Good news for Florida condo associations trying to recover from delinquent owners in foreclosure: An appellate ruling found associations have automatic liens, and don't need to take the extra step of recording claims to be considered prior lien holders entitled to surpluses in tax deed sales.

“It's a significant issue,” said condo association attorney Gregory Eisinger of Eisinger, Brown, Lewis, Frankel & Chaiet in Hollywood. “We're in front of courts all the time on this exact case.”

It's also an old issue that has divided Florida courts adjudicating the rights of condo association and how to prioritize their claims among multiple creditors in foreclosure.

The decision from the Fourth District Court of Appeal stemmed from litigation between unit owner Jennifer E. Calendar and Lauderhill-based Stonebridge Gardens Section III Condominium Association Inc.

Calendar defaulted on property tax payments, and her debt sold at a tax deed auction that left a roughly $25,000 surplus, disbursed to the condo association. She challenged the order granting the excess funds to Stonebridge Gardens, which had claimed Calendar owed for unpaid condo assessments. Calendar argued Stonebridge was not entitled to the surplus because it never recorded a claim of lien or moved to obtain a final judgment.

But the trial court ruled in Stonebridge's favor, and the appellate court agreed, finding Florida law gave the association a “statutory lien” under section 718.116(5)(a), which governs condominiums.

Under that statute, “The association has a lien on each condominium parcel to secure the payment of assessments,” and that lien takes effect from the moment the association issues its original declaration of condominium.

“Consequently … where a declaration of condominium is recorded, such as in the instant case, recording a claim of lien is not an absolute prerequisite to the enforcement of a lien for unpaid assessments,” former Fourth DCA Chief Judge Cory J. Ciklin wrote in a unanimous decision with Judges Robert M. Gross and Mark W. Klingensmith.

Court documents suggest Calendar will challenge the decision. Her attorney, Gilligan Gooding & Franjola shareholder George Franjola, filed a motion requesting an extended deadline to have the case reheard.

Meanwhile, condo association attorneys welcomed the ruling as a victory for associations hit hard by delinquent homeowners during the last housing market collapse.

“The association now has a recorded interest without having to file an actual claim of lien,” said Eisinger, who represented Stonebridge Gardens. “It doesn't have to do anything in these circumstances to protect its interests.”

The decision is the latest boon for condo associations. It follows a June 2016 ruling from the Fourth DCA that offered relief to associations grappling with the fallout of protracted lender foreclosures after hundreds of thousands of cases clogged the dockets beginning in 2008. Before that ruling, condo and other associations had been handicapped by lender claims, able only to attach their collection to other creditors' proceedings, instead of filing their own separate lawsuits. The 2016 ruling created new case law that clarified the legal precedent and cleared the way for associations to foreclose on liens for unpaid fees.