Condominium Assessment Liens in Florida, Part II: Perfecting Condominium Liens

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 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 II of this blog will discuss the condominium association’s process and procedure for perfecting assessment liens.

The Florida Condominium Act sets forth the process and procedure for perfecting a condominium assessment lien for delinquent assessments. A condominium lien creates an interest in real property in favor of the association. In many instances, it has been said that the association has a “perpetual” right to lien, so long as the association remains in existence. The condominium lien will take its priority in right based on the date the declarations were recorded.  Because Florida association liens require the inclusion of a legal description, and liens create real property rights, only attorneys who are members of The Florida Bar may draft liens. A non-Florida attorney’s preparation of a lien on Florida real property constitutes the unauthorized practice of law. This is so, even if the non-attorney is a licensed community association manager. See The Florida Bar re Advisory Opinion — Activities of Community Ass’n Managers, 681 So.2d 1119 (Fla. 1996).

A condominium association lien is a creature of statute; and a creature of the condominium declaration and bylaws. See 718.116(5)(a). The claim of lien must state the description of the parcel encumbered, the name of the record owner, the amount due, and the due date or dates.  The lien must be signed by an officer or authorized agent of the association, and must be recorded in the public records of the county in which the condominium parcel is located.  See 718.116(5)(a)—(5)(b). The condominium declarations may have exemptions to liens, such as developer exemptions, so it is therefore of the utmost importance to confirm with the community documents the exact nature of the condominium assessment lien rights.

Interest accrues on delinquent assessments. If the declaration of condominium does not specify an interest rate, interest accrues at 18% per annum from the date of delinquency.  718.116(3). If either the declaration or the association’s bylaws allow, the association may levy a late charge of the greater of $25 or 5% of the installment of the delinquent assessment. Even if a late fee does not bear a reasonable relationship to the cost of processing a late payment, the statutorily authorized late charge is not considered usurious.

Notice of Intent to Lien

The first step to perfect a condominium lien under the Florida Condominium Act is the sending of a Notice of Intent to Lien letter. Section 718.121.  The statute was revised in 2014 to include the notice form. The condominium association must follow the Condominium Act’s requirements since assessments liens are creatures of statute. The notice of the association’s intent to record a lien in the public records is delivered to the delinquent unit owner no less than 30 days before the lien is recorded in the public record. The notice is addressed to the owner’s last address on record with the association; however, if the address is outside the United States, the notice is sufficient if addressed to the unit. Notice is effective upon mailing, which must be by first class and registered or certified mail, return receipt requested. See 718.121(4).  The notice appears in the statute and the language of the letter should match the language in the statute.

Notice of Intent to Foreclose on Delinquent Assessment

After the lien is recorded, the next step—pursuant to 718.116(6)(b), Florida Statutes—is to send another notice of intent to foreclose on the condominium lien. No foreclosure judgment may be entered until at least 30 days after the association gives written notice to the unit owner of its intention to foreclose its lien to collect the unpaid assessments. This notice has also been amended for 2014. The notice appears in the statute and the language of the letter should match the language in the statute. If this notice is not given at least 30 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 will not be permitted to recover its attorney’s fees or costs in the action to enforce the assessment lien.

A copy of the notice must be delivered to the unit owner, or by certified or registered mail, return receipt requested, addressed to the unit owner at his or her last known address. Upon such mailing, the notice shall be deemed to have been given, and the court shall proceed with the foreclosure action and may award attorney’s fees and costs as permitted by law. The notice requirements do not apply if an action to foreclose a mortgage on the condominium unit is pending. See 718.116(6)(b). A good practice point is to send the Notices anyway if the association is seeking its own foreclosure.

Notice of Contest of Lien

A unit owner, his agent or his attorney may drastically shorten the time for an association to file suit by recording a notice of contest of lien. After notice of contest of lien has been recorded, the clerk of the circuit court will mail a copy of the recorded notice to the association by certified mail, return receipt requested, at the address shown in the claim of lien or most recent amendment to it. The clerk will certify to the service on the face of the notice. Service is complete upon mailing. After service, the association has 90 days in which to file an action to enforce the lien; and, if the action is not filed within the 90-day period, the lien is void.

Release of Condominium Lien

Section 718.116 was amended in 2014 to include a form release of lien. This release of lien requires two subscribing witnesses and a notary. Much debate has occurred over the addition of the two witnesses. The argument is that a release of lien is not a transfer of title document and should not require two witnesses. However, the language of the release appears in the statute and the association release should match the statute and follow the procedures set forth therein.

Condominium association board members and managers should understand the timing of notices and the process to follow when perfecting and releasing assessment liens. Part III of this blog post will discuss assessment lien foreclosure action.