Community associations have become very familiar with the statutory requirement that a 30 day Notice of Late Assessment must be sent to an owner prior to turning the account over to an attorney for collections. However, confusion over the need to send a Notice of Late Assessment often arises when an association adopts a new special assessment after an account is already in collections with the attorney. Understanding this concept requires an understanding of how Florida courts have distinguished special assessments from the ongoing regular monthly, quarterly or annual assessments that are adopted by an association and when the need for additional notice arises.
In general, once an association sends a delinquent owner the statutorily required 30 day Notice of Late Assessment for past due assessments and the account is turned over to the association’s legal counsel for collections, the association is not required to send a new Notice of Late Assessment every month, quarter or year when another monthly, quarterly or annual assessment accrues. These assessments are adopted as part of the association’s annual budget and, unless the association amends its budget, do not change throughout the year. This means that owners are on notice that the regular assessments will continue to accrue throughout the year and will be included in any subsequent collection or foreclosure action. Special assessments are a different animal as they can be adopted at any time if they are authorized by the association’s governing documents and the association follows the specific requirements found in the Florida statues to adopt the special assessment. If an association adopts a special assessment after an account is already in collections with the association’s counsel, an owner must be put on notice that the association will include the new special assessment in the collections action unless payment is remitted for the new special assessment. This requirement is satisfied by the association sending a Notice of Late Assessment for the newly adopted special assessment and providing the owner with an opportunity to remit payment for the newly adopted special assessment prior to counsel including same in the collections action.
Currently, there is no case law directly on point regarding the need for the association to send a Notice of Late Assessment for a newly adopted special assessment when an account is already in collections. However, there is case law addressing the need to put an owner on notice prior to including a newly adopted special assessment in an existing foreclosure action. This case law highlights the need for the association to provide delinquent owners with proper notice of a newly adopted special assessment prior to its inclusion in an existing collection or foreclosure action.
In the case of Losner v. Australian of Palm Beach Condominium Association, Inc., 139 So.3d 986 (Fla. 4th DCA 2014) the Association adopted a special assessment after a foreclosure action was filed against the unit owner. The first inclusion of the special assessment in the foreclosure action was when the Association filed its Motion for Summary Judgment along with supporting affidavits. The trial court granted the Motion for Summary Judgment and entered a Final Judgment of Foreclosure that included the special assessment. On appeal, the Fourth District Court of Appeal found that the inclusion of the special assessment in the Final Judgment was a violation of the unit owner’s due process rights as the owner was not given proper notice that the special assessment would be included in the foreclosure. The court drew a specific distinction between the regular assessments that were adopted prior to the foreclosure action and that continued to accrue throughout the collection and foreclosure action and the special assessment that was adopted after the initiation of the collection and foreclosure action. The court found that the owner was entitled to notice that the Association would be including the special assessment in the foreclosure action. The Association’s failure to do so resulted in a reversal of the portion of the Final Judgment that included the special assessment.
While the holding in the Losner case addresses the process for proper inclusion of a newly adopted special assessment in a foreclosure action, the principles discussed in the case provide a road map for an association to provide a delinquent owner with proper notice that a newly adopted special assessment will be included in a pending collection or foreclosure action. Given that a Notice of Late Assessment is the first step in initiating the collections process, sending a Notice of Late Assessment for a newly adopted special assessment would be the first step in providing the required notice to the delinquent owner that the special assessment will be included in the pending collection or foreclosure action unless payment in full is remitted for same. Failure to do so could result in an owner successfully arguing that the Association is not entitled to include the special assessment in the collection and/or foreclosure action.
Delinquent assessments and collection of same is an area that is fraught with frustration for community associations. The association should consult its legal counsel with any questions on providing proper notice prior to proceeding with collections to avoid additional frustrations in the collections process.
