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Associations Assignment Authority to Management Agent Confirmed

In Seaside Town Council v. Seaside Community Development Corp, 1D19-755 (Fla. 1st DCA 2021), Florida’s First District Court of Appeal (“DCA”) reversed the trial court’s judgment in favor of Seaside Community Development Corp. (“Developer”) holding that Seaside Town Council (“STC”), as the management agent with assignment of enforcement right by the associations, had standing to sue the Developer for failure to pay assessments.

STC was created through an amendment to recorded declarations by nine individual neighborhood associations. Each neighborhood association’s amendment provided that STC would assume management of the administration and operations of the nine individual associations.  In addition to management duties, the declarations specified that STC had the right to enforce payment of association assessments and to institute, prosecute, defend, or compromise any and all proceedings at law, in equity, or otherwise that STC may deem necessary to enforce the declarations. After initiation of proceedings against the Developer for failure to pay assessments to the associations, the Developer argued STC lacked standing to bring forth any lawsuit against the Developer because STC was not a party to the declaration, an owner within the community, and that they sought to obtain or enforce rights that had not been granted to them through the declaration.

In overturning the trial court’s judgment in favor of Developer, the 1st DCA opined that the associations were able to assign their enforcement rights to STC.  The record reflected that prior to the filing of the lawsuit, the nine neighborhood associations had a meeting and at that meeting approved STC to sue Developer on behalf of the neighborhood associations. The Court cited longstanding precedent that contractual rights are assignable unless the contract prohibits an assignment.  They further stated that there was no specific language necessary to assign those rights. The Court citing Mangum v. Susser, 764 So. 2d 653, 655 (Fla. 1st DCA 2000) further determined that an assignment need not be in writing but could be oral.

As there was no prohibition in the declarations for an assignment, and as the associations assigned their right to sue at a meeting to their management agent, STC, the 1st DCA reversed the trial courts judgment in favor of the Developer and remanded the case back to the trial court for further proceedings.

Posted in Contracts, Court Decisions of Importance, Governing Documents
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