Q: Our condo association, like many others, had to issue an assessment to owners to recover the cost of damages from hurricane Ian. We have issued the notices, and all the owners except one has either made full or partial payments. We understand we may place a lien against the property, but what kind of timeframe is required by law, and what other measures are we allowed to take against the non-compliant owner? (D.A., via e-mail)
A: The first thing the Association should do, unless your attorney prepared the special assessment meeting materials, is to ask for legal review of the assessment procedures that were used. There are a number of technicalities that must be followed, though a court may or may not relax some of them in an emergency situation. The most common defenses to payment of special assessments I see are procedural.
Assuming all proper procedures were followed, the next thing to do is to determine when the assessment became “delinquent.” Contrary to popular belief, the Florida Condominium Act does not define when an assessment becomes delinquent, this is left to the condominium documents. Most documents set a fixed delinquency date (which is essentially a “grace period”). 10 days, 15 days, and 30 days after the due date are the most common delinquency standards that I see in condominium documents.
Once it is determined that the assessment has become delinquent, then the documents must again be reviewed regarding interest and late fees. The law allows interest up to 18%, and states that if the documents do not specify an interest rate for delinquent assessments, the statutory default interest rate t is 18%per annum. Most documents allow interest calculation from the due date, as opposed to the delinquency date, but this should be verified.
Conversely, late fees can only be assessed if they are authorized by the condominium documents. Late fees cannot exceed $25.00 dollars or 5% of each installment for which payment is late, whichever is greater.
Once the assessment is delinquent, the association must send the owner what I call the “courtesy late notice.” The matter cannot be referred to legal counsel (or more precisely, legal fees cannot be added to the delinquent account), until the courtesy late notice is sent. However, interest and late fees may be added to amounts shown as due under the courtesy late notice. The form of required notice is set forth in Section 718.121(5) of the Florida Condominium Act. The courtesy notice must provide 30 days to pay.
After the 30 days has expired, the matter should be referred to legal counsel for action. In general, the association must give a 45-day notice by certified mail of the association’s intent to record a clam of lien for the unpaid assessment, interest, late, fees and attorneys’ fees. If payment is not made after the 45 days, a lien may be recorded, and a foreclosure action started after another 45-day period.
As you can see, there are a variety of steps and delays in the process, which have been added to the laws over the years as a reaction to what some saw as sharp practices by certain management companies and law firms. In addition to the lien and foreclosure process, there are a variety of other provisions of the condominium statute which may come into play.
Under certain circumstances, the association can “accelerate” all assessments due for the remainder of the year. If the unit is rented, there is a procedure for the association to seek to require that the tenant pay rent directly to the association.
The association can also suspend voting rights and the right to use non-essential common elements, such as recreational facilities, after a certain time, subject to certain minimum amounts being delinquent, and after following certain procedures. Members of the board, and candidates for the board who are delinquent, also face statutorily specified disqualifications for candidacy or remaining on the board.
Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@beckerlawyers.com. Past editions may be viewed at floridacondohoalawblog.com.