Pursuant to section 718.120 of the Florida Condominium Act, ad valorem property taxes are not to be assessed separately against any recreational facilities or common elements owned by the condominium association or jointly owned by its members. Prior to January 1, 2004, neither Chapter 720, which governs homeowners’ associations, nor Chapter 193, which governs tax assessments, addressed this issue. Therefore, some homeowners’ associations still paid taxes on the common areas and each county appeared to have different rules regarding such taxation. However, on January 1, 2004, section 193.0235, Florida Statutes, became effective and established the following uniform rules to be practiced by all property appraisers and tax collectors.
IMPACT OF LAW ON ASSOCIATIONS
1. Property taxes may not be assessed separately against common elements utilized exclusively for the benefit of lot owners within the subdivision, regardless of ownership. Therefore, even if the developer has retained title to the common areas, the parcels should not be taxed as long as the governing documents of the association or plat reveal that the parcel is to be used exclusively for the benefit of owners.
2. The assessments for the common elements shall be included in the assessment of all the lots within the subdivision that are, or will be, privately owned.
3. The relevant assessments are any ad valorem tax or non-ad valorem assessment, including a tax or assessment imposed by a county, municipality, special district, or water management district.
4. The common property which should not be assessed individually includes:
(a) Subdivision property that is not to be owned by private individuals or companies;
(b) Any easements which have been dedicated to the public or retained for the benefit of the subdivision; and
(c) Any other part of the subdivision property that is for a drainage pond, detention or retention pond, or for the exclusive benefit of the subdivision.
5. The law applies to all associations regardless of the date they were platted or planned.
6. If individual lot owners fail to pay their property taxes, then a tax certificate may be issued on the individual lot but will not be issued, or have any effect, on any of the common property.
7. To determine the legal status of real property held by the association, the property appraiser should refer to the declaration, or other governing documents of the association, and the plats.
8. As of January 1, 2004, the Property Appraisers were required to change the manner in which they assessed subdivisions and the lots therein.
WHAT REALLY HAPPENED?
Some Property Appraisers have failed to revise the tax assessments, have assessed the common areas individually and have sent the Truth In Millage ('TRIM') notices to the associations. As a result, some associations paid the taxes. A common argument by the property appraiser is that the association did not own the property before January 1, 2004 so the law does not apply to them. However, such a statement is erroneous and the Florida Attorney General has already issued an opinion on this matter confirming that developer-owned common elements were not to be assessed individually.
WHAT SHOULD THE ASSOCIATION DO?
IF TAXES HAVE NOT YET BEEN PAID
If the association has not yet paid the taxes, but received a TRIM notice, then the association should contact the county property appraiser and the county tax collector, inform them that the property in the TRIM notice is a common element as defined in the statute and, therefore, should not be taxed individually. If the association still encounters a problem, then the matter should be referred to the association’s attorney.
IF TAXES WERE PAID
If an association has paid the property taxes for the common areas, the association should immediately contact the property appraiser and tax collector and request that they start the procedure for issuing a refund from the Department of Revenue for such taxes. Some property appraisers have asserted that if the association did not contest the assessments within the time indicated on the TRIM notice, then the association could not receive a refund. However, since the error was made by the property appraiser, it is our opinion that the association is well within its rights to obtain a refund. If the association still encounters a problem, then the matter should be referred to the association’s attorney.
The firm of Taylor & Carls, P.A., with offices located in Maitland, Melbourne, Tampa and Daytona Beach, Florida, was founded in 1981 and has practiced in the area of community association law since that date. This edition prepared by Robyn S. Braun, Esq. of Taylor & Carls, P.A. The information contained in The Association e-Lawyer should not be acted upon without professional legal advice.