Collecting HOA Assessments from Tenants
By Michael J Posner
The Florida legislature recently added a new weapon in the arsenal of homeowner associations collecting delinquent accounts. Florida Statute §720.3085(8) provides:
If the parcel is occupied by a tenant and the parcel owner is delinquent in paying any monetary obligation due to the association, the association may demand that the tenant pay to the association the future monetary obligations related to the parcel. The demand is continuing in nature, and upon demand, the tenant must continue to pay the monetary obligations until the association releases the tenant or the tenant discontinues tenancy in the parcel. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the parcel owner.
The purpose of the new law is to prevent homeowners from avoiding payment of Association assessments while collecting rent from a tenant residing within the community. The law requires the Association to notify the tenant in writing of the demand for the assessment which demand will specifically state that it is an ongoing or continuing obligation and that if the tenant fails to pay the applicable portion of the rent to the Association to pay the assessment then due, the Association has the right, under the new statute, to evict the tenant from the property. A sample demand letter is as follows (be sure to send a copy to the owner as well):”
We represent XXX Association in connection with the past due assessments owed by your landlord for the above reference property. Pursuant to Florida Statute §720.3085(8) this letter shall serve as formal written demand for you to pay all future rent to the Association to cover the past due assessments, fees and costs of $_________ due, as well as payment of future assessments of $___________ per _______ commencing ______________, 2010 until otherwise notified.
Should you fail or refuse to make such payments to the Association, you will be considered in default of your obligations and the Association may pursue eviction so as to terminate your possession of the property in accordance with Florida Statute §720.3085(8). If you make the required payment due herein, we will, upon request, provide you with written receipts for payments made to the Association.
Your assistance and cooperation are greatly appreciated and if you have any questions please feel free to contact the undersigned.
One issue unaddressed by the new statute is whether the claim against the tenant is only for assessments that are coming due at the same time as the rent. Until this issue is addressed we are seeking all past due balances from the tenant but there is a possibility that a court could determine that in the future an Association may only collect from the tenant the current Assessment from the rent that is being paid.
With this new mechanism Associations have another avenue to seek collection. So far our experience been very positive with this new statute, as tenants do not wish to be evicted from their premises and as long as the Association agrees to protect the tenant from backlash from the owner, most tenants will readily cooperate with the Association in this collection effort.