SB 586

Relating to Condo Associations/Unpaid Assessment

S586    GENERAL BILL by Senator Siplin
Condo Associations/Unpaid Assessment; provides that lien foreclosure action or action to recover money judgment brought as result of unpaid condominium association assessments may be brought only in instances meeting monetary threshold; provides that association is not entitled to recover attorney's fees in foreclosure actions or in actions to recover money judgment brought as result of unpaid association assessments, etc.
Amends 718.116. EFFECTIVE DATE: 07/01/2006.
11/04/05 SENATE Filed

CODING: Words stricken are deletions; words underlined are additions. 

  19-212-06 

  1 A bill to be entitled

  2 An act relating to condominium associations;

  3 amending s. 718.116, F.S.; providing that a

  4 lien foreclosure action or an action to recover

  5 a money judgment brought as a result of unpaid 

  6 condominium association assessments may be

  7 brought only in instances meeting a monetary

  8 threshold; providing that an association is not

  9 entitled to recover attorney's fees in

10 foreclosure actions or in actions to recover a

11 money judgment brought as a result of unpaid

12 association assessments; requiring an

13 association to provide 180 days' written notice

14 of its intention to foreclose its lien before

15 foreclosure judgment may be entered; providing 1

16 an effective date.

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18 Be It Enacted by the Legislature of the State of Florida:

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20 Section 1. Subsection (3), paragraph (b) of subsection

21 (5), and subsections (6) and (8) of section 718.116, Florida

22 Statutes, are amended to read:

23 718.116 Assessments; liability; lien and priority;

24 interest; collection.--

25 (3) Assessments and installments on them which are not

26 paid when due bear interest at the rate provided in the

27 declaration, from the due date until paid. This rate may not

28 exceed the rate allowed by law, and, if no rate is provided in

29 the declaration, interest shall accrue at the rate of 18

30 percent per year. Also, if the declaration or bylaws so

31 provide, the association may charge an administrative late fee 

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Florida Senate - 2006 SB 586 19-212-06 

  1 in addition to such interest, in an amount not to exceed the 

  2 greater of $25 or 5 percent of each installment of the 

  3 assessment for each delinquent installment that the payment is 

  4 late. Any payment received by an association shall be applied 

  5 first to any interest accrued by the association, then to any 

  6 administrative late fee, then to any costs and reasonable 

  7 attorney's fees incurred in collection, and then to the

  8 delinquent assessment. The foregoing shall be applicable 

  9 notwithstanding any restrictive endorsement, designation, or 

10 instruction placed on or accompanying a payment. A late fee 

11 shall not be subject to the provisions in chapter 687 or s. 

12 718.303(3). 

13 (5) 

14 (b) To be valid, a claim of lien must state the 

15 description of the condominium parcel, the name of the record 

16 owner, the name and address of the association, the amount 

17 due, and the due dates. It must be executed and acknowledged 

18 by an officer or authorized agent of the association. No such 

19 lien shall be effective longer than 1 year after the claim of 

20 lien was recorded unless, within that time, an action to 

21 enforce the lien is commenced. The 1-year period shall 

22 automatically be extended for any length of time during which 

23 the association is prevented from filing a foreclosure action 

24 by an automatic stay resulting from a bankruptcy petition 

25 filed by the parcel owner or any other person claiming an 

26 interest in the parcel. The claim of lien shall secure all 

27 unpaid assessments which are due and which may accrue 

28 subsequent to the recording of the claim of lien and prior to 

29 the entry of a certificate of title, as well as interest and 

30 all reasonable costs and attorney's fees incurred by the 

31 association incident to the collection process. Upon payment 

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Florida Senate - 2006 SB 586 19-212-06 

  1 in full, the person making the payment is entitled to a 

  2 satisfaction of the lien. 

  3 (6)(a) The association may bring an action in its name 

  4 to foreclose a lien for assessments in the manner a mortgage 

  5 of real property is foreclosed and may also bring an action to 

  6 recover a money judgment for the unpaid assessments without 

  7 waiving any claim of lien. A lien foreclosure action or an 

  8 action to recover a money judgment brought as a result of 

  9 unpaid condominium association assessments may be brought only 

10 in those instances in which the amount in question equals or 

11 exceeds $2,500. The association is not entitled to recover its 

12 reasonable attorney's fees incurred in either a lien 

13 foreclosure action or an action to recover a money judgment 

14 for unpaid assessments. 

15 (b) No foreclosure judgment may be entered until at 

16 least 180 30 days after the association gives written notice 

17 to the unit owner of its intention to foreclose its lien to 

18 collect the unpaid assessments. If this notice is not given at 

19 least 30 days before the foreclosure action is filed, and if 

20 the unpaid assessments, including those coming due after the 

21 claim of lien is recorded, are paid before the entry of a 

22 final judgment of foreclosure, the association shall not 

23 recover attorney's fees or costs. The notice must be given by 

24 delivery of a copy of it to the unit owner or by certified or 

25 registered mail, return receipt requested, addressed to the 

26 unit owner at his or her last known address; and, upon such 

27 mailing, the notice shall be deemed to have been given, and 

28 the court shall proceed with the foreclosure action and may 

29 award attorney's fees and costs as permitted by law. The 

30 notice requirements of this subsection are satisfied if the 

31 unit owner records a notice of contest of lien as provided in 

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  1 subsection (5). The notice requirements of this subsection do 

  2 not apply if an action to foreclose a mortgage on the 

  3 condominium unit is pending before any court; if the rights of 

  4 the association would be affected by such foreclosure; and if 

  5 actual, constructive, or substitute service of process has 

  6 been made on the unit owner. 

  7 (c) If the unit owner remains in possession of the 

  8 unit after a foreclosure judgment has been entered, the court, 

  9 in its discretion, may require the unit owner to pay a 

10 reasonable rental for the unit. If the unit is rented or 

11 leased during the pendency of the foreclosure action, the 

12 association is entitled to the appointment of a receiver to 

13 collect the rent. The expenses of the receiver shall be paid 

14 by the party which does not prevail in the foreclosure action. 

15 (d) The association has the power to purchase the 

16 condominium parcel at the foreclosure sale and to hold, lease, 

17 mortgage, or convey it. 

18 (8) Within 15 days after receiving a written request 

19 therefor from a unit owner purchaser, or mortgagee, the 

20 association shall provide a certificate signed by an officer 

21 or agent of the association stating all assessments and other 

22 moneys owed to the association by the unit owner with respect 

23 to the condominium parcel. Any person other than the owner who 

24 relies upon such certificate shall be protected thereby. A 

25 summary proceeding pursuant to s. 51.011 may be brought to 

26 compel compliance with this subsection, and in any such action 

27 the prevailing party is entitled to recover reasonable 

28 attorney's fees. Notwithstanding any limitation on transfer 

29 fees contained in s. 718.112(2)(i), the association or its 

30 authorized agent may charge a reasonable fee for the 

31 preparation of the certificate. 

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Section 2. This act shall take effect July 1, 2006. 

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  4 SENATE SUMMARY 

  5 Limits a lien foreclosure or an action to recover a money judgment brought as a result of

     an unpaid assessment by a 

  6 condominium association to those instances in which the amount in question equals or

     exceeds $2,500. Requires a 

  7 written notice of 180 days rather than 30 days before entry of a foreclosure judgment.

     Removes authorization 8 for the association to recover attorney's fees and costs.