Michael L. Hyman, with Siegfried, Rivera.

Ten years ago during the height of the housing crisis, community associations were having a great deal of difficulty contending with the deluge of foreclosure cases they were facing. Many foreclosures would take years to prosecute, and mortgage servicers and lenders that had purchased loans from their original lenders in the secondary market were having difficulties procuring all the pertinent documents.

Today, foreclosures are taking considerably less time, but some cases can still prove to be extremely problematic. For those cases that begin to take on epic proportions and a great deal of time to prosecute, associations must always be mindful of the fact that they could be held liable for the attorney fees and costs of unit owners who prevail in foreclosure actions for past-due assessments. In fact, as a recent appellate ruling illustrates, associations can become liable for such legal fees even if owners sell their unit during the pendency of the foreclosure litigation.

In Victor Tison v. Clairmont Condominium F Association, the Fourth District Court of Appeal reversed the lower court's final order denying Tison's motion for attorney fees and costs. The appellate panel found that as the prevailing party in a lawsuit brought against him by his condominium association for unpaid assessments, Tison was indeed entitled to recover prevailing party attorney fees even though he sold his interest in the condominium unit during the pendency of the foreclosure action.

The case began in December 2015 when the association filed a lawsuit against Tison and another defendant seeking to foreclose on an assessment lien against their residence and recover damages for unpaid assessments. The defendants responded by filing an answer with affirmative defenses, which they later amended, and they alleged that they would be entitled to recover attorney fees and costs.

More than a year later in March 2017, the trial court denied the association's motion for summary judgment, and the defendants sold the residence. Another entire year after that, the trial court entered a final order dismissing the action for lack of prosecution.

When Tison then filed a motion for attorney fees and costs, alleging that he was the prevailing party and was therefore entitled to an award of fees pursuant to both the condominium association's own declaration as well as Florida law, the association did not waste any time in responding.  It asserted Tison was not entitled to be awarded for his legal fees because he was no longer a unit owner. The lower court agreed, ruling that although Tison was the prevailing party, he was not a unit owner and was therefore not entitled to attorney fees.

In Tison's subsequent appeal, the appellate panel first looked to the association's own declaration. It provides for attorney fees and costs to be awarded to unit owners if they are the prevailing party in such actions, and it defines owners as the owners of a condominium parcel.

In addition, the Florida law governing condominium associations provides that the prevailing party in such lawsuits by associations is entitled to recover reasonable attorney fees, and it defines a "unit owner" as "a record owner of legal title to a condominium parcel."

The appellate panel found that Tison was indeed the prevailing party in the litigation because the case against him was dismissed for lack of prosecution, and the association received none of the relief it sought in the complaint.

As to the question of whether Tison is entitled to attorney's fees and costs even though he was no longer a unit owner at the time he filed his fee motion, the court cited several prior Florida appellate court rulings and concluded the lower court erred in denying his motion. It found that the relevant question is not whether Tison was a unit owner at the time he filed the fee motion, but rather whether he was a unit owner when the cause of action for unpaid assessments accrued.

The panel concluded that obviously Tison was a unit owner under both the definitions in the declaration and Florida law at the time the association's alleged cause of action accrued. Under the plain language of the declaration, the court found his entitlement to the fees award did not turn on whether he was a unit owner when he filed his fee motion.  Likewise, the plain language of Florida Statutes Section 718.303(1) also authorized an award of fees under these circumstances.

The court concluded that Tison's sale of his interest in the unit during the litigation did not preclude a determination that he was the prevailing party in an action brought by the association entitling him to the fee award.

"In short, because Tison was a unit owner at the time the Association's alleged cause of action accrued, he had a vested right to attorney fees under the Declaration and under Section 718.303(1) upon prevailing in the litigation. Tison's substantive legal rights, including his status as a unit owner for purposes of the statutory and contractual fee provisions at issue here, were fixed when the cause of action accrued," the opinion concludes.

The panel reversed the lower court's ruling and remanded the case back to the trial court for a determination of the reasonable amount for the award, which presumably became substantially greater with the appellate action.

There are several reasons why foreclosure cases can be delayed and derailed, but associations must remain cognizant of the fact that they could be stuck with the bill for a unit owner's legal fees if the owner prevails. Even in cases that become problematic and difficult to prosecute or in which an owner sells their unit during the litigation, associations must remain diligent in prosecuting them to conclusion and at the very least reaching a token settlement that prevents the potential claim to a prevailing party fee award.

Michael L. Hyman is a shareholder with Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel in Coral Gables. He has focused on community association law since 1970. Contact him at [email protected].