Article Detail

News & Knowledge

The Legality of Post-Bankruptcy Condo or Homeowner Association Assessments

April 13, 2017

By: Jason W. Johnson and David E. Peterson

A recent bankruptcy case illustrates how bankruptcy affects condominium or homeowner’s association assessments. The Bankruptcy Court for the Southern District of Florida ruled that a condominium association was not in contempt when it attempted to collect post-bankruptcy assessments from debtors who had been discharged in bankruptcy. See, In re Ramirez, 547 B.R. 449 (Bankr. S.D. Fla. 2016).

The debtors were husband and wife and filed a chapter 13 bankruptcy, seeking to discharge their debts through a court-approved plan arranging for partial payment to their creditors. They received a discharge after they completed their plan payments. Later, their condominium association attempted to collect assessments that had accrued after the filing of the bankruptcy. The association sued the debtors and obtained a judgment. The debtors then filed a motion for sanctions against the association in the bankruptcy court, claiming that the effort to collect the assessments violated the “discharge stay” that prohibits a creditor from collecting discharged debts.

In 1994, Congress enacted 11 U.S.C. § 523(a)(16), stating that a discharge in bankruptcy does not discharge condo or homeowner’s assessments arising after the bankruptcy for as long as the debtor continues to own the property, but that assessments arising prior to the bankruptcy are discharged.

The court in Ramirez noted that the new provision was not cross-referenced in chapter 13, and concluded that the assessments remained valid as a lien against the real estate, but that the personal obligation of the debtor to pay them was discharged (thereby precluding collection against the debtors’ other assets).

Even so, the court declined to hold the association in contempt because the issue of whether the personal obligation was discharged had not yet been decided by the Courts of Appeal, and the last reported case held that the personal obligation was not discharged (citing In re Batali, 2015 Bankr. LEXIS 4050, 2015 WL 7758330 (B.A.P. 9th Cir. 2015).

In summary, prepetition assessments are discharged as a personal obligation, and the only recourse the association may have for prepetition assessments is to file a proof of claim in bankruptcy and enforce the assessment lien against the property. To the extent that the assessments arise after the filing of the bankruptcy, they are not dischargeable in chapter 7 so long as the debtor continues to own the property. In chapter 13, the law is not yet clear as to whether post-bankruptcy assessments may be discharged as a personal obligation of the debtor. However, in any event, the assessment lien may be enforced against the property.

One thing not discussed in the Ramirez case is the procedural impact of the automatic stay on the collection of the assessments, which is a separate issue from whether the obligation remains valid after the discharge. Generally, the automatic stay will remain in effect until the debtor is discharged and the property is no longer property of the bankruptcy estate. Therefore, before actually seeking to enforce the assessment, the association should enlist the services of a knowledgeable bankruptcy attorney.

If you have questions concerning the impact of a bankruptcy on condominium or homeowner’s association assessments, contact Jason Johnson or David Peterson, both of whom practice bankruptcy law at Lowndes, Drosdick, Doster, Kantor & Reed, P.A.


Dave Peterson has a broad background in bankruptcy and creditors’ rights, as well as commercial litigation, in general.

Dave represents lenders, creditors and lessors in sophisticated Chapter 11 reorganizations and Chapter 7 liquidations. He has represented creditors in negotiating Chapter 11 bankruptcy plans, as well as litigation concerning confirmation of bankruptcy plans. He has handled preference litigation, fraudulent conveyance claims, exemption litigation, and a wide range of other kinds of litigation arising out of bankruptcies, including appeals.

Further, Dave has experience accumulated over a period of approximately 26 years, handling real estate mortgage foreclosures, including foreclosures of hotels, apartment complexes, office buildings, retail property, and other types of commercial property, and in handling litigation arising out of the enforcement of security interests in personal property under the UCC.

He also has significant experience representing receivers in receivership cases, handling and litigating assignments for the benefit of creditors, and in defending lender liability claims. In addition, Dave has spent a number of years working on transactional matters related to his expertise in the area of finance. For example, Dave has experience handling the workout of problem loans and debt restructuring.

Dave has also spent approximately 8 years structuring, negotiating, documenting, and closing sophisticated financial transactions, such as mortgage warehouse facilities, repurchase agreement transactions, real estate loans involving special purpose entities, and revolving credit facilities secured by all kinds of personal property, as well as uniform commercial code transactions of all kinds. Many of these transactions have involved hundreds of millions of dollars.


“It’s a phase.”

That was Jason’s dad’s response when Jason told his dad he was going to law school – a predictable reaction, since Jason’s undergraduate degree was in Animal Science (pre-veterinary medicine).  Even more startling to his dad: Jason had already studied for and taken the entrance exam, applied to law schools, and secured acceptance and student loans before ever telling his dad about his plan.  More than 20 years later, his dad has long-since come around to the idea that he was meant to do this.

Jason believes there are two types of litigators—problem creators and problem solvers—and Jason is a problem solver. For his clients, that means looking for ways to achieve their goals in the most efficient, cost-effective way. Recognizing that there is a bit of an inherent tension in being a litigator, as often, the better you are at your job, the better you are at taking work off your own plate, Jason often jokes with his clients that “While I am all about the ‘Jason Johnson Full-Employment Program,’ it may not be in your best interests to implement that program, and it is your interests that must control.”  It is the creativity required to be a problem solver that is one of the reasons he most enjoys litigation.  Opponents who mistake his professionalism and reasonableness for weakness, though, do so at their peril, as being a problem solver and a zealous advocate are not mutually exclusive traits.

Jason is Board Certified in Business Bankruptcy by the American Board of Certification. He is a commercial litigator and the senior member of the firm’s Bankruptcy & Restructuring and Creditors' Rights practices. Jason represents commercial lending institutions, REITs, hedge funds, equity groups, financial services corporations, equipment lessors, commercial landlords, real estate developers, asset purchasers, and other secured and unsecured creditors in federal and state court matters throughout the State of Florida. His extensive experience in all aspects of bankruptcy, commercial foreclosure and workout proceedings have ranged to cases involving client assets exceeding $50-billion-dollars and claims exceeding $1-billion-dollars.

Jason also handles “white collar” criminal matters which, not surprisingly, sometimes flow from creditors’ rights cases. Additionally, Jason is a Florida Supreme Court Certified Circuit Mediator, acting as a trusted and effective mediator to help warring parties resolve their complex commercial litigation and complex bankruptcy litigation matters.

With deep roots in Florida, Jason has developed longstanding relationships in Central Florida’s business and political circles. He began his law career as a judicial law clerk to the Honorable Arthur B. Briskman of the United States Bankruptcy Court for the Middle District of Florida. A former President and current Board member of the Central Florida Bankruptcy Law Association, Jason is a longstanding leader in the Central Florida bankruptcy bar.

When not practicing law, Jason enjoys road cycling, Gator athletics, drinking fine bourbon, and spending time with his wife and daughter. Though he grew up surfing the warm waters off the Florida coast, he is more likely to be found on any present-day vacation sliding down the snow-covered Alps than at the beach.  He is happy to discuss your legal issues, his shift from vet school to the law, or about some of his more “interesting” Animal Science experiences—just don’t ask about the latter over dinner.

Meritas Law Firms Worldwide logo
Do Your Part Logo