Can Your Community Association Collect Rent Monies?

/in , /by

It’s extremely frustrating when an owner fails to pay their assessments.  After all, the collection of assessments is the backbone of all condominium and homeowners’ associations.  It doesn’t matter if your association is new or old, small or large, gated or non-gated, full of amenities or not.  Each and every community association requires money to operate and, for the most part, that money comes from the owners timely paying their assessments.

It’s probably even more frustrating when an owner fails to pay their assessments…but month-in and month-out collects rent monies from their tenant!  Fortunately, both Chapter 718, Florida Statutes (the Condominium Act) and Chapter 720, Florida Statutes (the Homeowners’ Association Act) provide a solution for our community associations.

Specifically, Section 718.116(6) (pertaining to condominiums) and Section 720.3085(1) (pertaining to homeowners’ associations) state that if a unit or parcel is rented during the pendency of the Association’s lien foreclosure action, the Association is entitled to the appointment of a receiver to collect the rent.  Typically, the Court will enter an order appointing our law firm, Martell & Ozim, P.A., as the receiver to collect rent monies on behalf of the Association.

The Court’s order will direct the tenant to make all rent payments to our law firm.  The tenant can make payment to the Association in the same form as he/she pays the owner.  In other words, the Association can’t require the tenant to make payment via certified funds or credit card.  The tenant’s obligation to pay rent to the Association begins immediately, unless the tenant already sent payment to the owner before receiving notice.  In that case, the tenant must provide the Association with written proof of payment within fourteen (14) days after receiving notice and the tenant’s obligation to pay rent to the Association begins with the next rental period.  If the owner receives any rent payments from the tenant after entry of the Court’s order, the owner shall forward said payments to our law firm within seven (7) days of receipt.

Once the account is paid in full, including all assessments, interest, late fees and attorneys’ fees and costs, the Association will dismiss its lien foreclosure lawsuit and notify the tenant to resume rent payments to the owner.

It’s important to remember, the tenant’s obligation to pay rent monies to the Association gives the tenant complete immunity from any claim for rent by the owner.

The ability for your condominium or homeowners’ association to collect rent monies from a tenant who is paying a delinquent owner is a great tool!  If your community association has owners who are delinquent in the payment of monetary obligations, contact Martell & Ozim, P.A. to schedule a free collections strategy session at (407) 377-0890 or info@martellandozim.com.

Can Condominium or Homeowners’ Associations Suspend Use Rights and Voting Rights Due to Delinquency?

/in , /by

You’ve likely been there before.  An owner is delinquent in the payment of a monetary obligation to your condominium and/or homeowners’ association, but that owner is still enjoying the common area/element amenities, such as the pool, gym, clubhouse, etc. and voting in association-related matters.  That’s certainly frustrating and our Firm is often asked what recourse an association has in this type of situation.

Fortunately, both Chapter 718, Florida Statutes (which governs condominium associations) and Chapter 720, Florida Statutes (which governs homeowners’ association) provide a few options.

Suspension of Use Rights

With regards to suspension of common area/element use rights, Section 718.303(4) states, “If a unit owner is more than 90 days delinquent in paying a fee, fine, or other monetary obligation due to the association, the association may suspend the right of the unit owner or the unit’s occupant, licensee, or invitee to use common elements, common facilities, or any other association property until the fee, fine, or other monetary obligation is paid in full. This subsection does not apply to limited common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators.”

Likewise, Section 720.305(3), Florida Statutes states, “If a member is more than 90 days delinquent in paying any fee, fine, or other monetary obligation due to the association, the association may suspend the rights of the member, or the member’s tenant, guest, or invitee, to use common areas and facilities until the fee, fine, or other monetary obligation is paid in full.”

As you can see, both condominium and homeowners’ associations can suspend common area/element use rights if an owner is more than 90 days delinquent in paying a monetary obligation to the association.

Suspension of Voting Rights

Moreover, pertaining to the suspension of voting rights, Section 718.303(5) reads, “An association may suspend the voting rights of a unit owner or member due to nonpayment of any fee, fine, or other monetary obligation due to the association which is more than $1,000 and more than 90 days delinquent. Proof of such obligation must be provided to the unit owner or member 30 days before such suspension takes effect.”

On the other hand, Section 720.305(4), Florida Statutes states, “An association may suspend the voting rights of a parcel or member for the nonpayment of any fee, fine, or other monetary obligation due to the association that is more than 90 days delinquent.”

While both condominium and homeowners’ associations can suspend voting rights, there is a slight difference in the criteria.

Ultimately, the outcome is the same.  A voting interest associated to an owner who has been suspended by the association shall be subtracted from the total number of voting interests in the association.

Remember, proper notice of the above-referenced suspensions must be provided to owners.  So, if you have any questions or need any assistance, please do not hesitate to contact Martell & Ozim, P.A. at 407-377-0890.