Process and Procedure

Associations need to take note:  Process and Procedure Matter.  A Florida homeowner association was recently reminded of this fact when it was ordered to pay an owner $85,000 in damages. The owner is seeking an additional $220,000 in attorney fees.  The dispute stemmed from a $2,212 landscaping bill for replacement of the owner’s lawn.  See the related news article at:

http://www.tampabay.com/

In ruling against the Association, the Court made the following findings:

  • The Association replaced the owners’ lawn when it was not the only yard affected by the drought.
  • Three Deed Restriction Committee members never inspected the property before the board authorized the work as required by governing documents.
  • The person who installed the sod was an officer and board member of the Association. Governing documents prohibit board members from receiving remuneration without a unanimously adopted resolution, which did not happen.
  • The fraudulent lien prohibited the Owners from selling their home, which they had purchased as investment property and rented out. At one point, when the home was valued at $215,000, they had an interested buyer. The property is now worth $100,000, according to the court order.

Keep in mind a couple of things that the Court did not find.

  • The Court did not find that the Association acted unreasonably in determining the lawn should be replaced.  To the contrary, the Court found it was not the only yard affected by the drought.
  • The Court did not find that the Association lacked authority to replace the lawn. To the contrary, it appears the Association did have authority replace the lawn and had specific procedures for making such a decision that included an inspection of the property by three committee members.
  • The Court did not find that the officer/board member could not perform the sod replacement.  The Court ruled that the Association’s governing documents require a unanimously adopted resolution and the process was not followed.

Boards sometimes get into the mindset that so long as they have the authority to make something happen, the process and procedure of getting to that end is largely irrelevant.  The Florida association in this case almost certainly argued that any procedural failure does not change the fact that the lawn needed to be replaced and the Association had the authority to replace it. Based on the Judge’s findings, it seems like the Association had a decent “no harm – no foul” argument.  The importance of following your governing documents cannot be overstated.

THE BOTTOM LINE: Associations lose lawsuits when they don’t follow the proper process and procedures. Obtaining sound legal advice to keep you OUT of court is far more cost effective than the alternative.

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