Community Update

The Owner’s Account Is Already in Collections – Why Do I Have to Send a New Notice of Late Assessment for a New Special Assessment?

By: K. Joy Mattingly

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.

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Bank Commitment Letter Pitfalls for Condominiums

By: Mark D. Friedman

When a condominium association is seeking to obtain a loan, too often the board is signing the Bank’s commitment letter before having that document reviewed by legal counsel. While some banks will permit the association to amend the commitment letter after the fact, through revisions to the loan documents, others will not permit that to occur. Some banks take the position that what the board agreed to in the commitment letter is contractual in nature and cannot be changed.

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The Three Key Elements of Properly Noticing a Special Assessment Meeting

By: K. Joy Mattingly

Special assessments are becoming more and more common in community associations. As the frequency of special assessments increases, so does the possibility of delinquencies in payment of the special assessments. A crucial element of collection of a delinquent special assessment is proving that the special assessment was properly adopted at a properly noticed board meeting. There are three key elements to properly noticing a special assessment meeting and which must be strictly followed to ensure collectability of the special assessment.

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Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc.
105 So. 3d 637 (Fla. 3d DCA 2013)

By: Joseph Markovich

Understanding the liability for unpaid assessments when a condominium association takes title through foreclosure, is at the heart of THIS CASE. This dispute arose when Spiaggia Ocean Condominium Association, Inc. (“Association”) initiated lien foreclosure proceedings against one of its unit owners, obtaining a default judgment and later acquiring the unit at auction subject to a first mortgage held by a bank. The Association rented the unit until relinquishing ownership after the bank foreclosed and sold the unit at auction, where Aventura Management, LLC (“Aventura”) was the successful bidder. After taking title, Aventura refused to pay the past due assessments, arguing that the Association, as the previous owner, was jointly and severally liable for the unpaid amounts the Condominium Act. The trial court ruled in favor of the Association, holding the new owner solely liable for the unpaid assessments.

On appeal, the district court reversed, emphasizing the plain language of Section 718.116(1)(a), which provided that a unit owner is “jointly and severally liable” with the previous owner for unpaid assessments that accrued before the transfer of title. The court rejected the Association’s argument that its lien did not merge with its ownership and that condominium associations should be exempt from such liability to preserve their ability to recover assessments. The court also dismissed the Association’s claim that Aventura’s notice of the unpaid assessments precluded reliance on joint and several liability. Instead, the court found that the Association, as a prior owner, was not exempt from liability under the statute and that the statute’s provisions applied equally to condominium associations.

Subsequent to this case, Section 718.116(1)(a), Florida Statutes, was revised to exclude condominium associations that acquire title through foreclosure or deed in lieu of foreclosure from the definition of “previous owner.” This amendment to the statute limited a subsequent unit owner’s liability for unpaid assessments to those amounts that accrued before the association acquired title. The legislative change reflected an effort to balance the financial interests of associations and subsequent purchasers.

So why does THIS CASE matter? THIS CASE serves as an important touchstone in a continuing line of cases addressing the responsibilities of condominium associations when acquiring title to units and understanding their potential liability for unpaid assessments under Florida law. Associations should carefully evaluate the legal implications of taking title to delinquent properties, as this can carry significant financial and legal consequences. Consulting with legal counsel and thoroughly reviewing applicable statutes and governing documents can provide clarity and help mitigate risks. By proactively addressing these risks, associations, owners, and renters can more effectively manage liabilities and navigate potential legal complications.