This is probably the most common question that clients ask us when they come to Kushner Carlson for help with their HOAs (your HOA might be referred to just as an “association”—or if you live in a condominium, a “condominium association”—but for purposes of this article, the term “HOA” will be used to describe all common interest developments). And we generally give them all the same answer—in most cases, yes.
To begin with, HOAs in Florida are largely governed by three separate sets of laws: (i) the Homeowners’ Association Act; (ii) the Condominium Act; and (iii) the Cooperative Act. Each of those “Acts” lays out the ground rules regarding how HOAs may be formed, governed, and dissolved. In other words, all HOAs in Florida, depending upon the “type” of housing found in a particular community (e.g., single family home, condominium, or a co-op) will be governed by the particular Act that governs that type of housing unit (as well as other applicable Florida laws, of course).
Each HOA in Florida is further governed by its own set of “governing documents,” the most important of which is a document known as the Declaration of Covenants, or in the case of a condominium association, the Declaration of Condominium. For our purposes, however, we’ll call that document by its most well-known name—the “CC&Rs” (which stands for Covenants, Conditions, and Restrictions). An HOA’s CC&Rs describes not only the rights, duties, and obligations that each member owes to the HOA, and vice versa, but also the rights, duties, and obligations that the members owe to each other. And, contained in many CC&Rs are provisions awarding a prevailing party their attorneys’ fees and costs.
Homeowners frequently entitled to their attorneys’ fees and costs under the provisions of their governing documents, but the Acts themselves also provide an avenue for many prevailing homeowners to receive their attorneys’ fees and costs. For example, the Condominium Act specifically mandates that the prevailing party in actions for “injunctive relief” (i.e., actions that ask a court to force an HOA to enforce its CC&Rs, or stop violating a homeowners’ rights) be awarded their attorneys’ fees and costs. The Acts also contain language that permit a prevailing party in several other types of HOA-related lawsuits/binding arbitrations to collect their attorneys’ fees and costs (e.g., election/recall disputes, many suits involving actual money damages, etc.).
Injunctive Relief as Enforcement Actions
Generally speaking, when a homeowner is suing an HOA because the HOA is, for example, not enforcing its governing documents (e.g., CC&Rs, bylaws, rules, etc.), the lawsuit filed often seeks injunctive relief. Such a lawsuit could also be described as an enforcement action, which in simple terms means any civil action or proceeding brought for the purpose of enforcing any or a combination of the following: (i) the provisions of whatever Act is applicable to the community; or (ii) an HOA’s governing documents. The thing to remember is that the term “enforcement action” is broad, often encompassing a wide variety of conduct (or misconduct) on the part of homeowners, board members, or property management personnel.
For example, as was referenced above, many enforcement actions involve scenarios where: (i) an HOA infringes on a homeowner’s right to do something with his/her property; (ii) the board of directors fails to perform one of its material obligations (e.g., maintain the common area or make repairs to an owner’s roof, etc.); (iii) a neighbor does something that is prohibited (e.g., damages another’s property or causes a nuisance); (iv) a member of the board of directors is engaged in something called “self-dealing” (e.g., a director using the HOA’s landscaper to maintain the board member’s personal garden without paying that landscaper separately, etc.); and/or (v) the board treats certain homeowners differently (i.e., better) than others.
And, as I indicated above, once a homeowner prevails in most such types of lawsuits, the homeowner will be entitled to their attorneys’ fees and costs. So, the question then becomes: “What is a prevailing party”?
To put it simply, a prevailing party is the party that “wins” the lawsuit. You might think that determining such a winner is a simple matter, but you’d be wrong. That’s not to say that there are no easy cases where the prevailing party is easy to identify. It just means that often that determination is not so obvious.
The Acts don’t provide a neat, bright line definition of the term “prevailing party,” nor do courts have any required rubric to follow. Rather, courts have been left to make that determination for themselves, which many have done by developing various “tests” that seek to determine which party achieved its main litigation objectives. For example, take a case where the party who brings an enforcement action receives a favorable verdict on all of the litigated claims. That party clearly achieved its main litigation objectives, and thus would be deemed the prevailing party. Or, take the case of a party that dismisses an enforcement action prior to trial (or even during trial, but prior to a verdict being reached). Such a party could not claim to have achieved its main litigation objectives, and thus the defendant in that case (i.e., the party that didn’t sue) would likely be deemed the prevailing party.
Those are both the easy cases. The harder cases involve situations where, for example, a party files an enforcement action alleging multiple causes of action, and either dismisses some of those causes of action prior to trial, or prevails at trial—but on only some of their claims (or they receive only a portion of the monetary damages or injunctive relief they were seeking). In those cases, it is difficult to predict who a judge might determine to be the prevailing party for the purpose of awarding attorneys’ fees.
The only thing close to a bright line rule is that if a homeowner receives a favorable verdict that gives him/her everything (or nearly everything) that he/she initially sought (or was fighting against), then the homeowner would almost certainly be deemed the prevailing party.