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January, 2019: Insider Real Estate and Community Association Update

Homeowners Association Not Liable for Failing to Enforce Parking Restrictions
Seminole Lakes Homeowner’s Ass’n, Inc. v. Esnard, 4D18-15, 2018 WL 6681726, (Fla. 4th DCA Dec. 19, 2018)



After they were hit in a rear-end car accident inside the Seminole Lakes Community,  two plaintiffs sued the Seminole Lakes Homeowners Association claiming that it negligently allowed parking on both sides of the streets, in violation of rules in the governing documents.  The case proceeded to trial and a jury returned a verdict in favor of the plaintiffs, finding the driver who hit them 70% responsible and the Association 30% responsible, for their injuries.



Florida’s Fourth District Court reviewed the case and in a somewhat surprising reversal of the type of decision that is typically left to the trier of fact, ruled in favor of the Association.    The Court examined all of the evidence, including the lack of any prior incidents of a similar nature and the general conditions of the residential neighborhood and found that the negligence of the driver who rear-ended the plaintiffs was not reasonably foreseeable by the Homeowners Association and that the failure to enforce its parking rules accordingly was not the proximate (legal) cause of the plaintiffs’ injuries.



While at first blush this case might seem to excuse community associations from liability for incidents for failing to enforce their rules and restrictions, its application may be limited as the Fourth District’s opinion was based upon the set of facts presented at trial to the jury.  Community associations should remain mindful of restrictions in their governing documents, including those on dangerous dogs in on animal-free communities or parking restrictions necessary for ingress/egress of emergency vehicles.  The courts may not be so forgiving in other instances.







Court Approves Experts’ Limited Sampling of Construction Defects Under Recently Affirmed Frye Standard and Affirms Judgment Against Developer
D.R. Horton, Inc. v. Heron’s Landing Condo. Ass’n of Jacksonville, Inc., No. 1D17-1941, 2018 Fla. App. LEXIS 18668 (1st DCA Dec. 27, 2018).



In one of the first condominium construction defect cases decided after the Florida Supreme Court’s recent affirmance of the Frye Standard for evaluating the testimony of expert witnesses (see, DeLisle v. Crane Co., No. SC16-2182, 2018 Fla. LEXIS 1883, 2018 WL 5075302 (Fla. Oct. 15, 2018)), Florida’s First District Court of Appeal held that a condominium association’s expert witness could properly opine that based upon his testing of 200 square feet of stucco, a total of 220,000 square feet of stucco in the condominium needed to be replaced.  The Court also approved testimony of a second expert as to damages based on that opinion.  The District Court rejected the developer’s argument that the experts presented improper “extrapolation evidence” which was “inherently unreliable” not pass the threshold for admissibility required by Florida Statute Section 90.702 and noted that the association’s expert had been an engineering consultant for almost forty years and performed hundreds of building condition assessments and surveys.



In reaching its decision, the Appellate Court considered DeLisle and the requirements thereunder, finding that no Frye analysis was required in this case because the association’s experts used scientifically reliable and peer-reviewed methodology that was an industry standard.  This decision is likely to be the first of many interpreting DeLisle and the application of the Frye standard in construction defect cases.  It is critical that counsel for community associations pursuing construction defect claims against developers, general contractors and design professionals thoroughly understand DeLisle and the Frye standard and formulate a trial strategy accordingly.







Lawsuit Against Individual Unit Owners for Trespass of Air Rights Allowed to Proceed
Five Seas Inv’rs, Inc. v. Guzman, 3D17-2271, 2018 WL 6186240 (Fla. 3d DCA Nov. 28, 2018)



When built, the La Perla Condominium in Sunny Isles Beach, Florida and the owner of an adjacent hotel property exchanged easements whereby the hotel obtained use of the Condominium’s driveway for commercial deliveries, garbage removal, valet parking and similar services in exchange for the right for the Condominium’s elevated parking garage to project over the hotel’s air space.  When disputes subsequently arose about the hotel’s use of Condominium property, the Condominium brought suit.  A year into the case, the hotel filed a counterclaim and third party claim against individual unit owners whose balconies allegedly extended over the hotel property.



After the trial court dismissed the hotel’s claims against the individual unit owners, the Third District Court of Appeal reversed, allowing the hotel’s case to continue finding that the agreements between the hotel and Condominium did not allow for air rights over the hotel’s property without any limitation.  This case will be closely watched, especially with regard to the claims against the individual unit owners regarding limited common elements.







Despite Void Buy-Back Provision Court Orders Parties to Arbitration
Vanacore Constr., Inc. v. Osborn, 5D18-598, 2018 WL 6579205, (Fla. 5th DCA Dec. 14, 2018)



In a decision of particular interest to purchasers of new homes, including those in planned communities, Florida’s Fifth District Court of Appeal recently ordered home buyers and the builder of their homes to arbitration to resolve construction defect claims.



After experiencing water intrusion and identifying other alleged construction defects, four buyers brought suit against the builder of their homes. The lower court found that a “buy back” provision was unenforceable and could not be severed from the respective new home construction contracts, and denied the builder’s motion to compel arbitration accordingly.  The arbitration clause required mandatory arbitration before a licensed “general BUILDER” but gave the builder the option, in lieu of arbitration, to purchase the property back as a calculated “total price paid” based upon the original contract price plus designated additional amounts such as closing costs and upgrades/change orders.



The Fifth District disagreed with the lower court and ruled that the “buy back” provision could be severed, resulting in an enforceable contract with a valid arbitration provision.  The appellate court looked to the broad language of the arbitration provision to glean an intent to arbitrate all claims with a “significant relationship” to the contract, such as those raised by the purchasers regarding the builder’s obligations under the contracts.  The purchasers must now arbitrate before a “general BUILDER.”



This decision illustrates the lengths that Florida courts will sometimes go to enforce arbitration agreements.  It is therefore critical that before entering into a contract with a mandatory arbitration provision (especially those involving new construction or the purchase of real estate) that parties consult with experienced counsel so that they understand the provisions of the contract they have been asked to sign and the prospects of what might happen in case of a later dispute.







Jed Frankel is a partner with Eisinger Law. He is a Florida Certified Circuit Mediator and is Board Certified in Condominium and Planned Development Law, as well as Civil Trial Law, by The Florida Bar. He focuses his practice on community association and dispute resolution. He can be reached at jfrankel@eisingerlaw.com or 954-894-8000 x 301.