The short answer to this question is yes, as long as the Declarations address it. A recent case decided January 6, 2012, by a Florida appellate court involved this issue, as well as the association’s claim for attorneys’ fees and costs associated with the lawsuit. Alorda v. Sutton Place Homeowners Association, Inc., No. 2D10–3966 (Fla. 2d DCA 2012).
The Alordas purchased a townhouse located in Sutton Place Homeowners Association on June 29, 2007. The association is organized pursuant to Declarations of Covenants, Conditions, Restrictions, and Easements filed in the public records of Hillsborough County. Section 9.04 of the Declarations requires that the owner of a residence in the subdivision maintain insurance on the residential property and annually provide notice of coverage to the association. Specifically, the Declarations state:
The 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 thereof. 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.
In June 2008, on the first anniversary of the Alordas’ purchase, the association did not receive notice that they had renewed their insurance coverage. The association sent letters requesting the proof of insurance. When the Alordas did not send proof, the association filed a complaint against the Alordas on April 9, 2009. The association sought the equitable remedy of injunctive relief, asking the trial court to “enter a permanent mandatory injunction requiring that the Defendant obtain the insurance coverages as are described in § 9.04 of the Declaration.” In response to the service of the lawsuit, the Alordas’ attorney sent the association’s attorney an email on May 6, 2009, advising that the Alordas did have the required insurance coverage. Attached to the email was a copy of the declarations page of the insurance policy, showing that it went into effect March 19, 2009. Counsel for the Alordas also asked the association to dismiss its action.
The case did not end there. The association refused to dismiss the action and ultimately obtained a judgment of attorneys’ fees and costs. The Alordas appealed that judgment, arguing that the original complaint did not state a cause of action for the injunctive relief requested.
To state a claim of injunctive relief, the requesting party must show that it does not have an adequate remedy available at law. The Alordas argued that the association acknowledged in its own pleadings that it had an available remedy at law, as the Declaration attached to the complaint provided the association with procedures to follow if an owner failed to provide the required notice of insurance coverage. The procedures specifically include allowing the association to obtain coverage and then assess the cost of obtaining that coverage against the owner. The procedures also provide that the assessment can be recorded as a lien against the owner’s real property if the assessment is not paid within thirty days and that an action at law could then be filed against the owner to collect the assessment.
The appellate court agreed with the Alordas and reversed the judgment for fees and costs, finding that the association was not the prevailing party. The court concluded:
[W]e are not unsympathetic to the Association’s having incurred unnecessary fees and costs in attempting to obtain the Alordas’ compliance with the terms of the Declaration. However, this opinion addresses only whether courts can award fees based on a prevailing party theory where that party can never prevail because the complaint, on its face, fails to state a cause of action. Because this impossibility prevents the award of fees to the Association in this action, we are compelled to reverse that award.
The outcome may have been different if the association had obtained insurance coverage for the Alordas’ property and then filed an action against the owner to assess the costs of that insurance against the Alordas. This case again makes clear that both associations and unit owners are bound by the terms of an associations governing documents and failure to comply with them can have detrimental consequences for both.
