Condominium Assessment Liens in Florida, Part I: Authority for Condominium Liens
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A condominium association’s governing documents in conjunction with Section 718.116, Florida Statutes, are the genesis of the condominium association’s authority to impose and perfect assessment liens against individually owned units and parcels within the community. This four-part blog will discuss the condominium association’s right to lien, perfecting the condominium association lien, and collection practices for condominium associations. Part I will discuss the condominium association’s authority for asserting liens.
The lien authority of associations is normally limited to money due for assessment charged to the owners to cover the community common expenses. See Section 718.115(1) and Section 718.103(9) for definition of “common expense”. If authorized by a declaration of condominium, limited common expenses—as a subpart of common expenses—may also be enforced by assessments, and thus by a lien. See Section 718.113(1) and 718.103(19) for definition of “limited common element”. Therefore, although non-assessment monetary claims may justify an action for damages, a condominium association cannot record a lien for items unrelated to common expenses. See Ocean Beach Resort, Inc. v. Rodack, 586 So.2d 363 (Fla. 3d DCA 1991).
Condominium association liens may seek to include claims for money other than, but related to, delinquent assessments—for example, default interest and late fees. Some condominium associations may be given the right, by virtue of their “governing documents,” to impose liens for “accelerated” assessments. These are installment payments of an annual assessment due in the future, but accelerated to render them immediately payable because of a delinquency. See 718.112(2)(g). Condominium associations have statutory authority to do this if it is granted in the governing documents. Id. Procedures to accelerate, if any, stated in the declaration or bylaws should be followed. See Rones v. Charlisa, Inc., 948 So.2d 878 (Fla. 4th DCA 2007).
The most common condominium lien arises out of the non-payment of the normal unit owner assessments. The annual assessment on which a lien is predicated must be approved by the association. Assessments are approved by an association’s board of directors which is typically done when the association sets its budget for the upcoming year. See 718.112(2)(e). To provide certainty as to the amounts due and installment due dates, the association should have a motion to accept and adopt the budget, then a separate motion to approve the assessments and payment schedule for the unit owners. The proper allocation of assessments among condominium units is a recurring issue. Section 718.115(2) states that assessments for common expenses must be made in proportion to the owner’s interest in the common elements and as stated in the community declarations. Some associations provide a “coupon book” to the unit owners on assessments, but there is no requirement that such a book be provided. It is up to each unit owner to know and understand how much the assessment for the upcoming year will be. Most associations will provide this information to the unit owners in the event of a change in the amount.
Another mechanism that results in amounts due to the association is a special assessment. Under 718.103 (24) a “special assessment” means any assessment levied against a unit owner other than the assessment required by a budget adopted annually. Special assessments are a source of frequent controversy and dispute. There are usually strict procedures for passing and adopting special assessments. For example, condominium associations must provide to the owners a specific notice 14 days in advance of the association’s board of directors’ meeting at which a special assessment is to be considered. Section 718.112(2)(e)—(2)(f). The notice must specify the purpose of the assessment. A special assessment that is passed without the notice or procedural steps being taken is subject to challenge.
Boards that are notoriously poor at communicating information to unit owners may also experience difficulty with special assessments. Although owners are generally aware of and are charged with constructive knowledge of annual assessment levies, an owner who is not attentive to association business may not comprehend that a special assessment has been passed and is due. An association may be better served to have its counsel review the special assessment documentation, including notices of meetings, meeting minutes, and the notice of the special assessment. This will ensure compliance with the applicable statutes and governing documents.
Condominium associations may not impose a lien for charges unrelated to assessments for common expenses and limited common element expenses. The Condominium Act specifically prohibits fines from being the basis for a lien. Section 718.303(3); Elbadramany v. Oceans Seven Condominium Ass’n, Inc., 461 So.2d 1001 (Fla. 5th DCA 1984).
The condominium association does have other options for enforcing fines. Condominiums may suspend the right of a unit owner, or a unit owner’s tenant, guest, or invitee, to use the common elements, common facilities, or any other association property for failure to comply with any provision of the declaration, the association bylaws, or reasonable rules of the association. This does not apply to limited common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators. Section 718.303(3). The association may also bring a civil action against the unit owner for the payment of the fine.
A fine or suspension may not be imposed unless the association first provides at least 14 days’ written notice and an opportunity for a hearing to the unit owner and, if applicable, its occupant, licensee, or invitee. The hearing must be held before a committee of other unit owners who are neither board members nor persons residing in a board member’s household. If the committee does not agree, the fine or suspension may not be imposed. Section 718.303(3).
If a unit owner is more than 90 days delinquent in paying a monetary obligation due to the association, the association may suspend the right of the unit owner or the unit’s occupant, licensee, or invitee to use common elements, common facilities, or any other association property until the monetary obligation is paid in full. This does not apply to limited common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators. The notice and hearing requirements under subsection (3) do not apply to suspensions imposed under this subsection. Section 718.303(4).
An association may suspend the voting rights of a unit or member due to nonpayment of any monetary obligation due to the association that is more than 90 days delinquent. A voting interest or consent right allocated to a unit or member which has been suspended by the association may not be counted towards the total number of voting interests necessary to constitute a quorum, the number of voting interests required to conduct an election, or the number of voting interests required to approve an action under this chapter or pursuant to the declaration, articles of incorporation, or bylaws. The suspension ends upon full payment of all obligations currently due or overdue to the association. The notice and hearing requirements under subsection 718.303(3) do not apply to a suspension imposed here. Section 718.303(5).
Condominium association board members and managers should understand the legal basis for imposition of assessment liens when properly governing the community. Part II of this blog post will discuss how the association perfects its lien rights.