Is a New Owner Responsible for Condo or HOA Liens After Buying a Foreclosure in Miami or Broward County?

By: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Given that there are literally tens of thousands of homeowners and condominium associations in South Florida, it is no wonder that purchasers of foreclosure properties in Miami-Dade and Broward County frequently have questions about whether they are liable for past due homeowners or condominium assessments after purchasing property at a foreclosure sale.  Once the initial excitement of the new purchase wears off, foreclosure purchasers frequently find themselves the target of associations seeking to collect past due assessments owed by the previous homeowner.

When confronted with this scenario, new property owners often recoil at the notion that they are responsible for the past due assessments: “What do you mean I owe the association $10,000 in back assessments, I just bought the property at a foreclosure sale free and clear last week?  Those fees are the responsibility of the prior owner, not me!”  Although this reaction is understandable, it is only partially correct.

In Florida, condominium association liens are governed by Sec. 718.116, Florida Statutes, whereas homeowners’ association liens are governed by Sec. 720.3085, Florida Statutes. Both statutes make the new owner “jointly and serverally” liable for unpaid assessments.  The statutes specifically provide that:

[An] owner, regardless of how his or her title has been acquired, including by purchase at a foreclosure sale or by deed in lieu of foreclosure, is liable for all assessments which come due while he or she is the unit owner. Additionally, a unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title.

In other words, the purchaser of a foreclosure is treated exactly the same as the prior owner and is equally responsible for the past due assessments.  Although this may seem unfair to the new owner, the law is clearly designed to address the needs of widespread association budget shortfalls.  Further, while the law gives the new owner to the right to sue the prior owner for the recovery of any money spent paying off the old assessments, it is rarely a good idea to take advantage of such a right given that the prior owner is usually penniless and judgment proof.

At this point, some readers may be thinking to themselves, this doesn’t seem right…  I understood that the new owner only has to pay up to 12 months of back assessments.  Given Florida’s ever-changing foreclosure law, there is legitimate confusion about this issue.   Regrettably, the 12-month rule only applies when the mortgage holder – i.e. the Bank – takes title to the property in a foreclosure sale, it does not apply to third-party purchasers who purchase properties at foreclosure sales.  As such, foreclosure purchasers seeking to take advantage of this law are oftentimes severely disappointed.  That is not to say that the new owner has no prospect of obtaining some accommodations from the association.  For those new property owners wanting to reduce their obligations to the association by as much as possible, working with an experienced real estate lawyer in Miami-Dade or Broward County who understands what assessments are valid and what assessments, fees or fines can be negotiated down is always the best bet.

If you have questions and are looking for answers to legal issues in Miami-Dade or Broward County, contact Jordan + Pascale, P.L. at 305-501-2836 or visit us at JordanPascale.com.