Florida HOA and COA Foreclosures

If you fail to pay homeowners' or condo association assessments in Florida, the HOA or COA can foreclose on your condo or townhome.

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.

Florida HOA and COA Lien Laws

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.

How HOA and COA Liens Work

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)).

Lien Priority

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.

  • If a lender or other entity recorded a lien against your home before the laws were enacted (July 1, 2008 for HOAs and April 1, 1992 for COAs), then the HOA or COA lien priority date doesn't go all the way back to the recordation of the CC&Rs or Declaration of Condo unless something in the HOA or COA declaration allows the association to use the earlier lien priority date.
    • 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?)

    Charges the HOA or COA May Include in the 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)).

    • Assessments. The HOA or COA can include amounts for unpaid assessments in the lien.
    • Late charges. If the HOA/COA declaration or bylaws so provide, the association may charge an administrative late fee in an amount not to exceed the greater of $25 or 5% of the amount of each installment that is past due. (Fla. Stat. Ann. § 720.3085(3)(a), § 718.116(3)). (However, while the HOA statute specifically states that these late charges may be included in the HOA’s lien, the COA lien statute doesn't.)
    • Attorneys' fees and costs. The HOA or COA is entitled to include its reasonable attorneys' fees and costs in the lien.
    • Interest. The HOA or COA may also charge interest on unpaid assessments at the rate provided in the declaration or bylaws, though it may not exceed the rate allowed by law. If no rate is provided in the declaration or bylaws, interest accrues at the rate of 18% per year. (Fla. Stat. Ann. § 720.3085(3), § 718.116(3)).

    Contesting the Lien

    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)).

    HOA and COA Foreclosures in Florida

    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.

    Notice Required in HOA Foreclosures

    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)).

    Notice Required in COA Foreclosures

    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:

    • the condo owner records a notice contesting the lien
    • an action to foreclose a mortgage on the condominium unit is pending before any court (if the rights of the COA would be affected by such foreclosure), and
    • if actual, constructive, or substitute service of process has been made on the unit owner. (Fla. Stat. Ann. § 718.116(6)(b)).

    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)).

    Making a Qualifying Offer in an HOA Foreclosure

    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:

    • the condo unit is not the subject of a mortgage foreclosure or a notice of tax certificate sale
    • the homeowner is not in bankruptcy proceedings, or
    • the trial for the lien foreclosure action is not set to begin within 30 days. (Fla. Stat. Ann. § 720.3085(6)).

    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)).

    Statute of Limitations

    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.

    What to Do if You're Facing Foreclosure by an HOA or COA

    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.

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