Tag Archives: lien

Collecting Unpaid Assessments from the Association’s POV

This question comes from the Florida Condo & HOA Law Blog, published by Becker & Poliakoff, one of the most recognized condo & HOA association firms in Florida. A writer asked:

Question: We recently had a home sell in our community, which is governed by a homeowner’s association. However, the title company handling the closing only collected a portion of the amount we stated was due prior to closing. We were of the understanding that the title company would be required to collect all amounts at closing. Now, it appears that the new owner is trying to flip the property and leave the next owner holding the bag. We sent a demand letter to the new owner but must wait 45 days before filing a lien. Are we correct in believing that the title company should have collected all amounts we claimed in our estoppel, and if so, what recourse do we have? S.J. (via e-mail)

To summarize the question, the association wants to know which party is responsible for paying unpaid assessments- the old home owner, the new owner, or the title company?

As Joseph E. Adams explains in the article, the title company cannot be held responsible to the association because there is no privity of contract between the two parties. In other words, since the association and the title company did not have a contractual agreement of any sort, the title company cannot be held liable to the association.

We know that Florida Statutes provides in the Florida Homeowners’ Association Act that a current owner is responsible for all unpaid assessments on the property left by the previous owner. It would truly be a nightmare situation to purchase a property that had thousands of dollars in unpaid assessments on it and not have previously know about that liability. The liability is only capped by the Act if the new owner acquired title via foreclosure or by taking a deed in lieu of foreclosure and is a first mortagagee.

An association’s governing documents may alter the liability limits for a prior owner’s assessments when a new owner acquires title through foreclosure. They may also allow an association to pursue the old owner and/or the new owner for unpaid assessments, including filing a lawsuit for money damages against the old owner or recording a lien against the property (held by the new owner) and foreclosing the lien if it remains unpaid.

A new property owner can avoid being left holding the bag by making sure a lien search is conducted and estoppel information is obtained prior to taking title to the property in an association. This is equally applicable to those who take title through a foreclosure sale because, although their liability may be capped under the Act, there still will be liability.

Only by getting estoppel information from the applicable associations (there may be more than one!) will a purchaser know what unpaid assessments she would be liable for. How does one go about obtaining this estoppel information? By using a trusted, professional company that specializes in navigating the complexities of association ownership. One such company that does that and is relied upon by some of the largest title companies in the Florida is Premier Lien Research, LLC.

To read Joseph E. Adam’s full article, click here.


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Filed under Associations, Buyers, Foreclosures, Investors, Legislation, Lien Laws, Nightmare situations

Top 10 Code Violations; Florida Named as #1 State for Violations

Field Asset Services (FAS), a Texas based property preservation, REO maintenance and repair services company released its list of Top 10 Types of Code Violations. The list is based on FAS’s research compiled from its work with 30 mortgage and asset management clients nationwide. Here’s the list:

"No". House in Mid-City New Orleans,...

By Editor B / Bart Everson via Wikimedia Commons

Top 10 Types of Code Violations
1.    High grass and weeds
2.    Nuisance such as abandoned vehicles and trash at the curb.
3.    Graffiti
4.    Open or vacant structures
5.    Junk, trash, and debris
6.    Minimum housing standards or habitability usually pertaining to the condition of the property.
7.    Substandard structure such as dilapidated sheds or detached garages.
8.    Unmaintained or unsecured swimming pools
9.    Dead trees and landscaping
10.  Vacant property registration

Said Dale McPherson, Chief Executive Officer, Field Asset Services about code violations:

Cities and local municipalities across the nation are becoming more vigilant towards issuing code violations to reduce blight and improve neighborhood conditions. With foreclosure timelines reaching nearly 21 months, these fines can add up over time, even exceeding the value of the property itself in some cases.

According to FAS data, Florida surpasses all other states in the amount of these violations. For example, FAS once encountered a property in Coral Springs, Florida that, since 2008, had violation citations accruing for an overgrown lawn, roof discoloration, a stagnant pool, and poor exterior maintenance. At at rate of $125/day for 927 days plus additional penalties, the property owed the City of Coral Springs $434,654.50.

While FAS worked to remedy the code violations and lower the fine amount for the Coral Springs home, hundreds of thousands of properties in Florida are without the benefit of FAS’ services and the daily accruing code violation fees for those properties are unrecorded in official records. Only by performing an unrecorded lien search can a prospective owner, lender, asset manager, real estate agent, attorney, or title/closing company know the true value of the subject property. Premier Lien Research, LLC is here to assist you! For more information please visit PremierLienResearch.com.

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Filed under Buyers, Code Violations, Florida Real estate, Foreclosures, Nightmare situations

Florida Supreme Court considers whether cities’ liens are superior to prior recorded mortgages.

Most Florida cities have ordinances that give them powers to assess liens on property for utility balances, code violations, etc. Often included in these ordinances is language giving the liens superiority over other liens, titles or claims against the property and giving the cities foreclosure power. English: Florida Supreme Court Building

The problem with these ordinances is that they may (or may not) directly conflict with Florida’s Recording Act (695.11 F.S.). The Recording Act determines the “priority” of interest in real property based on notice of competing interests. City ordinances that give their liens super-priority (regardless of notice) ignore 695.11. At least that is what is being argued by respondent, Wells Fargo, and the Florida Land Title Assn (FLTA) in its amicus brief before the Florida Supreme Court in Wells Fargo Bank, N.A. v. City of Palm Bay.

The certified question for the state’s highest court to answer is:

Whether, under Article VIII, Section 2(b), Florida Constitution, section 166.021, Florida Statutes and Chapter 162, Florida Statutes, a municipality has the authority to enact an ordinance stating that its code enforcement liens, created pursuant to a code enforcement board order and recorded in the public records of the applicable county, shall be superior in dignity to prior recorded mortgages?

The Court will hear oral argument at 9:00 a.m., Wednesday, April 11, 2012. Read City of Palm Bay’s brief here. Read Wells Fargo’s brief here. Read FLTA’s Amicus brief here.


Filed under In the Courts, Lien Laws

Monster Unrecorded Lien of $519,500 Found on Beachfront Property


Moving to Florida and buying a waterfront condo is the American Dream for plenty of folks (especially those in snow-storm prone areas). Imagine that you finally found the perfect condo- it was a hop, skip and a jump from the Atlantic Ocean and the Intercoastal, had beach access, and would make all your dreams of living in South Florida a reality.

Your closing date is approaching when you receive a nightmare call from your title company/real estate attorney/selling agent- they recently hired a research company to conduct a municipal lien search on the property and the results just came back : there is an outstanding lien in the amount of $519,500.

This was the recent case for a property being sold in Sunny Isles Beach, FL. According to the City:

A Warning Notice of Violation was issued on March 5, 2009 in the amount of $500 per day to wit: violation of 8-1 FBC 1-5.1: Failure of owner or contractor to obtain a permit…A Special Master’s Order found the violator guilty and imposed a lien for continuing penalties effective June 3, 2009…

Total outstanding lien amount for said non-corrected violation is $519,500.

Like most municipalities, the City of Sunny Isles Beach imposes penalties for code violations that go uncorrected. The local ordinances (S.I.B. Code of Ordinances §14-13) and Florida Statutes Chapter 162 provide that these penalties become liens that run with the property, which means that the property can change owners but the new owners would be responsible for the lien amount.

Here, the proposed buyer would have bought the condo and unknowingly, assumed responsibility for the $519,500 lien. Luckily, a municipal lien search was conducted and the proposed buyer was empowered to make a decision how to proceed with the transaction. Make sure a lien search is conducted before you close on a property!! One reputable company that searches the entire state of Florida is Premier Lien Research, LLC.

If you were in this situation, what would you do? Walk away from the transaction? Negotiate with the seller to pay off the lien amount pre-closing? Proceed with the purchase (heck, it’s a waterfront condo!)


Filed under Buyers, Florida Real estate, Investors, Nightmare situations

“Bought a house through foreclosure sale in Florida county. No lien filed by HOA so not aware of HOA dues owed. Are we liable?”

I came across this question posed on Avvo.com a few months ago:

We bought a house through the foreclosure sale in Florida. No lien filed by HOA so we were not aware of HOA dues owed. They are also charging 18% interest rate on over $4K in assessments owed and late fees per month. The lawyer is charging close to $3K with no lien filed and only one answer to a motion. I received title to the property but do I really owe over $8K?

This person bought a house in a community through a foreclosure sale (which was probably an online auction). The prior owners were in arrears of HOA assessments and late fees to the tune of $4,000. Additionally, the HOA’s attorney racked up another $3,000 in fees.

The new owner, who was not the mortgagee, is liable for payment of the full amount, including the HOA’s attorney’s fees, pursuant to Florida Statutes Chapter 720.3085 (2)(b) and (3)(b):

A parcel owner is jointly and severally liable with the previous parcel owner for all unpaid assessments that came due up to the time of transfer of title. This liability is without prejudice to any right the present parcel owner may have to recover any amounts paid by the present owner from the previous owner. F.S. 720.3085 (2)(b).


Purchasers can avoid these unrecorded HOA and Condo surprises by ordering Association letters, which include all outstanding assessments, late fees and attorneys’ fees, for a particular property. Purchasers can also avoid surprises from some other unrecorded liabilities, like fines for code enforcement violations, unpaid waste, water, sewer bills, etc. by ordering a lien search. Premier Lien Research, LLC specializes in lien searches and obtaining Association letters in the state of Florida.

No matter who you are, if you are purchasing a home in Florida or helping somebody purchase a home, you need to do your homework to avoid all “surprises.” Knowledge is power; knowledge is peace of mind.

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Buyer lucks out after realizing $100K+ foreclosure deal is ‘worthless junior lien’

This is such an appropriate story for this site’s first post. It is a textbook case of what could happen when a prospective real estate purchaser does not do all his homework on the property he is looking to buy. Gus Armenakis of Coconut Creek didn’t pay for a title search but instead did his own due diligence on a four-bedroom Parkland home and determined it had only one mortgage worth $90,500:

Armenakis, a 38-year-old doctor, logged in to the Broward County foreclosure auction website and spent six figures on what he thought was a bargain-priced four-bedroom home in Parkland. It turned out to be a worthless junior lien. The lender, Wells Fargo, still had a first mortgage worth $386,593 [on the property].

Armenakis filed an objection to the sale, which was denied by a Broward judge. Wells Fargo filed to foreclose, and the auction was scheduled for Wednesday. “It might be legal, but ethically it’s not right,” Armenakis said last month. Wells Fargo apparently agreed because the lender gave him his money back. Armenakis cashed the $102,600 check on Friday. Novice investors routinely make the same mistake Armenakis made and they don’t typically get their money back, auction officials say. (Source: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/05/wells_fargo_returns_102600_to.html)

Jason Menke, a spokesman for Wells Fargo, said in a statement: “Bidding on properties at foreclosure auction is a very different process from a standard home purchase. As with any real estate transaction, prospective buyers should carefully research the property before the sale to fully understand what they are bidding on.” For sure, Armenakis learned his lesson from that nightmare situation and, if he had to do it again, would have sought out professionals skilled at researching title and lien information… Knowledge is power; knowledge is peace of mind.

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Filed under Buyers, Foreclosures, Investors, Nightmare situations, Uncategorized