Case Law Update February 19, 2011 (Volume IV, Issue
One of the groups hardest hit by the mortgage foreclosure crisis are community associations, both condominium and homeowner. The Second District Court of Appeal may just have given the associations a silver bullet in South Bay Lakes Homeowners Ass’n, Inc. v. Wells Fargo Bank, N.A., — So.3d —-, 2011 WL 561188 (Fla. 2d DCA 2011). Many homeowners are not represented in foreclosure proceedings, but community associations often are and their efforts are frustrated by foreclosing lenders who file and then do not prosecute the case forward. The lenders are able to do so because their exposure to association dues are limited by Fla. Stat. §§ 718 (1)(b) and 720.3085. The problem is, of course, that if a delinquent homeowner is not paying association dues and the lender is not foreclosing (and also not paying association dues during the foreclosure process), the paying members of the association have to pick up the slack for the non-paying member. Some associations have tried inventive ways to try to get lenders to foreclose their loan such as filing a motion for summary judgment against themselves and asking the property be sold or having a receiver appointed for all non-paying members. The jury is out on these methods, but the South Bay Lakes opinion gives association lawyers an additional method to employ, i.e., moving for summary judgment and seeking § 57.105 fees if the lender did not have standing to sue when it filed suit. As recent events have demonstrated, many lenders did not have standing to sue when they filed suit, so this is no idle threat and it is anticipated many association lenders will start using this method.
This week’s full Case Law Update can be found here Issue 8