Q: Our condominium has had a few good years with no delinquencies. We now have a few owners who are 2 quarters behind in assessments. Can we record a lien against the unit for the unpaid assessments?
B.D., Treasure Coast
A: Thankfully, the delinquency rates in Florida condominium associations have been dwindling in recent years. The short answer is yes, Florida law provides that the condominium Association has a lien for unpaid assessments, as well as interest, late fees, attorneys’ fees and costs incident to the debt collection. First, you need to review your condominium documents to determine when the assessment becomes “late”. Then, Florida law provides that you can’t record a lien against the unit until you provide written notice and 30 days to pay the past due amounts. If the delinquency remains, you can record the lien. It is our recommendation that you have the above tasks performed by a licensed Florida attorney or at, at a minimum, have your in-house process reviewed by a licensed Florida attorney.
The bigger question is how to proceed after you record a lien. Each account should you analyzed separately because the situation where a unit is rented is different from the situation where the unit has mold damage, which is different than the situation where the owner lives out of the state or country. The statutes provide a few different approaches that should be reviewed and discussed to pursue the most cost effective solution.
One option, of course, is to foreclose the lien. This can be a valuable enforcement tool and the Association should not file an action to foreclose the lien until another 30 days’ notice is provided to the unit owner indicating the Association’s intent to foreclose on the lien.
I should not that the 30/30 timeline referenced above is different for homeowners associations under Chapter 720 which requires 45 days before a lien may be recorded, and another 45 days before the lien can be foreclosed.
Q: Our condominium Board does not get along well, and 2 of the 3 Directors just resigned, leaving only the President. How can the Association function with only 1 Director?
D.P., Stuart
A: In order for a corporation to act, it must act through its Board of Directors or through authorized individuals. If a quorum of the Board is not able to meet, the Board is not able to act, which means the corporation is not able to act. Florida law provides a mechanism to allow the sole remaining Director to appoint another individual so that there can be at least a quorum of the Board serving. Specifically, the statute provides: “unless otherwise provided in the bylaws, any vacancy occurring on the board before the expiration of a term may be filled by the affirmative vote of the majority of the remaining directors, even if the remaining directors constitute less than a quorum, or by the sole remaining director.” If the sole remaining director is not able to find a willing and eligible participant, the remaining director may be forced to file a petition in court seeking the appointment of an independent receiver to “run” the corporation. This process is very expensive and would serve as a great incentive to find eligible volunteers to serve on the Board.
John C. Goede Esq. is co-founder and shareholder of the Law firm Goede, DeBoest & Cross. Ask questions about your issues for future columns, send your inquiry to: question@gadclaw.com. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.