Tag: Florida condominium association

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Florida Real Estate Law

Florida Real Estate Law Defined

Florida real estate law simply governs all issues related to the use and ownership of Florida real property.  The actual transfer of ownership interests in real property is a formal process.  Florida real estate transactions seek to ensure that the interests in the property are properly transferred to the buyer and that any defects, judgments or liens that could affect the property are resolved prior to the transfer.  A common form for transferring real property is by way of a Florida Quit Claim Deed.  Caution should be taken in creating and recording a Florida Quit Claim Deed unless you know exactly what you are doing.

The ownership of property in a Florida condominium association is a unique form of real property ownership. For instance, a condominium owner only owns the interior space of the premises. The outside walls, roof, hallways and all other common elements are jointly shared with all the other condominium owners. There are unique challenges in the ownership and administration of condominiums and homeowner associations. From the members perspective, issues arise as to repairs for damages to the interior of units, violations of the rules by other members, and election matters for the board. For the association, frequent issues arise as to the payment of maintenance expenses, assessments, and the enforcement of rules. Additional concerns arise for associations that may need to revise and/or otherwise update their by-laws and rules.

Florida property disputes can arise over the use of land. Neighbors can become embroiled in property line disputes. Condominium or homeowner associations may seek to prevent its members from engaging in certain activities or altering the premises. Likewise, a city, county or the State may seek to prevent an owner from building, modifying or placing certain objects or things upon the property on the basis of an ordinance or zoning regulation.

Landlord-tenant matters involve the use and possession of land by a lease.  Florida Evictions are the legal process by which a landlord seeks possession of the property from the tenant. The most common reason for an eviction is the nonpayment of rent. However, a breach of a material condition of the lease can also be the basis for an eviction. Residential and commercial property are governed by different Florida laws and therefore different procedures apply.

Florida Real Estate Law Resources

Helpful legal resources for Florida Real Estate Law include Florida Real Estate Law Statutes for links to relevant Florida laws dealing with Florida real property in the State of Florida and Real Estate Law Research for general topics on real estate law.

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Foreclosing Bank Entitled to Legal Fees Against Condominium Association for Lien in Excess of Statutory Cap

Florida Claim of Lien

Florida Claim of Lien

 

In OCEAN BANK vs. CARIBBEAN TOWERS CONDOMINIUM ASSOCIATION, INC., 38 Fla. L. Weekly D1726a (Fla. 3DCA 2013), the Florida Third District Court of Appeal held that a foreclosing bank was entitled to prevailing party attorney’s fees against a condominium association under section 718.303(1), Florida Statutes (2012). In this case, the Bank brought foreclosure actions against two condominium unit owners. The Bank named the Association as a defendant in the foreclosure actions because the Association had liens for unpaid assessments. The Bank ultimately obtained foreclosure judgments and subsequently purchased the condominium units at foreclosure sales.

Florida Claim of Lien

The dispute involved the Bank’s liability to the Association for unpaid assessments after purchasing the condominium units at the foreclosure sales. Section 718.116(1)(b), Florida Statutes (2012), capped the Bank’s liability for condominium assessments at no more than one percent of the original mortgage debt. Notwithstanding this statutory cap, the Association made repeated demands for payment of liens in excess of the statutory maximum.

The Bank filed post-judgment motions against the Association in the foreclosure actions requesting the enforcement of the statutory cap and an award of attorney’s fees against the Association pursuant to section 718.303(1), which provides that the prevailing party is entitled to attorney’s fees in disputes between unit owners and condominium associations. The trial court ruled in favor of the Bank for the statutory cap but did not award attorney’s fees. The Association argues that not awarding attorney’s fees was proper because the substantive motions raised issues not strictly within the four corners of the foreclosure pleadings.

Owner as Prevailing Party

The Third District Court of Appeal reversed the trial court and ruled that the Bank as the prevailing party should be awarded attorney’s fees. The appellate court reasoned that the entitlement to fees did not exist from the outset of the Bank’s foreclosure actions since it was not an owner at the time. However, the Bank properly raised the issue of attorney’s fees only after it arose; and the Association was provided notice and adequate time to decide whether to pursue its claim for a lien in excess of the statutory maximum, drop it, or settle it. Accordingly, the Bank was entitled to its attorney’s fees incurred in successfully prosecuting its claim that the Association’s assessments were capped at the statutory maximums mandated by section 718.116(1)(b).

Lessons Learned

Florida condominium associations are cautioned to revisit their lien claims to ensure that they do not exceed the statutory caps for the purposes of foreclosures and mortgage lenders. Further, condominium associations should learn that once a foreclosing party has taken over the property that they are deemed owners and litigation involving them could involve the award of attorney’s fees in the event the association loses the case.

Related Topics: Florida Real Estate Law; Florida Condominium Associations; Florida Claim of Lien

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Florida Condominium Law Updated

Florida Real Estate Law

Florida Condominium Law Changes for 2010

Florida Governor Crist signed SB 1196 and 1222 into law creating Ch. 2010-174, Laws of Florida.  The new law whose text is spread over 103 pages includes many comprehensive changes to current Florida Condominium law.  The purpose of the new law is to address the depleted real estate market and the adverse impact on Florida condominiums, the owners and prospective purchasers.  Florida has one of the nation’s highest number of mortgage foreclosures with many of those foreclosures affecting condominium property.  As a Florida and Miami lawyer practicing in Florida Real Estate law and representing condominium associations, the following represents some of the highlights from the new law that went into effect on July 1, 2010:

Florida Statute 718.112(2)(d)3b

Within 90-days of being elected or appointed to the board, each newly elected director shall certify in writing to the secretary of the association that he/she has read the association’s declaration of condominium, articles of incorporation, bylaws and current written policies.  Further, he/she must certify in writing that he/she will uphold all such documents and faithfully discharge the responsibilities of office.  Alternatively, the new board member may submit a certificate of completing the educational curriculum by a division approved education provider.  Any director who fails to timely comply with this requirement will be suspended from office.

Florida Statute 718.116(1)(b)1

The liability of a first mortgagee who acquires title to a unit by foreclosure in a condominium is extended to up to 12 month’s of unpaid common expenses and regular periodic assessments.  Previously, a mortgagee was responsible only for up to 6 month’s of unpaid assessments or 1 percent of the original mortgage debt.

Florida Statute 718.116(11)

Tenants who occupy a condominium unit must pay the condominium association upon written demand by the association, monies owed to the unit owner directly to the association instead if the unit owner is delinquent in payments to the association.  To enforce this right the association must mail written notice to the unit owner of the association’s demand that the tenant pay the association directly.  A tenant who acts in good faith paying such monies to the association is immune from any claim from the unit owner.  If a tenant fails to pay the monies to the association after proper demand, the association is allowed to file an eviction action as if the association was the landlord.

Florida Statute 718.303(3)

If a unit owner is delinquent for more than 90-days for monies owed to the association, the association may suspend the unit owner or a unit owner’s occupant and/or tenant from the use of common elements or facilities of the association property until the monetary obligation is paid.  The association may not prohibit use of common elements that are only accessed by that particular unit (i.e. balcony) or any that would permit access to the unit, utility services, parking or elevators.  No fine or suspension is allowed unless the association provides at least 14-days advance written notice and an opportunity for a hearing to the unit owner.

Florida Statute 718.303(12)

A director, officer or committee member of an association may not directly receive any salary or compensation from the association for the performance of duties as an officer, director or member.

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