What remedies does a unit owner have if the condominium association fails to collect assessments and pay the bills? Perhaps the owner could sue each director for breach for fiduciary duty or sue the association to compel it to comply with its duties under the governing documents and Chapter 718. Another remedy might be the appointment of a receiver for the association. A receiver is a person or corporation who is disinterested and is given the authority to collect income and pay expenses for the association in lieu of the board of directors. The receiver accounts to the court and the association for the income received and expenditures made, and is entitled to reasonable compensation for its services.
However, statutory authority for appointing a receiver for a not for profit condominium association does not include the circumstance of a mismanaged association. Chapter 718 authorizes the appointment of a receiver only if the association fails to fill vacancies on the board, or to conclude the affairs of the association after a natural disaster. Chapter 617 authorizes the appointment of a receiver only to wind down the affairs of the corporation.
In Florida, common law can be applied by a court to determine the outcome of a legal dispute, unless its application is otherwise restricted or prohibited by statute or the constitution. “Common law” is the non-statutory law developed over the ages in England and passed down to the courts of the United States when England colonized North America. It consists of some of the most basic principles of law which evolved over time as the courts decided cases, and the older cases became precedent for more recent ones. For example, you will not find a statute which defines what the legal elements of a binding Florida real estate contract are. Instead, a review of Florida case law is required to make this determination. If there is no Florida case on point, you could look at case law in other common law states as persuasive authority on the issue presented.
In the recent case of Granada Lakes Villas Condominium Association, Inc. v. Metro-Dade Investments Co, So.3d (Fla. 2013), the Florida Supreme Court reaffirmed the applicability of common law in Florida if it has not been prohibited or restricted by statute. With respect to receiverships, common law permits the appointment of a receiver in cases of fraud, self-dealing, and waste, and a court has wide equitable discretion to appoint a receiver under those circumstances.
The Florida Supreme Court concluded that there is nothing in Florida Statutes Chapter 718 or 617 which restricts or prohibits the court’s equitable common law power to appoint a receiver for reasons other than those enumerated in the Statutes. Thus, a Florida court does have the common law authority to appoint a receiver when there is condominium association mismanagement which causes waste, for example, if an association fails to pay certain maintenance and utility expenses causing “health nuisances on the property”.
