Do Scrivenor’s Errors Invalidate an HOA Claim of Lien
In Pash v. Mahogany Way Homeowners Association, Inc., Case No. 4D19-3367 (Fla. 4th DCA January 27, 2021), Florida’s Fourth District Court of Appeal recently addressed whether a claim of lien is valid and enforceable if it contained an error in the amount due for unpaid assessments.
The homeowner’s association filed a foreclosure action to foreclose a lien against Pash’s Lot for failure to pay assessments. The association moved for a summary judgment attaching a copy of the Declaration of Covenants, Restrictions and Easements (the “Declaration”), the demand letters that it sent to the homeowner and an affidavit attested to by its president as to the amounts due and owing. The homeowner also filed a motion for summary judgment which included an affidavit that claimed he did not receive the required written notifications of the amounts due and that he did not owe what the association was demanding. The homeowner claimed the association overstated the amount of assessments due and, therefore, did not comply with section 720.3085(1)(a), Florida Statutes (2018), requiring a claim of lien to include “the assessment amount due.”
The association conceded that it made a mistake in its calculation of assessments, but that it, corrected the amount owed when it filed the foreclosure case, and that regardless of the mistake, the homeowner was delinquent in the amounts owed to the association under the Declaration. The trial court entered a final judgment in favor of the association.
Pash appealed the decision to the Fourth District Court of Appeals arguing the associations lien was invalid because it included incorrect amounts and therefore did not comply with section 720.3085(1)(a). In a split decision, the Fourth District Court of Appeal disagreed with the homeowner’s argument ruling the lien was valid even though it contained a mistake. However, the case was reversed for other reasons.
The Court conducted an in-depth analysis of section 720.3085(1)(a), which reads as follows:
To be valid, a claim of lien must state the description of the parcel, the name of the record owner, the name and address of the association, the assessment amount due, and the due date. The claim of lien secures all unpaid assessments that are due and that may accrue subsequent to the recording of the claim of lien and before entry of a certificate of title, as well as interest, late charges, and reasonable costs and attorney fees incurred by the association incident to the collection process. The person making payment is entitled to a satisfaction of the lien upon payment in full.
The Court found that nothing in this section of the statute “suggests that the claim must be free of error for it to serve as an otherwise valid claim of lien.” The Court recognized that the statute provides a specific procedure for contesting an error in a claim of lien by either filing a notice of contest pursuant to section 720.3085(1)(b), or challenging the foreclosure action. The court recognized that the association is only asserting a “claim” of lien. Therefore, like all claims, the association must prove its claim before the association can be the prevailing party in the action. If the association does not prevail on the issues of the claim, then the homeowner may recover his or her attorney’s fees and costs against the association. As a result, the Court concluded that the statute only requires that the claim of lien include the content specified in the statute to be valid and the court should not look to the accuracy of the content in determining whether the lien itself is valid. In other words, so long as all of the information referenced above that is required to be in the claim of lien is included then the lien is valid.
While this case dealt with a homeowners association governed under Chapter 720, the Florida Condominium Act contains substantially similar language in Section 718.116(5)(b), Florida Statutes (2018), and this case will serve as compelling persuasive authority in the condominium context.
Community associations should always be cautious when collecting assessments. It is important that the association have a collections policy in place supported by proper accounting procedures to minimize errors in accounting. Ensuring the proper procedures are in place for the collection of assessments can assist the association with avoiding costly and unnecessary litigation.