Q: I am president of our condo association and have had some experience in collecting delinquent assessments from unit owners. For the first time since I have been on the board, we now have unit owners who have received a demand letter, had claims of lien filed, have received their 30-day letter that demands payment and threatens the initiation of the foreclosure process. They still have not paid. How does the foreclosure process work? Are we guaranteed our money if we foreclose?



A: If you have reached the stage of possible foreclosure with unit owners, they are probably in serious financial difficulty and may have made a decision to use the foreclosure process to walk away from their properties. This means they probably have other creditors who are interested in obtaining what assets they do possess. It is in your best interests to extinguish as many of these competing interests in the unit as the law permits. There are usually mortgages, tax liens, construction liens and sometimes judgment liens against the property. The fewer encumbrances at the time the unit is put up for sale, the easier it is to sell. It isn’t possible to put the association’s debt above real estate taxes or the first mortgage that was recorded before the association’s claim. There are no guarantees that you will ever receive the outstanding fees.

Your attorney should handle the foreclosure process for you. The first step is a review of the title to determine what the competing interests are and which are superior or subordinate to your association’s claim of lien.

The next step is filling a complaint on the unit owner. This is called Service of Process and is performed by a sheriff or a process server who files an affidavit that it has occurred. The law requires delivery to the individual or delivery at the individual’s home to a resident who is at least 15 years of age.

If the unit owner cannot be found, the complaint can be “delivered” by publishing a notice of the foreclosure lawsuit in the local paper for two consecutive weeks. The unit owner has 20 days from the date of delivery in person and 30 days for the date of first published delivery to file a response.

If the bank has already filed for foreclosure, your association should examine whether the amount owed the bank exceeds the current value of the property. If so, it may not be worth actually pursuing the lawsuit. The bank will have to pay assessments from the date they acquire title and they may be obligated to pay some or all of the past due assessments. If the value of the property exceeds the mortgage, your attorney may advise you that it is worth pursuing you own suit.



Attorney Sylvia Heldreth is a Certified Specialist in Real Estate Law. Her office is located at 1215 Miramar Street in Cape Coral.

This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.