Henry W. Hicks and Adam J. Knight prove themselves as leaders in representing tax deed investors by successfully challenging a homeowners association’s argument that a homeowners association can claim a lien for pre-tax deed assessments against a property.
In Cricket Properties v. Nassau Point at Heritage Isles Homeowners Association, Inc., 124 So.3d 302 (Fla. 2d DCA 2013), the Second District Court of Appeal finally answered the question of whether a tax deed buyer is responsible for pre-tax deed homeowners’ association assessments with a resounding “no.” In its opinion rendered on September 20, 2013, the Second District held Florida’s tax deed statutes unequivocally prohibit a homeowners’ association from asserting a lien for prior assessments against property acquired by tax deed.
Cricket Properties was a tax deed buyer seeking to quiet title to its property in Hillsborough County. Cricket Properties argued that Chapter 197, Florida Statutes prevented the homeowners’ association from claiming a lien for past due assessments accrued prior to Cricket Properties’ tax deed. However, the trial court judge accepted the association’s argument that the 2007 amendments to Section 702.3085(2)(b), Florida Statutes extended liability for past due assessments to tax deed purchasers and, based on this reasoning, the trial court found that a lien for pre-tax deed assessments did survive a tax deed sale. In essence, the trial court ruled that Section 720.3085(2)(b) “trumped” Section 197.573(2). For years, homeowners’ associations and condominium associations sought to impose their will by requiring tax deed buyers to pay delinquent assessments accrued prior to a tax deed sale. When enacting Chapter 197, Florida Statutes, the Florida Legislature shielded tax deed buyers from monetary obligations pre-dating issuance of a tax deed. Section 197.573(2) preserves non-monetary covenants and restrictions, but that section specifically excludes from protection any covenant creating a lien or debt against the property. In 2007, the Florida Legislature amended Chapter 720, Florida Statutes to state “[a] parcel owner is jointly and severally liable with the previous parcel owner for all unpaid assessments that come due up to the time of transfer of title.” Based on this new language, homeowners’ and condominium associations were emboldened and began to seek pre-tax deed assessments from tax deed buyers. In its appeal of the trial court’s decision, Cricket argued to the Second District Court of Appeal that long standing case law established that a certificate of title issued in connection with a tax deed sale was not a transfer of title, but created a new title altogether. The Second District agreed and explicitly held that acquisition of property by tax deed does not constitute a “transfer” of title within the meaning of Chapter 720, Florida Statutes. Because there was no transfer of title, the Second District went on to hold Section 720.3085(2)(b) did not apply to tax deed purchasers and therefore the trial court should have quieted title against the homeowners’ associations’ potential lien for past due assessments accrued prior to Cricket Properties’ title.
With this ruling, any attempt by homeowners’ associations to impose obligations on tax deed buyers for assessments accrued prior to the deed should be met with appropriate Section 57.105 motions for sanctions. While the Cricket Properties decision was initially limited to homeowners associations’ ability to claim a lien against the property, Cricket Properties was the first Florida decision addressing a parcel owner’s liability for pre-tax deed assessments and Cricket Properties has been extended by subsequent courts throughout Florida. In Lunohah Investments, LLC v. Gaskell, 39 Fla. L. Weekly D41, ___ So.3d ___ (Fla. 5th DCA Dec. 27, 2013), the Fifth District Court of Appeal explicitly relied upon the Cricket case when concluding “[b]oth the lien and the grantee’s liability for the preexisting debt are extinguished upon issuance of the deed.” In A to Z Properties, Inc. v. Fairway Palms II Condominium Assoc., Inc., 137 So.3d 453 (Fla. 4th DCA 2014), the Fourth District Court of appeals applied Cricket Properties, and extended the reasoning of the Cricket Properties, decision when concluding unpaid condominium assessments did not survive issuance of a tax deed.
If you are a tax deed buyer facing an attempt by either a homeowners’ association or condominium association to hold you responsible for assessments and dues accrued before you acquired title, you should seek competent legal counsel to oppose and defeat those association’s claims. For more information or to schedule a consultation, please contact us at your convenience.
Hicks | Knight, P.A.
400 N Ashley Drive, STE 1500
Tampa, Florida 33602