The Foreclosure of Local Special Assessment Liens: What, Where, Why, and How of the Civil Action and Enforcement Methods.

• Author: Carbonell, Catherine M.

In these unprecedented times, there has been a drought in local government revenues and collections. These are times of fiscal need for local governments (i.e., cities, counties, and special districts) that must be able to recoup their expenditures and outlays in providing special benefits to affected and benefited properties in their jurisdictions. In this article, the authors showcase to the local government practitioner the available remedies provided by F.S. Chs. 170 and 173, regarding foreclosure of municipal special assessment liens.

This article outlines the rules, elements, practices, and procedures of cases brought to foreclose municipal special assessment liens. Specifically, the topics addressed include the notice and publication requirements, timing, essential elements, and nature of the civil action to collect and foreclose on special assessment liens, pre-judgment and post-judgment aspects, appointment of a special master, and recovery of court costs and attorneys' fees. The article is meant to be used as a starting point, as the local government practitioner should additionally refer to local rules and ordinances.

What Is/What Is Not a Special Assessment?

The determination of what constitutes a special assessment is a threshold issue. A special assessment lien is purely statutory. (1) Generally, a special assessment is a charge by a local government, including cities, charter counties, and non-charter counties, that has municipal power to impose special assessments. (2) Miami-Dade County, for example, possesses all municipal powers to impose special assessments and can utilize the procedures of F.S. Ch. 173 to enforce such obligations. (3) Therefore, it is important to note that only with legislative authority will a local government be able to enforce such a special assessment lien against a property. (4)

Historically, the rule was that there was no municipal power to impose a special assessment unless the authority was expressly granted by the state legislature. (5) Under the 1885 Florida Constitution, courts consistently followed "Dillon's Rule," which was a reservation of authority to the state legislature of powers that the legislature did not grant municipalities. (6) However, that has since been changed with the granting of broad home rule powers to municipalities when the Florida Constitution was revised and ratified by the electorate in 1968 and with the enactment of the Municipal Home Rule Powers Act in 1973, codified in F.S. Ch. 166. (7)

Under F.S. [section]166.021(1), municipalities are authorized "to exercise any power for municipal purposes except where expressly prohibited by law." (8) Municipalities no longer have to look to the legislature for express legislative authorization, but may conduct "municipal government, perform municipal functions, and render municipal services" so long as the power is used for a valid "municipal purpose." (9)

Among the powers of a municipality are the powers to levy ad valorem taxes and assess special assessments. Ad valorem taxes and special assessments are similar in that they are imposed on a property by a local government, but different in that the latter must be in relation to a specific benefit in added values on the property burdened. (10) Because a special assessment confers a benefit on the land burdened by the assessment, it is not a tax. (11) Taxes and special assessments are inherently different; therefore, they are "governed by entirely different principles." (12)

When determining whether a charge is a special assessment, "[a] court must consider all the circumstances together, and none in isolation." (13) To be treated as a valid special assessment, the charge "must meet two requirements: (1) the property assessed must derive a special benefit from the service provided; and (2) the assessment must be fairly and reasonably apportioned according to the benefits received." (14)

The first prong is not satisfied merely due to an increased demand for specific services. (15) It cannot be used to collect for services that benefit persons and not the real property. (16) Courts specifically look for an enhancement to the property's value. (17) As to the second prong, apportionment is based off the presumed benefit. (18) As an example, a property abutting an improved street via special assessment has a presumption of a special benefit. (19) Legislative findings made by the local government regarding whether a property receives a direct, special benefit and the apportionment of the special assessment will be upheld unless arbitrary. (20) It is considered a question of fact for a legislative body whether the property receives a benefit or was fairly apportioned. (21) As the presumption is that a special assessment is valid, the burden of proving otherwise is on the plaintiff, who is described later. (22)

By way of general examples, special assessments may be used to fund not only capital improvements, but also certain services. (23) However, this is not a complete statement of the rule. As to capital improvements, for example, "[s]treet improvements are beneficial generally to the city as well as specially to the owners of property that is specially assessed. Taxes are levied for one [the former] and special assessments for the other [the latter]." (24) As to services, emergency medical services, law enforcement services, fire rescue services, improvements to stormwater management system, street resurfacing, and an "Interim Government Services Fee" have been held to not be special assessments. (25) However, stormwater utility services, a mandatory garbage disposal system, an integrated fire rescue department, fire protection services, and solid waste disposal services were held to be valid special assessments. (26) The key here is that the direct, special benefit is shared only by those paying the special assessment without the requirement that it is shared uniformly. (27)

In an effort to provide clarity, F.S. Ch. 170 lists projects for which special assessments can be levied. However, this list is not exclusive or exhaustive and is simply supplemental. Caselaw and various Florida attorney general opinions recognize that special acts, enabling laws for special districts, and local city or county charters and codes can also, if provided expressly by legislation, provide for collection and later foreclosure of unpaid special assessment liens for valid special assessment. Besides Chs. 170 and 173...