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Assessments 101- An Overview of HOA and Condominium Assessments

by Robert N. Manning, Esq.

If you've let that bill from your homeowners or condominium association go unpaid-- it's time to open your checkbook. Failure to pay those assessments could ultimately result in the foreclosure of your home.

Homeowners associations or “HOAs” are entities recognized under Florida law. Florida Statutes define an HOA as a “Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners ... in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel."

When you purchase a home in a condominium or a homeowners association, you are contractually obligated to pay assessments. If those assessments are not paid timely, the associations have the right to record a lien against the property for the past due amount. That claim of lien may include interest, attorneys’ fees and costs of collection.

A claim of lien could be a big problem if you’re trying to sell or refinance your home. But there is an even more powerful tool than a claim of lien for condominium and homeowners associations to collect past due assessments: foreclosure. Florida Statutes section 720.3085 (governing HOAs) states, “The association may bring an action in its name to foreclose a lien for assessments in the same manner in which a mortgage of real property is foreclosed and may also bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney’s fees incurred in an action to foreclose a lien or an action to recover a money judgment for unpaid assessments.” Simply put, your homeowners association can force the sale of your home, just like a bank forecloses on a homeowner who defaulted on a mortgage. If the condominium or homeowners association decides not to foreclose on the property, it can sue you for a money judgment.

In my years of legal practice representing multiple condominium and homeowners associations in lawsuits related to the collection of unpaid assessments, I have seen past due assessments that began in the hundreds of dollars balloon to several thousand dollars. Homes are often sold at foreclosure sales for failure to pay past due assessments.

The Board of Directors of the condominium and homeowners association—made up of your neighbors who volunteer to serve on the board-- is responsible for the governance of the association. The Board of Directors will ultimately decide how it wants to address unpaid assessments. It’s an important issue. Assessments are the revenue source for the association to fund common areas—like signage in the neighborhood, landscaping, pool maintenance, etc. The theory is that if multiple homeowners fail to pay their fair share, the community will eventually fall into disrepair and homeowners that do pay their assessments on time will have to pay more. Clearly, condominium and homeowners associations are granted great power under Florida law—something to keep in mind when that bill for assessments arrives in the mail.

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