Association's Options to Push Bank Foreclosures Are Still Viable Despite Tadmore & Coral Key
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Fourth District Court of Appeal Rules that Lender Cannot be Compelled to Pay Assessments Prior to Acquisition of Title.
An earlier post discussed the Third District's appellate ruling in the U.S. Bank National Ass'n v. Tadmore case which held that the Court cannot require a lender to pay condominium assessments before its completes its foreclosure case and obtains a Certificate of Title or otherwise acquires title to the unit. The Fourth District ruled the same way in a case involving the Coral Key Condominium Association. The ruling is hot off the press, so its not final yet. If anything changes we will report it on this site.
Do these rulings mean the Association is powerless when a bank is foreclosing against a property within the community? No - not at all.
The Motion to Compel filed in both cases asked the Court to require the lender to pay assessments immediately, reportedly since the mortgage foreclosure cases were taking so long. The Associations supported their request for relief upon notions of equity and fairness. Sure, it is unfair. The Association has to insure the property, pay for common utilities, pay for maintenance and repair of the property, etc. all while the unit owner isn't paying assessments. The lender derives a benefit from the Association's actions - its collateral is preserved and insured at the expense of all the paying unit owners. But, as my Dad used to say, life just isn't fair sometimes.
That doesn't mean Association's are without options when a bank is foreclosing against a property in the community, especially when there is a feeling that the bank is 'dragging its feet'. The Florida Rules of Civil Procedure allow the Courts to establish deadlines or schedules for certain actions to take place. Any party is entitled to request a case management conference at which the judge may (among other things):
- Set deadlines for service of motions, pleadings or other papers;
- Limit, schedule, order or expedite discovery;
- Require preliminary stipulations to narrow the issues; and
- Set a date for trial.
Any party to the case can advise the Court that the case is ready for trial. Basically, once the pleadings are closed (all motions concerning the pleadings have been resolved or withdrawn or 20 days after the last pleading is served), the case is eligible for placement on the Court's trial calendar.
The Court has the power to award sanctions against a party that fails to comply with its scheduling orders and our Firm has had success showing that the lack of action on the part of the bank (and/or its counsel) justified sanctions.
That is not to imply that every bank in every case has done something wrong, even if the case takes what seems to be an extraordinarily long time. There are legitimate reasons that a foreclosure case can be on 'hold' Owners/borrowers may be trying to modify their mortgages, there may be an offer for a short sale on the property, and/or a bankruptcy filing may prevent the bank from moving forward, etc. You know, there is a pretty big load on the Courts right now as well.
Nonetheless, we have learned that some lenders deliberately allow some foreclosure cases to linger for various reasons. Those are the cases that Associations should address - first with the lender (actually, lender's counsel) and then with the Court. It is important to discuss your options in each of the cases involving property in your community with counsel. The board can't be expected to make reasonable strategy decisions unless it is fully advised.
