- September 02, 1992
- All Florida Offices and Agents
- Changes in the Condominium Act; Condominium Assessments
Significant changes in our condominium statute have been made by the passage of a new law which has been made retroactive to April 1, 1992. This new law affects the priority of condominium assessments and impacts the way title personnel should deal with these assessments in the future.
Basically, the new provisions have created a super-priority lien in favor of the Condominium Association which will relate back to April 1, 1992 or the date of the recording of the condominiums declaration, whichever is later. Although priority is seemingly given by the statute to first mortgages, it is taken away if the lienholder forecloses. In a foreclosure situation, the lienholder is held responsible for up to six months of unpaid assessments. However, these assessments can not exceed 1% of the original debt.
Therefore, effective immediately, Schedule B of all loan policies insuring a mortgage on a condominium unit must contain the following exception:
Any loss or damage arising from a lien for assessments pursuant to F.S. subsection 718.116 (5)(a) or for unpaid assessments pursuant to F.S. 718.116 (1)(a) despite assurances to the contrary in any attached ALTA Form 4, ALTA Form 5 or Florida Endorsement Form 9."
This language is necessary because these various forms of endorsements give affirmative coverage that no assessment lien can take priority over the insured mortgage.
Additionally, you should be aware of other chances which do not directly affect the issuance of title insurance policies., Sellers are now required to provide purchasers with certain documents prior to closing. This requirement is effective with contracts entered into after July 1, 1992. Since this disclosure requirement is not placed on title agents, this statement is for informational purposes only.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.