regulations pertaining to the use of such common areas and recreational facilities. No entity or entities shall unreasonably restrict any parcel owner’s right to peaceably assemble or right to invite public officers or candidates for public office to appear and speak in common areas and recreational facilities.

Similar provisions exist in both the Condominium and Cooperative Acts in §718.123 and §719.109, Fla. Stat., respectively.

With these statutory rights in mind, should an association member invite a candidate for political office to speak, the association must allow use of the clubhouse or other common area for the candidate to address the members. If members peaceably assemble and discuss today’s political events, that, too, seems to be a statutory protected right. However, if a political group requests use of the clubhouse to host an event in support of a candidate or political party, then it likely could be prohibited except that the candidate would still be permitted to speak and every association member would be allowed to attend, even those who may desire to protest.

If a rule adopted by the association prohibits the use of the clubhouse for political events and if legally challenged by an upset member, while it is difficult to predict the outcome, the court will need to balance the reasonableness of the board’s adopted rule as compared against the statutory protection. It should also be kept in mind that, if your association was created prior to the legislation protecting a political candidate’s right to speak, and the declaration does not contain a provision adopting the legislation through “Kaufman” type language (meaning it’s as if the legislation was adopted into the declaration), then such an association has an argument that such substantive legislation does not apply. (These rights came into existence on the following dates: October 1, 1977, for condominiums and cooperatives and April 1, 1992, for homeowners associations.)

Association rules governing and even completely prohibiting political signs are a different matter. Let’s face it, unless you share similar political views, your neighbor’s front yard sign supporting a favorite political candidate may be upsetting. Can a Florida association demand the sign’s removal? Well, not if the association has not yet adopted rules governing signage in the community.

A well-crafted and properly adopted board rule prohibiting all signs, as compared to just prohibiting political signs, is likely enforceable with this caveat. Section 720.304 of the Homeowners Association Act provides that any parcel owner may display a sign of reasonable size provided by a contractor for security services within 10 feet of any entrance to the home. In examining an association’s “no sign” rule, let us first address the argument heard every four years, “This is America! The First Amendment protects the right of all homeowners to display political signs.” Wishing this to be true will not help. In fact, the First Amendment concepts of freedom of speech and freedom of expression certainly apply to government settings. But, where the application of the United States Constitution First Amendment begins and ends as applied to Florida’s community associations is anything but clear. As such, the First Amendment could act as both a shield and a sword.

Community associations are not governmental; though admittedly they govern, they have no nexus to local or federal government. In 1987, the Florida Supreme Court held, in Quail Creek POA v. Hunter, 538 So. 2d 1288 (Fla. 2d DCA 1989), that neither a homeowners association’s recording of its covenants in the public records nor the enforcement of its covenants in state court created a sufficient nexus to evidence “state action” such that the First and Fourteenth Amendment would apply. With that in mind, any homeowner would be hard pressed to argue otherwise. But, should an association adopt a rule prohibiting one type of sign but allowing other types of signs, then notwithstanding the arguments that the First Amendment does not apply to community associations, this creates an argument that the association is regulating the type and manner of speech and thus, might, inadvertently be leaving room for a First Amendment type argument to be used against the association.

Courts have long since held that owners give up certain liberties when living in a community association. In 2002, the Florida Supreme Court held, in Woodside Village v. Jahren, 806 So. 2d 452 (Fla. 2002), that certain individual rights must be compromised when one chooses to live in a condominium association.

With that as our backdrop, any “no-sign” rule should be artfully drafted to help ensure enforceability. There is no margin for error. The dispositive court cases regarding rule enforceability make clear that a sign restriction must be “clear and unambiguous” to be enforceable against an owner. Remember, a basic principal of contract interpretation is that ambiguous terms are held against the drafting party. As a practical matter, in plain English this means that in the event the rule is even slightly confusing, the homeowner will receive the benefit of the doubt. Also, any covenant or rule must be applied fairly to avoid selective enforcement rebuttals; so, if Dorothy the Democrat is told to remove her lawn sign, so, too, must Roger the Republican be similarly told. Remember, too, that as a general rule, courts favor covenants adopted by the membership over rules adopted by the board; meaning, the former serves to increase the association’s chances of prevailing.

That rules prohibiting signs must be artfully drafted was a point made very clear to the homeowners association in Shields v. Andros Isle Property Owners Association, Inc., 872 So. 2d 1003 (Fla. 4th DCA 2004), in which the Fourth District Court of Appeal of Florida decided in favor of the homeowner who displayed a sign in her car window despite the association’s sign prohibition. The association’s rules prohibited the display of signs “on any lot”, except a “for sale” sign of a certain size, and prohibited signs on a vehicle. The Court, using the definition of a “lot” in the association’s declaration, interpreted these rules to mean that no sign, except a “for sale” sign, may be on the land or on the exterior of a vehicle. However, there was no prohibition for signs displayed from within a vehicle. When ambiguity exists, courts will rule in favor of the non-drafting party. In this instance the association is deemed the drafter of the rule, so therefore the ambiguity was held against the association, which worked to the owner’s benefit.

Consider, too, election season is short. By the time a lawsuit for an injunction to enforce the “no-sign” covenant is fully resolved, it might be time to consider the next presidential candidate! Please be sure to consult with your association’s attorney when considering new or modifying existing rules and regulations.

(Reprinted with permission from the October 2020 edition of the Florida Community Association Journal.)

May 26, 2012

Use Right Suspensions and Fining, and Protesting Board Action Through Non-Payment of Assessments

Not too long ago, both condominium and homeowners’ associations were provided legislative gift. Regardless of whether or not your community’s declaration provides for use right and voting right suspensions, and fining provisions, the Florida Legislature provided for them for you. They even provided the procedural mechanism to enact them, too. In so far as a member’s monetary delinquent obligation that is greater than 90 days delinquent is concerned, the board of directors has the power to suspend use rights of common areas and common elements, suspend the delinquent member’s voting rights, and can even levy fines. Comparatively, as it relates to all other types of violations, a committee of members not related to or living with board members must initially decide to enact a suspension or fine and recommend that board adopt the committee’s findings before they can be levied against the offending member. If the board does not agree, the fine or use right suspension cannot be enacted. While in the context of delinquent monetary obligations, the board makes its decisions at a properly noticed board meeting, which requires 48 hours notice to the community of all items on the agenda, the “covenant enforcement committee” is required to provide the offending member at least 14 days notice and an opportunity for hearing prior to their meeting.

At times I am asked, “how can that be? Can the legislature really just overwrite our governing documents like that?” Well, yes it can… (sort of). The answer depends on whether or not the issue under consideration is a “substantive right” as compared to a “procedural” matter. As often discussed in this column, the declaration of covenants is, at its essence, a contract between the members and their association. While the legislature cannot impair existing contractual rights, it can create new procedures which are binding upon their effective date.

To add some clarity, let’s more closely examine a first mortgagee’s assessment liability after foreclosing its mortgage. As you are undoubtedly aware, for the most part, the successful 1st mortgagee, upon taking title to a unit as a result of their own mortgage foreclosure, is responsible to pay the lesser of 1% of the initial mortgage or 12 months back assessments. More specifically, in the HOA context, the 1st mortgagee safe harbor only applies to mortgages entered into after the effective date of the legislation, that being July 1, 2008. Therefore, if a mortgage was entered into prior to July 1, 2008 the provisions in the declaration control. The reason is because the legislature cannot impair existing contractual rights. Because the lender made its loan in detrimental reliance upon the terms of the declaration, the legislature could not interfere with the rights created prior to its legislation. Comparatively, in examining use right and voting suspensions along with fines, the Florida Legislature’s recent adoption of new laws in this regard is of a “procedural” nature. Therefore, all condominium and homeowners’ associations must follow the procedures the Florida Legislature has created to enact use right and voting suspensions and the levy of fines, too.

In 2011, in “Tahiti Beach HOA v. Pfeffer”, the 3rd DCA affirmed the trial court’s partial summary judgment in favor of homeowners who were contesting their association’s foreclosure action filed against them based on what tuned out to be an improperly levied fine for a violation of the governing documents. The association had adopted its fining rules in the early 1990s. In explaining their rationale for supporting the trial court’s decision, the 3rd DCA held that the fining provisions enacted in 1995 by the Florida Legislature were not followed by the association. Procedural changes in the law apply to all associations retroactively because they do not impair existing contractual rights. In other words, the association failed to follow the then existing procedural laws when it enacted the fine which formed the basis of the association’s foreclosure. The moral of the story is don’t get caught in the trap of thinking that just because your community’s declaration provides a different use right and voting suspension and fining regime that you can ignore Florida law. If you do, you’ll suffer the same consequences as the Tahiti Beach HOA.

On a different note, it’s hard to fathom that there are still some association members who believe they can withhold payment of assessments as a form of silent protest taken against board action. Do not under any circumstances do that! Rather, correct way handle the situation is to pay any assessments due. Then, you can separately challenge the board’s action that led to the assessment. In “Coral Way v. 21/22 Condominium Association”, the 3d DCA held that unit owners who argue that their board breached their fiduciary duty could not refuse to pay assessments because of the alleged unauthorized acts. The Court held that a member’s duty to pay assessments is conditioned solely upon unit ownership and whether the assessment complies with the governing documents. The remedy for an upset owner must be brought as an independent claim. Protesting board action through non-payment of assessments has been repeatedly rebuked by the courts.