The Fourth District Court of Appeals has reversed a summary judgment in favor of a homeowner association in a commercial center in which the property owner had raised the negligence of the association in maintaining the property as an affirmative defense to its failure to pay assessments. While the decision of the Fourth DCA may be used in an attempt by others to avoid paying assessments to associations, the case was reversed primarily due to technical procedural-related issues in the litigation, rather than on that substantive basis. Consequently, it should not be viewed as creating a new defense to owners against an association foreclosure.
In the case of E. Qualcom Corp., v. Global Commerce Center Association, Inc., published on April 27, 2011, Qualcom had purchased property within a commercial center and, over time, accrued unpaid assessments to the Master Association for the center. When the Master Association filed its complaint to foreclose on the lien for unpaid assessments, Qualcom filed affirmative defenses and counterclaims for damages, alleging that the Association failed to maintain the roof on the unit, which resulted in damages to Qualcom’s property. The Trial Court ultimately granted summary judgment to Association on all counts. The Fourth DCA concluded that the Trial Court did so in error for the technical procedural reason that material issues of fact remained to be determined by the Trial Court, making summary judgment improper.
Summary judgment is only proper when there are no genuine issues of material fact left to be determined. The Appellate Court pointed out that the Association did not address the affirmative defenses to its foreclosure claim, which meant that material issues of fact remained for the Trial Court to resolve. Consequently, it was not proper for the Trial Court to have granted summary judgment under these specific circumstances and the case was reversed back to the Trial Court for a complete trial.
It has been a long established principle in Florida, first set forth by the Fourth DCA in Abbey Park Homeowners Association v. Bowen, 508 So. 2d 554 (Fla. 4th DCA 1987), that the failure of an association to maintain the common areas is not a defense to a claim for foreclosure for the failure to pay assessments. That court identified the covenant to pay to be separate and distinct from the covenant to maintain set forth in the governing documents. Any such failure on the part of an association may be a basis for counterclaims for damages, but will not be a valid defense to the claim for unpaid assessments. Procedurally, when an affirmative defense of this nature is included in the pleadings, it is necessary for the association, as plaintiff, to take steps in the litigation process to eliminate that issue prior to seeking summary judgment. There is no indication in this case that the appropriate steps were taken to eliminate or otherwise address the affirmative defenses prior to the request for summary judgment.
It is anticipated that the Qualcom case will be used on behalf of delinquent owners in an effort to avoid paying assessments, for which it is not truly a sufficient legal basis. Although associations should be maintaining the common areas as required under the governing documents, the failure to do so should not be adequate legal grounds for any owner to refrain from paying the assessment obligation to the association.