WAIVER OF RIGHTS BY SKIPPING ARBITRATION
In another decision emphasizing the importance of properly interpreting Florida community association documents, the question arose as to what happens when a homeowners’ association fails to timely submit a dispute to mediation or arbitration?
A Florida appellate court ruled that an Association waived its claim against a homeowner where the Association failed to submit its dispute to binding arbitration. In Guan v. Ellingsworth Residential Community Association, Inc., 44 Fla. L. Weekly D 2155 (Fla. DCA August 23, 2019), a homeowner modified the landscaping surrounding her home without first obtaining approval from the Association. The Declaration of Covenants required that disputes be resolved by mediation, and if that is unsuccessful, then within thirty days after termination of the mediation, the parties must proceed to binding arbitration; otherwise, the dispute is waived.
The Association sent the owner a letter demanding that she restore her landscaping. The owner refused, and the parties proceeded to mediation which was unsuccessful. Without first submitting to binding arbitration, the Association sued the owner. The trial court ruled that the Association did not have to first proceed with arbitration, and could proceed with the lawsuit.
The Florida appellate court disagreed, reversed and directed the trial court to dismiss the lawsuit. The appellate court found that the Association waived its claim because the Declaration required the Association to submit the dispute to binding arbitration within thirty days after termination of mediation.
Failure to comply with the documents dispute resolution process was fatal to the claim. Thus, another decision emphasizing the importance of knowing what is in your association documents!