A new appellate decision from the 3rd District Court of Appeals has addressed what happens to the outstanding delinquency if the association becomes the property owner as a result of foreclosure of the Association’s lien. Ultimately the Third District ruled that the new owner did not have to pay.
(Here is a link to an excellent blog post by Becker & Poliakoff attorney, Lisa Magill, Esq. explaining the new decision)
In my opinion, an association should not lose the right to collect past due assessments just because it has foreclosed its own lien. While some will argue that the decision is fair because the association could still rent the unit and recoup some of the delinquent fees through the collection of rent, there are times when the unit is not in a rentable condition. Further, even if the unit can be rented, the association may not own the unit long enough to recoup all of the past due assessments. CALL takes the position that the statute should facilitate association collections of delinquencies, not provide a safe haven for investors.
The court case actually comes at a good time, as the Legislature is set to convene in March for the 2013 Legislative Session and could fix this problem for associations legislatively.
Very Truly Yours,
Yeline Goin Executive Director
Community Association Leadership Lobby (CALL)
Follow me on Twitter: http://twitter.com/YelineGoin_CALL