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Condominium Buyers Beware: Potential for Increased Liability for Unpaid Assessments

Condominium Buyers Beware

Due to a recent court ruling, condominium purchasers may now be responsible for payment of the entirety of delinquent assessments owed by previous owners of a unit rather than just the delinquent assessments owed the previous owner. 

In Coastal Creek Condominium Association, Inc. v. FLA Trust Services LLC, Florida’s First District Court of Appeal held that a purchaser of a condominium unit is liable for unpaid assessments that came due during the ownership of all previous owners. The ruling is in direct conflict with cases out of the Third District Court of Appeal that hold that a purchaser of a condominium unit is liable for unpaid assessments that came due during the ownership of the previous owner. 

In Coastal, JP Morgan Chase Bank, NA obtained a final judgment of foreclosure against property owners Todd Levraea and Tracy Langly. At the foreclosure sale, Homes HQ, LLC (“Homes HQ”) purchased the property. Six weeks after Homes HQ took title, it quitclaimed the property to FLA Trust (“FLA”). 

The condominium association subsequently filed a foreclosure action pursuant to Fla. Stat. 718.116(1)(a) in which it demanded FLA pay all previous owners’ unpaid assessments, which accrued from 8/15/15 of Levraea/Langly’s ownership through Home HQ’s transfer of title to FLA on 7/26/16. At the trial level, FLA successfully argued that under the statute, it was only responsible for the previous owner unpaid assessments during Home HQ’s ownership from 6/13/16 to 7/26/16. On appeal, the appellate court overturned the trial court and held that FLA was responsible for unpaid assessments for all previous owners. 

As a practical matter, until the Florida Supreme Court addresses the conflict, buyers of property located in the First District must pay all unpaid assessments that came due during the ownership of all previous owners whereas buyers of property located in the Third District are only liable for unpaid assessments that came due during the ownership of the previous owner. 

As to purchasers in the remaining districts, it is unclear which interpretation holds sway. Buyers should take caution that, until the matter is settled, associations in the remaining districts will likely begin demanding payment of delinquent assessments that came due during the ownership of all previous owners rather than just the previous owner.

The above is intended to inform firm clients and friends about recent developments in the law, including analysis of statutes and new case decisions. This update should not be construed as legal advice or a legal opinion, and readers should not act upon the information contained herein without seeking the advice of legal counsel.

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