In Florida, residents who live in a planned development and who do not pay the required fees/assessments required by the HOA are exposed to the risk of home foreclosure.
In this article, we provide a guide on how to defend against HOA foreclosure in Florida.
Homeowners Association – How Does It Work?
Typically, a development in Florida has common areas (e.g., pools, playgrounds, etc.) that are jointly owned and maintained by the community’s homeowners, who are responsible for all associated costs.
Hence, all associated homeowners need to pay monthly fees (dues) and assessments to the HOA, an acronym for homeowners’ association, as a way to cover all costs.
An individual who purchases a property in development needs to agree with several terms and conditions contained in the development’s governing documents. In Florida, most HOAs are governed by a declaration of Covenants, Conditions, and Restrictions (CC&Rs).
These specific rules govern the community, including fees/assessment policy (e.g., what type of fees an HOA is allowed to charge residents).
HOA Foreclosure in Florida – In Detail
In case someone fails to pay the required fees/assessments, a lien will be attached to the property.
Besides, the HOA also can record the lien with the county recorder to provide public notice that the claim exists (although there is no specific requirement for it).
Once a lien is attached by an HOA on an individual’s property, it will generally incur foreclosure (even in cases where the property owner has paid the mortgage as required).
Unfortunately, many people lose their homes even after leaving a few thousand dollars behind on HOA assessments.
Even though receiving a notice that an HOA began a foreclosure against you is not a positive thing, the ideal approach is to stay calm and not waste time with uncertainty. Seek help with an expert foreclosure attorney to find a defense strategy for your case.
Several potential defenses can be utilized in cases involving HOA foreclosure, including cases in which:
- an HOA charged too much money or charged unreasonable fees,
- an HOA failed to comply with state foreclosure law,
- an HOA misapplied payments done in the past, or
- an HOA failed to record the lien properly.
Other common defenses include situations in which the CC&Rs do not authorize the HOA’s charges or do not authorize the HOA to foreclose a property.
Potential Defenses Against HOA Foreclosure in Florida
When an HOA Is Not Authorized by CC&Rs to Foreclose
Commonly, any CC&R governing an HOA must contain certain provisions to provide how and when the association may foreclosure an individual’s property. It is not uncanny to see HOAs trying to foreclosure a property despite provisions in the CC&R not authorizing foreclosure.
When the CC&Rs Do Not Authorize the Assessments
Unfortunately, another common mistake made by HOAs is to assess a charge that the CC&Rs did not authorize. Any property liens or attempts to foreclosure resulting from an unauthorized charge are not valid and cannot be enforced by an HOA against the property’s owner.
Incorrect Accounting and Unreasonable Charges
In some cases, a lien placed by an HOA is invalid because the association is incorrect. If an individual has evidence that an HOA has improperly calculated the assessments and files for justice in court, the HOA has the burden to show how all amounts were calculated (assessments, late fees, interest, fines, etc.).
Also, the HOA needs to demonstrate that all values are correct and have ground provided by the CC&Rs.
Another common situation involves HOA foreclosure resulting from unreasonable charges. All fines, interest, and fees assessed by an HOA must be reasonable. Otherwise, the court might decide the charges are not valid.
When an HOA Fails to Record the Lien Properly
It is possible to utilize the failure of an HOA to record a lien properly as a defense against foreclosure in Florida.
Regardless of the situation, a lien must be properly recorded in the county records to be considered valid. In a case an HOA fails to do so by improperly recording a lien on an individual’s home, or does not record the lien at all, the affected party may utilize it as a defense against foreclosure.
When an HOA Fails to Comply with the Assessment Lien Foreclosure Statutes
In Florida, any HOA that fails to comply with the state statutory requirements regarding foreclosure may not be successful in its attempt to attach a lien and enforce foreclosure against an individual’s property.
In case an HOA prematurely starts a foreclosure, the affected party can raise the failure to comply with state statutory requirements as a defense in court.