When I started practicing law in 1992, condominiums and HOAs had it a lot easier when it came to collecting their unpaid dues. If someone was thirty days late, you were able to file a lien on their home or unit right away. And if they didn’t pay within thirty days, foreclose on their unit.

I don’t remember when, but at some point The Florida Legislature amended the law to require the delinquent owner to get a thirty day letter, advising that they were late, showing how much was owed and which advised the delinquent owner that that if this amount is not paid within 30 days, the association will then file a lien.

Well, not even that was alright with The Florida Legislature. Last year, a new law was passed for both condos and HOAs which added a third step. Now, the very first letter that goes to the unit owner, advises them that they are delinquent and gives them thirty days to pay the amount due without any attorney’s fees whatsoever. Again, this letter must go out first.

Then, after thirty days, you can send a second letter advising that if the amounts due, plus interest, attorney’s fees and late charges, are not paid within 45 days, a lien will be filed against the home or unit.

After another 45 days, if still unpaid, you can file your lien and send a third letter to the owner advising that if not paid in full, including interest, costs and attorney’s fees within 45 days, a lawsuit to foreclose on the unit or home will be filed. If this notice is not given at least 45 days before the foreclosure action is filed, and if the unpaid assessments, including those coming due after the claim of lien is recorded, are paid before the entry of a final judgment of foreclosure, the association shall not recover attorney fees or costs.

So to recap on how to proceed against a delinquent owner:

  1. Send a 30 day letter requiring that they pay in full, with no attorney’s fees.
  2. Send a 45 day letter threatening to file a lien if not paid, including attorney’s fees, interest, and late fees;
  3. Send another 45 day letter advising that you have filed the lien and if the account is not brought current within 45 days, a foreclosure action is filed.

Under the current law, a unit owner now gets 120 days to pay, assuming that you sent each letter immediately when the clock allowed you to. The reality is, by the time you are able to finally file your foreclosure action, the unit will already be at least 5 or 6 months delinquent.

What to do about it

There is no perfect answer. But I do know that if If I’m the owner, I better come up with the money within the first 30 days, because I save a lot of money in attorney’s fees. Delinquent unit owners should do all they can to comply within that time, because it starts getting real expensive really quick to settle.

If I’m the association, I may want to make sure that I am on top of the collection process and immediately start the process when the owner is delinquent. You don’t need the attorney to send the first letter that you are not allowed to bill for anyway. Just make sure you give the owner the opportunity to pay in full without attorney’s fees within 30 days. Everything after the first letter should be done by counsel.

What to Expect

I already am starting to see delinquencies rise and new foreclosures being filed. When the cost of food, gasoline and just about everything else you buy starts skyrocketing, like now, there will be more delinquencies in our condominiums. The new legislation that is expected to make it more difficult to waive the funding of reserves and require more inspections of buildings is about to pass this week as well. Everyone’s assessments are about to go up. If you live in a community with no reserves in the bank, your assessments are about to go way up.

You also need to make sure your governing docs require purchasers at a foreclosure sale to pay the delinquent assessments owed to your association. Many of you have governing documents that lets the buyer purchase without owing anything to the community. In addition, you want to make sure your documents protect you against second mortgages by making sure you have language in your documents that do not say all mortgagees who take title to the unit are excused from paying any delinquent assessments. We want the second mortgage to be inferior to the association, so if they try and foreclose, the association’s lien remains in place. If they get the unit back, they owe everything.

It’s just not as simple as it once was doing collection work. I really advise to speak with your association’s counsel about getting the proper expedient plan in place because ladies and gentlemen; The foreclosures are coming, the foreclosures are coming.

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