PUDLIT JOINT VENTURE LLP, purchased a foreclosed property. Two months after the closing, the homeowners association billed Pudlit $6,097.46 for delinquent association dues. Pudlit paid the dues, but sued the association on the basis that under the association declaration, when assessments are unpaid and cannot be collected following foreclosure, the unpaid assessments
“shall be treated as a common expense, collectible from all Residential Lots, including the Residential Lot as to which the foreclosure . . . took place.”
i.e. that unpaid dues do not carry forward to a new owner. The association, however, argued that section 720.3085(2)(b), Florida Statutes. Chapter 720, Florida Statutes, provides:
“A parcel owner is jointly and severally liable with the previous parcel owner for all unpaid assessments that came due up to the time of transfer of title. This liability is without prejudice to any right the present parcel owner may have to recover any amounts paid by the present owner from the previous owner.”
i.e. that a new purchaser is liable for any past due association dues, and that the statute “trumps” the declaration.
The court ruled that “[P]arties are free to contract around a state law so long as there is nothing void as to public policy or statutory law.” Franks v. Bowers, 116 So. 3d 1240, 1247 (Fla. 2013) [38 Fla. L. Weekly S416a]. “A contract which violates a provision of . . . a statute is void and illegal, and will not be enforced.” Harris v. Gonzalez, 789 So. 2d 405, 409 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1433a]. The Declaration purports to allow Pudlit to avoid liability for unpaid assessments. This is plainly contrary to the terms of section 720.3085(2)(b), which specifically states owners such as Pudlit are liable for such assessments. Because Article VII, Section 12 of the Declaration absolves Pudlit of liability mandated by statute, it cannot be enforced.
THOUSAND OAKS AT CONGRESS MASTER ASSOCIATION, INC., Appellant, v. PUDLIT JOINT VENTURE LLP, Appellee. Circuit Court, 15th Judicial Circuit (Appellate) in and for Palm Beach County, Civil Division. Case No. 2014AP000037, Division AY. L.T. Case No. 2913CC003483. May 1, 2015. Appeal from the County Court in and for Palm Beach County, 22 Fla. L. Weekly Supp. 1123a
Author’s note: I have seen numerous instances of purchasers of foreclosed properties being stuck with unpaid association dues. Do not close until you have seen estoppel letters from all associations and the amounts stated as due placed on the settlement statement as seller expenses to be paid at closing. Do not permit association dues to be listed on schedule B 2 of your title insurance commitment as an exception to title. Typical REO purchase contracts will waive any recourse against the seller.