Suing A Florida HOA or COA for Fiduciary Duty Failures - South Florida Law, PLLC (2024)

Is suing a Florida HOA an option? Homeownership in Florida’s gated communities and condominium complexes often comes with the added responsibility of being a part of a homeowners association (HOA) or condominium owners association (COA). While these associations are established to maintain and enhance property values, there are instances when homeowners believe their HOA or COA has failed in its fiduciary duties, necessitating legal action. Florida homeowners can explore how they can address such concerns, understanding that the process can be intricate and requires careful consideration by a lawyer.

Understanding Dispute Resolution Requirements

Florida law generally requires condo owners (under Florida Statutes 718.1255) and homeowners (under Florida Statutes 720.311) to attempt dispute resolution through non-binding arbitration and mediation, respectively, before pursuing legal action against their associations. However, exceptions apply, particularly in cases involving allegations of fiduciary duty breaches by the board or individual board members.

When the heart of the claim revolves around the failure of the HOA or COA board to perform its fiduciary duties, exceptions typically apply to the mandatory dispute resolution processes. This means that homeowners can generally proceed directly with legal action in these specific cases.

Legal Actions Against the HOA or Board Members

In cases involving fiduciary duty breaches, homeowners have options. They can take legal action against the HOA itself, seeking remedies such as injunctive relief or monetary damages to address the alleged failures.

Alternatively, homeowners can pursue legal action against individual members of the board who are believed to have breached their fiduciary obligations. This can include claims for negligence, mismanagement of association funds, or other related misconduct.

Homeowners considering which of these two strategies to implement typically would benefit from consulting experienced legal counsel. A legal counsel with experience managing HOA and COA dispute cases would be able to determine which strategy better fits the particular circ*mstances of the case.

Complex Nature of Fiduciary Duties

Defining an association’s fiduciary duties is complex, often involving adherence to multiple layers of legal documents, including the association’s Covenants, Conditions, and Restrictions (CC&R), bylaws, local ordinances, Florida statutes, and even federal laws.

These duties typically encompass financial management, maintenance of common areas, enforcing community rules, and acting in the best interests of homeowners.

“Homeowners considering which of these two strategies to implement typically would benefit from consulting experienced legal counsel.”

The Importance of Legal Counsel

Given the intricate nature of HOA and COA law in Florida, homeowners considering legal action should seek the advice of an experienced Florida attorney well-versed in the nuances of association law.

An attorney can help you navigate the complexities of your case, ensure compliance with relevant laws, assess the strength of your claim, and guide you through the legal process.

In conclusion, homeowners facing fiduciary duty failures by their Florida HOA or COA have legal options available to address these concerns. Understanding the exceptions to mandatory dispute resolution requirements, the potential legal actions against the association or board members, and the intricacies of fiduciary duties is vital. However, due to the complex nature of these cases, consulting with a knowledgeable Florida attorney is strongly advised. Their expertise can be invaluable in advocating for your rights and achieving a resolution that aligns with your best interests as a homeowner.

South Florida Law

Attempting to sue your association or its leadership can be complex, so it is important to have an experienced HOA/COA attorney on your side. At South Florida Law, we have represented clients in a wide range of HOA and COA disputes, and we can help you navigate the process.

Contact us today to schedule a consultation either via our contact form or by calling (954) 900-8885.

Suing A Florida HOA or COA for Fiduciary Duty Failures - South Florida Law, PLLC (2024)

FAQs

What are the damages for breach of fiduciary duty in Florida? ›

Monetary damages: If a breach of fiduciary duty is proven, the aggrieved party may be entitled to recover monetary damages, which can include lost profits, restitution, and other financial losses. Disgorgement: The fiduciary may be required to disgorge any profits or benefits they received as a result of the breach.

What are the affirmative defenses to breach of fiduciary duty in Florida? ›

Affirmative defenses to breach of fiduciary duty in Florida

For example, you may be able to defend against a breach of duty of loyalty by showing a fiduciary properly informed the protected party of the potential self-dealing and that the protected party waived their rights in the matter.

What is an example of a breach of fiduciary duty in HOA? ›

A fiduciary breach in this area most commonly occurs when a board fails to enforce rules and regulations within their governing documents, fails to conduct needed inquires before investing community funds into a costly project, or failed to properly budget and plan for the current needs and future reserves of the ...

Can you sue your HOA in Florida? ›

In Florida, you can sue your HOA or Condominium Association for negligence if you, a loved one, or your property were adversely affected due to their flawed, faulty, or negligent maintenance, repairs, or security. This includes both personal injuries and property damage.

What are three examples of breaches of fiduciary duty? ›

Here are some common breach of fiduciary duty examples.
  • Misappropriation of Assets. ...
  • Conflict of Interest. ...
  • Self-Dealing. ...
  • Negligent Management of Assets. ...
  • Inadequate Record-Keeping or Failure to Account. ...
  • Failure to Distribute Assets.
Sep 22, 2023

How do you prove breach of fiduciary duty? ›

The standard for proving a breach of fiduciary duty varies from jurisdiction to jurisdiction. Typically, a claim for breach of fiduciary duty includes four elements: 1) the existence of a fiduciary duty; 2) a breach of that duty (through an act or omission); 3) damages; and 4) causation.

Can you get punitive damages for breach of fiduciary duty? ›

Punitive damages are recoverable in a breach of fiduciary duty case when the plaintiff is able to prove by clear and convincing evidence that the breach was oppressive, fraudulent, or malicious.

What is a negligent breach of fiduciary duty? ›

Fiduciary negligence occurs when a fiduciary fails to act on breaches of duty, specifically when their actions could have prevented the infractions or minimized the negative repercussions.

What is a tortious breach of fiduciary duty? ›

Breach of fiduciary duty is failure to adhere to the authority granted by the client. An attorney-client relationship imposes a fiduciary duty on the lawyer to represent the client with undivided loyalty.

Which two of the following are examples of breaches of fiduciary duty? ›

3 Examples of Breaches of Fiduciary Duty in Business Relationships
  • Engaging in business transactions in which a partner has a personal financial interest.
  • Pursuing business opportunities individually that would have benefitted the partnership.
  • Using partnership funds to pay for personal expenditures.
Sep 8, 2023

What consequences if any do directors face for a breach of fiduciary duty? ›

The shareholders would have to show the court that the director breached his or her fiduciary duty and also show that such a breach resulted in a loss for the shareholders. If such a breach were proven then the court could order the director to pay compensatory damages to the shareholders.

What is a breach of fiduciary duty cause of action? ›

Breach of fiduciary duty claims are based on the defendant's failure to meet those obligations as the plaintiff's fiduciary. Court Opinions. Common examples of fiduciaries include attorneys, trustees, and executors.

Where can I file a complaint against my HOA in Florida? ›

Filing an Official Complaint

Residents may file a Condominium/Cooperative Complaint Form (PDF) directly with the Division of Florida Condominiums, Timeshares and Mobile Homes. Hardcopies of the form can be obtained by calling 1.800. 226.9101 or 850.488. 1122.

How to fight an HOA in Florida? ›

You may be required to submit a complaint to the HOA before you can proceed to the next step, which is often a form of alternative dispute resolution (ADR), such as arbitration or mediation. Under most HOA bylaws, property owners cannot immediately sue the association.

What is the statute 720.3045 in Florida? ›

Because Section 720.3045, Florida Statutes, uses the term “parcel” to delineate where storage can occur, an association is prohibited from regulating backyard storage which may be visible across a waterway, from a golf course or a community park behind the parcel.

What damages are recoverable for breach of fiduciary duty? ›

Remedies available for claims for breach of fiduciary duty provide include:
  • lost profits, as the natural and probable consequence of the breach;
  • out-of-pocket losses, as the difference between the value paid and the value received;

What are the consequences of breach of fiduciary duty? ›

What is the penalty for breach of fiduciary duty? The most frequent penalties for breach of fiduciary duty include suspension or removal as trustee or executor and the payment of money damages, attorney fees, and court costs.

What are the remedies for breach of fiduciary duty in Florida? ›

In Florida, a person who breaches a fiduciary duty can be held liable for any damages caused by the breach. Shareholders and other parties can also seek legal remedies such as an injunction, corporate governance changes, and monetary damages.

What happens if a fiduciary duty is breached? ›

Any fiduciary who breaches the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 (ERISA) is personally liable to make good to the plan any losses suffered by the plan and return all profits made through the improper use of plan assets.

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