Foreclosing mortgagees often wait until after a foreclosure judgment and certificate of title are issued to determine the extent of liability to a homeowners or condominium association for past due assessments. But what if there is a dispute as to the amounts owed to the association after the mortgagee takes title to the property? Can the parties return to the trial court for an order determining the amount due? Recently, the Third District Court of Appeals ruled that the parties could not return to the trial court for this purpose because the foreclosing trial court lacked jurisdiction to settle the dispute. Central Mortgage Company v. Callahan , No. 3D13-1672, 2014 WL 3455485 (Fla. Dist. Ct. App., 2014). In that case, Central Mortgage Company (“Central”) filed an action to foreclose a mortgage after the borrowers defaulted on their underlying loan obligations. Central named the borrowers, a homeowners association and a condominium association as defendants in the foreclosure complaint. The final judgment of foreclosure made no reference to the amount of past due assessments the mortgagee owed to the associations. Central took title to the property after foreclosure sale and a dispute arose with the associations as to the amount of past due assessments for which Central was responsible. Central filed a post-judgment motion seeking a determination of the amounts due and the associations objected, claiming that the trial court did not have jurisdiction to consider the issue. It is well established in foreclosure law that the trial court loses jurisdiction after entry of judgment unless there is reservation of jurisdiction in the language of the final judgment. Frequently, a plaintiff will include a general reservation of jurisdiction but courts are more often requiring that it be specific to be effective. For example, there have been recent decisions finding that, in order to reserve jurisdiction for reforeclosure, the final judgment must specifically reserve jurisdiction for that purpose. In the Central case, the final judgment contained merely a general reservation of jurisdiction. The trial court held, and the Third District Court of Appeals affirmed, that it did not have jurisdiction to determine the amount of the assessments because the foreclosure judgment had not made a determination on the amount of the assessments and had only made a general reservation of jurisdiction. As such, if Central wanted a court to make a determination on the amounts owed, it would have to bring a separate action.
Last December, the 1 st District Court of Appeals made a similar determination in the case of Montreux at Deerwood Lake Condominium Association v. Citibank, N.A ., No. 1D13-4808, 2014 WL 7183213 (Fla. Dist. Ct. App., 2014). After acquiring a condominium at a foreclosure sale, Citibank, as trustee, filed a motion to enforce final judgment of foreclosure to determine the amounts owed to the association. The 1 st District Court of Appeals held that the trial court lacked jurisdiction to make a determination on the amount of the assessments because the trial court had not made a judgment on the amount of the assessments in the foreclosure proceeding and had not specifically reserved the issue for later determination.
These opinions indicate the direction that Florida courts are moving in this area. As such, a foreclosing mortgagee should consider asking the trial court for a judgment on the amount of assessments that would be owed if the mortgagee takes title to the property or, in the alternative, make sure the final judgment contains a special reservation of jurisdiction for the specific purpose of determining those amounts. If not, the plaintiff may be left to the more costly alternative of filing a new action.