Trial Court Order Enforces Condominium Declaration’s Pre-Suit Mediation and Arbitration Provisions

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Analysis of Coach Homes II at Gran Paradiso Condominium Association, Inc. v. Lennar Homes, LLC et al, Amended Order Granting Motion to Dismiss or Stay, No. 20 CA 003307 NC (Fla. 12th Cir. Ct. June 28, 2021).

Unlike some other forms of declarations1, a condominium declaration in Florida can govern and bind developers and unit owners of a condominium with respect to numerous rights and duties concerning a condominium. These rights and duties can vary from project to project, but this flexibility in no way diminishes the binding nature of the declaration. Accordingly, those drafting, amending, or supplementing a written declaration may, in some circumstances, limit the potential risks and liabilities attendant with the development and ownership of a condominium, including selecting a pre-litigation forum to resolve construction defect disputes. In Coach Homes II at Gran Paradiso Condominium Association, Inc. v. Lennar Homes, LLC  ("Coach")a condominium developer appears to have done just that. According to the court’s order, the condominium declaration in Coach—as well as the purchase and sale agreements for each unit—contained a pre-suit mediation and arbitration requirement for construction defect claims. Following construction, the condominium association filed a lawsuit against the developer alleging claims for construction defects, including breach of the statutory warranty under section 718.203, Florida Statutes, violation of the building code under section 553.84, Florida Statutes, and negligence in construction. The developer moved to dismiss or, alternatively, stay the litigation pending pre-suit mediation and arbitration, in accordance with the pre-suit requirements set forth in the declaration and the subject purchase and sale agreements. The trial court found that the association was bound by these provisions and granted the motion2. As a result, because the association’s claims against the developer require arbitration, it appears the dispute will be resolved outside of a courtroom.

The Order recognizes that courts will not hesitate to enforce written mandatory pre-suit requirements—even when such requirements may be located in a recorded condominium declaration. Declarations operate like any other contract. Therefore, careful drafting of declarations, purchase and sale agreements, and construction contracts may ensure that the parties’ contractual expectations are enforced.

 

1 Cf. The Office: Money (NBC television broadcast Oct. 18, 2007) (“Oscar: Hey. I just wanted you to know that you can't just say the word ‘bankruptcy’ and expect anything to happen. Michael Scott: I didn't say it. I declared it.”) (emphasis added).
2 The subject Order is an order granting a motion for reconsideration, which sought to reverse a portion of a prior Order finding that the developer was entitled to attorney’s fees. The trial court’s order can be accessed here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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