Question: I would like to know what rights a Florida homeowners’ association has to enforce collection of assessment from the individual members. I believe the Florida Statutes say something about late fees and interest, but can they place a lien on my property even if the amount owed is minimal? Also, can the association pass its attorneys fees associated with collection of assessments I owe on to me? G.R. (via e-mail)
Answer: Chapter 720 of the Florida Statutes, which governs homeowners’ associations, permits the association to charge interest on assessments that are not paid by the due date established in the association’s governing documents. The right to charge interest need not appear in the association’s governing documents. However, if the association’s declaration or bylaws prescribes a rate of interest, that is the rate of interest that must be applied, so long as it does not exceed the maximum rate allowed by law. If the declaration and bylaws are silent, the default rate of 18 percent per year applies.
The association is not automatically entitled to charge an administrative late fee on assessments that are not timely paid. Rather, this right must be contained in the association’s declaration or bylaws and the fee established therein may not exceed the greater of $25 or 5 percent of the amount of each installment that is paid past the due date.
The association can pass on the costs and reasonable attorneys’ fees incurred in collecting assessments to the member who has failed to timely pay. Any payment made by the member is applied first to any interest accrued, then to any administrative late fee (if the association is authorized to charge such a fee), then to any costs and reasonable attorney’s fees incurred in collection, and then to the delinquent assessment.
Similar to the administrative late fee, the right of a homeowners’ association to record a claim of lien against a property to secure payment of past due assessments must be authorized by the association’s governing documents. If the association has the right to record a claim of lien, Chapter 720 also bestows upon the association a right to foreclose a lien for assessments, no matter how small the amount owed. Similarly, the association can collect the amounts owed by bringing an action to recover a money judgment. The association may recover any interest, late charges, costs, and reasonable attorney’s fees incurred in a lien foreclosure action or in an action to recover a money judgment for the unpaid assessments.