Assessment collection is one of the most consequential actions a condo board takes. Get it right and the association stays funded. Get it wrong and the board faces legal exposure, delayed revenue, and unit owner disputes.
The statutory lien
Under F.S. 718.116(1), the association has a lien on each condominium parcel for any unpaid assessments, plus interest, late fees, and reasonable attorney fees and costs. The lien exists automatically by operation of law. The board does not need to record it for the lien to exist, but recording a claim of lien in the county records is required before foreclosure.
Notice requirements
Before the association can record a claim of lien, it must provide the unit owner with written notice of the delinquency. The notice must include:
- The amount owed
- A description of the charge
- A statement that the association intends to record a claim of lien if the amount is not paid
The unit owner has 45 days from the date the notice is mailed to pay the amount due before the lien can be recorded.
Lien priority
The association's lien under 718.116 has a limited priority over a first mortgage. The lien secures up to 12 months of unpaid assessments (or 1% of the original mortgage amount, whichever is less) even against a first mortgagee who forecloses. This means the association recovers at least some assessments even when a bank forecloses on a delinquent unit.
Foreclosure
The association may foreclose its lien in the same manner as a mortgage foreclosure. This is a judicial process that requires filing a lawsuit. The association must have recorded the claim of lien before initiating foreclosure.
The practical takeaway
The board should have a written collections policy that specifies when late notices go out, when the claim of lien is recorded, and when foreclosure is initiated. Consistency matters. A board that enforces against one unit owner but not another creates legal risk.
The board should have a written collections policy that specifies when late notices go out, when the claim of lien is recorded, and when foreclosure is initiated. Consistency matters. A board that enforces against one unit owner but not another creates legal risk.
This is a factual summary of the statute. Consult your association attorney for application to your specific governing documents and circumstances.