Amendments to provisions of Chapter 720 of the Florida Statutes, recently signed into law by Governor Crist, address several issues of interest to homeowners associations, including receivership, delinquent assessments and liens, and the display of flags. The following is a brief summary of some of the legislation included in these bills, which take effect on July 1, 2008.
House Bill 1105 (Receivership). House Bill 1105 amends provisions of Chapter 720 of the Florida Statutes (as well as Chapter 718 and Chapter 719) to provide notification requirements and procedures relating to the appointment of a receiver to manage the affairs of an association.
Senate Bill 1986 (Delinquent Assessments; Liens). Senate Bill 1986 amends Florida Statutes Section 720.3085 regarding payment for assessments and liens.
- Liens. A homeowners association, when authorized
by the governing documents, has a lien on each parcel to
secure the payment of assessments and other specified
amounts. Such lien is effective from and relates back to the
date the original declaration of the community was recorded.
As to first mortgages of record, however, the lien is
effective from and after a claim of lien is recorded in the
public records. The legislation establishes requirements for
the validity of a claim of lien and identifies the
assessments and other amounts secured by the claim of
lien.
- Notice of Contest of Lien. A parcel owner may
record a notice of contest of lien, in substantially the form
set forth in the statute, to require an association to
enforce a recorded claim of lien against the parcel within
ninety (90) days after service of the notice upon the
association. The lien becomes void if the association fails
to file an action to enforce the lien within such period,
subject to extension for delays arising from the filing of a
bankruptcy petition.
- Foreclosure of Lien. An association may
foreclose a lien for assessments in the same manner in which
a mortgage of real property is foreclosed. Further, an
association may recover a money judgment for unpaid
assessments, as well as reasonable attorney's fees
incurred in the action.
- Rent. The court may require a parcel owner who
remains in possession of a parcel after entry of a
foreclosure judgment to pay reasonable rent. If a parcel is
leased during the pendency of a foreclosure action, a
receiver may be appointed to collect rent, with the expenses
of such receiver to be paid by the party who does not prevail
in the action.
- First Mortgagees. The legislation limits the
liability of a first mortgagee, or its successors or assigns,
that acquires title to a parcel by foreclosure or deed in
lieu of foreclosure for the unpaid assessments that became
due prior to such acquisition to the lesser of the unpaid
common expenses and assessments that accrued during the 12
months immediately preceding the acquisition of title or 1%
of the original mortgage debt. This limitation applies only
if the first mortgagee initially joined the association as a
defendant in the foreclosure action filed against the parcel
owner, subject to certain exceptions.
- Notice. The association is required to make
written demand upon the parcel owner for payment of unpaid
assessments before it may file a lien. The demand for payment
must give the parcel owner 45 days following the date the
demand is deposited in the mail to make payments for amounts
due. Further, an association may not file an action to
foreclose a lien until 45 days after the association has
given the parcel owner written notice of its intent to
foreclose the lien. Such notice may not be provided to the
parcel owner until the passage of the 45-day period after
mailing of written demand for payment. These time limitations
do not apply if the parcel is subject to a foreclosure action
or forced sale by another party or if the owner of the parcel
is a debtor in a bankruptcy proceeding.
- Qualifying Offers. The legislation provides an
additional limitation on when a parcel owner may make a
qualifying offer to an association and specifies
circumstances in which a qualifying offer may become void. In
addition, a qualifying offer must be in substantially the
written form set forth in the legislation.
- Senate Bill 1378 (Display of Flags).
Senate Bill 1378 amends Florida Statutes Section 720.304 with
respect to a homeowner's display of flags. The
legislation allows a POW-MIA flag of limited size to be
displayed, in lieu of one of the flags of branches of the
armed services. The bill further allows a homeowner to erect
a flagpole no more than 20 feet high on such
homeowner's parcel to display the United States flag
(not larger than 4½ feet by 6 feet) and the official
flag of the State of Florida or the United States Army, Navy,
Air Force, Marines or Coast Guard, or a POW-MIA flag, which
additional flag is equal in size to or smaller than the
United States flag. The limitation that flags of the branches
of the armed services may be displayed only on certain
holidays has been removed.
For the full text of House Bill 1105, see http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h1105er.xml&DocumentType=Bill&BillNumber=1105&Session=2008.
For the full text of Senate Bill 1986, see http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_s1986er.xml&DocumentType=Bill&BillNumber=1986&Session=2008.
For the full text of Senate Bill 1378, see http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_s1378er.xml&DocumentType=Bill&BillNumber=1378&Session=2008.
If you have any questions about this Alert or would like more information, please contact Jeffrey R. Margolis, Susan Pontigas, P.A., any other member of the Real Estate Practice Group or the attorney in the firm with whom you are regularly in contact.
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