Apparently the new law allows the HOA to be the superior lein holder and trump the mortgage company. The new law doesnt not have to go thru a judical process either. Are there ways to stop the process that the HOA is now allowed to follow?
Are the timelines for foreclosures due to HOA filing a foreclosure creating less time for the foreclosure to be completed?
While such a change in the law in favor of the Associations would certainly be good news to many HOAs and their attorneys, I am unfamiliar with any law of this sort. There were laws enacted in 2011 allowing Associations to collect rents from tenants in properties that were delinquent as well as laws related to Master Association and neighborhood association priority.
However, a law that creates an HOA "super lien" over the bank and allows the Association to side step the judicial process sounds, at best, to be the pipe dream of every HOA board in the state. There is in fact case law to the contrary at the appellate level stating HOA's can have their entire amount due and owing wiped out in spite of 720.3085. (see Coral Lakes decision 2dca)
There is no current law that allows for any "non-judicial" foreclosure by any entity - bank, HOA, condo, etc. all foreclosures are judicial, meaning the lienholder has to file a lawsuit and go through the process until the court orders a foreclosure sale through summary judgment proceeding ( no disputed facts) or at trial.
There is a push by the banking industry every year to try to change Florida to a non-judicial state ( lienholder files court documents for possession and if the owner wants to contest it the owner has to file suit against the lienholder), but those efforts so far have been unsuccessful.
There are various community association groups that have tried to get legislation passed to speed up the process or jump ahead of the banks, but that has not happened yet.
The law allowing associations to collect rent is only successful if the tenants don't care or don't know that new laws can not be applied retroactively to change the HOA docs unless the docs claim they are subject to the law as amended from time to time. I have counseled tenants of this and they have successfully defeated eviction by the HOA representing themselves pro se.
HOAs can foreclose faster than banks and cause they hold the original debt and didn't sell it to Wall Street in a securituzed trust. I suspect more HOAs will be having problems now that collection agencies are offering to fund their litigation and advance them funds for pastbdue assessments. These collection agencies have been defeated in other states and I would like to see the same happen in Florida.
One technique that does work is to foreclose and then deed the house to the bank so they have to pay assessments. I personally will not foreclose unless an owner just flat out refuses to enter into a payment plan.
My own HOA has a new board who put a moratorium on foreclosures until each owner is offered a payment plan. We are currently organizing a group of volunteers to do fund-raisers for those who can't do a payment plan or need help with maintenance. The new slogan is "neighbors helping neighbors.". It may work and it may not, but at least they are tryiing!
I am not aware of any law in Florida that renders HOA liens superior to institutional first mortgages in first position or that allows HOA foreclosures to proceed on a non-judicial basis, and in fact such a law would be unconstitutional. If you have a particular statutory reference, please post it here, I will be curious to see it, however I am doubtful that there is such a statute.
However, with that said, HOA and condo lien foreclosures are a huge problem, and most people in Florida do not understand that they can and will lose their homes to an association lien, whether there is a mortgage on the property or not. This is an extremely messy problem. As a result, I wrote a Legal Guide, What You Need to Know - Condominium and Homeoweners' Association Foreclosures in Florida at
I agree with Atty. Stage. There is a push every year, however there are serious Constitutional issues which would undoubtedly render such a law void if it were to actually pass.
It is good to see that her association is trying a more reasonable and enlightened approach. While associations' budgets are seriously strained by the many defaults, forcing people out of their homes is not the answer. Often times, the homeowners don't realize the danger they are in until the association debt has become tremendous compared to what it should be - it is greatly magnified by the addition of legal fees, costs, filing fees, etc. It makes much more sense to try to work it out first. Associations are indeed comprised of neighbors, not Wall Street predators, and if the helping hand is extended in a reasonable and timely manner, it will undoubtedly resolve many of these issues.
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