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Most homes built in the last thirty years are subject to deed restrictions or are condo units subject to declarations of condominium, and are subject to the payment of maintenance fees and assessments. What this means in the current foreclosure crisis is that when an owner finally stops paying their mortgage they also stop paying their assessments.
Generally, my advice to a homeowner that is faced with the decision to stop paying a mortgage is to keep paying their association fees. This is because like the bank the association can foreclose a lien against the lot or unit to collect its fees, but unlike the bank an association can accomplish having the home sold in months not years.
When an owner stops paying both the mortgage and association fees at the same time a common result is two separate foreclosure suits against the same property. This happens much of the time when the bank foreclosure stalls and the association decides to take the home at sale and rent it out pending completion of the bank foreclosure to recover some of its loses, or to at least stop losing money.*
But, according to Florida Statute §48.23 the Association may not be entitled to bring these separate foreclosure actions. This statute states, "...recording of such lis pendens...constitutes a bar to the enforcement against the property described in the notice of all interest and liens...unrecorded at the time of recording the notice unless the holder of any such unrecorded interest or lien intervenes...within 30 days after the recording of the notice."
In U.S. Bank Nat Assn v. Quadmaine Condominium Association, No. 4D12-422, the Court applies the statute to the following facts: The bank recorded a supplemental Lis Pendens in connection with a reforeclosure; followingthe recording of the supplemental Lis Pendens, the condominium association files its lien and suit to foreclose. Under these facts the Association had to intervene in the bank foreclosure within 30 days of the recording of the Supplememtal Lis Pendens, and failing to do so barred the Association from liening the unit and foreclosing its lien.
The affect on pending mortgage foreclosures is to prevent the Association from initiating a separate law suit for delinquent assessments when it doesn't have a recorded lien at the time the bank's Lis Pendens is filed. If assessmemts are delinquent, if and when the mortgage foreclosure is settled through modification or otherwise, the delinquent assessments will need to be immediately resolved to avoid a second, successive foreclosure action. But, the Association is not be able to interfere in the pending bank foreclosure by threatening to foreclose its own lien quickly, allowing the owner the time to fully defend the mortgage foreclosure and seek a fair resolution of the case.
*The Association is entitled to recover its past due assessments from the purchaser at bank foreclosure sale, but if the bank purchases the lot or unit the association is limited to recovering the lesser of 12 months or 1% of past due assessments. When bank forclosures take three, four or more years the Association is destined to lose money.