Ocean Two Condominium Ass'n, Inc. v. Kliger

• Decision Date: 11 June 2008
• Docket Number: No. 3D07-1860.,3D07-1860.
• Citation: 983 So.2d 739
• Parties: OCEAN TWO CONDOMINIUM ASSOCIATION, INC., Appellant, v. Gregory KLIGER and Faina Kliger, Appellees.
• Court: Florida District Court of Appeals

983 So.2d 739

OCEAN TWO CONDOMINIUM ASSOCIATION, INC., Appellant, v. Gregory KLIGER and Faina Kliger, Appellees.

No. 3D07-1860.

District Court of Appeal of Florida, Third District.

June 11, 2008.

McConnell Lipton and H. Hugh McConnell, Coral Gables, for appellant.

Mark S. Sussman, North Miami Beach; Mark L. Pomeranz, Hallandale Beach, for appellees.

Before WELLS and SALTER, JJ., and SCHWARTZ, Senior Judge.

SALTER, J.

Ocean Two Condominium Association appeals a final judgment denying the foreclosure of alleged liens on two condominium units owned by Gregory and Faina Kliger. The result turns on the Kligers' right to make partial payments during the pendency of their dispute with the Association. We affirm the trial court's determination that the Association and its management company improperly refused a tendered payment in the early part of the dispute, with the result that the lien foreclosure action was premature.

The problem that arose in this case is a common one, unfortunately. For one reason or another, a unit owner falls behind in payment. If efforts to resolve the problem are unavailing, the condominium association—usually through a management company—turns the matter over to the association's attorneys for the imposition of a lien and the commencement of a lien foreclosure action. If, as here, the unit owners wish to dispute part of the association's claim (interest and attorney's fees, for example), and to pay the undisputed monthly maintenance amounts, there is evidently a misapprehension by some management companies and associations that they should reject any such partial payment. Apparently the reason—not recognized in the condominium statute—is that the association's claim will be waived or impaired if a partial payment is accepted after "it's been turned over to the attorneys."

Because of the statutory lien rights and the power to prosecute the foreclosure action, an association and its attorneys have ample leverage, and the unit owners have very little. Every telephone call, meeting, or hearing regarding the genesis of the dispute and the amount due produces an incremental unit of attorney billings, and every day until resolution of the dispute increases the interest tariff.

This system is not unfair and functions appropriately when the unit owners have no bona fide basis for dispute. But when the unit owners do have a good faith argument for disputing the billings, the interest, late charges, or attorney's fees, the lien amount can become a moving target for the unit owners. It becomes cheaper for the unit owners to settle above what they actually owe than to continue the dispute.

In this case, the Kligers used a direct debit "Sure Pay" account to pay maintenance fees. The Kligers asserted at trial that their Sure Pay account was inadvertently debited for three months after they sold another unit in the same condominium, with the result that the balance in the account was insufficient to cover the charges for their two remaining units in January 2004. The Association presented evidence to the contrary, but it is undisputed that once the Kligers received billings showing insufficient funds in the Sure Pay account and arrearages (including late charges and bank fees) for January and February 2004, they tendered checks to the management company for the Association in an effort to bring current all undisputed monthly maintenance fees.¹ The evidence showed, however, that the tendered checks were refused by the management company because the Kligers' account had been turned over to the Association's attorneys and accepting a payment "might jeopardize the lien."²

No such prejudice or jeopardy can occur under the statute, however, because it specifically provides that the payments will be applied on...