Friday, December 10, 2010

5th DCA rules that Association can demand sale date in a mortgage foreclosure case!

Finally some good news on the mortgage foreclosure front for associations! The Fifth District Court of Appeals has recently ruled in the case of LR5A-JV, etc. v. Little House LLC, et al (Case No. 5D09-3857) affirmed the trial court’s order setting a date for the lender’s foreclosure sale at the association’s request.

The lender, LR5A, argued unsuccessfully that as the judment holder only it has the right to control when, if at all, a foreclosure sale takes place under Section 45.031, F.S. According to LR5A, the Association as a junior lien holder cannot demand that a foreclosure sale be set. LR5A appealed to the 5th DCA claiming that the trial court erred as a matter of law when it set the date for the lender’s foreclosure despite the lender’s objections.

The association argued that Section 45.031, F.S. gives the trial court the ultimate authority to order a judicial sale and the 5th DCA agreed with the association. The exact language from Section 45.031(1)(a) is as follows:

(1) Final judgment. –
(a) In the order or final judgment, the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof, on terms and conditions specified in the order or judgment. A sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time . . . .

The appellate court stated that the lender’s argument “not only contravenes the provisions of section 45.031, but also ignores the Association’s interest in collecting lawful assessments on the subject property. As the Association points out, LR5A is not obligated under 7203085, Florida Statutes, to pay the Association’s assessments, yet, the Association must still maintain the common property and facilities, which inure to the benefit of the property.”

This ruling is binding authority in Florida’s Fifth District ( which includes 13 Florida counties: Orange and Osceola, Volusia, Flagler, Putnam, St. Johns, Lake, Marion, Sumter, Citrus, Hernando, Brevard and Seminole) and persuasive authority in other districts elsewhere in our State. It is welcome relief provided by both the trial and appellate courts which acknowledged that foreclosure proceedings are equitable in nature and, as such, the interests of all involved parties should be taken into account when the matter of the foreclosure sale date is raised!

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

1 comment:

  1. If the banks would do their duty and pay the maintenace and assessments no Association would need to force foreclosures.
    In one sense, however, allowing the banks not to foreclose has had the positive effect of keeping the number of units for sale lower than it would be if all mortgage holders suddenly dumped properties in arrears on the market.