Florida Safe Harbor Provision Limits Association | KEY POINTS

  1. Stat. § 720.3085 requires a parcel owner to pay assessments to a home owners’ association if the governing documents of the association allow for such assessments. If a parcel owner sells or transfers its ownership interest, it is “jointly and severally liable with the [new] parcel owner for all unpaid assessments that came due up to the time of transfer of title.” § 720.3085(2)(b), Fla. Stat. Subsection (2)(c) of the statute includes a safe harbor provision wherein a first mortgagee or first mortgage holder’s liability for unpaid assessments on a parcel it acquired by foreclosure or by deed in lieu of foreclosure is limited to the lessor of twelve months of assessments that became due immediately preceding the acquisition of title or 1% of the original mortgage debt. § 720.3085(2)(c), Fla. Stat.
  2. In Villas of Windmill Point, Fannie Mae purchased real property (the “property”) from CitiMortgage. The property was subject to unpaid Villas Association assessments. Villas of Windmill Point II Prop. Owners’ Assoc., v. Nationstar Mortgage, Case No. 4D17-2128, 2017 Fla. App. LEXIS 15415 (Fla. 4th DCA October 25, 2017). Although there was no dispute CitiMortgage was entitled to the protection of the safe harbor provision of § 720.3085(2)(c), the Villas Association and Fannie Mae disagreed on whether Fannie Mae was entitled to the same protection.
  3. The Fourth DCA concluded since Fannie Mae and CitiMortgage were jointly and severally liable, Fannie Mae’s liability was “coextensive with that of CitiMortgage for all unpaid assessments that were due up to the time of the transfer of title.” Since CitiMortgage was an assignee of the first mortgagee, joined the association in its foreclosure action and acquired title to the property by foreclosure, its liability for the unpaid assessments was limited by the safe harbor provision as was Fannie Mae’s.

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