Florida Law Florida Condominium Foreclosure

Florida Law

Florida Condominium Foreclosure Law

In Florida, a condominium owner failing to pay either maintenance or assessment fees, may be subject to lien and/or foreclosure due to the nonpayment. The controlling statute in this matter is Florida Statute 718.116. Two recent cases on point in Florida come out of South Florida. In April 2010, The Fourth District Court of Appeal, serving Broward and Palm Beach County, affirmed a 2009 ruling (U.S. Bank National Association as Trustee for the Benefit of Harborview 2005-10 Trust Fund v. Tadmore) from the Third District Court of Appeals, which covers Miami-Dade County.

Case Brief

Parties:

Plaintiff- U.S. Bank National Association as Trustee for the Benefit of Harborview 2005-10 Trust Fund, and Defendant- Danny Tadmore, deceased, The Unknown Spouse of Danny Tadmore and the Estate of Danny Tadmore.

Fact:

Defendant Tadmore's condominium was in foreclosure by lender for failing to pay mortgage. Condominium Association filed motion seeking payment of assessments from foreclosing bank.

Background:

Florida Statute 718.116 clearly states in Section 1(a) that:

(1)(a) A unit owner, regardless of how his or her title has been acquired, including by purchase at a foreclosure sale or by deed in lieu of foreclosure, is liable for all assessments which come due while he or she is the unit owner. Additionally, a unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title. This liability is without prejudice to any right the owner may have to recover from the previous owner the amounts paid by the owner.

The statute further gives the association the right to file a lien against any unit owner who does not pay their assessments and to subsequently foreclose on the lien. According to Section 5(a) and (b) of the statute:

(5)(a) The association has a lien on each condominium parcel to secure the payment of assessments… the lien is effective from and after recording of a claim of lien in the public records of the county in which the condominium parcel is located.

(b) To be valid, a claim of lien must state the description of the condominium parcel, the name of the record owner, the name and address of the association, the amount due, and the due dates. It must be executed and acknowledged by an officer or authorized agent of the association. No such lien shall be effective longer than 1 year after the claim of lien was recorded unless, within that time, an action to enforce the lien is commenced

Issues:

What rights do Condominium Associations have against unit owners and against non-owner lenders foreclosing against unit owners.

Decision:

Condominium Associations have statutory fee to foreclose against unit owners for non-payment of fees and assessments, but foreclosing lenders are not liable for same until they officially take title to unit.

Reasoning:

The Tadmore case makes it clear that first mortgage holders have substantial protection by statute. However, associations still have the right to pursue owners for assessments and to file and foreclose their own liens. Associations choosing to wait for bank foreclosure may be exacerbating the problem of unpaid assessments rather than solving it. (Morris)