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News & Information: Orlando REALTOR® magazine - Legal Resource

Estoppel Sign

Friday, March 16, 2012  
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Legal Resource
From the March/April 2012 issue


A recommended route for protecting
rental tenants from HOA demands

Florida Statutes Section 718.116 includes new amendments signed into law by Gov. Rick Scott stating that a community association may make written demand upon a homeowner's tenant to pay directly to the association past due dues and assessments out of the tenant's rent due to the owner. This is a big change from earlier views of the law wherein the tenant was only obligated to the landlord/owner and was not responsible for any of the owner's failure to pay.

With the flood of residential single family homes and condos in foreclosure in our area, many an innocent tenant makes an appointment to come into my office when he or she is served with a summons and complaint for foreclosure either by the first or second mortgage holder of the owner or by the homeowners or condominium association for unpaid dues and assessments. Please note that these are real lawsuits against each such tenant served and will ultimately serve to dispossess the tenant of his ability to stay in the home.

The rights of the mortgage holders and the rights of the associations are superior under the law to the possessory rights of any parties in possession (tenants) either with or without a lease. Too often, owners rent out their properties, even through management companies, when the owner is already in foreclosure. Therefore, it will only be a matter of time until the tenant is asked to leave.The new twist as to the association asking the tenants to pay part of their rents directly as dues has been meant as an emergency measure because so many of our community associations' budgets have been in dire financial distress because of the number of non-paying or foreclosed upon owners.

The solution is that each tenant should ask his landlord or his landlord's management company for an "Estoppel letter" from the applicable association showing that the owner is current on his dues at least at time rental begins. When tenants are dealing with a management company, more and more tenants are asking the management company for this information prior to signing a lease. Management companies need to pay attention to these growing requests from potentially great tenants.

A brief consultation with a real estate attorney by either the management company or the tenant can provide further comfort that the owner is not in any type of foreclosure.

Grace Anne Glavin, Esq., is owner of Law Offices of Grace Anne Glavin, P.A., and Morgan Title Company and can be reached at morgantitle@msn.com. She is also a founding board member of the Central Florida Real Estate Council. CFREC provides this column on real estate law issues as a service to ORRA members to provide a general understanding of the law on various topics of interest, not as a substitute for individual legal consultation, and should not be relied on in specific situations without consulting with a real estate attorney. For more information, please visit www.centralflrec.com.


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