Condominium and Homeowner Associations are required by Florida Law to follow strict budgeting and reserve requirements. When members fail to pay assessments the impact on the association can be severe. Due to lien priorities and statute of limitations, debts that are not timely pursued may never be collected.
Ansbacher Law is sensitive to the needs of its association clients to collect delinquent receivables in a way that is not only compliant with all laws and regulations, but in a manner that is respectful to all parties. We offer a unique program that in most cases does not require the association to pay any fees or costs associated with collections. Our goal at Ansbacher Law is to work closely with the Board of Directors and community association manager for each association we represent to develop an effective assessment and collection procedure. Properly implemented, this has proven to reduce the number of delinquent accounts and to encourage timely payment of assessments and fines.
Prior to representing an association with respect to collection of delinquent assessments, Ansbacher Law first reviews the applicable governing documents (covenants/condominium declaration, articles of incorporation, & bylaws) and reviews the collection procedures employed by the association and its community association manager. We meet with the Board of Directors to discuss their policy preferences, assist in developing a clear and efficient process, and to assure that the methods comply with applicable law (Chapter 718 –condominiums / Chapter 720 – homeowner associations). The goal is to be sure that procedures are in place to minimize the need for legal action and to place the association in the best position to prevail in any subsequent legal action. We will also review procedures to confirm that hearings are held as required by §720.305(2)(a) or §718.303(3) prior to the imposition of any fines by the association.
Where appropriate we will discuss alternative legal actions in lieu of lien/foreclosure actions. These might include suing for a money judgment, seeking an injunction, or denying membership privileges to the delinquent homeowner. As part of our legal review will we discuss the possibility of collection activity against the mortgage lenders which are required to pay all assessments accruing after they complete foreclosure or otherwise become the new owner. Mortgage lenders may also be responsible to pay some of the delinquent assessments accruing prior to taking ownership. [This amount may vary depending on the applicable statute and the Association’s subordination provision but is generally the lesser of 12 month’s assessments or 1% of the original mortgage.] In some instance the new owners may be legally responsible for assessments in addition to the prior owners. We may also discuss the possibility of pursuing assignment of rents from tenants occupying the property owned by delinquent homeowners under §718.116 or §720.3085, Fla. Stat. Upon demand, tenants are obligated by Florida law to make payments of any monetary obligations related to the [unit or parcel directly] to the association. This means that tenants of delinquent owners may be required to pay rent to the association until the owner’s delinquent account is paid in full.
Dealing with delinquent homeowners is a frustrating reality facing most associations in Jacksonville and Northeast Florida. Bad debt prevents the association from properly carrying out its functions and places an unfair burden on the other members who must not only pay their assessments, but also be responsible for covering the budget shortfall. Ansbacher Law’s dedicated collections team is here to help.
Call 904-737-4600 to schedule a consultation with a collections attorney who specializes in community associations.