Article Courtesy of Lexology
By Maurice Wutscher
Published May 2, 2016
The Third District Court of Appeal of the State of Florida recently affirmed final judgment in favor of a mortgagee that took title to real property as a result of a foreclosure, and against two homeowner associations, holding that the safe harbor provision of subsection 720.3085(2)(c), Florida Statutes applied, and therefore that the amounts recoverable by the homeowners associations were substantially limited.
A copy of the opinion is available at: Link to Opinion.
Husband and wife borrowers obtained a mortgage loan in 2005, which was assigned a little over one year later. The mortgagee filed a mortgage foreclosure action in 2011, naming, in addition to the borrowers, two homeowners associations (HOAs) as defendants. A foreclosure judgment was entered in February 2013 and a certificate of title was issued to the mortgagee in April 2013.
In December 2013, the HOAs provided estoppel letters to the mortgagee reflecting unpaid assessments, late charges, “violation charges, costs and attorney’s fees.”
The mortgagee filed a complaint seeking declaratory and injunctive relief, asserting the HOAs’ estoppel letters violated the “safe harbor” for first mortgagees contained in subsection 720.3085(2)(c), Florida Statutes by seeking to recover attorney’s fees, costs and other charges accruing before the mortgagee acquired title.
The HOAs raised as an affirmative defense “that section 720.3085 required them to apply any payments received from [the mortgagee] first to late charges and interest, and then to costs and attorney’s fees incurred in collection, and only then to assessments.” Read more: