Assessment Collection (Community Association Quarterly)

March 22, 2013

Assessments are often a community association’s only source of income. Without regular payment of assessments, community associa­tions in financial distress downgrade amenities, close recreational facili­ties, lay off staff, and reduce security. This has a negative impact on quality of life, happiness, safety, and prop­erty values, but is the only option for many communities suffering in a dif­ficult economy. Obtaining regular as­sessment income can be particularly problematic in communities with a large percentage of units in foreclo­sure. Of course, when an owner fails to pay, they increase the burden on their neighbor.

To protect the financial viability of community associations, the Florida Legislature has set forth strict procedur­al guidelines for establishing and levy­ing assessments, collecting unpaid as­sessments, and imposing penalties on owners who fail to pay. The process of establishing and levying assessments is meant to be as transparent as possible. Assessments are typically established at annual budget meetings that are open to the membership. This provides a level of protection for the owners who wish to ensure the elected members of the board are establishing reasonable assessments in accordance with Florida Statutes and the association’s govern­ing documents. In addition, this places the ownership on notice of their finan­cial obligation to the association. This is critical, as an owner’s failure to pay may result in a lien against their unit.

Both the Condominium Act and the Cooperative Act define “as­sessment” as “a share of the funds which are required for the payment of common expenses, which from time to time is assessed against the unit owner.”1 Florida Statutes Chap­ter 720, governing homeowners’ as­sociations, defines “assessment” as “a sum or sums of money payable to the association by the owners of one or more parcels as authorized in the governing documents, which if not paid by the owner of a parcel, can re­sult in a lien against the parcel.”2

An owner’s obligation to pay assess­ments is “conditional solely on wheth­er the unit owner holds title” and whether the assessment conforms with the governing documents and Florida Statutes.3 There is no statu­tory basis, and no argument based in case law to suggest that an owner may withhold payment of assess­ ments because he or she dislikes the actions of the board of directors, or believes they have been negligent in the operation of the community. This is true even if the expense is due to an unauthorized act of the board of directors.4 “Avoidance of the payment of a valid assessment is not a rem­edy available to unit owners to cure unauthorized acts by officers or di­rectors of an association,” even if the assessments are made necessary by the board members’ breach of their fi­duciary duty.5 So long as an expense is “properly incurred by the associa­tion,”6 the owner may be assessed, and they must pay their share.

For instance, in Abbey Park Homeowners Ass’n v. Bowen, the court determined whether a home­owner could forgo payment of assess­ments because of the association’s failure to maintain the common ele­ments. In that case, the owner failed to pay her monthly assessments for common expenses, which resulted in the homeowners’ association filing an action to foreclose a claim of lien. The owner filed an answer, affirma­tive defense, and counterclaim. The affirmative defense asserted that the owner was not liable for the assess­ments because the association failed to maintain the common elements pursuant to the declaration. The court held that the owner’s “duty to pay the assessment fees was conditioned solely on her acquisition of title as stated in the declaration.” Her only defense that the association failed to maintain the common elements was totally inadequate as a matter of law.7

While an owner may not for­go payment of assessments because of the association’s negligence in the operation of the community, the as­sessment itself must be valid. If an owner specifically denies the validity of the assessment, the association bears the burden of proving that it has properly levied the assessment in accordance with the community’s declaration and by-laws. 8

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