All entries tagged with “condominium and homeowner associations”

Can a homeowners association be first in lien priority over a purchase money mortgage?

A recent decision by the Fourth DCA raises the question of whether an association can add a new lien against a homeowner for unpaid assessments and actually take priority over the lender’s mortgage on that property.  In U.S. Bank Nat. Ass'n v. Grant, the appellate court found that, though the association’s declaration had been filed prior to the lender’s mortgage, a later added lien for unpaid assessments could not take priority over the bank’s mortgage because the declarations failed to state that a later lien would be superior to purchase money liens or that the later liens would related back to the date of recording of the declaration.  180 So. 3d 1092, 1093 (Fla. 4th DCA 2015). 

The Fourth DCA cited in the opinion Florida’s Supreme Court in Holly Lake Ass'n v. Fed. Nat. Mortg. Ass'n, wherein the Court distinguished declaration language such as that in Grant from another case wherein “the language in the declaration of restrictions put all parties on notice that an ongoing, automatic lien had been created at the time that the property was purchased, and that this lien would continue each month until the owner paid the monthly assessment fee.” 660 So. 2d 266, 268 (Fla. 1995). 

Based on this decision and the line of cases finding similarly, smart homeowner’s associations could try to incorporate a lien right ‘shoehorn’ for sliding later-filed liens for unpaid assessments in ahead of even purchase money or other mortgage interest rights. 

If you have questions about your association’s lien rights and whether the findings in these cases may be applicable to your declaration, contact our knowledgeable attorneys who practice in association law.   Icard Merrill represents clients in a number of homeowner and condo owner association lien matters and disputes.  Put one of our attorneys to work for you today.