With that letter, the bank had taken the necessary steps to file for foreclosure on Nov. 9, 2007, setting the clock in motion on the statute of limitations, the condo association argued.
The bank disagreed. It said another affirmative step — beyond the acceleration notice — was required for the clock to start running, and the statute of limitations should begin when the bank’s first foreclosure was filed Feb. 21, 2008.
“Their argument didn’t make sense,” said attorney Cotzen. “If their argument is correct, there is no point to the statute of limitations.”
At a hearing May 8, the judge ruled in favor of Peninsula, dismissing the bank’s foreclosure as “untimely.”
A 30-day deadline for appeal passed with the bank taking no action.
While it isn’t uncommon for a homeowner to raise the statute of limitations in a foreclosure case, Bronstein said, he hasn’t seen the law used by a condominium association.
“What makes this unique is it’s an association arguing the statute of limitations. Associations have really gotten slammed [in the foreclosure crisis,] and there could be 100 other associations in a similar situation,” Bronstein said.
Banks usually have the upper hand over condo associations in foreclosure cases. Florida law protects banks, Bronstein said, by limiting their responsibility for back condo fees to the lesser of one year of fees or 1 percent of the mortgage principal.
WHO IS RESPONSIBLE?
In the Peninsula case, who is responsible on the bank’s side for dropping the ball? That’s hard to say.
Danielle Spradley of Orlando law firm McCalla Raymer represented the lender in the recent foreclosure case. She declined to comment, referring questions to the firm’s managing partner, who didn’t return calls.
Nicole Garrison-Sprenger, a spokeswoman for Minneapolis-based U.S. Bank, said in an email: “As the trustee for mortgage-backed securities, our role is purely administrative. It is the duty of the servicer to initiate foreclosure action, and they do so in the name of the trustee, which is why you see our name on the public filing.”
Garrison-Sprenger, whose giant bank earned net income of $5.65 billion in 2012, added: “The servicer that initiated this filing was EMC Mortgage, now known as JPMorgan Chase Bank NA, which then took over the handling in that name.”
Chase spokeswoman Maribel Ferrer told the Miami Herald on Friday morning: “I’m still trying to get more information to see what our bank’s role was in the case.” Later Friday, she sent an email: “I just wanted to follow up and let you know that I do not have a comment.”
The condo association has yet to determine what to do with its windfall. The unit, which isn’t currently rented, would fetch roughly $5,000 a month in rent, according to Steinberg.
Similar units are selling for $1.1 million to $1.2 million, according to Bronstein.
While the condominium association’s board is aware of the court win, other unit owners will be notified in an upcoming association newsletter, Steinberg said.
“It’s a seismic shift, and we’re elated,” Steinberg said. “We’re deciding how to proceed.”