Can my condominium association or homeowners’ association file a lien against my unit or parcel? If so, can they also foreclose on that claim of lien?
The answer to both questions is “yes.” In Florida, community associations, which include condominium associations and homeowners’ associations, have the right to record a claim of lien and foreclose on that claim of lien for unpaid assessments and related charges owed to the association. This process is governed by Florida Statutes, particularly Chapter 718 for condominium associations and Chapter 720 for homeowners’ associations. The following is a step-by-step overview of the process:
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Notice of Late Assessment (“NOLA”)
Before the collection process can be turned over to the association’s attorney or before any attorney’s fees and costs may be added to the owner’s account, the association must send the owner a Notice of Late Assessment (NOLA). The NOLA includes an itemization of the amount due, including the following: assessments, late fees, and interest accrued on the account. The NOLA provides the owner with thirty (30) days to remit payment to bring their account current. It must be sent by first-class U.S. Mail to the owner’s last address as reflected in the association’s records. If that address is not the unit or parcel address, the NOLA must also be sent to the unit or parcel address. The association or its property management company should prepare an affidavit of mailing to evidence that the NOLA was properly sent.
- Notice of Intent to Lien (“NOIL”)
If the owner fails to pay within the 30-day period set forth in the NOLA, a Notice of Intent to Lien (NOIL) must be sent to the owner. The NOIL contains an itemization of the amount due, including assessments, late fees, interest, and any attorney’s fees and costs. The NOIL provides the owner with an additional forty-five (45) days to remit payment to bring their account current. It must be sent by certified U.S. Mail, return receipt requested, to the owner’s last address as reflected in the association’s records. If that address is not the unit or parcel address, the NOIL must also be sent to the unit or parcel address.
- Notice of Intent to Foreclose (“NOIF”)
If the owner fails to pay within the 45-day time period set forth in the NOIL, the association’s counsel prepares a claim of lien for the outstanding assessments and related costs, which is then recorded in the official records of the county where the property is located. Next, a Notice of Intent to Foreclose (NOIF) is sent to the owner along with a copy of the recorded claim of lien. The NOIF contains the total amount due, including assessments, late fees, interest, and any attorney’s fees and costs. The NOIF provides the owner with another forty-five (45) days to remit payment to bring their account current. The NOIF must also be sent by certified U.S. Mail, return receipt requested, to the owner’s last address as reflected in the association’s records. If that address is not the unit or parcel address, the NOIF must also be sent to the unit or parcel address.
- Foreclosure Lawsuit
If the owner fails to pay within the 45-day period set forth in the NOIF, the association may initiate foreclosure proceedings against the unit or parcel. In Florida, community associations must pursue judicial foreclosure, meaning the court oversees the process. The association begins this by filing a lawsuit against the owners of the unit or parcel in the appropriate court. Once the complaint is filed, a summons is issued for each defendant, including the owner(s) of the unit or parcel and any individuals or entities having liens or mortgages on the property. The complaint and summons will be formally served on each defendant.
Defendants have twenty (20) days from the date of service to file a response to the foreclosure complaint. Owners have the right to defend against the foreclosure lawsuit and can raise various defenses, such as challenging the validity of the lien, the notices provided, or the amount owed. After the defendants have filed a response or have been defaulted by the clerk of court, the association may seek a judgment to foreclose on the lien, which could lead to a public auction of the property. If the foreclosure is successful, the owner risks losing their property, and the association could recover the debt owed through the sale proceeds. However, under certain circumstances, the owner may be able to redeem the property by paying off the debt before the foreclosure sale.
Conclusion
Community association foreclosure of a claim of lien is a significant legal process that affects both the association and the owner. If you are involved in such a situation, whether as a unit owner facing foreclosure or as a member of the board of directors of an association seeking to collect on overdue assessments, it is advisable to consult with an attorney who specializes in community association law to understand your rights and options.