The District Court of Appeal of the State of Florida, Second District, recently reversed a summary judgment in favor of a mortgagee in two consolidated actions for declaratory and injunctive relief regarding the extent of the mortgagee’s liability for unpaid homeowners association assessments, holding that the trial court erred because the homeowners association was not joined as a party, and therefore its liens remained unaffected by foreclosure of the mortgages.

The Court pointed out that the only remedies available to a purchaser such as the mortgagee was to move “to compel redemption or filing a de novo action to re-foreclose.”

A copy of opinion is available at:  Link to Opinion.

The servicers of mortgage loans on two properties subject to a recorded homeowners association’s declaration of covenants, conditions and restrictions sued to foreclose. The HOA, which had recorded liens for unpaid assessments against the subject properties, was not named as a party in either action.

Final judgments of foreclosure were entered and the first-lien mortgagee was the highest bidder at the foreclosure sales. It then requested an “estoppel letter” from the HOA setting forth the amount owed for unpaid assessments.  Read more: