Condominium associations faced with increasing
delinquencies now have an appellate court ruling that backs their right
to appoint receivers to collect rent on delinquent condo units.
Florida’s 3rd District Court of Appeal recently
validated the use of "blanket receivership," which has been
used by at least 18 condo associations in Miami-Dade and Broward
counties.
Blanket receivership allows a court-appointed
receiver to collect rent directly from tenants when their units are in
foreclosure.
The appellate court denied an appeal from a condo
unit owner at the Village at Dadeland, who protested the appointment of
a receiver because he said he was not given proper notice.
According to motions filed by the condo
association, the unit owner owns 17 condos at the Village and was
delinquent on his association fees, even though he allegedly received
rental income from the units. The condo association had filed
foreclosure actions against the 17 units.
“The court decided unanimously to deny the unit
owner’s petition. This will put an end to him collecting rent while
being under foreclosure,” said Ben Solomon, a member of the
Association Law Group of North Bay Village, which has handled several
receivership appointments for condo associations. “This opinion is
essentially binding on any lower court, and its very persuasive in any
other district in Florida, as well.”
According to the association’s court responses,
it was facing extreme financial hardship because 267 of the 410
condominium units were 60 days or more delinquent in the payment of
maintenance assessments. The delinquency totaled $863,063, preventing
maintenance of the common property.
Solomon said the right to collect rent ends when
the debtor’s obligation to the association is met.
Another
condo receivership Solomon’s firm handled, at The Oaks at Miami
Gardens, has more than doubled the association’s monthly income since
appointment of the receiver in March, according to a news release.