How Long Does a Florida HOA or Condominium Association have to foreclose on a HOA/COA Lien?

Florida law provides that community associations may collect assessments from unit owners to cover operating and maintenance costs. If a unit owner fails to pay, the association may record the unpaid assessment as a lien against the property and eventually file for foreclosure. However, to perfect the assessment as a lien and foreclose, the association must follow the statutory guidelines in Florida Statute Chapter 718.

As of May 2022, the Florida legislature updated the requirements for perfecting a community association assessment as a lien. The changes implemented provide longer notice periods prior to recording the assessment as a lien or foreclosing on a lien. Once an assessment becomes overdue, the association may begin the first steps of the process of perfecting the assessment as a lien.

The first step is required if the association plans to assess the unit owner for its attorneys’ fees but is otherwise optional. § 718.121(5), Florida Statute (2022) provides that after an assessment becomes delinquent, the community association must send a Notice of Late Assessment and provide the unit owner 30 days to pay the assessment without the extra costs of attorneys’ fees. If the association fails to send such notice in accordance with the form provided in the statute, the association may not assess the unit owner for its attorneys’ fees.

An association’s failure to send Notice of Late Assessments will not prohibit the filing a lien against the unit, however, failure to send notice of its intent to record the lien prior to filing will. If the delinquent assessment is not paid, the association must deliver a Notice of Intent to Record a Claim of Lien 45 days prior to filing a lien against the unit owner’s property. § 718.121(6), Fla. Stat. (2022). The statute provides another form with the contents that must be included in such notice.

After the lien is recorded, the community association must commence legal action within one year. However, if the unit owner files a Notice of Contest of Lien, the association must commence legal action within 90 days. § 718.116(5)(b), Fla. Stat. (2022). If, after recording the lien, the delinquent assessment is still outstanding, the association may begin the foreclosure process. To do so, the association then must send a Notice of Intent to Foreclose 45 days prior to filing a foreclosure suit. § 718.116(6)(b), Fla. Stat. (2022). The statute also provides a form for this notice.

While Chapter 718 provides a statute of limitations for filing foreclosure proceedings after recording a lien, it does not provide guidance as to how long the association has to file for foreclosure or perfect a lien after the assessment becomes delinquent. However, in 2019, the First District Court of Appeals held that condominium assessments are considered “consumer debts” under the Florida Consumer Collection Practices Act (FCCPA) and the Fair Debt Collection Practices Act (FDCPA). See Kelly v. Duggan, 282 So. 3d 969, 973 (Fla. 1st DCA 2019). The Fifth District Court of Appeals affirmed the decision, holding that the “ongoing obligation to pay assessments is a ‘consumer debt’ under the FCCPA.” Williams v. Salt Springs Resort Ass’n, Inc., 298 So. 3d 1255, 1260 (Fla. 5th DCA 2020). Because an assessment is considered a consumer debt, the statute of limitations for instituting a legal action to collect consumer debt would also apply to instituting legal action to collect assessments, such as foreclosing a lien.

Under § 95.11(2)(b)-(c), Florida Statute, “a legal or equitable action on a contract, obligation, or liability founded on a written instrument” or “action to foreclose a mortgage” must be brought within 5 years of the date of the first missed payment. This means that from the date the assessment becomes delinquent, the association likely has 5 years to file foreclosure. However, because of the notice requirements discussed, the community association must begin the notice process within at least 4 years and 9 months to be able to file a lien and valid foreclosure suit within the 5-year limitation. Additionally, community associations must be careful to follow the FDCPA, FCCPA, and new “Regulation F” requirements when attempting to collect delinquent assessments. To learn more about those requirements, you can read our blogpost here.

For assistance in foreclosing community associations liens contact the community associations team here.