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Associations Can Bring Own Lawsuit to Collect
Florida’s Fourth District Court recently decided a case that is important to community associations throughout Florida. As a result associations can now bring their own lawsuit to collect past due assessments, even where a first mortgage holder previously filed a foreclosure action.
In Jallali v. Knightsbridge Village Homeowners Ass’n, Inc., decided June 29, 2016, a delinquent homeowner claimed that a final judgment of foreclosure her homeowners association obtained against her property was void because the association brought its own action after a lis pendens was
filed in a first mortgage foreclosure proceeding involving the same property. Earlier Fourth District decisions suggested that in such case a community association seeking to collect delinquent assessments through its own foreclosure had to bring a “crossclaim” in the first mortgage foreclosure rather than in an independent action.
Given the still staggering amount of pending foreclosure cases and the extremely long time that it takes many contested cases to work their way through the system, filing a “cross-claim” as part of a first mortgage foreclosure is often times not the best way to proceed, especially if an association needs to collect what it is owed quickly and at a minimum expense.
The Fourth District decided that the association could bring its own case because it was relying on its own declaration which was recorded prior to the first mortgage proceeding. The Jallali decision allows community associations to bring their own lawsuit separate and apart from a pending first mortgage foreclosure. With yet another change in the law governing association collections, now is a critical time for association boards to update their collection practices so that they can collect delinquencies as fast and efficiently as possible.
If you have any questions in regard to this or if you would like to discuss your specific governing documents and the process for amendment thereto, please do not hesitate to call and we will be happy to assist you.