Avatar Properties, Inc. v. Gundel
The Sixth DCA affirmed a nearly $35 million class judgment holding that a developer's perpetual "Club membership fee" — pure profit above actual amenity expenses — is an illegal assessment under section 720.308, Florida Statutes, because chapter 720 limits assessments (including those payable to a developer or owner of recreational facilities under section 720.301(1)) to the member's proportional share of expenses. The court further held that the developer could not rely on a contractual waiver/estoppel clause to defeat the statutory protection, and that section 725.04 bars the voluntary payment defense for payments made pursuant to a contract. The court certified a question of great public importance to the Florida Supreme Court, over a lengthy dissent.
Key facts
- Avatar Properties, Inc., a developer, imposed perpetual 'Club membership fees' on homeowners in a residential community that exceeded the actual cost of maintaining recreational amenities and generated pure profit for the developer.
- Homeowners filed a class action claiming the fees violated Florida Statutes section 720.308, which limits assessments to a member's proportional share of expenses; the trial court entered judgment for the class in the amount of nearly $35 million.
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Why it matters
This is a landmark decision for developers, community associations, and homeowners: it caps developer-imposed amenity/club fees at actual expenses under chapter 720 and forecloses contractual waiver of chapter 720… — full analysis with a trial
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