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HOA & 720.305 - Master Association Blocks HOA Residents

 

The Condominium Act was amended, effective July 1, 2010, to allow associations to suspend use rights in the event an owner is more than ninety (90) days delinquent.  Section 718.303, Florida Statutes says in part:

If a unit owner is delinquent for more than 90 days in paying a monetary obligation due to the association, the association may suspend the right of a unit owner or a unit’s occupant, licensee, or invitee to use common elements, common facilities, or any other association property until the monetary obligation is paid.

There is a similar provision in the statutes that govern homeowners' associations operations.  Section 720.305, Florida Statutes likewise states (in part):

If a member is delinquent for more than 90 days in paying a monetary obligation due the association, an association may suspend, until such monetary obligation is paid, the rights of a member or a member’s tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines of up to $100 per violation, against any member or any tenant, guest, or invitee.

Thus, it is evident that the association (whether a condominium association or a homeowners' association) has certain remedies available to it against a delinquent owner.  The question here is whether this punishment may be imposed against all owners in a particular sub-association when some are delinquent and others paid in full.

Many communities are developed with several neighborhoods inside a large subdivision.  There is a master association that bears responsibility for certain portions of the property, generally including the roads, perimeter fencing or walls, security gates and recreational facilities.  In newer communities, typically the governing documents will give the master association's board the choice to 1. collect assessments directly from the individual owners, or 2. to require the sub-association to pay the aggregate amount.  Obviously the latter is far easier for the master association administratively - keeping track of 5, 8, 10 or 15 payments is a lot easier than keeping track of hundreds or thousands of payments from individuals.  The master doesn't necessarily need to keep track of property transfers or participate in many of the lender foreclosure actions when the sub-association bears responsibility for payment of the assessments attributable to its units/homes (although in many cases it may be wise).

Not all governing documents give the master association the options stated above.  Some of the declarations merely require the sub-association to act as a conduit, not as a guarantor of payment.  Some declarations actually require the master association to collect assessments from the individual owners.

One of the sub-association boards in the Quail Run community decided it could not absorb the costs of owners in default and only paid the master association for the unit owners that submitted their payments.  The master association, relying on the language of Section 718.303, Florida Statutes, then suspended use rights for everyone in that neighborhood, rather than limiting the suspension to the owners in default.   A hearing was recently held to determine whether the master association was right or wrong by taking that action.  We'll be sure to report on further developments in this particular case as they become known.  In the meantime, be sure counsel has reviewed your governing documents to see what options are available to secure your community's continued viability.

 

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