Special Assessments and Chapter 159 Liens
In most cases liens and assessments must be recorded in official public records of the property’s county to be valid, however, there are some liens which automatically attach to real property and do not need to be recorded. For these liens, a standard title insurance commitment will typically contain requirements and/or exceptions specifically dealing with assessments in favor of the county, district or municipality and liens in favor of the county or municipality for unpaid service charges by any water, sewer or gas system supplying the land. These matters can be ‘super-priority’ (taking priority to previously recorded judgments, mortgages, etc.) and are commonly referred to as special assessments and Chapter 159 liens.
Examples of potential assessments that could be in favor of the county, district or municipality include code enforcement violations, environmental liens and non-ad valorem assessments (Fire, Street lighting, Waste). The majority of these would be evidenced in the public records and picked up by a title examiner (and shown on the title commitment). For example, Code Enforcement Liens must be recorded in accordance with 162.09 F.S., Environmental Liens must be evidenced by a recorded Notice of Violation and Outstanding Permits/Zoning matters are excluded from coverage per terms of Title Policy. It’s the non-ad valorem and special assessments that may or may not be recorded and/or shown with the Ad Valorem Taxes (paid in arrears annually). Because of this, the underwriter will typically require that an independent lien search of the county, district and municipality be performed to remove the special assessment requirement/exception.
The second matter deals with unpaid service charges in favor of the county or municipality for water, sewer and gas. Currently the State of Florida has two main statutes that provide a super-priority lien for the county/municipality which may be foreclosed in the same manner as a mortgage.
The first statute, 153.67 F.S., gives the county a ‘superior and paramount’ lien in the amount of the unpaid balance for any water or sewer service provided by the county to a property or parcel of land. A separate lien does not need to be recorded in the official public records of the county, it exists automatically on all past due service charges.
The second statute, 159.17 F.S., provides any municipality who issued revenue bonds to pay for utility system infrastructure with a lien on all lands served by any water, sewer or gas system with a lien for all service charges until paid. A separate lien does not need to be recorded in the official public records of the county, it exists automatically an all past due service charges. Keep in mind that a revenue bond had to have been issued in order for the municipality to have a lien in accordance with Chapter 159.
The underwriter will typically require that an independent lien search showing water, sewer and gas bills as paid be obtained prior to removing the Chapter 159 requirement/exceptions from the title commitment.
Electrical service is typically provided by a public or private company – usually not a municipality or county owned entity. The super-priority lien protection does not include outstanding electrical payments and can be generally disregarded from the title insurance standpoint.