Has your board spent considerable time waiting and wondering if a lender that started a foreclosure in your community is going to complete it? During that same time period, have you lost hundreds or thousands of dollars in lost assessments on that unit or home?  As many of you unfortunately know, one of the most significant issues facing community associations today is the long delay in banks pursuing their residential foreclosure actions. Banks are in no rush to take title to these troubled properties and they are protected in that stance by the statutory caps on their liability for past due assessments.

In addition to their statutory cap on liability, some banks are further damaging community associations by virtue of the way in which they pursue their foreclosures in court. A lender who has not done its homework and does not know the current value of the property in order to bid properly at the foreclosure sale may file one or several "ex-parte motions to reset sale" further delaying the sale date of the delinquent property and further delaying the association's ability to start collecting assessments.

In addition, we have seen banks file motions to vacate their judgments and their title claiming that they made a mistake in their title search. Again, if a bank can delay becoming the record title owner of the property, that bank can delay paying past due assessments owed to the association as well as avoid paying all current and future assessments. Judges often think the banks are doing this to negotiate with the owner or simply to add missed lien holders to their complaint but many times it is a tactic designed precisely to avoid taking title to the property in order to avoid the financial obligations associated with ownership.

At times judges rely on the representations of banks' counsel to grant these bank ex-parte orders summarily as if no one could possibly have an objection. In fact, community associations as parties to these bank foreclosure actions should have proper notice and an opportunity to voice their very real objections to bank motions which further delay resolution of the bank's foreclosure action. It would be helpful if judges required that these lender ex-parte motions be set for hearing (even telephonically) a reasonable time before the sale date so the court could determine the appropriateness of the lender relief sought. If the banks artifically create an "emergency" situation by failing to seek such relief timely enough for a hearing to be conducted before the scheduled sale, the relief should be denied. Lenders are well aware of the foreclosure sale date well in advance (presently about 90 days in many counties) and by delaying the filing of such a motion until very close to the sale date they prejudice all other parties to the action especially the association. In addition to the timing of these lender ex-parte requests, judges may want to consider the number of times a particular lender uses such motions in any particular file or community and the unnecessary financial burden placed on the association to have to respond to such motions.

There is one bit of good news for community associations as several judges in Miami-Dade County have recently signed orders for "blanket receivers" so communities can collect rent from tenants in delinquent units throughout the community. This saves the association significant money and time since a separate motion is not needed against each delinquent owner in order to have a receiver appointed by the court to collect the rents being paid by a tenant. It is hoped that judges in other jurisdictions will follow suit. If you would like to see some of these Orders Appointing Receiver please click here:  http://www.canfl.com/Documents/Orders%20Appointing%20Receiver.PDF.

County and Circuit Court judges are elected positions. If there is an opening during a judge's term that position is then filled via appointment from a list submitted by the Judicial Nominating Commitee. 99% of bank foreclosure actions are filed in Circuit Court.  If you have the opportunity to speak with a Circuit Court judge, you should be talking about these issues as many judges might like to know more about the specific matters discussed above.  Your community can also contact the Chief Judge in your county and/or the Clerk of Courts in your county to discuss the foreclosure crisis and what can be done to assist struggling communities. You can determine your judicial circuit by going to www.flcourts.org and clicking on your county.  In Broward County, for example, we are the 17th Judicial Circuit Court and our Chief Judge is Victor Tobin. Judge Tobin's judicial assistant is Claudia Pasas and both can be reached at 954-831-6332. 

Some judges may believe that by granting the banks' motions to delay the completion of the foreclosure they are doing a good deed by helping the delinquent owner remain in the property. In fact, the delay is putting too great a burden on the other owners who are still paying and, at times, is forcing some of these owners in to foreclosure as well because they can no longer carry the additional burden.  The sooner paying owners are placed in these delinquent units, the sooner the burden on the entire membership begins to lighten a little. Every bank motion to further stall or delay completion of their foreclosure action should be strictly scrutinized and the association should be given proper notice and an opportunity to object.
 

Donna Berger, Esq. - Executive Director, Community Advocacy Network