By Jan Bergemann 
President, Cyber Citizens For Justice, Inc.

Published January 29, 2012


Careful what you wish for was the warning given to board members who listened to specialized attorneys pushing for fast foreclosure for unpaid dues. Make no mistake: These attorneys make big bucks pushing the foreclosure proceedings. As soon as the foreclosure took place these attorneys get their money – paid for by association funds. Now it’s up to the association to recover the money already owed on the unit plus the thousands of dollars in legal fees spent on the foreclosure. The golden carrot dangled in front of the board members’ faces? Rent out the unit/home until the first mortgage holder finally forecloses. Don’t forget, the association has the right – now being the deeded owner – to rent out the home/unit and collect the rent.


But please think twice before you fall into this treachery trap. Many associations have found out that attempting to recover lost income this way comes with a high price. In many cases associations never recovered all the money they had to spend before being able to rent the foreclosed upon property before the foreclosure of the mortgage holder takes place.


Don’t forget, before the first rent reaches the association coffers, the association has spent thousands of dollars to get to the point where the property can be rented out, not counting the assessments, late fees and interest already owed to the association. Many board members only found out that thousands of dollars were needed to restore the property to a state that allowed the home/unit to be advertised as a rental.


Add the latest decision of the Florida Third District Court of Appeals in the case of Aventura Management, LLC vs. Spiaggia Ocean Condominium Association, Inc.. In that ruling the court tells associations: Once you foreclosed on the property and became the deeded owner, all prior demands and debts are wiped out. No more demands on third party buyers who buy the property at the foreclosure sale initiated by the mortgage holder. The provisions that allows associations to collect prior debts from third party buyers (FS 718.116(1)(a) and FS 720.3085(2)(a)

 are moot. The association doesn’t receive one dime when the first mortgage holder finally forecloses.


I am not an attorney, but after reading this ruling over and over again, I come to the conclusion that this ruling of “prior debts being wiped out” goes as well for the money an association is entitled to get from the first mortgagee [FS 718.116(1)(b) and FS 720.3085(2)(c)] – the so-called Safe Harbor payments.


In my opinion the ruling of the 3rd DCA clearly means one thing: Once the association took title to the property the association can’t make any monetary demands to anyone after the foreclosure initiated by the first mortgagee took place. Period!


Maybe the association could now go again after the original owner – but honestly: Good luck on that attempt! That attempt might as well be listed under the headline: More Lost Legal Fees!


Board members beware when listening to the push of your association/collection attorney to foreclose fast on that property with assessments in arrears and take title a.s.a.p.. You could lose your shirt over it and spend a lot more money on taking this path than you might recover. It’s like a lottery: We may win – or we may lose (remember the Eagles?), but should we really use association funds to play the lottery?

In my opinion your changes to win are better at the Hard Rock Casino than by trying to recover money by renting out foreclosed upon properties!


This court ruling shows again that the system called community associations sure doesn’t favor the owners who own property in these associations – and pay their assessments as required!