The Florida Legislature was busy during the
2007 session crafting various pieces of
legislation to further confuse, complicate
and, sometimes, improve the operations of
condominium associations and homeowners
associations. A number of new statutes
became effective on July 1, 2007.
The
next few issues of BackerReport will
discuss the various changes made to Chapters
718 and 720. These articles are not intended
to be exhaustive, detailed analyses of each
amendment, but, rather, will highlight those
changes that will impact most communities.
Homeowners Association Assessments
Section 720.3085 was amended to clarify that
a parcel owner in a homeowners' association
is responsible for paying all assessments
that come due while he is the parcel owner
regardless of how he acquired title. That
section also was amended to expressly state
that a parcel owner's liability for
assessments may not be avoided by waiver or
suspension of the use or enjoyment of the
common area or by abandonment of the parcel
upon which the assessments were made. The
amendment did little to change the
obligations of the lot owners in most
communities; most communities' governing
documents already provide that the lot owners
are obligated to pay for assessments that
come due while they hold title. The
legislature did, however, add language to
this section
that may not have been contained in many
communities' governing documents concerning
the parcel owners' obligation to pay for
assessments that became due prior to that
owner's taking title. The statute provides
that a parcel owner is jointly liable with
the previous parcel owner for all unpaid
assessments that came due up to the time of
transfer of title. Interestingly, the
statute is silent about the potential
liability of lenders that take title to
parcels through foreclosure where there were
assessments that came due prior to the
lender's taking title.
Many clients had been counseled to decline to
accept partial payments from delinquent
owners. The rationale for declining partial
payments was to avoid an owner's claim that
the association had agreed to a payment plan.
The statute was amended to provide that
homeowners
associations may accept partial payments and
that those payments must be first applied to
any interest accrued, then to any
administrative late fee, then to any costs
and reasonable attorney's fees incurred in
collection and then to the delinquent
assessment. The statute provides that the
application of payment sequence applies
despite any restrictive endorsement,
designation or instruction that may have been
placed on or instruction that may have been
placed on or that accompanies the payment.
The statute specifically clarifies that a
late charge authorized by the association's
bylaws shall not be construed as a fine. By
clarifying that point, the legislature has
clarified the fact that it is not necessary
to have hearing before a committee before
including a late charge on a delinquent account.
Homeowners Association Liens
The statute provides that a homeowners
association may not file a claim of lien
against a parcel for unpaid assessments
unless a written notice or demand for past
due assessments as well as other amounts owed
to the association has been made by the
association. The written demand must provide
the owner with forty-five (45) days to make
payment for all amounts due, including, but
not limited to any attorney's fees and actual
costs associated with the preparation and
delivery of the written demand. The statute
requires that the demand be sent by
registered or certified mail, return receipt
requested and by first class United States
mail to the parcel owner at his last known
address as reflected in the records of the
association. For those owners who live
outside of the United States, the letter is
required to be mailed to the owner at the
address of the parcel. The legislature has
also imposed a forty-five (45) day waiting
period between the time that the association
records its claim of lien and the time that
the association is authorized to file a
foreclosure action. The foreclosure action
may not be filed until forty-five (45) days
after the parcel owner has been provided with
notice of the association's intent to
foreclose and collect the unpaid amount. The
combined effect of the two new requirements
means that our collection procedures will be
changed somewhat. For those communities for
whom we perform collections work, our initial
thirty (30) day letter will now be required
to provide the owner with forty-five (45)
days before we can record a claim of lien.
Our second letter, which includes the
preparation of the claim of lien will now be
required to provide forty-five (45) days
notice of the association's intent to
foreclose before the foreclosure action is
filed.
The overall effect of the new
amendments is that the Association's ability
to pursue collection may be delayed for up to
thirty (30) additional days. No one is more
frustrated than this author by the
legislature's creation of these
needless obstacles to an association's
ability to collect its lawfully levied
assessments. It is difficult to think of any
other type of creditor that must jump through
such detailed hoops to collect money it is
owed while, at the same time, being required
to continue to provide services to the
person that owes the money. Can you imagine
a law, for example, that requires a dry
cleaner to continue cleaning a customer's
clothes even when the customer has failed to
pay for previously cleaned clothes? Can you
imagine a law that would require Publix to
continue to provide a
customer with food even when the customer
refuses to pay? Should Publix or the cleaners
be required to send a series of certified
letters over the course of 90 days before
they can pursue their right to collect the
debt? You can see where this is going; once
again, the Florida legislature has created
laws that favor those who refuse to pay their
bills at the expense of the vast majority of
those who pay on time. In this author's
opinion, these new laws reflect
the legislature's failure to recognize the
challenges an association faces when owners
do not contribute their share of a budget
that was created based upon an optimistic
ssumption of
everyone paying timely.
To avoid any
delay in the ability of your association to
collect its delinquent assessments, the
association and its management should be
diligent in forwarding those accounts in need
of collection to our office for processing
promptly.
Condominium Beach Access
An amendment to the Condominium Act (718.106)
specifically prohibits a local government
from adopting an ordinance or regulation that
would prohibit condominium unit owners or
their guests, licensees or invitees from
pedestrian access to a public beach that is
contiguous to a condominium property. The
prohibition is not applicable where it is
necessary to enact the ordinance to protect
the public health, safety or natural
resources and the statute specifically does
not prohibit a governmental entity from
enacting regulations governing activities
taking place on the beach. Apparently, there
were some condominium associations who were
being subjected to local ordinances or
regulations that prohibited them from
accessing the beach that was adjacent to
their condominium parcel. This author is not
aware of any of those particular communities,
however, this amendment is intended to
address those communities' concerns.
