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It's The Law: Arbitration Before Suit May Be Required In Condominium Disputes

Question: I own a condominium unit. I have been in an almost constant battle with the Board of Directors about tenants in my unit. I am ready to sue, but the board tells me that I have to first go through non-binding arbitration. Can you explain?

Answer: Condominium disputes are not generally welcome by the courts. They often involve issues that are more emotional than substantive.

In an effort to reduce the number of lawsuits involving condominium disputes, the legislature passed a law in 1982 that requires disputes be submitted to non-binding arbitration with the Division of Florida Condominiums, Time Shares and Mobile Homes before suit can be filed. The legislature also believes that by mandating arbitration with the Division, many disputes could be settled cheaply and would be decided by arbitrators with substantial experience in condominium law.

The statute limits definition of dispute to conflict over authority of a Board of Directors (a) to require an owner to take action involving the owner's unit or to alter or add to a common area or element or (b) failure of the board to properly conduct elections, give adequate notice of meetings or other actions, properly conduct meetings or allow inspection of books and records. Dispute under the statute does exclude any disagreement that primarily involves title to a unit or common element, levy or collection of a fee or assessment, eviction or removal of a tenant, breach of fiduciary duty by a director or claims for damages due to the association's failure to maintain the condominium property.

If your disagreement falls within the statute, you must petition the Division for non-binding arbitration. That means the arbitrator will make a decision, but that the decision is not binding unless the parties accept it. If either party is unhappy with the decision, that party can file suit as if arbitration had not taken place. That is known as a trial de novo. If the judgment is not more favorable than the arbitration decision, the party who files suit will be ordered to pay the other party's arbitration cost, court costs, attorney's fees and other reasonable fees. The decision to file suit after an unhappy ending to arbitration should not be made lightly.

Before filing for arbitration, you must provide the other party with written notice of the specific nature of your dispute and that you intend to file an arbitration petition. If the dispute is not resolved, arbitration is started by filing a petition with the Division along with a $50.00 filing fee. The petition must show that you gave the other party written notice of the dispute and of your intent to file arbitration. The petitioner must attach a complete copy of the by-laws, articles of incorporation, declaration of condominium and rules and regulations to the petition.

The petition is assigned to an arbitrator and the arbitrator determines if the petition qualifies for non-binding arbitration. If it qualifies, the arbitrator notifies the petitioner and sends a copy of the petition to the other party with order requiring the other party file an answer.

The arbitration proceeds in a rather concise and expedited fashion. If anyone needs information from the other party, the arbitrator can order information be produced. Ultimately, the arbitrator sets the time and place for final hearing. Most hearings are conducted by telephone conference call. The arbitrator must enter a final order within 45 days of the hearing or, within 45 days of receipt of the arbitrator transcript or any post hearing memoranda, whichever is later. The final order must be in writing and include a statement of any award or remedy.

If a party believes the arbitrator is wrong, a motion for rehearing may be filed within 15 days after the order is entered. The motion must state what law or fact has been overlooked or misunderstood by the arbitrator. It is not to be re-argument of the case. The petition for rehearing extends time for filing suit.

If a party wants to pursue suit after losing at arbitration, a complaint for a trial de novo must be filed with the court in the county in which the condominium is located within 30 days of the arbitration decision. If suit is filed, the trial judge is entitled to review the arbitrator's decision but otherwise, what happened in arbitration may not be introduced in evidence at trial.

You should discuss your particular circumstances with an experienced condominium attorney. The attorney can advise you as to requirements for non-binding arbitration or if you can proceed directly to court. The attorney can also opine as to the merits of your case. Since attorney's fees are usually awarded to the prevailing party, you should be sure of your proceeding before further action. Paying your opponent's attorney's fees after you lose can be painful.

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