Condo Assessments Can Grab Heirs in Cases of Homestead
It may not be safe for the heirs to just “walk away” from a homestead condo due to the law on condo association assessments.
Inheriting a condominium is no longer safe to walk away from. The condo associations in Florida obviously have great lobbyists, because the Florida statute on fees and assessments owed by condo owners to the association includes unit owners who inherited worthless condos, even if the new owners don’t want them. It can happen when the condo is the decedent’s homestead because in that case the title to the homestead vests in the beneficiaries under the Will or vests in the statutory heirs when there is no Will. Title vests even without a probate administration.
In probate, the standard “homestead order” merely confirms who owns the homestead, and so a condo association can interpret their statute to make the heirs of the deceased owner liable for fees and assessments from the date of death forward. This is a major concern where the condo is “upside down,” meaning the market value is less than the mortgage balance. Historically the heirs of a deceased owner could just “walk away” and let the condo association foreclose the lien it has for unpaid fees. Now, when the condo is upside down with its mortgage, the association might choose to sue the new owners rather than foreclose its lien. See Fla. Stat., sec. 718.116.
The same definition of owner exists in the statute governing homeowner associations in chapter 720. The frequency with which condos and houses are upside down on their mortgage may lead associations to get aggressive against the “new owners” who want nothing to do with the homestead. Legal defenses may help the new “owners,” but now we’re talking lawsuits.