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When Does a Condo Owner’s Lien Liability End?

Editor’s Note: This article originally appeared in the SHD Legal Group’s Florida Legal Update. It is reprinted with permission.

The First DCA rendered an opinion this month wherein it certified conflict with the Third DCA over a condominium unit owner’s liability for association assessments and liens pursuant to § 718.116(1)(a), Fla. Stat., which pertains to a. Coastal Creek Condo. Ass’n, Inc. v. Fla Tr. Services LLC, 1D18-1457, 2019 WL 3114229, at *1 (Fla. 1st DCA July 16, 2019). In Coastal Creek, the mortgagors defaulted on their loan, the bank foreclosed and Homes HQ, LLC purchased the property at the foreclosure sale. Homes HQ transferred the property to FLA Trust Services LLC. Thereafter, Coastal Creek Condominium Association (“the Association”) recorded a lien against the property for unpaid “assessments and related expenses” and filed a lawsuit against FLA Trust and the tenants of the property seeking to foreclose its lien for delinquent assessments due since August 15, 2015.

FLA Trust Services, LLC responded to the claims and filed a counterclaim. The counterclaim sought a declaration as to which party was responsible for assessments and expenses incurred from July 2007, a time period which included the original mortgagors’ ownership. Both FLA Trust and the Association moved for summary judgment. The disputed issue was whether § 718.116(1)(a) limited FLA Trust’s liability solely to “assessments that came due during Homes HQ’s ownership” or also assessments that came due during the original mortgagor’s ownership. The pertinent portion of §718.116 reads as follows:

“A unit owner…is liable for all assessments which come due while he or she is the unit owner. Additionally, a unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title …”

The trial court analyzed prior cases which interpreted § 718.116(1)(a) and surmised under those cases the court was required to find § 718.116(1)(a) limited FLA Trust’s joint and several liability to assessments that came due during the Homes HQ’s ownership and did not include assessments that came due during the original owners’ ownership. The Association appealed that ruling to the First DCA.

On appeal, the First DCA discussed amendments to § 718.116(1)(a) which were made shortly after several Third DCA cases, imposed limitations to the present owner’s liability under its interpretation of the statute. The First DCA explained that reference to “the previous owner” in § 718.116(1)(a) did not pertain to the period of ownership during which the present owner is liable, as suggested by the Third DCA and FLA Trust; rather, the phrase identified the person with whom the present owner has joint and several liability. The Court explained the phrase “all unpaid assessments that came due up to the time of transfer of title” was key and supported an interpretation that the present owner’s liability for unpaid assessments was not limited to that of only the previous owner under § 718.116(1)(a).

The First DCA concluded the amendments to the statute and its unambiguous language made it clear the legislature intended the present owner would be “…liable with the previous owner for unpaid assessments that came due during the ownership of both the previous owner (unless it was the association) and the original owner.” In so ruling, the First DCA reversed judgment for FLA Trust, entered judgment in favor of the Association and certified conflict with the Third DCA to the extent that Court held § 718.116(1)(a) limited a current owner’s liability “to unpaid assessments that came due during the ownership of the immediate prior owner, and not the original owner.”

About Author: Roy Diaz

Roy A. Diaz is the Managing Shareholder of Diaz, Anselmo Lindberg, P.A. The firm provides representation in Florida, Illinois, Ohio, Indiana, Kentucky, Wisconsin and Michigan. Diaz has been a member of the Florida Bar since 1988. He has concentrated his practice in the areas of real estate, litigation, and bankruptcy. He has represented lenders, servicers of both conventional and GSE loans, private investors, and real estate developers throughout his career with an emphasis on the mortgage servicing industry for over 25 years.

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