Legal Morsel | Court Concludes That Mistakes on a Claim of Lien Does Not Invalidate the Claim by BY ROBERT KAYE, ESQ., B.C.S

Legal Morsel | Court Concludes That Mistakes on a Claim of Lien Does Not Invalidate the Claim

by BY ROBERT KAYE, ESQ., B.C.S

The Florida Fourth District Court of Appeal recently provided a ruling regarding the ability of a homeowner’s association to successfully complete a foreclosure for unpaid assessments when there was an error in the amount indicated as being owed on the claim of lien.  In the case of Pash v. Mahogany Way Homeowners Association, Inc., Case No. 4D19-3367, January 27, 2021, the Appellate Court was faced with the challenge of a lower court ruling in favor of the homeowner’s association in which the homeowner, Mr. Pash, had claimed that the amount indicated on the claim of lien was overstated from what was owed.  The record also reflected that the homeowner’s association admitted that it made a mistake in its calculation of the assessments on the lien but corrected the amount when it filed the foreclosure case.  It was not disputed that some assessments were delinquent when the foreclosure case began.

In a split decision, a majority of the Court focused on the requirements of Section 720.3085(1)(a) of Florida Statutes, as well as the provisions of the Declaration of Covenants for the Community.  The Statute provides the following:

To be valid, a claim of lien must state the description of the parcel, the name of the record owner, the name and address of the association, the assessment amount due, and the due date.  The claim of lien secures all unpaid assessments that are due and that may accrue subsequent to the recording of the claim of lien and before entry of a certificate of title, as well as interest, late charges, and reasonable costs and attorney fees incurred by the association incident to the collection process.  The person making payment is entitled to a satisfaction of the lien upon payment in full.

While the case was reversed for other reasons, the majority of the Court stated that “Nothing in section 720.3085(1)(a) suggests that the claim [of lien] must be free of error for it to serve as an otherwise valid claim of lien.”  The Court also concluded that the statute, as written, does not provide that an error in the amount stated in the claim of lien invalidates an otherwise valid claim by an association.  Rather, the Court indicated that the association is merely asserting “a claim” in the lien and the association remains obligated to prove its claim in order to prevail in its case and homeowners have the ability to contest the claim made.

The Florida Condominium Act contains substantially the same provision as set forth above in Section 718,116(5)(b) F.S.  Consequently, it is anticipated that a lower court would likely apply the conclusions of this case to a condominium association foreclosure case.

It remains to be seen whether this holding is going to be viewed as an anomaly or will be followed by the remaining District Courts in Florida.  Notwithstanding this easing of the perception of association requirements on this point, it remains the recommendation that all collection efforts by associations be fully documented to a “zero” balance on the specific homeowner account to minimize any possible adverse conclusion in an assessment foreclosure case.  Legal counsel familiar with community association law should be involved to assist in the formal collection efforts against any homeowner.

 

 

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