4th DCA Clarifies It’s Position on Association Foreclosure Interacting with Mortgage Foreclosure

Recently, the 4th DCA ruled that the foreclosure by the HOA was void for lack of jurisdiction and that the lender’s foreclosure was the property place to adjudicate all liens on the property, as discussed here.

The Court, upon re-hearing, withdrew this prior opinion and clarified it’s position.  Opinion here.

Upon re-hearing the Court held that the Association’s foreclosure foreclosure and judgment, filed after the mortgage holder’s lis pendens, was not in fact void.  The Court found that the basis for the Association’s lien was the Declaration of Covenants; which was recorded long before either the Association or lender filed lis pendens to foreclose.  Thus, the lender was on notice that the Association could file and foreclosure a lien based on violation of the governing recorded covenants.

The Court further held that “the association in Quadomain was attempting to foreclose its lien against the bank’s interest, as well as that of the homeowner, unlike the present case where the Association only foreclosed against the delinquent homeowner.”  Meaning that the lender’s interest would have been wiped out by interpreting the Quadomain ruling as it had.

The Court found that protecting the purpose of a lis pendens in protecting lender from liens unrecorded the time of filing, would not be served by allowing the homeowner to assert priority over the association’s interest.

Homeowners with both lender and association issues should contact an experienced attorney who is following the newest case law as it may change completely in a matter of a few weeks, as seen here, removing possible defenses or prior wins (or losses).   Contact us today for your FREE consultation!

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