Foreclosing On HOA and COA Liens In Florida
Homeowners’ associations (HOAs) and condominium associations (COAs) want to work with their residents in order for everything to go smoothly. However, residents must live up to their end of the bargain, and if they fail to pay dues and assessments on time, it is the right of the HOA or COA to obtain a lien on the property so that if the property needs to be sold, the association can obtain their fair share. Understanding this process is pivotal, regardless of which side of the lien one finds themselves on.
Associations At An Advantage
If an HOA or COA has a delinquent tenant, they can file to put a lien on the property. They cannot immediately initiate proceedings; a HOA must give a delinquent homeowner 45 days to pay off the balance they owe, or a COA must provide at least 30 days’ notice of intent to file before proceeding. Once these time frames have passed, the lien can be filed, though if the tenant is in financial trouble, you may have to contend with other liens having priority. Priority determines the order in which lienholders can collect debts that they are owed – for example, a bank lien usually takes priority over other creditors’.
The laws surrounding lien priority can be very complex. Most of the time, an HOA or COA can use the date that they recorded their Declaration of Covenants, Conditions, and Restrictions as the date of their lien on your home, which can be very advantageous because this will often be earlier than the dates of other liens, even though other liens might have been recorded more recently. There are exceptions where this date cannot be used, but each case is different.
Liens and Foreclosures
After a lien is filed, the homeowner has a certain period of time to contest the lien, by filing a Notice of Contest of Lien. After the homeowner’s response is filed, the association has 90 days to reply and enforce the lien. If this does not happen, the lien is void. However, if the lien is enforced, it may result in a foreclosure on the home or condo unit if not paid off. Foreclosures in an HOA or COA are done in the same manner as any real property foreclosure involving a mortgage.
In Florida, foreclosures are judicial, which means that a creditor must bring a lawsuit in the correct court in order to move forward. During that lawsuit, a homeowner may make what is referred to as a qualifying offer, which is essentially an offer to pay off the debt within a certain period, but certain criteria must be met. However, this can only be done once, and if the homeowner defaults, they are essentially out of options. In addition, be advised that as of this writing, Governor Ron DeSantis has enforced a foreclosure ban due to the COVID-19 pandemic, though it is set to expire very soon.
Call A Tampa HOA and COA Attorney
No association wants to get tough with its tenants, but there is no choice if dues and assessments are not forthcoming. If you have questions concerning liens and foreclosures in an HOA or COA, contacting a Tampa HOA and condo association attorney at the Seward Law Office can be the first step toward getting those questions answered. Call our offices today at (813) 672-1900 to speak to an attorney.