Collections From Tenants
Once a tenant is evicted, can the association put its own tenant in the property?
Only if the Association completes its foreclosure against the homeowner and takes title to the property.
Is the cost of eviction of a tenant recoverable against the homeowner?
Yes. The cost of eviction of a tenant can be added to the homeowner’s account, because the eviction was pursued in an attempt to collect the homeowner’s monetary obligations to the Association.
What is a "blanket receivership" to collect rent?
This is a term coined by some attorneys to describe a procedure by which an Association, separate from the actual foreclosure case, files another separate lawsuit to appoint a receiver to collect rents from the tenants of delinquent homeowners. In most of these types of cases, a private receiver was appointed.
Are the attorney's fees and costs incurred by an association in establishing such a blanket receivership recoverable?
No. The action is not filed against any one particular homeowner. Therefore, this cost is an out of pocket expense for an Association.
In the case of a blanket receivership, is the association or the receiver required to post a bond as a condition of the receivership?
Yes. We have seen in various jurisdictions throughout the State bond requirements ranging from $5,000 to $100,000 to establish such receiverships. If the receiver does not post this bond, this would be an additional cost for an Association that must be considered.
Is it true that once a blanket receivership is established, anytime a homeowner is delinquent in the payment of assessments, the association simply begins to collect rent through the receiver?
No. The Association is still required by statue to file an individual foreclosure action against each homeowner before the receiver has authority to collect the rent. Once filed, the tenant is then served with the prior receivership order.
Is it true that once a blanket receivership is established, an association may join each delinquent homeowner in one single foreclosure action?
The only concrete advantage is a slight time advantage. If a blanket receivership is successfully established, once foreclosure action is filed by the Association the tenant can immediately be served with the receivership order rather than waiting the extra week or so to appear before the judge to obtain an individual order.
Is a blanket receivership subject to legal challenge?
Yes. Contrary to some erroneous reporting, although many blanket receiverships have been granted by lower court in Florida, the concept of blank receivers has not been reviewed directly by an Appellate Court in the State of Florida and is subject to legal challenge on several grounds. The most prevalent argument against such receiverships is that the actual wording of the Florida Statutes arguably allow the judicial appointment of a receiver only in individual foreclosure actions filed against individual homeowners.
Will a blanket receivership allow the receiver to take possession of empty properties and place renters in those properties on behalf of an association during the pendency of foreclosure?
No. Our opinion is that any such order is a violation of Florida Law. An Association does not have the legal right to take possession, and a does not have the legal authority to grant possession of a property until the foreclosure is complete and the property is sold. We are aware of the fact that at least one lower court in Florida has granted, at least cryptically, such an order. However, in our opinion any such order will be overturned and the risk of loss to an Association is too great to justify pursuing such a course.
Does Larsen & Associates obtain blanket receiverships for clients?
Yes. If, after understanding the pros and cons of such receiverships, a client wishes to pursue the blanket receivership option, we will be happy to establish one for an Association. We charge a flat attorney’s fee for this service, exclusive of the filing fee and any bond required.