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2002
OUT OF STATE OWNERS PRESENTS A WHOLE SET OF PROBLEMS Easy (from pg 1) |
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the state in the same manner that Process is served when they are within the state. The practical result is that an association suing an owner would have to hire an out-of-state or even international process server to accomplish this task. This obviously complicates the task, extends the duration of the litigation and increases the expense. Unfortunately, an additional complication is that there is also a greater likelihood that owners will try to contest the sufficiency of how that out-of-state Service was accomplished. One of the few exceptions to this general rule has been for mortgage foreclosure proceedings. For instance, under Florida Statue Section 48.194, mortgage companies have been allowed to serve process on owners of real property in Florida that are non-residents by sending the complaint via registered mail. Process is served once the out-of-state owner signs the return receipt. If the defendant/owner refuses to sign the receipt, then the plaintiff mortgage foreclosure company can serve process by sending the complaint via first class mail. However, mortgage companies have only been allowed to use this procedure in circuit courts rather than county courts, which are fewer in number and thus busier than the county courts. In most instances, condominium associations, homeowners associations, and cooperative associations may foreclose on an owner’s property because they have failed to pay assessments. However, these associations have had to follow the general rule of using the more expensive out-of-state or international process servers to accomplish their goals when dealing with an owner that resides out-of-state. The 2002 Florida legislature has recently decided to change the law so that condominiums and cooperatives are able use the less costly Service of Process procedure that mortgage foreclosure companies have been entitled to use. The legislature has amended Florida Statute Section 702.09 that has been essentially unchanged for nearly 80 years to redefine a foreclosure proceeding as one by a mortgage company, condominium association, or cooperative that is made in either county or circuit court. The definition of a mortgage |
has been changed to include liens to secure payment for assessments. The effect of the change in the definition of a foreclosure proceeding is to grant condominiums and cooperatives the same footing as mortgage companies under Florida Statute Section 48.194. Unfortunately, homeowners associations were not included in this statutory change. The change in the law became effective July 1, 2002. In cases filed thereafter it should be easier, less expensive, more sure proof and less time-consuming for condominium and cooperative associations to enforce their declarations on out-of-state owners when they fail to pay their assessments. The effects should include a definite cost savings to the associations when a lawsuit is filed to collect on unpaid assessments on out-of-state residents. More importantly, the change will eliminate some of the delays in foreclosing on property that may have even been abandoned by owners who wish to avoid Service. Condominium and cooperative associations should, in some cases, be able to collect their assessment money sooner and thus be better able to preserve property values of the condominium or cooperative. Unfortunately, homeowners associations will have to continue using the more costly alternative of utilizing out-of-state process servers unless and until the Florida legislature changes the law to allow homeowner associations to use the streamlined approach for Service of Process on out-of-state owners.7
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