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07/31/14 It's The Law: Condominium Lien May Not Include All Assessments

It's The Law

Condominium Lien May Not Include All Assessments

(07/31/14)

Question:

I am on the board of directors for my condominium. We have a disagreement concerning liens for unpaid assessments. I claim the lien includes all assessments until paid in full. Another board member argues that the lien is only for assessments through the date that it's filed. Who is right?

Answer:

The answer to your question depends, in part, on the wording of your declaration and, in part, Florida Statutes. Some declarations provide an association with authority to accelerate the assessments remaining due for the balance of the year in which the lien is filed and demand payment immediately. For those associations, the lien should reflect the accelerated balance and not merely the assessments due through the date the lien is filed. Others make various sums that might be due from owners as lienable.

To be valid, a claim of lien must include description of the condominium unit, name of the record owner, name and address of the association, the amount due and the due dates. A lien must be recorded at the Public Records of the county where the property is located. If action to foreclose the lien is not filed with the courts, the lien expires one year after it is recorded.

By statute, the lien secures all unpaid assessments that are due and "that may accrue after the claim of lien is recorded and through the entry of a final judgment," plus interest, costs and attorney's fees incurred in collection. Many understood the statute made the lien include all assessments by an association that were levied or due prior to final judgment of foreclosure. But, the appellate court in the recent case of Losner v. Australian of Palm Beach Condominium Association, Inc. indicates that may not be correct.

In Losner, a condominium association foreclosed its lien and the judgment included quarterly assessments and two special assessments. A special assessment is an assessment levied by the board of directors to meet an unbudgeted and unexpected expense. It is defined by statute as any assessment other than assessments required by a budget adopted annually.

Mr. Losner appealed arguing that the special assessments should not have been included in the judgment. The appellate court agreed.

The Court explained that Section 718.116 (5) (b) of Florida Statutes states the claim of lien "secures all unpaid assessments that are due and that may accrue after the claim of lien is recorded and through the entry of a final judgment." But, the court explained that the word "accrue" includes assessments already adopted before a claim of lien is filed, but coming due afterward. It is not include additional assessments for other purposes. The court further explained that the association had not pled any basis for including the special assessments as part of the foreclosure. Since the statute only brought assessments that had been established but not yet due within the association's lien, something more would have to be shown for the association to include special assessments or other charges as part of its foreclosure. The case was sent back to the trial judge to enter a corrected judgment.

Florida statutes also make it clear that the lien does not secure payment of any fine imposed by the association. Other expenses due from unit owners, such as reimbursement for damage to association property, are also not likely subject to lien. But, language in your declaration may make such expenses lienable. I suggest you consult an experienced attorney to settle your issue with finality.

By: William G. Morris, Esquire.

William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.

Questions for this column can be sent to: William G. Morris, e-mail: wgmorrislaw@embarqmail.com or by fax, (239) 642-0722 or

The Marco Island EagleOther articles of interest can be viewed at our website, www.wgmorrislaw.com

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