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A to Z Properties, Inc. v. Fairway Palms II Condominium Ass'n
Citations: 137 So. 3d 453; 2014 WL 1031407; 2014 Fla. App. LEXIS 3923Docket: No. 4D13-1267
Court: District Court of Appeal of Florida; March 19, 2014; Florida; State Appellate Court
A to Z Properties, Inc. is appealing a circuit court decision that held it liable for $16,291.61 in unpaid condominium assessments after acquiring a unit through a tax deed. The appellate court reversed the lower court's ruling, determining that the unpaid assessments did not survive the issuance of the tax deed. The appellant purchased the condominium unit at a tax sale in October 2010, and shortly thereafter sold it to Rafael Charre-Sanchez. The Fairway Palms II Condominium Association recorded a lien for the unpaid assessments shortly after the sale and later sued both the appellant and Sanchez for foreclosure of the lien and recovery of the assessments. In motions for partial summary judgment, the trial court found the appellant liable under section 718.116(1)(a) of the Florida Statutes, dismissing the appellant's argument that section 197.552 extinguished the assessments. The appellant contended that the provisions regarding tax collections in Chapter 197 take precedence over those concerning condominium assessments in Chapter 718. The Association countered that liability for unpaid assessments arises only upon becoming a 'unit owner' and that section 197.552 does not affect the liability under section 718.116(1)(a). The appellate court applied a de novo standard of review regarding the summary judgment. It cited section 197.552, which states that no rights or interests survive the issuance of a tax deed, and noted that section 197.573 specifies that while some restrictions do survive, those regarding debt or liens do not. Therefore, under sections 197.552 and 197.573(2), the court concluded that neither the covenants governing assessments nor liens for unpaid assessments survive a tax deed issuance. Section 718.116(1)(a) of Florida Statutes establishes that unit owners are liable for assessments due during their ownership, regardless of how they acquired their title, including through foreclosure. It also states that unit owners are jointly liable with previous owners for unpaid assessments up to the transfer time. Recent rulings from the Second and Fifth Districts clarify that owners obtaining property via tax deed are not liable for unpaid assessments that accrued prior to the issuance of the tax deed. This interpretation, while arising from homeowners association statutes, applies similarly to condominium assessments due to the identical language in both statutory provisions. Specifically, acquisition of title by tax deed is viewed as the establishment of a new title, not a transfer of title, thus exempting these owners from liability for prior unpaid assessments. In cases of conflicting statutes, the more specific statutes (sections 197.552 and 197.573(2)) regarding tax deeds take precedence over the general provisions of section 718.116(1)(a). Consequently, any liens or obligations for debts before the tax deed issuance are extinguished. The court reversed the prior order and directed the trial court to enter summary judgment favoring the appellant and to proceed accordingly.