Condominium and homeowners association liens

Association liens for unpaid assessments

An association, as this page uses the word, is a condominium or homeowners' association that levies assessments on the units or parcels it governs. When an owner falls behind, the governing documents and the statute give the association a lien.

In Florida the lien is automatic and old. A condominium association's lien on each parcel relates back to the recording of the original declaration, which may be decades before any assessment went unpaid. Fla. Stat. 718.116¹ says so, and Fla. Stat. 720.3085² gives a homeowners' association the same reach when its governing documents authorize it. So the lien can predate the owner who stopped paying.

Nevada and Minnesota do not wait for a claim of lien. The lien arises when an assessment becomes due, and recording the declaration is itself the perfection. NRS 116.3116³ and Minn. Stat. 515B.3-116⁴ both say no further recording of a claim is required. The declaration is on file from the day the development opened, so the public record already carries notice of a lien for money nobody has yet failed to pay.

Florida's condominium claim of lien is the exception to all of that, and it is a document with contents. To be valid under Fla. Stat. 718.116 it must state the parcel, the record owner, the association's name and address, the amount due and the due dates. Once recorded it secures not only what is due but assessments that accrue afterward through final judgment, plus interest, late fees and collection costs. And the interest runs high: 18 percent a year where the declaration sets no rate. Fla. Stat. 718.116(3).

Enforcing the lien, and the clock on it

An association can foreclose the lien much as a mortgage is foreclosed, or sue for the money instead. But the lien does not sit forever, and each state sets its own deadline to act.

Florida gives the association both routes. Under Fla. Stat. 718.116 a condominium association may foreclose the lien in the manner a mortgage is foreclosed, or sue for a money judgment without waiving the lien, and Fla. Stat. 720.3085 says the same for a homeowners' association. Minnesota offers the two doors as well: Minn. Stat. 515B.3-116 allows foreclosure by power of sale under chapter 580 or by action under chapter 581.

The clock is where creditors get caught. A recorded Florida condominium claim of lien is not effective one year after recording unless an action to enforce it is commenced within that time. Fla. Stat. 718.116. And a homeowners' lien can have its fuse shortened: once a notice of contest is recorded and served, the association has 90 days to sue or the lien is void. Fla. Stat. 720.3085(1)(b).

Nevada and Minnesota each run three years. A Nevada lien is extinguished unless a notice of default and election to sell is recorded, or judicial proceedings begin, within 3 years after the full amount of the assessments becomes due. NRS 116.3116(10). Minnesota bars enforcement begun more than three years after the last installment becomes payable. Minn. Stat. 515B.3-116(d). One more trap closes around a buyer: a Florida owner is jointly and severally liable with the previous owner for assessments unpaid when title passed. Fla. Stat. 718.116 and Fla. Stat. 720.3085(2)(b). Buy the unit, buy the arrears.

The super-priority slice

Call it the slice: the part of an association lien that ranks ahead of a first mortgage, while the rest of the lien ranks behind. Nevada carves one out directly. Minnesota does it from the far side of a foreclosure.

Nevada's lien is prior to most other liens, but not to a first security interest recorded before the assessment became delinquent, with one exception. NRS 116.3116(2). The exception is the slice. Under NRS 116.3116(3) it covers the regular budget assessments that would have come due in the 9 months immediately before the notice of default and election to sell is recorded. That piece jumps the mortgage. Everything beyond it does not.

The slice has a floor and a ceiling on costs. If Fannie Mae or Freddie Mac rules require a shorter period those rules govern, but the Nevada slice can never be less than the 6 months immediately before the notice of default. NRS 116.3116(3). The enforcement costs that ride ahead of the mortgage are capped item by item, at $165 for a demand letter, $325 for a notice of delinquent assessment, $90 for an intent to record a notice of default, $400 for a notice of default and $400 for a trustee's sale guaranty, and no attorney's fees may be included in the priority amount at all. NRS 116.3116(5).

Minnesota reaches the same place through foreclosure survival. Its lien sits behind a first mortgage. Minn. Stat. 515B.3-116(b). But when a first mortgage recorded after June 1, 1994 is foreclosed and nobody redeems, the holder of the sheriff's certificate takes title subject to the common expense assessments levied under the listed subsections of 515B.3-115 that came due, without acceleration, in the six months before the redemption period ended. Minn. Stat. 515B.3-116(c). Both conditions have to hold: the recording date and the failure to redeem. What a uniform statute provides on this question, and which states follow it, is not something this page sets out.

Florida's safe harbor

Florida has no slice. Against a first mortgage of record, the association lien is effective only from the day its claim of lien is recorded, for condominiums and homeowners' associations alike.

The relation-back date that made the lien old disappears against a first mortgagee. Fla. Stat. 718.116 and Fla. Stat. 720.3085 both say the lien is effective, as to first mortgages of record, from the recording of a claim of lien. A claim recorded last month does not climb over a mortgage recorded last decade. That recorded claim is part of the county record once it is filed, because the clerk records notices and claims of lien among the instruments listed in Fla. Stat. 28.222(3)(a)⁵. So a creditor can find out the date it holds by reading the record, which is the whole argument of the page on priority by recording date.

There is also a cap, which the statutes do not call a safe harbor but everyone else does. A first mortgagee that takes title by foreclosure or deed in lieu owes earlier assessments only up to the lesser of 12 months of regular assessments or one percent of the original mortgage debt. Fla. Stat. 718.116(1)(b)1. for condominiums, Fla. Stat. 720.3085(2)(c) for homeowners' associations. It is a limit on the lender's bill, not a slice that outranks the lender.

The cap carries conditions, and they bite. For condominiums it applies only if the first mortgagee joined the association as a defendant in the foreclosure. Fla. Stat. 718.116(1)(b)1. For homeowners' associations the mortgagee must have sued the parcel owner and initially joined the association as a defendant. Fla. Stat. 720.3085(2)(c). And for condominiums the cap is unavailable in any case where the assessments are secured by a lien recorded before the mortgage. Fla. Stat. 718.116(1)(f). A lender who forgets to name the association, then, may find the limit is not there when the bill arrives.

What this does not cover

Three states, and the answer changes across all three. Florida, Nevada and Minnesota, and nothing past them.

The slice that outranks a first mortgage exists in Nevada and, as survival after foreclosure, in Minnesota. It does not exist in Florida, where the lien counts against a first mortgage only from its recorded claim and the cap limits what a foreclosing lender owes rather than lifting the association over it. Carry the Nevada rule into Florida and the answer is simply wrong.

Nobody writing this is a lawyer and none of it is advice. Whether a particular association lien reaches a particular mortgage is a question for counsel with the declaration, the claim of lien and the recording dates in front of them. What a page can do is narrower. It can tell you that the question has three inputs you can read off the record: the state, the date the claim of lien was recorded, and how many months of assessments are unpaid.