FL Trial Court Rules Mortgage Loan Owner’s Liability for Unpaid Condo Assessments Not Limited by Fla Safe Harbor, Where Foreclosure Judgment Was Entered in Servicer’s Name

A Broward County  Judge- 17th Circuit of Florida held that a mortgage loan owner’s liability to a condominium association for unpaid assessments was not limited by Florida’s safe harbor provision at Fla. Stat. § 718.116(1)(b).  The safe harbor did not apply where the loan owner was not the first mortgagee of record at the time of foreclosure but rather was assigned the right to bid at the foreclosure sale by the loan’s servicer, ( the plaintiff and mortgagee of record) .

Section 718.116(1)(b) limits “the liability of a first mortgagee or its successors or assignees who acquire title to a [condominium] unit by foreclosure or by deed in lieu of foreclosure for unpaid assessments that became due before the mortgagee’s acquisition of title to the lesser of: (a) the [unpaid assessments] which accrued or came due during the 12 months immediately preceding [acquisition of title]; or (b) one percent of the original mortgage debt[.]” § 718.116(1)(b), Fla. Stat.

To be entitled to limited liability under the Florida safe harbor, “a party must establish: (1) it was a first mortgagee; (2) it acquired title to the condominium unit through foreclosure; and (3) the condominium association was joined as a defendant in the foreclosure action[.]”

The court held, in order to be entitled to the safe harbor, “[t]he key is who had rights and obligations under the mortgage at the time of foreclosure, whether as a first mortgagee or as a successor or assignee.” Bermuda Dunes Private Residences v. Bank of Am., 133 So. 3d 609, 615 (Fla. 5th DCA 2014).

A post-judgment assignment of a foreclosure judgment is insufficient to confer the protection of the safe harbor as a matter of Florida law. Bay Holdings, Inc. et al. v. 2000 Island Boulevard Condo. Ass’n, 895 So. 2d 1197 (Fla. 3d DCA 2005).

Fannie Mae v Park Place at Pompano Condo. Ass’n (17th Jud Cir)


Carol A. Lawson, Esq., 28870 U.S. Hwy19 #300, Hodusa Towers, Clearwater, FL 33761             Phone: (727) 410-2705;   email: calh@gate.net