Live in a home governed by a condominium, co-op or homeowner’s association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers.
Question: Three months ago my relative had minor work performed in her condominium. As the workmen left, they caused damage to the common area walls. My relative notified the workmen and their insurance company shortly afterwards. There are existing negotiations occurring between the workmen’s insurance company and the condominium to pay for the damages.
Presently, she is selling the unit and the condominium association will not approve the new buyer until my relative pays the damage amount, and they will not wait for the insurance company to pay (if they pay at all). The association will not even allow the damage amount to be placed in escrow so the sale may occur.
Is there a Florida statute that prohibits the association from preventing the sale by basing approval on payment of the damage amount? Also, is there a Florida statute requiring the association to approve a buyer within a certain time frame and if they don’t they waive that right? Signed, J.P.
Dear J.P.,
This is not an issue dealt with in the statute, and everything related to a condominium’s approval authority would be found in the declaration of condominium. You should read that first, because I find many condominiums that purport to have the right to approve unit sales when in fact there is no such power granted by their documents.
Let’s assume that the declaration of condominium (usually in a section labeled “Maintenance of Community Interests”) states that the board of directors must approve all sales. What that language will typically provide is that, if the association wants to say “no,” they must provide a substitute purchaser (either themselves, or someone that is acceptable to them) — this is called a right of first refusal. There’s an appellate case stating that a right to approve sales is contrary to public policy, and unenforceable, if it does not also contain a mandatory obligation to substitute a purchaser of the condominium’s choosing. So, technically speaking, the association likely doesn’t have the right to just bar the sale completely.
Even though that’s the technical answer, as a practical matter, there’s no easy solution to this dispute.
For one thing, if the association has approval authority but refuses to grant that approval, even if the governing documents don’t give them that right, no title company is going to sign off on the sale. So, your relative might have a strong lawsuit against the association, but it would take years to resolve — not to mention them having to spend far more than the cost of the damage in the process to pursue the claim.
Further, the Condominium Act provides that a Unit Owner is responsible for any damage caused to the condominium property by their invitee’s negligent or intentional act (an “invitee” is a person who you invite onto the property). Any amounts that aren’t recovered from insurance can be charged to the owner’s account and collected as an assessment.
I’m assuming from the incident you describe the damage will be well below the condominium’s deductible, so if they want, the condominium can go ahead and put this damage on your relative’s account and they’ll owe the association money — and that assessment would be transferable to a new owner, anyway.
Not to mention, it’s hard for me to believe that the cost of the damage is so significant that it’s worth holding up a deal to sell your relative’s home. So, if it were my choice, I would pay off the damage to the association, get the unit sold, and then go after the contractor’s liability insurance to recover.
Or, if it’s a small amount, just move on — at some point the time and energy spent won’t justify the dollars she is going to recover.
To share a personal anecdote, I once got taken advantage of by a contractor doing work in my home, and I spent years chasing them on principle. I spent more on my own attorney than I would ever have been able to recover, and in the end I just settled because it wasn’t worth the aggravation. After all, it was your relative who hired the contractor, so everything they did, good or bad, was her responsibility, and not the condominium. So, assuming the amount of damage isn’t extraordinary, I would pay the condominium, sell the unit, file a claim with the contractor’s insurance, do her best to recover, and move on.
Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living.” Email your questions to condocolumn@gmail.com. Please be sure to include your location.
This article originally appeared on Palm Beach Post: Can condominium board block a sale in Florida? What are the rules?
Reporting by Ryan Poliakoff, Special to the Palm Beach Post / Palm Beach Post
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By Ryan Poliakoff, Special to the Palm Beach Post | USA TODAY Network
