Florida Association Foreclosure, Part 2: The anatomy of a foreclosure by a homeowners or condominium association

In many respects an association foreclosure mirrors a bank foreclosure, with some minor differences.

Once an account is delinquent, the association is permitted under Florida Statutes to place a lien on the subject property for nonpayment of assessments.

Prior to recording this lien, the association is required to send the offending homeowner a Notice of Intent to Lien and to provide a period of time with which to bring the account current (30 days for a condominium association, 45 days for a homeowners’ association).

If the account is not brought current during this time period, the association is permitted to record its lien and institute a foreclosure action in the subject property and against the offending homeowner.

Prior to filing the lawsuit, however, the association is required to offer the offending homeowner one last chance to bring the account current.

This is achieved by sending a Notice of Intent to Foreclose which includes a period of time with which to bring the account current (again, 30 days for a condominium association, 45 days for a homeowners’ association).

If no payment or other arrangement is made, the association is free to file a foreclosure action with the court.

Once a foreclosure action is filed and served, the homeowner has 20 days to file a response, otherwise the association may default the homeowner out of the lawsuit and immediately move for final judgment of foreclosure.

In this regard, it is very important for the homeowner not to ignore the lawsuit because, just like in a bank foreclosure, the homeowner will end up losing title to the property if nothing is done.

In the event a final judgment is entered in favor of the association, the court will set a foreclosure sale date for approximately 30 days out for the subject property.

A foreclosure sale is a public auction traditionally held on the courthouse steps (but now many counties conduct foreclosure sales online by using the service realforeclose.com).

Once the foreclosure sale is held, the clerk of court will wait 10 days before issuing a Certificate of Title to the high bidder. Once a Certificate of Title has been issued by the clerk, title to the property is considered to be transferred.

Don’t Let an Association Foreclosure Sneak Up

An experienced attorney can help a homeowner navigate the murky waters of an association foreclosure.

Even during the pendency of an association foreclosure, an attorney may be able to negotiate a settlement agreement (and many times may include a waiver of interest and late fees).

In addition, an attorney may be able to help defend against the association foreclosure to allow the homeowner to explore other options, such as a deed in lieu of foreclosure or short sale.

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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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