The Division of Florida Condominiums, Timeshares and Mobile Homes began investigating the Heritage Circle Condominium Association, Inc. as a result of the association's failure to prepare annual financial statements and its failure to fund reserves. Unfortunately, the association continually failed to produce all of the documents requested by the Division throughout the course of its investigation which resulted in the Division filing a petition to compel compliance.
The Division later amended its initial complaint to seek statutory penalties from the association. The Division's discovery requests were never fully met and finally, the trial court entered a default judgment, without a hearing, against the association. The Division requested and received liquidated damages in the amount of $25,000 and attorney's fees of $4,647.89.
The condominium association appealed and the Fourth District Court of Appeals reversed and remanded the case on September 18, 2013. Whether or not the sanctions will stand remains to be seen. Still, this case clearly demonstrates how frustrated the trial court must have been with the condominium association as the striking of pleadings is a severe penalty which is used only in extreme circumstances. It is not an unfair question to ask why this association felt that failing to cooperate with the Division's discovery requests was the best strategic move.
Sometimes the old advice to "stand up and face the music" are the words a wayward association needs to hear before making its errors even more complicated and more costly. There is simply no reason to believe that a regulatory agency is not serious about enforcing its requests and if a fellow board member, manager or lawyer tells you otherwise, get a second opinion!