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FLORIDA COMMUNITY ASSOCIATION COLLECTIONS GUIDE

Florida Community Association Collections Guide: Get answers to your questions about Florida HOA Collection Laws

Welcome to Florida

With over 48,500 condos, HOAs and co-ops, the state of Florida has the second-highest number of common interest realty associations in the country, exceeded only by California. According to CAI, An estimated 9.5 million Florida residents live in a community association. So, it’s not surprising that Florida is also one of the better-regulated states when it comes to community association collections. And while regulation can be good, it can also be confusing at times.

Unlike other states with a single set of laws to govern community associations, Florida has a unique set of laws for each association type (Condos, HOAs, and Co-Ops.) They don’t always match. Sometimes, they even conflict. Maybe a lot of times. Even your association type may not be what you expect! For example, your townhome association may be either an HOA or a Condo, but if your community association has mobile homes, it may be a co-op.All that is to say, before you read anything on this page about the laws governing Condo and HOA collections in Florida, make sure you have read the governing documents for your association. It really does make a difference!

In addition to the Federal and State laws restricting collection practices, The Statutes for your community association type will dictate collection procedures, requirements and restrictions.As a general rule, neither your management company or board members should attempt to make contact with delinquent homeowners in an attempt to collect the debt, beyond the initial courtesy letters. You need an attorney or a licensed collection agency to collect on your behalf.

Legal Reference Links

FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)

FLORIDA’S CONSUMER COLLECTION PRACTICES ACT (CCPA)

CHAPTER 718.116 OF THE FLORIDA STATUTES (Condos)

CHAPTER 719.108 OF THE FLORIDA STATUTES (Co-Ops)

CHAPTER 720 OF THE FLORIDA STATUTES (HOAs)

Relevant Sections: 308, 3085, 30851

How to improce HOA delinquencies

How to Reduce Your Condo/HOA Delinquency Rate

Are you living with the Consequences of nonpaying homeowners? If so, you need a better approach to collections for your community association!

This guide will will give you the same techniques that we use to help our clients reduce delinquencies, all but eliminate bad debt write-offs, and see significant savings on legal fees.

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Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. Axela is a technology provider and is not a debt collector. Laws and procedures may change and may vary depending on the specific circumstances. This information should not be relied upon as a substitute for advice from qualified legal counsel. Users should consult an attorney regarding applicable laws and compliance requirements.

State Collection Laws for HOAs & Condos

Foreclosure should be the last desperate attempt to recover the association’s money. An HOA should consider a merit based collection agency to recover it’s delinquent money before moving to put people out of their homes.
If the file has not gone to the attorney it is advisable to contact the manager or treasurer of the association to get a copy of the delinquent ledger. Then review the ledger and if you can prove that you made payments that were not applied advise the management company. If the file has been sent to a collection agency the law requires that the collection agency give the debtor 30 days to dispute the debt and just as mentioned above
Yes, one must look to the governing documents to see if the association can charge late fees. If the governing documents are silent on late fees then they cannot charge them. However, there is also a limit on late fees. Late fees up to the greater of $25 or five percent of the past-due installment can be charged in Florida. Regarding late interest if the governing documents are silent the association can charge the maximum allowed by law which is 18% as of the writing of this document. If the governing documents prescribe a late interest rate then that is the maximum a HOA or Condo can charge.
A HOA and Condo must be a properly registered corporation and up to date on all of their state and federal filings.  If a HOA or condo has not had legally noticed budget meetings that could make collections more difficult so it is important that a community association be properly governed.
No. An owner is an owner no matter what state they come from. There is no difference between an out of state owner from a collections perspective.
Some attorneys are of the opinion that the statute of limitations may apply (five years) others do not. However, some attorneys believe that each missed assessment constitutes a new cause of action on the entire balance thereby tolling the debt.
By post petition assessments we are talking about a bankruptcy and the answer is absolutely yes. The board of directors has a fiduciary duty to collect these assessments and if the individual is not in bankruptcy there is nothing legally stopping them from the collection of delinquent assessments.
The best way to handle collections for HOAs is to engage the owners and be armed with all the information you can acquire. Know the equity in the unit, read and understand the governing documents, find out where the owner is and then begin to engage in the collection efforts. Once again, this is a very heavily regulated industry so this should be done by professional and licensed companies. Once you engage with an owner and work with them you would be surprised to see that most of them will cooperate and come to the table. It’s not 2008 where nobody had equity in their properties and were willing to lose them because they had no value. People will pay and for the most part people want to pay. You just have to ask them and work with them.
The old fashion way is to have the management company send a few courtesy letters to a delinquent owner and then send the file to the attorney for collections. Some boards of directors and managers will tell you that “it has always been done this way” but “the times they are a changing.”  HOAs can add a new link to the “value chain” in its operations by sending delinquent owners to merit based collection agencies who specialize in collections for HOAs and Condos.
Yes, aside from the Federal Fair Debt Collection statutes Florida has its own laws regarding collections. The law provides a list of prohibited practices at §559.72. The Florida law provides for the right of consumers to sue an offending party or parties for the greater of actual damages or $1,000, plus costs and attorneys fees.
First let us distinguish between a bank foreclosure and an association lien foreclosure. A Bank Foreclosure requires the lender (and it does not have to be a bank to pay the association the lessor of 12 months or 1% of the first mortgage amount). This is known as Safe Harbor or the Statutory Cap. Some may call this a super lien but in reality it is not the association’s lien that is partially in front of the bank’s/lenders lien it is hard coded in the statutes 720 & 718. Also in the case of Bank foreclosure if the bank brings the property to an auction and there is a surplus the association has a right to petition the court for the amount that is owed to them from the surplus funds. Finally, a bank foreclosure does not extinguish the debt that is owed to the association and the association has the right to pursue the old owner in court for a monetary judgment to recover this debt. It may not be a secured debt but it is surely collectible unless the governing documents say that the debt owed to the association rolls over to the association.
Once a property has gone through probate and the court has decided who is the owner all the past due fees are due and payable to the HOA unless the governing documents have a provision that says the debt rolls over to the association.
An association should always try their very best to to contact a delinquent owner to advise them regarding what is owed. Every owner is entitled to see their ledger and know how much they are owed. An owner may request their ledger at any time and a HOA should be very willing to provide it to them.
As long as money spent is in the budget and/or approved by the board of directors it can be spent on any improvements or maintenance that is required by the association.
An HOA can collect as much as is legally owed to them in fees, violations, special assessments, administrative costs, and legal fees.
No, but that does not mean that a management company cannot be in violation of the collection statutes. Collections are heavily regulated and anybody who attempts to collect debts should know what they are doing. Specifically in Florida a Management Company and an association got itself into deep water as a result of the court determining that they were acting as debt collectors. See the case in the United States Court of Appeals for the Eleventh Circuit Agrelo v Affinity Management
Although Florida is a Homestead State, debts owed to HOAs and Condos are considered as consumer debts. HOAs can foreclose on a property. To understand the laws better for Florida HOAs please refer to Florida §720.3085 and for Condos 718.116. Also, you may be guided by your own governing documents.

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