City of Palm Beach Ordinance 97-07 provides that liens on property created pursuant to an order of the City’s Code Enforcement Board will be coequal with state and local tax liens, and shall be superior to all other liens until paid. Wells Fargo challenged this ordinance, as it would relegate its mortgages to an inferior position with respect to the City’s code enforcement liens. As authority for the ordinance, the City asserted its broad home rule powers. The City argued that it could create exceptions to certain statutory rules governing the priority of liens, as the Legislature made exceptions itself. The trial court and the 5th District Court of Appeal ruled against the City, and held that the Ordinance was invalid.
The Supreme Court began its analysis by examining the Local Government Code Enforcement Boards Act. It pointed out that while s. 162.09, Fla. Stat. permits local code enforcement boards to place liens for fines and repair costs on properties that violate local codes, the statute does not provide for local ordinances to establish priority status for such liens. And, while Art. VIII, sec. 2(b) of the Florida Constitution grants municipalities broad powers to conduct municipal business, those powers are generally limited to the extent they conflict with state law. The Court further noted that the priority of liens is generally governed by s. 695.01, Fla. Stat., which provides in relevant part that no lien on real property shall be valid against subsequent purchasers for value and without notice unless the lien is first recorded.
While the Court recognized that the Legislature has created exceptions to the general rule for the priority of liens (notably for property taxes and special assessment liens), it held that municipalities are preempted from creating additional exceptions to the general statutory rule, as they would otherwise to destroy priority rights that were established by statute. In short, municipalities may not by ordinance affect the priority status of liens unless authority for such an ordinance is explicitly provided for by statute.
2 thoughts on “Florida Statutes Preempt Local Laws Related to Priority Status of Code Enforcement Liens”
So 3rd party bidders can no longer get hit with code enforcement liens. What about tax deed purchasers?
I should explain. 3rd party bidders bid on foreclosure sales. Sorry- Jon Knapp