Florida statute reference · F.S. § 719.108
§ 719.108 - Cooperative Assessments & Collection
Section 719.108 governs how a Florida cooperative collects unpaid assessments. The mechanics differ substantially from Chapter 718 because of cooperative ownership structure: the association holds title; the member holds shares plus a proprietary lease. Collection therefore proceeds against the shares and the lease, not against a fee-simple unit. Boards transitioning from condo experience to co-op governance need to relearn the playbook.
Reviewed by the Common Elements editorial team, which includes a Florida-licensed community association manager (LCAM) and insurance broker - Florida Licensed Community Association Manager, 2-20 & 6-20.
What co-op boards need to know
Cooperative collection is not condominium collection. In a Chapter 718 condo, the association files a lien against the unit, sues to foreclose, and the unit is sold at auction. In a Chapter 719 cooperative, the member doesn't own a unit - they own shares in the corporation and a proprietary lease on their unit. The association's remedies attach to the shares and the lease, not to real property. The mechanics and timelines are different, and the priority rules interact with the UCC rather than the recording statutes.
When a member falls behind, the standard sequence is: late fees and interest accrue, the association sends a demand letter, and (if no cure) the association files a lien against the share interest. The lien is recorded in accordance with the bylaws and § 719.108. If the delinquency persists, the association can pursue collection through civil suit and, ultimately, termination of the proprietary lease - the cooperative equivalent of foreclosure, but accomplished through the lease's termination clause rather than a circuit court foreclosure judgment.
Lender involvement complicates everything. Cooperative loans are typically UCC-secured loans on the share interest, with the lender holding a collateral assignment of the proprietary lease. The lender's consent or notice may be required before the association can terminate the lease. Many bylaws and proprietary leases bake in lender notice-and-opportunity-to-cure provisions; missing them can expose the association to a lender claim.
Wrongful termination of a proprietary lease is a high-stakes claim. Damages can include the value of the share interest (which can be significant in a desirable building), lost rent or housing costs, and attorney's fees. Always engage cooperative-experienced counsel before pursuing any lease termination. The board should document every step, preserve all notices, and follow the bylaws and proprietary lease language to the letter.
Key requirements
Assessment liability and collection authority
§ 719.108(1)- Members liable for assessments and rent under proprietary lease
- Association can charge late fees, interest, and collection costs
- Late fees must be reasonable, not punitive
- Reasonable attorney's fees recoverable from delinquent member
- Document late fee basis in bylaws or board policy
Association lien on share interest
§ 719.108(3)- Lien attaches to share interest and proprietary lease
- Recording per bylaws and statutory requirements
- Priority governed by UCC framework, not real-estate recording
- Interacts with lender's UCC security interest in shares
- Different priority rules than condo lien under § 718.116
Termination of proprietary lease
§ 719.108(4)- Termination available for material breach (including sustained non-payment)
- Written notice and opportunity to cure required
- Bylaws may require board or membership vote to terminate
- Lender notice and consent often required
- Wrongful termination claims can produce significant damages
Foreclosure procedures
§ 719.108(4) & (5)- No traditional condo-lien foreclosure mechanism
- Civil suit for damages and lien enforcement available
- Sheriff's sale of share interest possible per writ of execution
- Lease termination is the more common remedy
- Engage cooperative-experienced counsel before any action
Related tools
Common questions about § 719.108
- How are cooperative assessments collected under § 719.108?
- When a cooperative member fails to pay assessments, the association has a different set of remedies than a condominium would have. Because the cooperative holds title to the property and the member holds shares plus a proprietary lease, the association cannot foreclose on a unit interest in the same way a condo association would. Instead, the association can lien the member's share interest, sue for the assessments, and ultimately seek termination of the proprietary lease for material breach (non-payment). This is a fundamentally different collection framework from Chapter 718.
- Where does the cooperative association's lien rank?
- Under § 719.108, the association's lien for assessments attaches to the member's share interest and proprietary lease. The lien priority is governed by the timing of the lien recording and any prior recorded interests. Because cooperative ownership is a security interest in shares (not real property), traditional real-estate lien priority rules don't always apply cleanly - lenders making 'cooperative loans' typically take a UCC-1 security interest in the shares and a collateral assignment of the proprietary lease. The association's lien framework lives alongside this UCC structure.
- Can a cooperative association terminate a member's proprietary lease for non-payment?
- Yes. § 719.108 contemplates termination of the proprietary lease as a remedy for material breach, which includes sustained non-payment of assessments. The termination procedure typically requires written notice, an opportunity to cure within a specified period, and (often) a vote of the board or membership per the bylaws. Termination effectively evicts the member and extinguishes their share interest. This is a more direct and powerful remedy than the condo lien-and-foreclose process, but it carries significant procedural risk - wrongful termination claims are an ever-present litigation risk.
- How is the co-op assessment collection process different from a condo's?
- Three big differences. First, the association is not foreclosing on real property - it's acting against the member's shares and lease. Second, lender involvement is different - cooperative loans are typically UCC-secured, not mortgages, and lender consent (or notice) is often required before the association can terminate the lease. Third, the timeline is often faster but more procedurally risky - proprietary lease termination doesn't require a circuit court foreclosure judgment, but a wrongful termination claim can produce massive damages exposure. Engage cooperative-experienced counsel before pursuing any collection action.
- Can the cooperative association charge late fees and interest under § 719.108?
- Yes. Section 719.108 permits the association to charge late fees, interest at the rate specified in the governing documents or, if none, the statutory rate, and reasonable attorney's fees and collection costs. The proprietary lease and bylaws typically spell out the late fee structure. Late fees must be reasonable and not punitive - courts have struck down late fees that exceeded the actual administrative cost of collection. Document the basis for any late fee structure in the bylaws or board policy.
Track co-op assessments and collection on Common Elements
Log delinquencies, schedule late-fee accruals, document demand letters, and maintain the procedural record that defeats a wrongful-termination claim.
This is not legal advice. Consult association counsel for your specific situation.