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City Liens Are Inferior to Ass...

City Liens Are Inferior to Association Liens

In the case of City of Palm Bay v. Wells Fargo Bank, heard in the Supreme Court of Florida, the Court found that Municipalities may not establish a superior status for code enforcement liens to that of previously recorded interests such as mortgages.

The city of Palm Bay enacted an Ordinance in 1997, which in part indicated “liens created and recorded in the public record shall remain liens coequal with the liens of taxes, superior to all other liens.”  The purported effect of this provision was to establish the superior nature of a code enforcement lien against a property which might have a mortgage or other securitized interest.

The City’s intention was to ensure they were paid prior to any mortgages or other security interests in the event the property was foreclosed and sold to a third party, or if the City itself began to foreclose other lienors.

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