Q: An HOA Lien was sold at Auction, the person that purchased it wants us to pay rent or get out in 24 hours. What is the law related to this subject?

The purchaser at the HOA foreclosure, provided the foreclosure was properly performed and after issuance of the certificate of title in their name, should now own the subject property subject to any superior interests, many times the first mortgage. The pending bank foreclosure does not effect this right in relation to your ability to remain in the property.

That being said, the owner is offering  the option of staying in the property at an undisclosed rental amount. This is not something they are required to do but rather something they offering in the alternative to removal from the premises. The time limit is not appropriate however. The appropriate action the purchaser must take is called a writ of possession. Such action occurs within the Court System and culminates with the Sheriff providing you notice and a time frame to vacate.

If you are a tenant rather than the owner pursuant to the qualifications of the Federal Protecting Tenants in Foreclosure Act, additional time is mandated by law.

Q&A: When can a foreclosure sale winner enter the property?


If the property is vacant, do I have to wait for the certificate of title before I can open the door? After all, I already paid the final amount owed with the wining bid.


In Florida the title transfers upon the filing and issuance of the certificate of title. Despite having paid good and valuable consideration for the unit, you are not the owner until the certificate of title is issued in your name. Also there is a right of redemption period in Florida prior to the issuance of the certificate of title during which the original own can redeem his property.

Q&A If I Purchased A Foreclosure Property What Do I Owe the Association?


I received the Certificate of Sale, then Certificate of Title. I have now received an invoice for $18,000 in past dues for the last 4 years. Is this legal?


This is a frequent issue in foreclosure situations where the buyer is saddled with “buyer beware” or taking the property “as is”. There are a handful of arguments which may be made, although their efficacy is fact specific.

You should consider having an attorney review the Final Judgment of foreclosure entered in the case as well as having said attorney review the specific amounts being requested by the Association to ensure that the amounts may be recovered against the previous parcel owner as well as yourself and are not simply being “piled on”.

The relevant statute is 720.3085 (2)(b):

(b) A parcel owner is jointly and severally liable with the previous parcel 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 present parcel owner may have to recover any amounts paid by the present owner from the previous owner.


Q & A HOA Changing the Locks


Does the Florida HOA have the right to change the locks on an occupied unit they foreclosed on without informing the tenant?


Provided the leasehold is still in effect or was at the time of foreclosure, it is possible the Florida HOA has run afoul of several aspects in the Federal “Protecting Tenants in Foreclosure Act”. This act sets forth the manner in which tenants are treated and dealt with during and after a Florida HOA foreclosure on the property.

The act applies to all residential foreclosures, not just bank foreclosures. One additional consideration is that the lease must be “bona fide”. Bona Fide leases are defenied under the “Act” as one of three types:

(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;

(2) the lease or tenancy was the result of an arms-length transaction; and

(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State, or local subsidy

Who Pays Delinquent HOA Assessments After Foreclosure?

Florida Homeowner’s Associations have dealt with the issue of payment of delinquent assessments after foreclosure for some time. This issue is so prevalent in fact that Florida Statute address the issue in detail. Due to the substantial amounts involved in a prolonged foreclosure action, it is important for Associations to know what they may and may not recover. Furthermore, the recent filing of suits against Associations attempting to over reach in their recovery adds further weight to the need for awareness. This article will discuss the most common ways in which properties are transferred as a foreclosure proceeds and what can be recovered by the Homeowners Association.Association Foreclosures Florida
The Short Sale:

When a property is in foreclosure the owner may attempt to sell the property to an interested third party. However, with a foreclosure ongoing, it is necessary to first consult with the bank and obtain “short sale approval”, with a specified price the bank is willing to accept. Upon conclusion of the short sale, the new owner of the home becomes responsible for the entirety of the delinquent assessments, interest, late fees, costs and attorneys fees incurred by the Association in pursuit of recovering its assessments.
The reason for this is because of the language in Florida Statute 720.3085(2)(b). The statute states:

A parcel owner is jointly and severally liable with the previous parcel 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 present parcel owner may have to recover any amounts paid by the present owner from the previous owner.

This paragraph simply means that the new owner steps into the shoes of the old owner and is responsible to the same degree as the previous owner. If the Association is not adequately paid off at the time of short sale, the Association can then seek to recover all amounts due from the new owner.

Florida Homeowners Associations and Bank Foreclosure
The Bank Takes Title:
When the property concludes its foreclosure action and the foreclosure bank takes title at the foreclosure sale by outbidding all other bidders, the title transfers to the bank. This is one of the few situations where the Association’s usually superior interest in the property is undercut. The statutes specifically limits the recovery of Associations through a “safe harbor provision” in the statute.
Florida Statute 720.3085(2)(c) states:

… the liability of a first mortgagee, or its successor or assignee as a subsequent holder of the first mortgage who acquires title to a parcel by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due before the mortgagee’s acquisition of title, shall be the lesser of:

1. The parcel’s unpaid common expenses and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
2. One percent of the original mortgage debt.

These limitations on recovery for the Association mean that even under the best conditions, the Association will only be able to recover 12 months or 1% of the delinquent assessment owed on the property, whichever is less. Furthermore, the Association may not recover costs, late fees, interest or attorney’s fees as they are wiped out by the bank.
The bank may go beyond this statute and raise Appellate case law which, upon looking at the Association’s Governing Language, may reduce the amount the bank owes the Association to 0. These are very serious issues that should be discussed with your HOA Attorney to determine what position the Association will take when a bank purchases at foreclosure sale.

Third Party Purchaser:
Occasionally, a third party will throw their hat into the ring and purchase a property at the bank’s foreclosure sale. This is less frequent recently given the volume of foreclosure but still occurs every so often.
The third party purchaser find him or herself in the same unenviable position as the short sale purchaser. As the new owner of the property, the third party purchaser becomes responsible for the entirety of delinquent assessments, interest, late fees, costs and attorneys fees incurred by the Association.
This is often a surprise to the third party purchaser, especially if the Association has not secured its interest with a claim of lien. However, the Association need not be concerned regarding arguments as to a claim of lien as the Association’s interest in the property is secured by its governing documents.
Suffice to say, whenever there is a third party purchaser the Association should make every effort to collect all that is owed to it.
The most important thing to take away from this article and from any foreclosure sale is the same,  as much delinquent assessments as possible. A dedicated homeowner’s Association attorney can help do just that. Consider Association Assessment Attorneys, PA, www.AssociationAssessmentAttorneys.com for the task.

What to Do When Served with Foreclosure: A Step by Step Guide

Step by Step Guide after service of foreclosure.

For Associations who have not been brought into the current foreclosure crisis, and even for those who have, the service of a bank foreclosure Complaint, (the document that starts a foreclosure action in Court) can be a troubling, scary and confusing event. Usually the foreclosing party will serve the registered agent of the Association as listed on Sunbiz.org. Occasionally, the foreclosing party will serve members of the board of directors, their family members, the Association’s attorney, non-homeowners, mail men and the occasional doormat.


Service by any person other than the registered agent of the Association should generally not be accepted. There are strategic exceptions to this which are outside the scope of this article.


So your Association has been served:


Step 1: After confirming that you have indeed received a foreclosure complaint, the process-server is supposed to advise you what they are handing to you, immediately fax and if possible email the complaint to your attorney/legal adviser.


Step 2: Always follow-up with a call to your attorney/legal adviser to confirm receipt of the Complaint. The reason for this follow-up call is two-fold.


First, it is imperative that the Complaint be received and reviewed as soon after service as possible. Florida has a 20 day time frame for answering foreclosure Complaints. If a responsive document or extension is not done within that time frame, the bank may default the Association. This can result in the Association not being able to request the maximum amount of delinquent assessments at the end of the foreclosure. Additionally, the Association will be unable to move forward with motions to compel or motions to dismiss should the foreclosure stall.


Second, you can then discuss the strategy on how to respond to the foreclosure. There are many different reasons to avoid filing a simple answer to complaint.


For Example: Is the Association foreclosing itself? If so perhaps it would be more favorable to Association to make the bank prove its foreclosure by aggressively responding to the Complaint.


Is the bank attempting to overstep the provisions of Florida Statute 720.3085 or 718.116? If so, a simple answer may trap the Association into a certain recovery at the end of the foreclosure.


Step 3: Schedule a follow-up for 20 days from the date of the foreclosure to confirm that action has been taken.


If valid service occurred on August 31, 2011. The Association has until September 20, 2011 to respond. The date of service does not count. Weekends do.


Step 4: Expect and request monthly updates regarding the status of the foreclosure.


Foreclosure actions have taken several years to conclude given the volume and skill with which they are being worked by the bank. If a short sale or bankruptcy comes into play, years spent waiting can cause serious difficulty for the Association. If more than 3 months pass without significant progress, consider inquiring whether a motion to compel or call to the bank is appropriate.


To read more about our firm’s legal services, including Association Foreclosures, please visit Association Assessment Attorneys, P.A. main website.

Assessment Collection 101: What every Florida Condo and HOA needs to know

Condo Collection and HOA Collection in Florida

Claims of Lien Secure the Association’s Interest in Delinquent Assessments. Detailed State Law Guidelines must be followed to ensure the validity of a Claim of Lien.


Efficient, fee conscious collection is often enough to provide the Association with payment. However, when collection efforts are not enough, a claim of lien, prepared by Association Assessment Attorneys, P.A., creates a public notice of an owner’s indebtedness to the Association.


There are many detailed requirements in the law, which vary between Condominium Associations and Homeowner’s Associations, which must be complied with to ensure the validity of a claim of lien. Once prepared by an attorney, a claim of lien allows the Association to pursue foreclosure against the debtor.


Association Assessment Attorneys, P.A. offers the following legal services to assist your association with assessment collection: collection letters, claims of lien, payment plans, quit claim deeds and tenant rent demands.

Firm Founder Robert Todd Publishes Article on Association Assessments

First Published The West Florida Wire Community Association Institute Magazine: March 2011 


Association foreclosure due to delinquent assessments

Non-payment of Association Assessments has become a significant burden for many communities. Whether it is a result bank foreclosure, intention or apathy, the situation has affected thousands of communities across the state. There is no vaccine, but there is treatment.


At first blush, taking action against a unit owner that is delinquent or worse, in foreclosure, seems counter-intuitive. Why add to the problem? Why throw good money after bad debt? The weight of these questions can seem insurmountable when the initial delinquency occurs. It is only after an Association experiences a protracted bank foreclosure or repeated promises to pay that go unfulfilled, that the importance of early action in a delinquency becomes evident.


What follows will be a general analysis of the fictional delinquency of Unit A and the benefits of aggressive action.


Unit A has missed its January 2011 assessment and in keeping with the appropriate governing documents and statute, the Association may legally secure a claim of lien against the property. Other than the owner who is months or even year’s delinquent in assessments, why secure a claim of lien against a property that has recently become delinquent? Beyond providing evidence to the world that your Association has an interest in the property, there is now the requirement to satisfy the newly placed encumbrance on the property should the property be transferred or sold. In addition, if Unit A’s owner is still residing in the unit and simply not making payments or the community is beginning to see a trend of delinquent payment, it may be of assistance to indicate the Association’s refusal capitulate in instances of non-payment to the community as a whole.


Generally, the majority of Association’s governing documents provide for the ability to foreclose on a claim of lien against a unit. This “nuclear” option provides the Association governing Unit A the option to pursue a fully fledged foreclosure against the unit, ask the Court to sell Unit A on the Court House steps and eventually take title to the unit in order to rent it out or potentially even be paid in full by a third party purchaser.


Unfortunately, properties are not always held free and clear of a note to a lending entity. Frequently, properties will have a first, second or maybe even a third mortgage encumbering them. Therefore, it is necessary to review the governing documents to determine what mortgages the Association can wipe out and what mortgages can wipe out the Association. The most common circumstance involves a first mortgage which is superior but that is all. This also creates a unique opportunity to bargain with secondary mortgages as to the preservation of their interest by satisfying the Association’s lien.


It is a recurrent misconception that upon taking title to a unit with a first mortgage that an Association needs to begin making payments to the bank in order to avoid becoming personally responsible for the mortgage. This is not the case. Upon taking title to Unit A in the above scenario the Association would be able to rent the Unit while securing only landlord insurance for unforeseeable events. One caveat however, although rare, a bank that is foreclosing may seek to have a receiver appointed to collect the rents paid directly to the Association.


Finally, while on the topic of a foreclosing first mortgage, why would an Association ever begin an Association foreclosure when the bank is already foreclosing? The simple answer is time. Time is a commodity banks squander. The foreclosure process has consistently taken banks eight to fourteen months to conclude. Many foreclosures take considerably longer while some are dismissed only to be reinstituted extending the process for years. It is during this time that a timely filed, aggressive Association foreclosure against Unit A would reap the rewards of a lucrative tenant and a non-aggressive Association would continue to accrue unpaid assessments. As you can see, what at the inception of a bank foreclosure did not make financial cents to the Association can become financial dollars when appropriately aggressive.


To read more about our firm’s legal services, including Association Foreclosures, please visit Association Assessment Attorneys, P.A. main website.