Can You Bring a Lawsuit on Behalf of Your Client Association?

When a manager brings a lawsuit on behalf of a client association, the other party is likely to claim the manager doesn’t have the “standing” to do so. In essence, the other party is claiming the manager isn’t the person harmed and therefore has no legal right to complain.

This defense was recently raised by a developer in Florida, after it was sued for violating declarations.

Seaside is an 80-acre development with nine separate neighborhood associations, with identical language in their respective original declarations. Those declarations gave each “the right to enforce, by any proceedings at law or in equity, all restrictions, conditions, covenants, reservations, liens, and charges now or hereafter imposed by the provisions of this Declaration.”

In 1991, the associations all amended their declarations and formed the confusingly named Seaside Town Council (STC) to “assume management of the administration and operations” of the associations. The STC isn’t a town council but rather a nonprofit corporation.

In 2011, the associations voted to assign to the STC the right to sue the developer for violating the declarations. When the STC did so, the developer argued it couldn’t bring the claims because it wasn’t a party to the declarations or any transaction and doesn’t own property in Seaside. The trial court agreed and dismissed the lawsuit.

The Court of Appeals, on the other hand, sided with the STC. It found the 1991 amended declarations specifically granted the STC the right to represent the associations in asserting their rights to sue under the original declarations.

Read the full story now to learn how the case turned out, as well as some advice on how to protect yourself when a client wants to give you authority to sue:

Manager Could Sue Developer on Behalf of Clients

Best regards,
Matt Humphrey
President