Associations frequently ask the question: “When should a delinquent owner be turned over for collections?” To fully answer to this question, the association must understand the relatively new statutory requirements that must be fulfilled before an account is turned over to legal counsel for collections, as well as understanding the increased timeframes an owner is given to remit payment in both condominium and cooperative associations. These timeframes impact how quickly an association can proceed with collections and foreclosure proceedings against delinquent owners.
First, all community associations are required to send delinquent owners a 30-day notice of delinquency prior to turning an account over to an attorney for collections. This requirement has been in effect since July 2021. It’s crucial for associations to properly provide this notice as failure to do so will preclude the association from recovering legal fees incurred in a collection/foreclosure action. The 30-day notice must be sent via first class United States mail to the owner’s last address as reflected in the association’s official records, and if the last address is not the property address, the notice must also be sent to the property address by first class United States mail. The notice is deemed delivered upon mailing and a rebuttable presumption that the notice was mailed as required can be established by a sworn affidavit executed by a board member, officer or agent of the association, or by a licensed manager. Your legal counsel can provide you assistance with the proper form of this notice based on the requirements found in the statutes.
Second, also effective July 1, 2021, the Florida legislature increased the amount of time a delinquent owner in a condominium and cooperative association have to remit payment after receipt of a pre-foreclosure demand letter from the association’s legal counsel. Previously, a delinquent owner in a condominium or cooperative association had thirty (30) days to remit payment after receipt of notice of intent to lien letter. Per the July 1, 2021, changes, an owner now has forty-five (45) days to remit payment after receipt of a notice of intent to lien letter. In addition, in a change only affecting condominium associations, the timeframe for an owner to remit payment after receipt of a notice of intent to foreclose letter increased from thirty (30) days to forty-five (45) days.
The effect of these timeframes means that when an account becomes delinquent, it will take a minimum of thirty (30) days before an account can be turned over to legal counsel for collections, and, for most accounts, a minimum of 120 days, i.e., three months, before a foreclosure can be filed against a delinquent owner. Given the length of time a delinquent owner now has to make payments makes it more important than ever that associations stay on top of delinquencies rather than letting too much time pass before taking action. The best way to address these issues is to speak with your legal counsel to institute a fair and consistent collection policy that will protect your community from out-of-control arrearages and ensure that all statutory requirements and timeframes are properly followed.