Chapter 9-2 Pre-Foreclosure

• Jurisdiction: Florida

9-2 Pre-Foreclosure

Before a foreclosure action is filed, the foreclosing lender should run a title report and be sure to name (and serve) any and all associations as defendants in the foreclosure. Care must be taken, for there is often more than one association vis à vis a given property. Joinder of the association is not required if, on the date the complaint is filed, the association was dissolved or did not maintain an office or agent for service of process at a location that was known to or reasonably discoverable by the mortgagee.⁵

Failure to name an association results in the loss of the statutory "safe harbor" as to that association.⁶ Safe harbor is discussed further below, but for introductory purposes, safe harbor is a statutory provision that benefits first mortgagees by tempering the general rule of joint and several liability for dues liability, both for homeowners associations ("HOAs") and condominium associations.⁷ Under these safe harbor statutes, a first mortgagee or its successors or assigns is not responsible for any past due assessments for amounts over 12 months of dues, or 1 percent of the mortgage amount, whichever is less.⁸

However, in many cases an association's declaration provides something akin to, or even better than, the statutory safe harbor without the necessity of suing the association, but such may not remove the lien.⁹ In any event, if that situation occurs, it is a happy accident,¹⁰ but the wise foreclosure law firm will use wisdom as opposed to fortuity by ensuring that it has named and served all associations relevant to a given property.¹¹ With homeowners associations, as opposed to condominium associations, the association must be named from the inception of the case in order to obtain the statutory safe harbor, due to the word "initially" in Section 720.3082(2)(c).¹²

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Notes:

^[5] Fla. Stat. § 720.3085(2)(c) ("Joinder of the association...