Florida Association Foreclosure, Part 1: Understanding the terms of your purchase into a homeowners or condominium association

Because of Florida’s boom in development during the 1990s and early 2000s, many properties are included in planned unit developments, more commonly known as homeowners’ and condominium associations.

If a property is located within one of these developments, activities conducted on and uses of the particular property are governed by the association charged with overseeing the day-to-day operations of the development.

Although we tend only to notice the activities of the association as they relate to aesthetic matters (landscaping, trash disposal, pool maintenance, etc.), much of the association’s duties relate to community finances and enforcement of the association’s governing documents.

While the legal principles involving associations is vast, this blog will focus on one small aspect of the association puzzle: association foreclosures for nonpayment of assessments.

Governing Documents

All associations are governed by a set of documents, most commonly referred to as the declaration.

This comprehensive document sets forth all rules, regulations, and restrictions to be enforced within the bounds of the association, including restrictions on use of the property and setting forth the assessments to be paid by each lot or unit owner.

The declaration for any given association is a recorded document and can be found in the public records of the county where the development is located. The declaration can be amended from time to time, and each amendment is typically memorialized by the recording of a document outlining the changes made to the original declaration.

If a dispute ever arises regarding use of the property, or assessments owed on a particular property, the declaration is the first place to look in determining the rights and responsibilities of the parties to the dispute.

Assessments

As outlined in the declaration, assessments are the amounts paid to the association by each person or entity holding title to property within the association.

Although assessments are most typically paid on a monthly basis, some associations collect payment of assessments on a quarterly, semi-annual, or annual basis (be sure to check the governing documents for this information).

Payment of assessments by the owners is essential to the association’s ability to maintain the grounds and perform all the duties placed upon it in the governing documents.

Owners in an association should be aware that payment of assessments is an obligation that comes with owning a property governed by an association (and is not included in a mortgage payment).

In other words, payment of assessments is the price for enjoyment of all the amenities association living can offer.

Nonpayment of Assessments and its Consequences

Unfortunately, as is all-to-common these days, situations can arise which place a strain on one’s ability to keep current on all financial obligations.

When financial pressure mounts, it may be easy to stop making assessment payments to the association; however, this is a very perilous decision.

Many owners are not aware the association has the right to foreclose (or take) a property for nonpayment of assessments, and it can even obtain a monetary judgment against the offending lot or unit owner.

As many homeowners have discovered, it can be very difficult to escape an association foreclosure because once an assessment payment is missed, many declarations permit the association to tack additional fees on to the homeowner’s account (such as interest, late fees, collection costs, and other fees).

Check back next week when we examine the anatomy of an association foreclosure.

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This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.

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