February 5, 2015
by Robert Schneider
Ronald R. Wolfe & Associates, P.L.
USFN Member (Florida)
Litigation between foreclosing lenders and condominium (and homeowners) associations over past-due assessments is nothing new in Florida. The methods by which lenders may seek recourse for improper assessments, however, have been clarified — and limited — by the recent Third District Court of Appeal decision in Central Mortgage Company v. Callahan, 2014 WL 3455485 (Fla. 3d DCA).
In Callahan, Central obtained final judgment of foreclosure, was the successful bidder at the foreclosure sale, and ultimately took title to the foreclosed property. Central’s final judgment included language stating that Central’s lien was superior to all other interests in the property, with the exception of condominium and homeowners association assessments (which are greatly limited by statute in Florida when the foreclosing lender takes title to the property through the foreclosure sale).
In a scenario that has become all too common in Florida, the associations that oversaw the subject property sought past-due assessments from Central for amounts much greater than what were owed to them. Central filed a post-judgment motion in its foreclosure case, seeking a judicial determination of the amounts due to the associations. The trial court denied the motion, based on a lack of jurisdiction, and Central appealed.
On appeal, Central contended that since the court had inherent jurisdiction to enforce the judgment, it necessarily had the authority to determine statutory assessments after the time had run to amend Central’s judgment. The appellate court disagreed. Because Central included in its judgment only a general reservation of jurisdiction to enforce writs of possession and deficiency judgments, and because the issue of past-due assessments had never been litigated or adjudicated, the court ruled that it was without power to determine Central’s motion.
The takeaway from Callahan, much like that of a similar reforeclosure opinion in Florida [Ross v. Wells Fargo Bank, 114 So. 3d 256 (Fla. 3d DCA 2013)], is that if post-judgment litigation is possible, the foreclosure judgment must specifically reserve jurisdiction over the anticipated type of litigation. The practical solution to the instant situation (and one which has been previously implemented by this author’s firm) is to include language in all final judgments of foreclosure reserving the right to determine the amounts owed to any condominium or homeowners association. Without the inclusion of the necessary reservation language in the final judgment, lenders may be forced to file separate suits to fight improper assessments, or be prepared to give in to the associations’ improper demands.
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