U.S. Bank National Association v. Ralph A. Grant and Deborah Grant, husband and wife and Pipers Landing, Inc.

180 So. 3d 1092, 2015 Fla. App. LEXIS 18025, 2015 WL 7752864

• Court: District Court of Appeal of Florida
• Decided: December 2, 2015
• Docket: 4D14-979
• Status: Published

Opinion

GROSS, J.

The issue in this case is whether a homeowner’s association lien for unpaid assessments takes priority over the lien of the mortgagee in a foreclosure proceeding. Under the holding of Holly Lake Ass’n v. Federal National Mortgage Ass’n, 660 So.2d 266 (Fla.1995), the mortgagee’s lien takes priority.

The salient facts are not in dispute. U.S. Bank National Association filed a foreclosure complaint based on a mortgage and note dated March 14, 2007. 1 Pipers Landing Association, Inc., answered the complaint and denied that its lien interest in the property was inferior to the Bank’s. The Bank’s mortgage was recorded prior to the Association’s delinquency lien against the homeowners and after the recording of the Declaration of Covenants and Restrictions for Pipers Landing.

The Declaration states that any unpaid assessment becomes delinquent on the date due and, along -with interest and the cost of collection, becomes “a continuing lien on the Unit and Equity Certifícate against which the assessment is made, and shall also be the continuing and personal obligation of the Owner against whom the assessment is levied.” Subsection E(3) goes on to say that if charges or assessments are not paid within 30 days after the due date, the Association may record a claim of lien and bring an action to foreclose. Nowhere in the Declaration does it state that any such lien is superior to other hens or that the lien would relate back to the date the Declaration was recorded.

This case is controlled by Holly Lake. In Holly Lake, the association claimed that its lien, recorded after the mortgage, had priority because it related back to the date the declarations were recorded. 660 So.2d at 267-68. The supreme court found that the language of the declaration of covenants “merely granted the Association the right to file a lien in the event of nonpayment.” Id. at 268. The language failed to “put all parties on notice that an ongoing, automatic hen had been created at the time that the property was purchased, and that this hen would continue each month until the owner paid the monthly assessment fee.” Id.

Following the rule governing priority of hen interests: “first in time is first in right,” the court held that the mortgage had priority since it was recorded first. Importantly, the court found that:

in order for a claim of hen recorded pursuant to a declaration of covenants to have priority over an intervening recorded mortgage, the declaration must contain specific language indicating that the hen relates back to the date of the filing of the declaration or that it otherwise takes priority over intervening mortgages.

Id. at 269. Here, the Declaration does not contain the language required by Holly Lake to give the Association’s hen priority over that of the Bank.

We have considered and reject the Association’s argument that the Bank’s failure to file exceptions to the special master’s report precludes appellate review. See Land & Sea Petroleum, Inc. v. Bus. Specialists, Inc., 53 So.3d 348, 356 (Fla. 4th DCA 2011); Aspsoft, Inc. v. WebClay, 983 So.2d 761, 764 n. 1 (Fla. 5th DCA 2008).

Reversed and Remanded.

MAY and CONNER, JJ., concur.

1 . The mortgage and note were executed prior to the July 1, 2007 effective date of section 720.3085, Florida Statutes (2007). See Ch. 2007-183, § 2 Laws of Fla.