In the first of two interesting appellate opinions yesterday, it was held that a trial court has no discretion regarding the ministerial award of interest awarded to a condominium association seeking to collect delinquent assessments. First Equitable Realty III Ltd. v. Grandview Palace Cd’m. Ass’n., Inc., Case No.: 3D17-669 (Fla 3rd DCA, April 11, 2018).
As a result of the Association’s lawsuit against a developer, the Association recovered a judgment for unpaid assessments. The declaration of condominium provided that interest accrues at the maximum rate permitted by law. The trial court reduced the interest claim to approximately $14,000.00, about one-third of the Association’s calculation. The Court determining that “the Association was responsible for protected litigation” and the Association “failed to mitigate its damages.”
Reversing, the appellate court relied on §718.116(3) Fla. Stat. (2017), which provides a default assessment interest rate of 18% per year if the declaration of condominium fails to provide a different rate. The court held that the statute is “clear and ambiguous.” Thus, the court would not reinterpret the statute. Therefore, the trial court had no discretion to vary from the Declaration’s rate of interest.
The opinion is unclear as to the underlying facts the trial court relied upon when reducing interest. Apparently, the trial court was less than impressed with the proceedings. Whether that impression was justified or not is unknown.
This decision likely is of assistance to condominium associations where a trial court may not understand the dynamics with the need to litigate when delinquent assessments are not paid. It is also likely that the holding will apply to homeowners’ associations because the Homeowners’ Association Act provisions in §720.3085 Fla. Stat. (2017) are substantially similar to the Condominium Act provisions cited above. As a practical matter counsel likely will need to exercise some awareness of courtroom dynamics and the potential need to educate a trial before a trial court may seek to “take it out on you” by silently punishing through a reduction in attorney’s fees.”
Michael J. Gelfand
Real Property, Probate and Trust Law Section of The Florida Bar
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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section
© 2017 Michael J. Gelfand
Michael J. Gelfand
Florida Bar Board Certified Real Estate Attorney
Florida Supreme Court Certified Mediator:
Civil Circuit Court & Civil County Court
Fellow, American College of Real Estate Attorneys