Article Courtesy of The Herald Tribune

By Aaron Kessler

Published May 10, 2008 

SARASOTA — Can you lose your home over $100 in late fees?

Most Southwest Florida residents are by now quite familiar with how lenders can take back a property through foreclosure. But under Florida law, it is not just banks that can foreclose -- homeowners and condominium associations can take a home to pay off past-due assessments and other fees.

It is rare, but it happens, and when an association decides to play hardball, there is no minimum amount required in order to foreclose.

Joyce Evans, 66, owns a condo in Village Plaza, a senior community near Bee Ridge and Beneva roads. Evans was going to lose her home over what originally amounted to an outstanding balance of just $112.50.

What makes Evans' case all the more unusual is that in July 2007, before a lis pendens was ever filed to begin foreclosure proceedings, Evans wrote the association a check for what she thought was the amount needed to bring her account into compliance.

"I just wanted it to be over," Evans said. "I asked the attorney what the amount was, and I paid it."

What happened next sparked a dispute that resulted in nearly a year of legal wrangling, during which the tiny sum Evans owed ballooned into potentially thousands of dollars in subsequent attorney's fees and court costs that the association intended to collect.

A final hearing was scheduled for Monday in Sarasota county court to determine whether Evans would be forced to pay nearly $3,000 in attorney's fees -- a sum she said she could not afford. If she did not pay, her home was to be sold on the courthouse steps.

But on Friday afternoon -- about a week after the Herald-Tribune began investigating her story -- an 11th-hour deal was offered: The attorney's fees would be waived if Evans agreed to settle her claim for the assessment she owned, plus about $600 in court costs, or a total of $715.

So what happened to cause such a protracted battle to begin with? It all turns on Evans' July 2007 check.

Somehow the condo association, its management company and the attorney involved all say they did not realize at the time that Evans' $1,051.83 check had been deposited. Instead, nearly a week later the attorney, Andrew Cohen, recorded a lien with the court for a debt that already had been almost entirely satisfied.

Almost, but not entirely. Therein lies the rub. The lien document details $939.33 in assessments, which include $220.33 for the balance Evans owed plus $719 for the regular July quarterly assessment -- a total of $939.33. Those amounts were seemingly covered by Evans' check.

But the lien also includes a paragraph referring to securing any unpaid attorney's fees. At the time, those amounted to $225, bringing the grand total owed to $1,164.33 -- leaving Evans, after writing her check, $112.50 short.

"Why didn't someone just call me and tell me my amount was wrong? I would have written another check right there on the spot," Evans said.

Those involved eventually did give Evans credit for her check. Cohen sent her a letter dated July 23 informing her of the lien. But in addition to the $112.50 shortfall itself, it said she now owed $460 -- because of additional attorney's fees associated with drawing up and filing the lien.

"That's when I said enough is enough," Evans said. "I have to pay for something they never should have filed in the first place? I told them forget it, I'm not paying those additional lawyer's fees."

The association did not agree. Both sides dug in, and things escalated from there.

Mistakes to go around

Evans maintains that the $1,051.83 figure of her July check was based on what Cohen told her to pay in a phone conversation in early July.

Cohen said he did speak with Evans several times during that period, but could not recall what was discussed.

"The May letter spelled out what was due at that time pretty clearly," Cohen said, referring to the May 21 letter initially sent to Evans that listed the $220.33 in late assessments plus the $225 in attorney's fees she owed at the time.

Evans was indeed short by the $112.50. But no one seemed to communicate that she had even paid anything until the lien was already filed.

Her check was dated July 10, 2007, and the association's ledger indicated the payment was received on July 12, Cohen says. Bank records provided by Evans indicate the check cleared on July 13.

But that same day, July 13, Phil Neitzel, the Village Plaza Condominium Association president, signed the lien document to initiate foreclosure proceedings. The document was then mailed to Cohen, and five days later, on July 18, it was recorded with Sarasota County.

Cohen said the burden for informing him of Evan's payment should have been on the condo association and AMI, the management company. Would knowing about the deposit have prevented the lien from being filed in the first place? Could the remaining $112 have been paid up right away by Evans, preventing everything that subsequently took place?

"It's possible, but there's no way of knowing; that would've been up to the association," Cohen said. "All of this would have been avoided if she just paid in full on time."

When questioned Monday about the oversight regarding the check, Neitzel said he did not know whether anyone checked to see if Evans had paid or contacted her prior to when he signed the lien document. He also said he could not explain why once the check cleared no one contacted Cohen to avoid the lien being filed as it was.

"I don't remember that," Neitzel said. "I don't handle that stuff; talk to our management company." He hung up the phone before further inquiries could be made, and did not return subsequent phone calls.

The AMI employee who handled Evans' case at the time has since moved to Tennessee. But Cindy Klimeck, AMI's office manager, said a preliminary search of the company's records indicated a potential explanation for the oversight: Evans sent her check to the place for normal payments, the bank, rather than directly to the attorney.

"She should have sent the check to the attorney; that's how it's done," Klimeck said.

Klimeck said AMI normally only reviews its clients' bank transactions twice a month, and so it is possible the deposit made by Evans in July could have escaped notice.

As last week wore on, Evans said she was contemplating bankruptcy if the ruling went against her. She did not have the money to cover the attorney's fees. The association was prepared to take her home to pay off the debt.

"I just can't believe it's come to this," she said.

But on Friday, she got the call. For $715, the matter would be over. She accepted. The Monday hearing is canceled. Once Evans' payment is received, the court will be notified, and the judge will then be able to cancel the June 6 foreclosure sale.