If you choose Florida as your permanent place of residence, understanding the intricacies of Homeowners Associations is a must. The state has one of the highest concentrations of HOA communities in the United States, with millions of homes governed by associations. In Miami-Dade, Broward, and Palm Beach alone, the majority of new construction and many resale properties are governed by HOAs or condo associations.
While HOA liens are a routine part of Florida real estate closings, misunderstandings are just as common, often leading to legal disputes over thousands of dollars’ worth of debt. Today, we delve deep into the topic so you know what to look for in your own real estate transaction.
An HOA lien refers to a legal claim that a Homeowners Association can file on a unit when a homeowner fails to pay their HOA dues, assessments, or fines. In Florida, HOA liens are governed by the following chapters of the of the Florida Statutes:
Typically, the Homeowners Association starts by sending notices to the owner, with enough room for the owner to catch up with their payments. If that fails, then the HOA can file a lien with the county recorder’s office, officially establishing the association’s claim on the property.
An HOA lien makes it difficult for the homeowner to sell their home or refinance their mortgage without satisfying the lien first. It ensures that public costs are evenly collected from all property owners.
Homeowners Associations also have the right to place additional fees when a part of the property requires major repairs. These are called special assessments and shouldn’t be mistaken with claims of liens, which are filed by contractors, subcontractors, and suppliers. As defined by Barnes Walker, the main purpose of a claim of lien is to secure payment for labor, services, or materials provided during a construction project.
A special assessment, on the other hand, are one-time charges levied by HOAs for improvements like roof replacements, pool resurfacing, street paving, water line installation, etc.
Special assessments can run into thousands of dollars, but they’re often overlooked, especially when they’re not displayed in an association’s estoppel certificate.
Given Florida’s thriving housing market, it’s no surprise that special assessments have only become much larger and more common with time. With that said, the tightening of structural regulations can also be traced back to tragedies like the Surfside condominium collapse in 2021. The collapse left a death toll of 98 people and played a part in the rapid increase of insurance rates.
It also led to the passing of new landmark legislation in 2022. The post-2022 condo structural reserve laws enforced milestone inspections of buildings that were 3 or more stories high. Said inspections should take place before December 31 of the year that is 25 years from issuance of the certificate of occupancy, and then every 10 years thereafter. Associations need to keep record of all milestone inspections, and they’re not allowed to reduce funding for critical structural components.
All these developments have helped shape HOA and condo liens across the state, with a strict focus on resolving unpaid dues to ensure equal contributions from all parts of the community. In fact, the increase of special assessment liens is a direct result of the Surfside collapse and the condo structural reserve laws.
Another matter comes with the changes introduced after the House Bill 1203 reform, that was introduced in July, 2024. The most relevant reforms include:
With this reform legislation, HOAs adhere to stricter ethical regulations, and homebuyers can make an informed decision before purchase.
Now that all this important context has been covered, let’s see how liens are resolved:
Unlike other parts of the country, HOA liens in Florida grant priority to the first mortgage lender when it comes to payment, followed by the HOA’s in what’s known as a super lien.
Florida Statute 720.3085 states in one of its clauses that new owners can be held liable in a foreclosure sale, so they will still be responsible for any HOA dues. The Statute’s “safe harbor” provision caps buyer liability for predecessor owner’s delinquent dues to the lesser between twelve months of unpaid assessments preceding acquisition of title, or one percent of the original mortgage debt.
This caveat has led to disagreements between HOAs and new property owners regarding liability for a previous owner’s unpaid dues. The fact remains that HOA liens must be resolved before closing, or you can’t move on with the title transfer.
Since the HOA is expected to issue an estoppel certificate outlining the property’s finances and legal standing, buyers can verify in advance if a seller owes any fees, property taxes, fines, or past-due assessments. The certificate should include the current homeowner’s name, property address, and financial obligations, including monthly dues and upcoming special assessments. Buyers can also check whether the property falls under any architectural or occupancy violations.
The process usually goes as follows:
An estoppel certificate primarily helps buyers make an informed purchase decision because they can learn about any financial obligations related to unpaid liens. This includes special assessments for specific repairs or renovations, unless they were voted on recently at the time of closing. Any recent additions may only be found on the local county records, and that’s something that title companies usually care to look into alongside the certificate and other property documents.
With these financial records, buyers can ensure that sellers complete their payments before closing, and lenders can include the corresponding amounts in the closing costs. By contrast, failing to get an estoppel certificate can saddle buyers with undisclosed liabilities that will only come to light after the title transfer is finished.
A professional title search will reveal recorded HOA liens, unpaid assessments, and any other encumbrances on the property. Some buyers take to public records to check if they have a faulty title on their hands, but the support of a title and escrow company is the best way to save time and cover more ground.
This is essential when you’re navigating Florida’s housing system and the restrictions imposed by different Homeowners Associations. For example, you can have a seller who is 18 months behind on HOA dues. If the lien is discovered during the title search, then the amount can be deducted from seller’s proceeds at closing.
This is also why title insurance is so important, since it’s fairly common to see pre-existing liens surface after closing.
Key Title & Escrow provides specialized title and closing services in Miami-Dade, Broward, Palm Beach, and the rest of Florida. Our methods and resources are designed to catch HOA and condo associations liens, so you can ensure that all payments are done before it’s time for closing.
Key Title & Escrow is the answer to all your real estate needs, especially if you plan to purchase a unit that’s part of a HOA or condominium association.
Our specialists have 24+ years of experience conducting successful closings all across Florida, and we understand real estate transactions inside and out. This, of course, allows us to navigate complex HOA and condo association situations effectively, with no time wasted in between.
You can trust us to customize the process to ensure a smooth closing without disregarding Florida’s HOA and condo laws. Our representatives will evaluate all property documents, including estoppel certificates outlining the property’s financial status and structural integrity. We also help you identify any special assessment liens so that the payments are handled during the closing proceedings. With Key Title & Escrow in your corner, you don’t have to worry about missing any HOA dues before the closing date.
If this sounds like something that could help your real estate transaction, don’t hesitate to contact us today! You can give us a call or send us a message at any time, and our specialists will be happy to answer all your questions about HOA and condo liens in Florida.
Yes. The HOA lien remains on the title in a foreclosure sale.
As per Florida Statutes Chapter 720.3085, both the previous owner and the current title holder share liability for all unpaid HOA dues.
It’s a legal document that outlines a property’s finances and legal status. It shows any pending fees, fines, or other payments that the seller must resolve before the property is transferred to its new owner.
Usually, the seller pays the amount, as part of the closing costs.
Yes. When conducted by a title company, title searches will reveal any liens placed by homeowners / condo associations, including special assessments corresponding to previous repair jobs.
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