Basic Considerations for Condominium Arbitrations: Alternative Dispute Resolution with “Thy Neighbor”

Effective 1992, the Condominium Act requires arbitration of certain condominium disputes as an alternative to court litigation and also authorized mediation of such disputes. The objective of the program is to provide condominium unit owners and associations a just, speedy and inexpensive alternative to litigation in the court system.

Section 718.1255, Florida Statutes, defines which disputes are eligible for arbitration “as any disagreement between two or more parties and the authority of the board of directors or the association’s governing document”.  An eligible dispute for arbitration requires any owner to take or not to take any action involving that owner’s unit, or involving the alteration or addition to a common area or element of the condominium property.  Also required to be arbitrated under the Condominium Act are disputes involving the failure of a governing body, when required by law or an association’s document to: (1) properly conduct elections; (2) give adequate notice of meetings or other actions; (3) properly conduct meetings; or (4) allow inspection of books and records.

In condominium arbitrations, an attorney-arbitrator functions as a hearing officer or judge and issues a decision or award after hearing the evidence and testimony. An arbitration proceeding may involve a hearing if there are disputed issues of fact.  If a hearing is held, each party is given an opportunity to present testimony and evidence through witnesses and/or exhibits.  If there are no disputed issues of fact, the arbitrator will generally decide the case based on the assertions in the petition for arbitration, the answer, and the applicable law.   If a party does not appeal the arbitration final order within 30 days from the date of the order, the final order becomes binding on the parties. Rules of Procedure for Mandatory Non-Binding Arbitration are located in the Florida Administrative Code at 61B-45.001 et. seq.

To initiate a condominium arbitration, the unit owner or association must file a petition and be accompanied by a $50.00 filing fee.  Petitions, answers and other pleadings must be filed with the Division of Condominiums at the DBPR at the following address: Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares, and Mobile Homes, Arbitration Section, Northwood Centre, 1940 North Monroe Street, Tallahassee, Florida 32399-1029. Filings may also be made by facsimile at 850.487.0870.

The arbitration program’s jurisdiction is limited. Therefore, any party who is in doubt as to whether a controversy falls within the jurisdiction of the arbitration program may file a request for expedited determination of jurisdiction.  This is accomplished by filing a completed DBPR form ARB96-004, REQUEST FOR EXPEDITED DETERMINATION OF JURISDICTION along with a completed Mandatory Non-Binding Petition – DBPR Form ARB 6000-001. The $50.00 filing fee must accompany the request. The Department will then issue a finding of jurisdiction.

Disputes not eligible for arbitration include any disagreement that primarily involves: (1) title to any unit or common element; (2) the interpretation or enforcement of any warranty; (3) the levy of a fee or assessment; (4) the collection of an assessment levied against a party; (5) the eviction or other removal of a tenant from a unit; (6) alleged breaches of fiduciary duty by one or more directors; (7) claims for damages to a unit based upon the alleged failure of the association to maintain the common elements or condominium property.

Condominium owners should also be aware that if they lose in arbitration they may have to pay the other side’s attorney’s fees and costs as such fees are awardable under the Condominium Act and usually in the declarations.  If a party does not understand the arbitration process, they should consult an attorney licensed to practice law in the State of Florida.