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When unit owners refuse to pay their assessments, it puts everyone in a bind, condominium assessment liens might be one way?

When unit owners refuse to pay their assessments, it puts everyone in a bind, condominium assessment liens might be one way?

  • Posted: Jul 16, 2024
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Florida Condominium Associations and Homeowners Association Boards have many challenges in managing the needs of their communities. As a result, when unit owners refuse to pay their assessments, it puts everyone in a bind. Fortunately, there is a key tool that you may use in Florida to compel payment of the monies due: a condominium assessment lien.

Collecting Assessment Revenue Through A Condominium Assessment Lien
There are steps that must be taken in order for a condominium association lien to be properly filed. This is a brief summary of the steps:

 

*A condominium association’s governing documents in conjunction with Section 718.116, Florida Statutes, are the genesis of the condominium association’s authority to impose and perfect assessment liens against individually owned units within the community.

 

 

Delinquency Notice

This is not a requirement but good collection practices dictate that the association attempt collection efforts prior to engaging a law firm. Sometimes the unit owner may have just forgotten to place the payment in the mail. These delinquency notices can help remind the unit owner of their payment obligation.

 

Notice of Intent to Lien

The first statutorily required step is to send a formal letter from the law firm announcing the association’s intent to place a lien on the unit for the failure to pay. The letter has very specific requirements and should be sent from the association’s attorney. If a condominium, the association must wait 30 days from the date of this letter to record its lien. The time frame for a Homeowners Association is 45 days.

 

Claim of Lien

This is the actual document that gets recorded in the public records and encumbers the unit. It must have the Unit legal description, the owners name and a description of the delinquency. There is a form in the statute and Florida law requires that this lien be created and recorded by the association attorney.

 

Notice of Intent to Foreclose

After the lien is recorded, another notice must go to the unit owner announcing the intention to take the unit by legal process. The association must also wait an additional 30 days after this notice is sent. 45 days for HOAs.

 

Foreclosure Action

This is the lawsuit that will take the unit. A Lis Pendens is recorded when the lawsuit is filed to provide public notice of the legal action on the lien. Most lien foreclosure actions result in either settlement of the claim of taking of the unit. Defenses to lien foreclose actions are tough to prove and seldom release the unit owner from the obligation to pay the assessment.

 

 

Time Is not on your side, dont delay if this is the action you are taking?

It is imperative that all these steps are followed to the tee or the lien may be dismissed outright. In addition to these steps, Florida condominium associations can take additional steps such as suspending unit owner common element or amenity rights. This is done by alerting the unit owner of the delinquency and then if amount is greater than $1,000 and 90 days the Board may consider the suspension of voting rights at a board meeting. The unit owner will then receive notice of the suspension after the vote has occurred.

 

Florida Condominium Associations

Under Florida State Law, only an attorney may draft a condominium assessment lien, because it contains a legal statement. Once the lien is filed, there is a one year timeline for Florida condominium associations to file suit. If the Association misses that deadline, the whole lien process will have to be redone. Therefore, it is paramount that the steps are followed properly, and in a timely fashion, or you may forfeit what is due to the community.

Remember to contact your Attny, Ask them for the best options for your communities!

 

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The Corporate Transparency Act and Your HOA/Condo.

The Corporate Transparency Act and Your HOA/Condo.

  • Posted: Jul 16, 2024
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By: Mitchell Drimmer, CAM

President, Axela Technologies

Starting next year, Community Associations (HOAs & Condos) in the U.S. will have to follow new rules. These rules are part of something called the Corporate Transparency Act (CTA). The CTA requires most Community Associations (HOAs & Condos) to share information about the people who own or control the association. This is called a beneficial ownership report. While some non-profit groups are exempt from this rule, most Community Associations (HOAs & Condos) are not.

Community Associations (HOAs & Condos) are groups that take care of neighborhoods. There is a lot of money flowing in and out of these associations and many boards of directors and even their management companies are not quite ready for this process. There are a lot of Community Associations (HOAs & Condos) in the U.S., more than 355,000 of them. They serve around 74 million people which is about 24% of the population of the United States.  Community Associations (HOAs & Condos) are not exempt as they may be the perfect place to engage in money laundering for the purposes of fraud (unjust enrichment), and terrorism. The CTA was specifically established to make money laundering more difficult.

The new rule says that Community Associations (HOAs & Condos) need to provide specific information about the people who own or control the association. This includes their names, addresses, and other details. This information will be collected by a government agency called FinCEN. The goal is to make sure this information is not available to the public, but it can be used by law enforcement. There remain some questions regarding owner access to association records but as we all know Federal law overrides State laws and an association’s by-laws.

Most Community Associations (HOAs & Condos) need to report. They are considered “reporting companies” under the CTA. This means they must file the beneficial ownership report. There are some exemptions, but most Community Associations (HOAs & Condos) won’t qualify for these exemptions. This will add costs to the management of community associations and naturally will be passed through to the owners making life more expensive for community associations. Adding this to structural inspections, increased insurance premiums, and rising costs, this is not good news.

Community Associations (HOAs & Condos) need to figure out who their beneficial owners are. These are people who have control over important decisions in the HOA. It could be board members or others who influence how the HOA operates. Community Associations (HOAs & Condos) need to collect specific information about these people and report it to FinCEN. They also need to update this information if anything changes. The Board of Directors will now be scrutinized more than ever before, making it even more difficult to enjoin volunteers to run for board positions.

The new rule starts on January 1, 2024.

Existing Community Associations (HOAs & Condos) have until January 1, 2025, to file their first report.

Community Associations (HOAs & Condos) formed after this date must file within 30 days of their formation.

Community Associations (HOAs & Condos) need to understand these new rules and make sure they follow them. It’s important to collect the right information and report it on time. If they need help, they can talk to community association specialists who have studied this matter. These rules are meant to increase transparency and prevent fraud, so following them is essential.

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