Condominium associations and homeowners associations have the option to foreclose on a property to recoup debts owed. Although each situation is unique, there are considerations to be made before deciding to file a lawsuit against a homeowner. Our Miami HOA and COA foreclosure attorneys have provided insight into this often complex situation.
Address the Arrears Early
A common mistake made on the part of community associations is to allow an owner to acquire a significant amount of outstanding credit before taking action. Allowing years worth of past due assessments to accumulate eliminates the possibility of developing a reasonable repayment plan for the financially struggling individual. Besides, settling for a smaller amount is not an option due to Florida Stat. 718.116(9)(a) which states that one owner may not be excused from their payment unless all other unit owners are also proportionately excluded.
Put Into Effect a Collection Procedure
Establishing a collection procedure is one method of preventing accounts from accumulating large balances. Issuing past due letters and turning the matter over to the Association Attorney at the first sign of trouble is one way for associations to be proactive. Furthermore, notifying an attorney of delinquent accounts once they become 30 days past due will aid in more efficient collection of assessments.
Rental Properties with Outstanding Fees
Under Florida law, community associations are permitted to directly collect rent from leased properties that are behind on their assessment fees. The collected payments would then be used by the association to offset the arrears.
Placing a Lien on the Property
Once a homeowner falls behind on their dues and assessments the HOA or COA has the option to automatically place a lien on the property in order to collect the debt. Florida law requires an HOA to provide written demand to be given to the owner allowing 45 days to reconcile the balance, and a COA must provide a 30 day-notice of intent before a lien can be filed. The individual may be held liable for unpaid assessments, late fees, attorney’s fees, fines, and interest.
Foreclosing on HOA Liens
The HOA may choose to foreclose on a property with a lien, even if the property has a mortgage. Florida law permits the HOA or COA to foreclose a lien for outstanding assessments in the same way that a mortgage if foreclosed. Mortgages in Florida are foreclosed judicially, meaning that the association must file a lawsuit in court to foreclose the lien.
While foreclosure may not always be the best solution, experienced Miami HOA and COA foreclosure attorneys can provide significant insight into available options for recouping outstanding fees and assessments. Contact Graham Legal, P.A. today for a free consultation.