Super-priority city lien - CITY OF PALM BAY, FL vs WELLS FARGO

[Sam Leon]

May be a RE attorney in FL can comment on this. I have a REO property currently under contract with Fannie Mae in the City of Hallandale, FL with a number of violations fined at $350 per day and after a number of years it is now over $300,000 of fines. City code enforcement officer said if I bought it and corrected all the violations (and that may cost over $20,000) they will accept 10% of the current fine...

I noticed this case of CITY OF PALM BAY FL vs WELLS FARGO and I wonder if it has any relevance to my specific situation.

Supreme Court of Florida

No. SC11-830

____________

CITY OF PALM BAY,

Appellant,

vs.

WELLS FARGO BANK, N.A.,

Appellee.

[May 16, 2013]

CANADY, J.

In this case we consider whether a municipal ordinance may validly establish superpriority status for municipal code enforcement liens. In City of Palm Bay v. Wells Fargo Bank, N.A., 57 So. 3d 226 (Fla. 5th DCA 2011), the Fifth District Court of Appeal concluded that such an ordinance superpriority provision is invalid because it conflicts with a state statute and that the City’s lien accordingly did not have priority over the lien of Wells Fargo’s mortgage that was recorded before the City’s lien was recorded. Palm Bay sought review, and we accepted jurisdiction based on the Fifth District’s certification of the following question of great public importance:

Whether under Article VIII, section 2(b), Florida Constitution, section 166.021, Florida Statutes and Chapter 162, Florida Statutes, a municipality has the authority to enact an ordinance stating that its code enforcement liens, created pursuant to a code enforcement board order and recorded in the public records of the applicable county, shall be superior in dignity to prior recorded mortgages?

City of Palm Bay v. Wells Fargo Bank, N.A., 6

7 So. 3d 271, 271 (Fla. 5th DCA

2011) (mem.). On appeal, the City argues that the ordinance superpriority provision is within the “broad home rule powers” of the City. Petitioner’s Brief on the Meritsat 5,City of Palm Bay v. Wells Fargo Bank, N.A., No.SC11

-

830 (Fla. May 16, 2013). The City contends that because the Legislature has made certain exceptions to the general rules governing the priority of liens, municipalities have the power to likewise make exceptions. For the reasons we explain, we conclude that the Fifth District correctly decided that the ordinance superpriority provision is invalid.

Accordingly, we answer the certified question in the negative. Before explaining

our conclusion, we will review the pertinent provisions of the Palm Bay

ordinance,the constitutional and statutory provisions relevant to the City’s exercise of power, and the statutory framework governing the priority of interests based on recorded instruments.

To read the entire document use the link to the PDF below:

http://www.floridasupremecourt.org/decisions/2013/sc11-830.pdf