If you live in a house, townhome, or condominium that's part of a common interest community in Florida, you're most likely responsible for paying dues and assessments to the homeowners’ association (HOA) or condominium association (COA). If you don’t pay, in most cases, the HOA or COA can get a lien on your property that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA and COA foreclosures in Florida.
In Florida, two separate sets of statutes govern association liens. One set covers HOAs in planned communities (Chapter 720 of the Florida Statutes) and the other covers COAs (Chapter 718 of the Florida Statutes). The two sets of laws are very similar.
In most cases, once you fall behind in payments, the HOA or COA can obtain a lien on your property. Almost all HOAs and COAs have the power to place a lien on the property if the homeowner becomes delinquent in paying the monthly dues or any special assessments (collectively referred to as “assessments”).
In Florida, an HOA may not file its lien unless it first provides the homeowner with a written demand that provides 45 days to pay all amounts due. (Fla. Stat. Ann. § 720.3085(4)). A COA can't file a lien until 30 days after a notice of intent to file a lien has been delivered to the owner. (Fla. Stat. Ann. § 718.121(4)).
Two Florida laws speak to lien priority. According to changes in 2008 to the HOA law and changes in 1992 to the COA law, for purposes of lien priority, you use the date that the HOA or COA recorded its Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium. (Fla. Stat. Ann. § 720.3085(1), § 718.116(5)(a)). This is advantageous to the HOA or COA because its lien might get priority over another lien recorded before you became delinquent on the assessments if the association's declaration was recorded even earlier.
There’s a wrinkle though. In some cases, the association can't use the earlier lien priority date. Here’s why.
Even if the declaration provides language allowing the association to use the earlier date, some courts have ruled otherwise—that the lien priority position doesn't go all the way back to the recordation of the declaration.
Needless to say, the law in Florida on lien priority of HOA and COA liens is complicated. If you have questions about how lien priority impacts you if your home or condo is foreclosed, talk to a Florida attorney with experience in dealing with association foreclosures.
When it comes to first mortgages of record, the lien is effective from and after the date the HOA or COA records the lien in the public records in the county where the property is located. (Fla. Stat. Ann. § 720.3085(1), § 718.116(5)(a)). (Learn more about lien priority and what happens to a first mortgage in an association foreclosure in What happens to my mortgages if the HOA forecloses on its lien?)
Florida law sets out the types of charges that the HOA or COA may include in the assessments lien. (Fla. Stat. Ann. § 720.3085(1)(a), § 718.116(5)(b)).
A homeowner can force the HOA or COA to enforce a recorded claim of lien by recording a particular notice called a “Notice of Contest of Lien”. The exact format that you must use for the notice is included in the statute. (Fla. Stat. Ann. § 720.3085(1)(b), § 718.116(5)(c)).
The association then has 90 days after being served with the notice to file an action to enforce the lien. If the action isn't filed within the 90-day period, the lien is void. (Fla. Stat. Ann. § 720.3085(1)(b), § 718.116(5)(c)).
If you default on the assessments, the HOA or COA can foreclose. A common misconception is that the association can't foreclose if you're current with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments.
In Florida, the HOA or COA may foreclose a lien for assessments in the same manner in which a mortgage of real property is foreclosed. (Fla. Stat. Ann. § 720.3085(1)(c), § 718.116(6)(a)). Because mortgages in Florida are foreclosed judicially, the HOA or COA will file a lawsuit in court to foreclose its lien.
An HOA can't initiate a foreclosure until 45 days after the homeowner has been provided with a notice of the association’s intent to foreclose and collect the unpaid amount. (Fla. Stat. Ann. § 720.3085(5)).
A foreclosure judgment can't be entered until at least 30 days after the COA gives the owner written notice of its intention to foreclose its lien to collect the unpaid assessments. (Fla. Stat. Ann. § 718.116(6)(b)). The COA will be considered to have met this notice requirement if:
If the notice is not given at least 30 days before the foreclosure action is filed, and if the unpaid assessments—including those coming due after the claim of lien is recorded—are paid before the entry of a final judgment of foreclosure, the COA can't recover attorney’s fees or costs. (Fla. Stat. Ann. § 718.116(6)(b)).
In an HOA foreclosure, at any time before the entry of a foreclosure judgment, the homeowner may serve and file with the court a “qualifying offer” to pay all amounts secured by the lien (plus accrued amounts while the offer is pending) for the HOA to consider, so long as:
Generally, HOAs are willing to accept a qualifying offer because it means the debt will be paid off.
Once the homeowner files such an offer with the court, this stays (postpones) the foreclosure action for the period of time stated in the qualifying offer (not to exceed 60 days) so the homeowner can submit payment. (Fla. Stat. Ann. § 720.3085(6)(b)). The form to use when making a qualifying offer is provided in the statute. If the homeowner does not comply with the terms of the qualifying offer, the stay is lifted and the HOA may proceed with obtaining a foreclosure judgment.
A homeowner may only make one qualifying offer during a foreclosure action. (Fla. Stat. Ann. § 720.3085(6)).
For the lien to remain valid, a COA must initiate an action to enforce the lien within one year from the date that the lien was recorded. (Fla. Stat. Ann. § 718.116(5)(b)). This time limit is called the statute of limitations.
If you're facing an HOA or COA foreclosure, consider consulting with an attorney licensed in Florida to discuss all legal options available in your particular circumstances.