Owners of condominium units must pay assessments to their condominium association. The assessments pay operating costs for the condominium, such as maintenance, repairs, insurance, and utilities, which are not otherwise responsibility of individual unit owners.

Condominium associations are generally required to have zero-based budgets, which means their budgets are intended to collect exactly the amount needed to pay expenses for a given year. When owners do not pay assessments, the association may be unable to pay its bills.

Most associations do not have a substantial surplus of funds. It is important they take quick action to pursue collection of delinquent assessments. Collection can be expensive for unit owners, as the unit owner becomes responsible for interest, late fees, and attorney fees in addition to unpaid assessments. These additional expenses can reach or exceed credit card levels, making failure to pay condominium assessments an expensive option when funds are tight.

There are two sides to the collection process. In years past, some associations were particularly zealous in collection efforts and were happy to pile on attorneys’ fees and expenses when an owner dared not pay assessments. That was true even when failure to pay was due to hardship. And there were often arguments between owner and association about how an owner’s payment was to be applied. These issues and others led Florida’s legislature to address assessment issues with periodic amendments to Florida’s Condominium Act.

One provision of the Act is helpful to associations by providing delinquent assessments bear interest at the rate in the declaration and if no rate in the declaration, at eighteen percent (18%) per year. That was a big help to many older condominiums with declarations that did not include interest in delinquent assessments.

The Act also directs how owner payments are applied. Payments from owners are first applied to interest, then to late fees if provided by the declaration or bylaws, then to costs and attorney fees of collection. After all of the foregoing are paid, payment from an owner is applied to principal of assessments. This mandated application of payments helped end the fight over what was paid so that a lien for assessments remains until all paid in full and owners can no longer argue they paid the assessment but just not interest or late fees.

The legislature also adopted various notice requirements in an effort to minimize attorney fees and expenses passed on to delinquent owners. These requirements also delay the time a lien can be filed and later foreclosure suit filed with the court.

The first notice requirement of delinquency is a 30-day Notice of Late Assessment. The Notice must be in the form and content provided by statute and must be mailed to the owner at the owner’s address in the association’s records, and if that is not the unit, then also to the unit. The association cannot recover attorney fees in connection with this notice.

If the owner does not pay what is due within thirty (30) days, the association can record a lien in the Public Records. But the association cannot record a lien until forty-five (45) days after an additional notice is sent to the owner by certified mail at the owner’s address in the association records and, if different, to the unit by first-class mail warning that a lien may be filed and calculating the amount due. The association can add its attorney fees for preparing and sending this notice and collection.

If the owner still does not pay, the association can file suit to foreclose its lien, much like a mortgage foreclosure. But there is yet another notice required if the association wants to also recover attorney fees. If the association does not send the owner notice of intent to foreclose its lien at least forty-five (45) days before foreclosure is filed (by hand delivery or certified mail ) and the owner pays what is due before foreclosure judgment is entered, the owner is exempt from paying the association’s attorney fees and costs. If the association failed to give the notice before filing suit, the association cannot even get a judgment until forty-five (45) days after providing the notice.

In tacit recognition of the delays involved with association collection of assessments, the Act does provide that if an owner is delinquent in any payment due the association, the association may demand any tenant pay rent to the association instead of to the owner and the tenant must comply. Payments from a tenant to the association must be credited by the owner to payments due to the owner from the tenant.

The notices required under the Act are clearly intended to “protect” a delinquent owner from a zealous association. But the delays added to the collection process can really strain an already tightly budgeted association.