Community Associations, including condominium and homeowners’ associations, have specific responsibilities to their owners to ensure that budgets are met and maintenance and operation services are performed. For an association to be able to achieve these goals, owners must pay their assessments in full, and on time. When owners fail to fully or timely pay, the association must pursue the amounts owed from delinquent owners.
Under Florida Statutes Chapter 718 and 720, as well as the association’s governing documents (typically the declaration or covenants), community associations have legal rights to regularly collect assessments from all owners to pay for common expenses. When owners do not pay their share, the Board can use various measures to collect the delinquent monies from the owner.
Some of the most common approaches are filing a claim of lien against the unit followed by foreclosure, collection of rent directly from a tenant residing in the unit, suspending owner voting rights, and restricting owner access to amenities.
Each association is subject to the “operative statute” from when it was created and the specific language within that statute. Each governing law may vary, but most establish the association’s lien rights against the unit to secure the payment of assessments, along with other expenses such as interest, late fees, collection costs, and attorney’s fees incurred incident to the collections process.
The association must be careful in how these delinquent amounts are calculated. The laws in Florida are very specific on how much interest an association can charge as well as how partial payments must be applied. It is helpful for the association to have a uniform collections policy on when and how the collections process will be handled, in order to apply it fairly and evenly to all owners.
An experienced community association attorney can help prepare this type of collections policy for association approval, and can also help ensure that the association calculates the delinquent amounts owed correctly and complies with the legal requirements and process to collect those amounts.
Before a claim of lien can be recorded, the association must first send the proper notice to the unit owner and then follow the specific guidelines outlined in the governing documents and operative statute.
Once a claim of lien is recorded in the public records where the property is located and notice of the recording is sent to the owner, the association can file a lawsuit seeking to foreclose on the claim of lien.
Depending on the governing statute, an association may also have the right (after notification and in compliance with the law) to collect rent directly from a tenant who lives in the unit and whose landlord is the owner in arrears. Those rent payments would then go towards paying down the back-owed assessments.
An additional option for associations is to suspend the delinquent owner’s voting rights and/or prohibit them from using certain common areas and amenities until the debt owed is fully paid. However, these sanctions require certain board approval with proper notice before and after the suspension is imposed. This is another area where your community association attorney can help.
About the Author: Rebecca Newman Casamayor is an experienced commercial litigator with expertise in complex business and commercial litigation, breach of contract cases, construction law, community association law and litigation, business fraud, and bankruptcy.
In the world of high-end residential real estate, developers are constantly pushing the boundaries of…
The reading of a community association’s election results can be filled with mixed emotions ranging…
A well-drafted partnership agreement among law firm partners is often the initial step to long-term…
The leadership team at Haber Law today announced the promotion of long-time office administrator, Nilka…
Haber Law Equity Partner Roger Slade and Senior Associate Eddie Holiday prevailed in a two…
The developer of the planned Edition Residences in Miami’s Edgewater is on unforeseen footing after…