Lenders escape Court Sanctions aiming to Expedite the Process

Lenders are escaping from court sanctions

Foreclosing lenders have escaped court sanctions aiming to expedite the process or making them bear common expenses. The Third District Court of Appeal has shattered the attempts of communities having shared amenities to compel the foreclosing lenders to bear the common costs.

It is a common story. Those who are regular in paying their maintenance fees and have not skipped any mortgage payments are now being forced to bear the leftover debts of owners who are not paying for the common utilities. The lenders are not taking over the title of these foreclosed homes to escape the financial responsibilities that come with becoming a “unit owner.”

There are many instances of unit occupiers living for many years without paying maintenance or mortgages. In some cases they are even renting out the units with the delinquent original owners making neat gains without any responsibility. This has caused more and more community associations to become bankrupt or trying to cut down on services.

Some courts with courage have tried to assist by ruling receivers to collect rent from the defaulters and use the money to pay for maintenance. Also some of the courts have tried to force the lenders not to be tardy about the foreclosure process but to get along with it speedily. One particular court gave the ruling on a foreclosing bank to “diligently proceed with the (instant) pending foreclosure action within 30 days or pay monthly maintenance fees.”

Unfortunately the Third District Court of Appeal in Florida relying on another precedent reversed the order of the trial court saying the courts of equity lack the authority under laws of Florida to give a ruling that it considers to be best for “social justice” at that moment of time, without regarding the established law.

It sounds like a call to the legislature of the State to wake up and come face to face with the realities of the crisis that is threatening to pull the rug from the under the concept of the shared-ownership-communities involving nearly 5 million residents of Florida.

The house associations manage common facilities in sprawling gated communities. There are also many sub-associations and many types of housing. The particular clauses vary from one association to another depending on what the developer had laid down at the time of setting up documents. But a common thread runs through all of them albeit with some confusion and contradictions.

Share and Enjoy: