One of the most common concerns among community associations today is the number of lender foreclosures that are taking place within their communities, and, more particularly, the length of time it has been taking for the lender to complete the foreclosure. A great many cases are taking over two years for the lender to complete. What has been observed in a large percentage of lender foreclosure cases is that during the pendency of the case, the unit owner or homeowner has stopped paying the maintenance assessments to the association relatively early on in the case. In some instances, the owners have remained in the home or unit, while in many other cases, the property has been abandoned. This condition has created serious budgetary problems for associations.
It is not uncommon for a board to ask its attorneys to make an effort in the foreclosure case to push the lender to foreclose faster or to take responsibility for the payment of the maintenance assessments before the foreclosure has been completed. We have generally provided the advice to our clients that under current Florida law, there is no mechanism available to compel the lender to move the case along at a pace other than the pace the lender chooses, nor is there a provision in the law to compel the lender to pay the maintenance prior to the lender taking title. Notwithstanding that advice, we have heard of occasional situations in which a lower court judge may have taken extraordinary measures against a lender in an effort to provide assistance to the affected association. Unfortunately, if this were ever to occur, it would have been an exception, not as a rule.
The Florida Third District Court of Appeal has provided a substantive answer to this issue in its very recent holding in U.S. Bank National Association as Trustee for the Benefit of Harborview 2005 10 Trust Fund v. Danny Tadmore, deceased, et. al., Case No. 3D09-1389, December 2, 2009. In the Tadmore case, the Circuit Court Judge in a mortgage foreclosure case entered an order requiring the lender to “diligently proceed with the [instant] pending foreclosure action . . . within thirty (30) days” or pay monthly maintenance assessments on the condominium unit in foreclosure. The lender immediately appealed. The District Court of Appeals reversed the order of the Circuit Court, stating that there is no basis in the law for imposing such fees as a sanction or to compel the lender to proceed at a pace other than that which the lender has chosen to proceed. The Appellate Court went further to state that “equity and fairness” did not support such a conclusion by the Circuit Court. The opinion also indicated that the courts do not have the right or power to implement an order that it considered “social justice” at the particular moment without regard to established law.
The holding in Tadmore reiterates the need for Legislative action on this very important issue to virtually every community association in the State. We are aware that some legislation to that effect has been drafted and proposed already and more may follow in the coming weeks and months. All board members are urged to contact their State representatives to let them know of their support for legislation presented in the upcoming session that addresses this issue. If you have further questions regarding this topic, please contact the Firm.