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Delinquencies Force Owners To Pay Extra

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By RICHARD WHITE

Tribune correspondent

Published: July 3, 2008

We just received a letter from our board of directors telling us it is approving a special assessment to provide for delinquent accounts that are in foreclosure and bankruptcy. Is this legal?

R.L.

Bradenton

I have received several e-mails and letters concerning associations' financial needs as a result of the sour economy.

Each member of an association is responsible for his or her share of the common expenses. Owners who do not pay their fees become a burden on the other members. Remember, the association's primary income is the assessments paid by the owners. When one does not pay, then the others must compensate for the lost income.

The board of directors is responsible for maintaining and operating the common area. It can't afford to do that if some of the owners don't pay their assessment.

The board can lien and foreclose, but in today's financial market, collecting will be a slow if not impossible process. If the board does not collect the money needed to operate the association, some common facilities will shut down. If that were to happen, the board would be in violation of the statutes that govern it.

I am president of a 78-unit condominium. We have an owner who has not paid her maintenance fees for the past year. She owes the association more than $5,000. Our attorney, whom we had to push to act, finally filed a lien.

We have found that she is behind in her mortgage but foreclosure has not been started. I believe the board is obligated to inform the other owners of the delinquency, but some directors fear a lawsuit. Your help is appreciated.

R.U.
Naples
First, it sounds as though the board is not meeting its fiduciary obligations. To do that, you need to start foreclosure action on the lien immediately, and then approve a strict collection policy to address such issues in the future. I recommend that the policy say that a lien will be filed on any owner who is 60 to 90 days late, and foreclosure will begin 30 to 60 days later.

As to publishing the delinquent account, part of the board's responsibility is to communicate to the owners. I don't recommend putting the resident's name on the bulletin board, but you can say that Unit 109 is delinquent. You can use an address but withhold the name.

If your board members are still concerned, publish a notice that an owner is delinquent and the details are part of the official records. Then, any owner can request the information if they want it.

Regarding the lien, you need to review section (5)(b) of Florida Statute 718.116. It says that a lien can only be enforced for one year. If you do not start foreclosure immediately, you may not be able to enforce the lien and collect the delinquent fees.

This statute section also addresses the possibility that a unit goes into first mortgage foreclosure. In that case, the association can lose the right to collect the delinquent fees.

I would immediately find a lawyer familiar with condominium laws. Failure to take fast action will result in a serious breach of your duties.

Richard White is a licensed community association manager. He does not offer legal opinions; any other questions and comments concerning association operations can be sent to Richard White, 6039 Cypress Gardens Blvd., No. 201, Winter Haven FL 33884-4115; or e-mail

camquestion@cfl.rr.com.

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