|Florida law allows homeowner associations to file for foreclosure against an owner and take possession of their properties when they are delinquent in paying their monthly maintenance fees. |
And in case you are wondering, the Green Cay Village Townhome and Condo Association Boards have instructed their legal council to proceed on Association Foreclosures on a number of properties in Green Cay Village.
While such action may seem harsh, it all comes down to the fact that if homeowners don't pay their association fees, then the burden falls to their neighbors and the Townhome and Condo Boards of Directors are charged with the responsibility of not letting that happen if at all possible.
That said, if you are current in paying your monthly maintenance fees, you need read no further. But if you are behind in your payments, or thinking of not making future payments, you should read on.
1. The first thing you should understand is that it is a lot easier for an association to foreclose on the amount you owe the association than it is for a bank to foreclose on your mortgage.
For a variety of reasons including a bad housing market, lost paperwork, work out programs etc. it is possible to stall a bank for literally years in its effort to foreclose. Associations on the other hand can foreclose quickly.
The reason association foreclosures can move so fast is that your docs and state statutes allow the association to lien your property for non payment of your monthly maintenance fees and to foreclose on this lien with a minimal amount of paperwork, basically the ledger for your account.
So if you are short of cash or planning a "strategic default" you should pay your monthly maintenance fees, even if you don't pay your mortgage.
2. The second thing you should understand is that as the association foreclosure process moves forward you will be responsible for paying not only the original amount owed to the association, but also late fees, interest at 18% per annum, and the association's legal expenses.
The message here should be clear - the sooner you pay up, the less you will pay.
3. The third thing you should understand is how the association foreclosure process works so that you can determine where you are now and where you are headed.
- Payment of monthly maintenance fees must be received before the 10th to avoid late fees. A Late Notice is mailed out on or about the 16th to homeowners telling them their payment is late. Accounts that are not current are charged a $25 late fee each month that the account is in arrears.
- Accounts that are overdue by more than one month are handled by the Property Manager or turned over to the Association's Attorney for collection.
Thus the first letter you receive will be either a 30 or 45 Day Final Notice from the Property Manager's office or a Demand Letter from the Association's Attorney. These letters typically state that "If payment in full is not received on or before the date indicated herein, we may have no alternative but to proceed with any and all legal actions necessary to protect the Association’s interest, including but not limited to the filing of a Claim of Lien".
Note: By Statute, a 30 Day Final Notice or Demand Letter is used for condominium associations whereas a 45 Day Final Notice or Demand Letter is used for townhome associations.
- The next letter you will receive will be a Claim of Lien Letter from the Associations Attorney. This letter typically states that "Enclosed with this letter is a copy of the Claim of Lien against your property, which has been sent to the Palm Beach County Public Records for recording, due to your failure to pay property assessments. You are hereby advised that a foreclosure action will be commenced against your property unless the following amounts are paid in full within thirty (30) days from the date of this letter".
- Next you will be served with a Summons by the Sheriff that typically states in English, Spanish, and Creole that "A lawsuit has been filed against you. You have 20 calendar days after this summons is served on you to file a written response to the attached Complaint with the Clerk of this Court. A phone call will not protect you; your written response, including the case number given above and the names of the parties, must be filed if you want the Court to hear your side of the case. If you do not file your response on time, you may lose the case, and your wages, money and property may thereafter be taken without further warning from the Court. There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may call an attorney referral service or legal aid office (listed in the phone book)".
The attached Complaint typically states "That such lien be foreclosed in accordance with Florida Statutes, and the established rules and practices of the Court, that upon default of the payment to Plaintiff of the amounts so found to be due, that said real estate be sold by the Clerk of the Court to satisfy Plaintiff’s lien in accordance with the provisions of Florida Statutes; and that a deficiency judgment be entered for the sum remaining unpaid against the Defendant and that the Final Judgment of Foreclosure incorporate an order dispossessing Defendants, and requiring that the purchaser at the foreclosure sale, his representative or assigns, be let into possession of the property."
- Assuming you do not respond to the affirmative to the Summons, your property will be sold by the Court after which you will no longer be the owner of your home and will have about 30 days to leave or be evicted. BUT you will still owe the bank the amount on your mortgage.
Disclaimer - I am not an attorney and the above is provided as information only, as best I understand it, as a service to the homeowners of Green Cay Village. Furthermore I expressly disclaim all liability for damages of any kind arising out of the use, reference to, or reliance on this information. Put simply, if you need legal advise you should get it from your attorney.
Originally published 3/12/2011.