Getting out of a contract signed by the developer
Q: I am working hard as a member of the transition committee for our condo association because turnover from developer control is imminent. The developer negotiated a long-term cable television /internet contract that is going to last for years. There are better alternatives now because of changes in technology. Any chance we can get out of this contract because the developer signed it and not the owner-controlled association?
A: Section 718.302(1) of Florida statute says: “Any grant or reservation made by a declaration, lease or other document and any contract made by an association prior to assumption of control of the association by unit owners other than the developer that provides for the operation, maintenance or management of a condominium association or property serving the unit owners… shall be fair and reasonable, and such grant, reservation or contract may be canceled by unit owners…” under certain circumstances.
The cable providers have argued that this does not apply to them because cable contracts do not provide for the “operation, maintenance or management of condominium property.”
There was a case in Broward County recently that tested this, although because the case was not in a local court, the result is not strictly applicable to west coast associations.
In the case, the association’s attorney sent a written notice that the association was terminating the contract signed by the developer and asked that the cable company open its lock boxes. They didn’t and responded with a lawsuit for breach of contract. The association drilled into the boxes and permitted another provider to connect. The courts found for the association with the appellate court stated that the cable company “installed wires and lock boxes to provide services to all the unit owners. By virtue of the agreement, the cable company operated and maintained the system that it installed. Further (the statute) provides that the cost of cable television service obtained pursuant to a bulk rate contract is deemed a common expense. Common expenses include the expenses of the operation, maintenance, repair, replacement or protection of the common elements and association property.”
The east coast case does not guarantee success but should a local court be involved, it would certainly be taken into account. Seek the advice of an attorney before proceeding, especially to better understand that the contract may be canceled “under certain circumstances.”
Attorney Sylvia Heldreth is a Certified Specialist in Real Estate Law. Her office is located at 1215 Miramar Street in Cape Coral.
This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.