Not My Building Not My Problem: Special Assessments, Cost of Repairs, and Who Has to Pay
Condominium associations exist in high concentration throughout Florida, many of which are made of a collection of buildings, and not just a single tower. Damage to buildings happens, and insurance is not always sufficient to pay for all needed repairs. So, what if only one of the buildings is damaged? Is every member of the association required to pay for repairs or should only the residents of the damaged building be responsible?
This question is addressed by the Third District Court of Appeals (“Court”) in Lecorps v. Star Lakes Association, Inc. in May of 2022. Stare Lakes Association, Inc. (“Star Lakes”) governs Star Lake Estates, a condominium community made up of 17 residential condominium buildings. At one time, each building had a separate set of governing documents, but the membership, in 2000, voted to consolidate authority over the buildings for financial reasons. In 2017, one of the buildings caught fire and became uninhabitable (“Building 12”). Unfortunately, the insurance proceeds were not sufficient to cover the costs to rebuild. Therefore, with membership approval to rebuild Building 12, the Star Lakes noticed a board meeting to approve a special assessment, a portion of which would be dedicated to rebuilding. The Board subsequently approved the special assessment and allocated the costs equally amongst all members. Nearly all owners paid the special assessment. However, several members (“Owners”), each residing in other buildings, challenged the levying of the special assessment without member approval and filed suit.
Initially the trial court agreed with the Owners, issuing a temporary injunction that invalidated the assessment, and required Star Lake to stop construction and obtain membership approval of the special assessment. Shortly after, Star Lake successfully argued to dissolve the injunction and the Owners then appealed to the Court.
The Owners’ challenge rested on two arguments, that i) a special assessment to restore a single building should only be passed against the owners residing in that building, and ii) Star Lake was required to obtain approval of the special assessment through a community-wide vote. Ultimately, the Court sided with Star Lake.
In addressing the first argument, the Court establishes an association’s authority to collect the additional required cost of repair, but also that those costs be allocated equally amongst the members. Generally, associations have authority to collect amounts for repair not otherwise covered by an insurance claim as a common expense under Section 718.111(11)(j), Florida Statutes. Here, because of the consolidation vote, the individual buildings’ declarations could not be read independent of the facts and Florida Statutes and Building 12’s language limiting liability to only affected owners was not applicable.
Analysis of the second question rested largely in established precedent determining how and when a board of directors may act without a membership vote. Specifically, that a board of directors may approve a special assessment where the need for common area repair is urgent and the association otherwise complies with notice and meeting requirements outlined in its governing documents and Section 718.112(2)(c)1, Florida Statutes. The Court distills the argument into a single statement acknowledging the issues presented where an association must quickly convince a large portion of the membership to contribute funds to something they find neither urgent nor individually beneficial. “Indeed, a procedure to the contrary would presuppose that unit owners are incentivized to vote for the collective good, rather than in their owner financial interest.”
What does this mean for your association? In reality, application of this decision will depend on the specific facts of individual situations. However, it supports one of the primary purposes of the condominium structure – to work as a community to benefit the whole. It affirms an association’s authority to act for the community as a whole in emergency situations, without being prohibited or delayed by the votes of a handful of self-interested members.