The firm’s Michael Toback authored an article that appeared as a “Board of Contributors” guest column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which was titled “Ruling Quashes Lingering Questions on Partial Payments to Condo Associations,” discusses the implications of a recent ruling that brings clarity for condominium associations in their handling of partial payments from delinquent unit owners. His article reads:
Two years ago a ruling by the state’s Second District Court of Appeal created a major wrinkle in the acceptance of partial payments by condominium associations when the payments had been endorsed and presented as full and complete remittances of the total outstanding debt owed by unit owners.
The court’s ruling in the case of St. Croix Lane Trust v. St. Croix at Pelican Marsh Condominium Association essentially made it necessary for associations to consult with legal counsel when they received checks for partial payments that were in any way endorsed as representing the full and final payment of assessments owed by an owner. Prior to this ruling, associations were guided by a 2008 ruling by the Third District Court of Appeal which held that associations cannot refuse partial payments of assessments made by or on behalf of owners.
In St. Croix, the unit owner’s attorney specifically wrote to the association attorney stating that the payment made by the owner in the amount of $840 was to be considered as the full and complete payment for the settlement of the account, which the association claimed was delinquent in excess of $38,000. While the Naples association responded to the owner’s attorney by denying that the partial payment was the full and final payment of the amount owed, it accepted and deposited the check, applying the funds as a partial payment in accordance with Florida law.
The appellate court found that the association’s depositing of the check containing the restrictive endorsement operated as an “accord and satisfaction,” resulting in a waiver of the association’s right to collect the remaining debt owed by the unit owner.