Legal Question in Real Estate Law in Florida
I bought a foreclosure that was deep in arrears with HOA (Home Owner Association) fees. I purchased title insurance and the closing went smoothly. The contract was predicated on all liens vacated and clear title being delivered to me.
I recently received a demand for $37,000 in past HOA dues and attorney fees along with a threat of placing a lien on the property. This is from the law firm the HOA uses for collections. I now find out that the title company did not file an estopple during the closing which I was under the impression was necessary. Attorney for title company claims estopple was not needed to be filed.
Further researching Florida law, I found the maximum I can be liable for 6 months of past HOA dues (Florida statute 718.116 (1) (B) (1). Would this not a fraudulent lien being placed on my property seeing how it is a "willful exaggeration" as outlined in Florida statute 731.31 (2) (a)?
Is the title insurer liable for this since in essence I was not given clear title?
1 Answer from Attorneys
First, 718.116 only protects first mortgagees and the assignees of first mortgages.
The statute does not protect third party bidders, which it sounds like you are, unless you purchased from the bank after the bank took title. Also, if you were the assignee of a bid, you would not have protection under 718.116.
To complicate things further, a new Fl Supreme Case came out that could turn the entire law upside down on this issue. I don't think it will, but you might want to seek legal advice more than on this forum.
A title insurer may or may not be liable - I can't tell from the facts you gave. FIling an estoppel is not necessary. The title attorney was correct.
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