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Now browsing: Hometown News > Business & Finance > Indian River County

Collecting from delinquent owners
Rating: 3.14 / 5 (7 votes)  
Posted: 2013 Apr 19 - 06:34

By Michael McSoley

A common problem facing condominium associations today is collecting the maintenance assessments from delinquent unit owners.

One of the condominium association board of directors' many duties to the association is the collection of past due assessments. We are often asked by our clients to assist in collecting those assessments.

Once a unit owner's past due assessments are to the point when action by the association is necessary, the options the association may take are defined by statute.

An association may file a lawsuit seeking money damages in court. The association may also file a claim of lien against the condominium parcel for the amount of the past due assessments, and then file a lawsuit in court to foreclose the lien.

This action works much like a mortgage foreclosure. The association does not necessarily have to choose between whether to file a lawsuit for money damages or to foreclose a claim of lien. Both of these actions are available to an association and can be filed simultaneously.

Regarding filing and foreclosing on a claim of lien for assessments, there are statutory procedures in place that the association must follow in order to perfect its right to foreclose the lien and to protect its right to recover the attorney fees and costs expended to accomplish the filing and foreclosure of the lien.

Once the decision to file a claim of lien against a unit is made, the association must deliver to the unit owner a thirty (30) day notice of its intent to file a claim of lien. Once the thirty days has passed, if the unit owner has not paid the past due assessments, the association may then file and record the lien and serve it on the unit owner.

The next step in the process is to file a lawsuit to foreclose the claim of lien. However, the lawsuit cannot be filed until the association files another thirty (30) day notice to the owner of its intent to foreclose. Once the thirty days have passed and the owner has still not paid the past due amounts, the association may then file its lawsuit to foreclose.

Failure to adhere to these notice requirements may affect the association's ability to proceed with its foreclosure action and its ability to recover its attorney fees.

Regarding the association's decision of whether to file a lawsuit seeking a money judgment, or to foreclose its claim of lien, or both, other factors such as the status of any mortgage foreclosures or likelihood thereof should be considered.

It is also important to keep in mind that the ultimate end result of a lien foreclosure is that the unit owner will lose the property and the unit will be sold to satisfy the past due amount owed to the association. Thus, the ultimate goal of any association faced with this responsibility should be to collect the past due funds and not the unit owner losing the property.

Michael McSoley is an attorney practicing with the legal association Groelle and Salmon. For more information, he can be contacted at mmcsoley@gspalaw.com.




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