by Grant W. Kehres* | Posted 01/10/2014

Some say you can’t beat the HOA unless you are the bank.  Lunohah Investments[1], decided by Florida’s Fifth District Court of Appeals on December 27, 2013, demonstrates that along with certain mortgage lenders there’s a new protected player in town.


In 2007, the Florida legislature amended the Florida homeowners’ association statute to allow homeowners’ associations to impose liability on a parcel owner for all unpaid assessments due up to the time of transfer of title.[2]  In 2008, a safe harbor provision was added to the law that limited that liability for a first mortgagee who acquired title by foreclosure or deed in lieu of foreclosure to the lesser of twelve months of unpaid HOA fees or 1 percent of the original mortgage amount.[3]  Thanks to Lunohah Investments, LLC v. Gaskell, tax deed purchasers can now defeat the HOA for pre-tax deed assessments.

Lunohah Investments, LLC acquired title to a parcel of real estate by tax deed and initiated a suit to quiet title against the prior owner and two homeowners’ associations holding liens on the property for unpaid HOA assessments.  The HOA’s asserted that Lunohah remained liable for the HOA liens by virtue of Section 720.3085(2)(b), F.S. (2011) which imposes joint and several liability on a parcel owner for unpaid assessments that came due up to the time of transfer of title.  Lunohah countered that the lien and liability to pay the unpaid assessments were extinguished upon issuance of the tax deed by virtue of Sections 197.552 and 197.573(2), F.S. (2011) which provide that covenants creating any debt or lien upon property or requiring the grantee of the tax deed to expend money for any purpose do not survive the issuance of a tax deed.

The Court observed that the tax deed statutes preserve the validity of covenants that control the use of the property but extinguish all such covenants, upon issuance of the tax deed, to the extent they authorize a lien for unpaid assessments or require the grantee to expend money.  The HOA statute is a more general statute that imposes liability on any grantee for unpaid assessments without specific reference to the manner by which the grantee acquires title.  The Court held that when two statutes embrace the same subject and produce contradictory results, the law requires that the specific statute be given effect over the general statute.

From this case we learn the homeowners’ association statute that imposes joint and several liability on a parcel owner for unpaid assessments does not apply to a parcel owner that acquires title by tax deed.  As a practical matter, tax deed purchasers, who might have limited their interest in a property “encumbered” by a substantial unpaid HOA assessment no longer have to factor this into their bid.  Although this case addressed only the HOA statute, the result for a condominium association assessment would likely be similar.


[1] Lunohah Investments, LLC v. Gaskell, No. 13-1175 (Fla. DCA December 27, 2013)

[2] Section 720.3085(2), F.S. (2007)

[3] Section 720.3085(2)(c), F.S. (2008)

*Grant Kehres is Board Certified by the Florida Bar Board of Legal Specialization as a Real Estate Law Specialist.  He holds a doctorate in jurisprudence from Vanderbilt University, an MBA (finance) from Babson College and a dual undergraduate degree in Investments and Economics from Babson College.  Admitted to The Florida Bar in 1978, he has handled more than 10,000 closings for more than 8,000 clients.  For more information on our services and what distinguishes our office from other law firms and title companies, call (561) 392-5200 or e-mail us at


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