In an interesting split decision, the 1st District Court of Appeal has decided that, under Florida law, a condominium association may sue under a performance bond issued by a surety in favor of a developer and enforcable only by the 'owner and its ... successors'.
In a decision yet to be published (Marseilles Condominium Owners Ass'n, Inc. v. Travelers Cas. and Sur. Co. of America --- So.3d ----, 2009, App. 1 Dist., October 30, 2009), the majority held that the condo association is a "successor" to the owner (the developer) who may enforce the bond. This is interesting; as the dissent points out, the association does not typically step into the shoes of the developer except insofar as it ultimately manitains and controls the common elements of the condo -- the association is not a successor in ownership (it never owns the units or the common areas). Therefore, doesn't it seem like a stretch to deem an association which is not a successor in ownership to be a party able to enforce a bond which expressly limits its protection to the owner and its successors?
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As a result of ongoing litigation, this decision was withdrawn by the court, and will not be published or become law. However, it remains interesting to know that this appellate court was leaning that direction.
ReplyDeleteWhat was the "ongoing litigation"?
ReplyDelete