By: John M. Jorgensen, Esq.
Condominium associations in Florida have a new lever to pry money for assessments from unit owners. Largely in reaction to the hard financial times being suffered by associations during the Great Recession, the Florida Legislature enacted a new law that allows a condominium association to collect rent from tenants whose unit owner/landlords are delinquent in the payment of assessments. The new law, found at section 718.116(11) Florida Statutes, became effective July 1, 2010. It should be effective in forcing deadbeat unit owners to pay their assessments at the risk of losing their tenants.
With rising foreclosure rates and dropping property values, some unit owners have made the decision to rent their units for whatever they can get, and at the same time, stop making payment on their condominium assessments, or their mortgage, or both. Often, as foreclosure actions languished in the overloaded courts, associations were hamstrung from being able to collect assessments as certain unit owners dodged process servers and hired “foreclosure defense specialists” to delay, delay, delay. In the meantime, these unit owners were entering into unauthorized leases with tenants. Now, under the new law, if a unit is occupied by a tenant and the unit owner is delinquent in the payment of any monetary obligation due to the association, the association may make written demand that the tenant pay the future monetary obligations to the association. If the tenant after notice refuses to pay, then the association can sue to evict the tenant.
The association must also provide notice to the unit owner of its intention to collect assessments from the tenant. If the tenant in good faith makes payment to the association, then the tenant is immune from “any claim from the unit owner”. The new law is hardly a model of clarity and some of its provisions will have to be interpreted by the courts. The language suggests that payment of rent by the tenant is only for future obligations, and not past due assessments, although associations may attempt to argue otherwise. It would also seem that the immunity from “any claim from the unit owner” would only apply to claims for amounts actually paid by the tenant to the association. For instance, if a tenant paid rent of $1000 per month, and the monthly condominium assessment was $250, the tenant ought not get off the hook with the landlord by paying $250 to the association and nothing to the landlord.
The new law, despite being vague in certain aspects, will probably be used with increasing regularity by condominium associations, primarily as a threat to force unit owners and their tenants to pay assessments. However, for owners and tenants who persist in nonpayment, associations will have the power to evict.