Start with the citation, because this is where the analysis most often goes wrong. The cooperative assessment lien is created by section 719.108, and the lien provision sits in subsection (4). Section 718.116 has no application to a cooperative. The two liens are similar in mechanics and quite different in priority, and the difference is worth real money to an association, to a share lender and to anyone buying a co-op unit out of a foreclosure sale.
The right section, and why it matters
Section 719.108 is titled "Rents and assessments; liability; lien and priority; interest; collection; cooperative ownership." It runs from subsection (1), liability, through subsection (10), the demand that a tenant pay rent to the association. The lien is at subsection (4). Foreclosure and the money judgment are at subsection (5). The estoppel certificate is at subsection (6). The preservation of other remedies is at subsection (7).
Citing section 718.116 in a cooperative claim of lien is not a harmless typo. It invites a motion, and it signals to the other side that the file is being run off a condominium form. If your association's collection documents reference Chapter 718, have them rewritten.
What the lien attaches to
In a condominium, the lien attaches to the unit, which is real property the owner holds in fee. A cooperative works differently, and the statute defines the collateral with some care.
A cooperative parcel, under section 719.103(14), is the shares or other evidence of ownership in a cooperative representing an undivided share in the assets of the association, together with the lease or other muniment of title or possession. A unit owner, under section 719.103(27), is a person holding a share in the association and a lease or other muniment of title or possession. Both legs are required, and the lien reaches the package.
Section 719.103(26) then supplies the fact that makes cooperative foreclosure work like real property foreclosure at all: an interest in a unit is an interest in real property. That is also why section 719.105(1)(a) requires the evidence of membership to include a legal description of each dwelling unit and to be recorded in the office of the clerk of the circuit court, as required by section 201.02(3). Cooperative interests in Florida sit in the public records, and that is what a title search finds.
When the lien is effective, and the priority gap
Section 719.108(4) provides that the lien is effective from and after recording a claim of lien in the public records. That sentence is short, and everything a board needs to know about co-op lien priority follows from what it does not say.
A condominium lien, under section 718.116(5)(b), is effective from and relates back to the recording of the original declaration of condominium, except as to first mortgages of record, against which it is effective only from the recording of the claim of lien. A cooperative has no declaration of condominium to relate back to, and Chapter 719 supplies no substitute. The cooperative association's lien takes its place in line on the day the claim of lien is recorded and not before.
The practical consequence is a discipline problem more than a doctrinal one. An association that lets a delinquency run for eight months before recording has given every intervening lienholder eight months of seniority it cannot get back. In a co-op, recording early is not aggressive; it is the only way the association holds its position.
No safe harbor for a first mortgagee
In the condominium world, section 718.116(1)(b) caps what a first mortgagee who acquires title by foreclosure owes the association: the lesser of twelve months of unpaid common expenses and regular periodic assessments accruing immediately before acquisition of title, or one percent of the original mortgage debt, and then only if the first mortgagee joined the association as a defendant. Every condominium collection file is valued against that cap.
Chapter 719 contains no such provision. Section 719.108(1) instead reaches the acquiring party directly: a unit owner, regardless of how title is acquired, including without limitation a purchaser at a judicial sale, is liable for rents and assessments coming due while in exclusive possession, with joint and several liability on a voluntary transfer for the prior owner's unpaid share.
| Cooperative, § 719.108 | Condominium, § 718.116 | |
|---|---|---|
| Lien section | (4) | (5) |
| When effective | From and after recording the claim of lien | Relates back to recording of the declaration, except as to first mortgages of record |
| First mortgagee cap on taking title | None in the chapter | Lesser of 12 months or 1 percent of original mortgage debt, if joined as a defendant |
| Pre-foreclosure notice | None in the section | 45 days, or no fees and costs |
| Lien duration | One year from recording unless an enforcement action is commenced | One year from recording unless an enforcement action is commenced |
| Foreclosure standard | In like manner as a foreclosure of a mortgage on real property | In like manner as a foreclosure of a mortgage on real property |
Treat this as a point to confirm with counsel before it is relied on in a negotiation with a lender, because the conclusion rests on the absence of statutory language rather than on an express statement. Where it holds, it cuts in the association's favor and it is the single strongest card in a cooperative collection file.
Priority against a share lender
Financing a cooperative unit does not work like financing a condominium. The buyer's lender takes the shares and the proprietary lease as collateral rather than a conventional mortgage on a fee interest, and because a Florida cooperative interest is an interest in real property recorded under section 719.105(1)(a), the documentation usually gets recorded as well.
Chapter 719 does not address the relative priority of the association's lien and a share lender's security interest. What governs in practice is the order of recording and the recognition agreement, the three-party document among the association, the owner and the lender under which the association agrees to notify the lender of a default and the lender obtains the right to cure. A recognition agreement is a contract the association negotiates, not a form it has to accept. Our guide to share loans and recognition agreements covers the terms worth insisting on, starting with a requirement that the lender cure the assessment delinquency as a condition of any transfer.
Whatever the recognition agreement says, the association should still record its claim of lien. A contractual right to notice is not a lien, and a lender with no obligation to cure will not volunteer.
Recording the claim of lien
The mechanics are in section 719.108(4) and the precondition is in the same subsection.
- Deliver the Notice of Intent to Record a Claim of Lien in substantially the statutory form. The lien may not be filed until 45 days after delivery.
- Record the claim of lien in the public records of the county. It must state the description of the cooperative parcel, the name of the unit owner, the amount due and the due dates.
- Calendar the one-year deadline. The lien is not effective one year after the claim of lien is recorded unless an action to enforce it is commenced within that time.
- Send the owner a copy, and update the estoppel figures. Section 719.108(6) requires an estoppel certificate within 10 business days of a request, and the certificate the association issues binds it.
The 30-day Notice of Late Assessment under section 719.108(3)(c) comes before all of this and is the precondition to charging the owner for the attorney fees. The full sequence is set out in our guide to collecting cooperative maintenance fees.
Foreclosure and the money judgment
Section 719.108(5) supplies both remedies in a single subsection.
Foreclosure. Liens for rents and assessments may be foreclosed by suit brought in the name of the association, in like manner as a foreclosure of a mortgage on real property. The association as plaintiff is entitled to the appointment of a receiver to collect the rent, which matters where the unit is occupied by a paying tenant and the owner is pocketing the rent. Unless the cooperative documents provide otherwise, the association may bid at the foreclosure sale and may acquire, hold, lease, mortgage or convey the parcel. The mechanics run much like the condominium lien foreclosure process, with the priority differences above.
Money judgment. A suit to recover a money judgment for unpaid rents and assessments may be maintained without waiving the lien. That is the alternative worth considering where the parcel has little or no equity, where a share lender's position would swallow a foreclosure sale, or where the owner has other assets or reliable income. A money judgment is slower to convert into cash, but it is not extinguished by the one-year lien deadline and it follows the owner.
Pursuing both is permitted, and in the ordinary file the association records the lien, files to foreclose, and pleads the money count in the alternative.
The second remedy a condominium does not have
Section 719.108(7) provides that the remedies in that section do not exclude other remedies provided by the cooperative documents and permitted by law. In a cooperative, that clause opens onto something a condominium association has no version of: a landlord-tenant relationship with the delinquent owner.
The association owns the real property. The owner holds shares plus a proprietary lease. Most proprietary leases contain a default and termination clause for nonpayment, and an association that could terminate the lease and remove the occupant would have a remedy measured in weeks rather than the months a foreclosure takes. That is why the question is asked so often, and it is why it deserves a careful answer rather than a confident one.
The counterweight is in the same chapter. Section 719.103(26) provides that an interest in a unit is an interest in real property, and section 719.108(5) directs that the lien be foreclosed in like manner as a mortgage on real property, with the redemption rights that carries. Chapter 719 invokes the Chapter 83 eviction machinery in exactly one place, section 719.108(10), and there only against a tenant who fails to comply with the association's rent demand. A court could reasonably read that as a signal that the Legislature did not intend summary removal of an owner.
So the honest statement is this. The statute does not answer it. The answer in any given case turns on the language of the proprietary lease, on the relief actually sought, and on case law that should be checked before the association commits to a course. What a board should not do is treat termination as the obvious shortcut and file an eviction as a first step. We address the question at length in our guide to terminating a proprietary lease for nonpayment, and the related approval questions in our guide to transfer and purchaser approval.
Frequently Asked Questions About Cooperative Liens and Remedies
Is the cooperative lien in section 718.116?
No. Section 718.116 is the condominium provision and has no application to a cooperative. The cooperative lien is created by section 719.108, with the lien itself at subsection (4), foreclosure and the money judgment at subsection (5), and the preservation of other remedies at subsection (7). Collection documents that cite Chapter 718 on a co-op file should be rewritten.
When does our lien take priority?
From the date the claim of lien is recorded. Section 719.108(4) makes the lien effective from and after recording. Unlike a condominium lien, which relates back to the recording of the declaration under section 718.116(5)(b), a cooperative lien has nothing to relate back to. Record early; every month of delay is a month of seniority given away.
Does a bank that forecloses its mortgage owe us only twelve months of assessments?
Chapter 719 contains no safe harbor comparable to the twelve-month or one-percent cap in section 718.116(1)(b). Section 719.108(1) makes a unit owner liable regardless of how title is acquired, including a purchaser at a judicial sale. Because that conclusion rests on the absence of statutory language, confirm it with counsel before relying on it in a negotiation with a lender.
How long does the claim of lien last?
One year. The lien is not effective one year after the claim of lien is recorded unless an action to enforce it is commenced within that time. Put the date on the board calendar when the lien is recorded, not when the file is reviewed. Letting a lien lapse means starting the notice sequence over.
Should we foreclose or sue for a money judgment?
Section 719.108(5) permits either, and a money judgment suit may be maintained without waiving the lien. Foreclose where the parcel has equity and the association wants control of the unit. Take the money judgment route where a share lender's position would swallow a sale or where the owner has other assets. In most files the association pleads both.
Can we terminate the proprietary lease instead of foreclosing?
The statute does not answer it. Section 719.108(7) preserves remedies in the cooperative documents, and most proprietary leases contain a termination clause. But section 719.103(26) makes a unit interest an interest in real property and section 719.108(5) prescribes mortgage-style foreclosure, both of which cut against summary removal. Get an opinion on your specific lease before proceeding.
Contact Hamilton Mikes
Hamilton Mikes represents cooperative boards in Lee, Collier and Charlotte Counties on lien recording, foreclosure, money judgment collection, recognition agreement negotiation and proprietary lease remedies. Call 239-594-7227 or visit our Lien and Foreclosure page.
Statutes and authorities referenced
- § 719.108, Fla. Stat. (rents and assessments; liability; lien and priority; interest; collection; cooperative ownership)
- § 719.108(1), Fla. Stat. (liability regardless of how title is acquired, including a purchaser at a judicial sale)
- § 719.108(3)(c), Fla. Stat. (Notice of Late Assessment; 30 days)
- § 719.108(4), Fla. Stat. (the lien; effective from and after recording the claim of lien; 45-day notice of intent; contents; one-year duration)
- § 719.108(5), Fla. Stat. (foreclosure in like manner as a mortgage on real property; receiver; association may bid; money judgment without waiving the lien)
- § 719.108(6), Fla. Stat. (estoppel certificate within 10 business days)
- § 719.108(7), Fla. Stat. (remedies not exclusive)
- § 719.108(10), Fla. Stat. (demand that a tenant pay rent to the association; Ch. 83 remedies against a tenant)
- § 719.103(14), Fla. Stat. (cooperative parcel)
- § 719.103(26), Fla. Stat. (an interest in a unit is an interest in real property)
- § 719.103(27), Fla. Stat. (unit owner: share plus lease or other muniment of title or possession)
- § 719.105(1)(a), Fla. Stat. (evidence of membership; legal description; recording with the clerk of the circuit court)
- § 201.02(3), Fla. Stat. (documentary stamp tax on cooperative transfers; recording reference in § 719.105(1)(a))
- § 719.114, Fla. Stat. (separate taxation of cooperative parcels; survival of contractual provisions after tax sale)
- § 718.116(1)(b), (5)(b), (6)(b), Fla. Stat. (condominium safe harbor, relation back and pre-foreclosure notice, for contrast only)
- Ch. 83, Part II, Fla. Stat. (residential tenancies; invoked by § 719.108(10) against a tenant)