A Homeowners Association Lien Does Not Survive a Real Property Tax Deed Sale, By Dane E. Leitner, Esq.

 

 When the Florida Statutes concerning homeowners associations and condominium associations were amended a few years ago, there was a question of whether a homeowners association and condominium association’s lien for past due assessments was enforceable after a real property tax deed sale occurred.  This question has now been answered in Cricket Properties, LLC v. Nassau Pointe HOA, a decision issued by the Second District Court of Appeal.  

 Case facts: a company acquired the title to real property by purchase at a tax deed sale.  The new owner then sought to quiet title against the prior banks that had mortgages on the property and a homeowners association’s lien for unpaid assessments.  An action to quiet title is a lawsuit brought in court to establish a party’s title to real property against anyone and everyone, and thus “quiet” any challenges or claims to the title.  The homeowners association objected to the quiet title action and claimed that its lien was still enforceable pursuant to Section 720.3085(2)(b), Florida Statutes, and that it supersedes the provision in Section 197.573(2), Florida Statutes, regarding tax deed sales.  The lower court agreed with the homeowners association, and the case was then appealed to the Second District Court of Appeal.

 The Appellate Court held that the purchaser at a real property (ad valorem) tax deed sale pursuant to Section 197.573(2), Florida Statutes, takes title free and clear of a homeowners association’s lien, thereby reversing the lower court’s decision.  The Court applied rules of statutory interpretation, looking at both statutes as a whole rather than isolating certain provisions.  According to the appellate ruling, “A court must read related statutory provisions ‘together to achieve a consistent whole’ so as to ‘give full effect to all statutory provisions and construe related statutory provisions in harmony with one another.’”

The court rejected the homeowners association’s argument that the later enacted homeowners association statute, applicable to assessment liens, prevailed over the earlier enacted tax deed statue.  The Appellate Court also determined that it was not the legislature’s intent for the homeowner association statute to create a priority over tax deed sales, as the statute omitted any such language.  “This omission calls for the application of the rule of statutory construction that by mentioning one thing the legislature intended to exclude the other, or expression unius est exclusion alterius.”

 Therefore, unless this issue is heard before the Florida Supreme Court, the case law states that a homeowners association lien does not survive a real property tax deed sale.  Should you need legal counsel, please contact me or any of the real estate attorneys at Ward, Damon, Posner, Pheterson & Bleau, P.L., so we can assist your association with all of its needs.

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