Assessment Collection Tips for Northwest Florida Condo Boards
Few condominium association board members relish their role as bill collector, but ensuring that assessments are timely paid is one of the most important responsibilities of a condo board. If unit owners are not pulling their weight and meeting their obligations to contribute to the financial common good, it can create cash flow problems and set a bad precedent going forward.
But collecting overdue assessments can be tricky, both personally and legally. Sloppy or ham-handed efforts can fray friendships and make matters worse. If your board is faced with the delicate but vital task of enforcing assessment obligations, here are some things to keep in mind.
First, know the rules. Both the Florida Condominium Act (the “Act”) as well as your governing documents should be the first place you look to understand what you can and cannot due as part of your collection efforts.
Suspension of Voting Rights and Use of Common Elements
Under the Act, once a unit owner is more than 90 days delinquent on an assessment or other monetary obligation owed to the association, the board of directors may suspend the unit owner’s voting rights and rights to use the common facilities and amenities. But be careful: a board’s right to suspend use of common elements does not include the right to suspend access to common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators.
Forwarding Rent and Evicting Any Renters
If the delinquent unit owner has a tenant, the board can make a demand on the tenant to remit all rent directly to the association until the owner’s account is brought current. The Act prevents any retaliation against the renter by the unit owner if the tenant complies with the demand.
If, however, the tenant does not comply, the association can begin eviction proceedings against the tenant. The Florida eviction process is highly technical and the rules governing that process are strictly enforced. A board seeking to evict a tenant can make any number of mistakes that can turn the eviction into a frustrating, costly, and lengthy ordeal. Make sure you consult with experienced landlord/tenant counsel before initiating any eviction.
Lien and Foreclosure
Condo boards have the right to place a lien on a unit for unpaid assessments. If the owner remains recalcitrant and fails to pony up, that lien can ultimately be foreclosed upon.
Boards reaching this point must make an initial demand on the owner to remit all past due amounts, and then wait 30 days to take the next step. This involves recording a claim of lien in the official records of the county. Once the claim is filed, the board can send a notice of intent to foreclose if the debt is not paid in full within 30 days. If the threat of foreclosure isn’t enough to get the owner’s compliance, the board can proceed with a lien foreclosure lawsuit.
At the successful conclusion of a lien foreclosure suit, a final judgment against the owner and unit will be issued which will include:
- The principal assessments owed
- Any interest and late fees provided for in the governing documents
- Reasonable attorney’s fees and costs incurred in collecting and enforcing the owner’s payment obligations.
At the foreclosure sale, the association will be able to make a “credit bid” up to the total amounts owed under the judgment. If a third-party bids more than the association’s bid and is the successful purchaser, the board will be paid in full by the new owner. Alternatively, if the association is the highest bidder, it will become the new unit owner.
As with evictions, foreclosures involve very specific procedures that must be followed in order to be valid. Experienced Florida condominium and community association attorneys can assist your board with its assessment collection efforts in a way that maximizes the likelihood of recovering all amounts owed while minimizing the chances of costly errors.
McDonald Fleming Moorhead’s experienced community association lawyers provide seasoned representation for all forms of common ownership property throughout northwest Florida. This includes condominium associations, cooperative associations, commercial condominium associations, mobile park associations, and homeowners’ association attorneys.