Negotiating a check which indicates “payment in full,” may estop the Association from collecting any more funds from that owner, regardless if they legally owe more. Recently, a Florida Appellate Court ruled that an Association’s cashing of a check which included a restrictive endorsement (e.g., paid in full) is considered the full accord and satisfaction of the debt. Based on this case, it appears that if an owner writes a check and/or letter that states “payment in full,” or any other notation on the check (e.g., September 2014 assessment), that check can only be applied to the September 2014 assessment.

Much to the dismay of the Association ( and it’s attorney!), the Second DCA in Saint Croix Lane Trust and ML Shapiro Trustee v. Saint Croix Pelican Marsh Condominium Association, Inc. (2014 WL 3882458 (Fla. App. 2 Dist.)), held against the Association because it cashed a check with a similar notation. In view of this unfavorable opinion, it is imperative that your Associations not cash or deposit any checks that are submitted by the owner with any such qualification. If the owner sends such a check, it should be scanned and sent check directly to your attorney to determine whether or not the check can be cashed and deposited. Further, if the Association uses lockboxes, the lockbox should be turned off for any owner who has been turned over to your attorney for collections and/or foreclosure, in order to prevent a check with a restrictive endorsement from being accepted and deposited into the Association’s bank account.

Based on this Court opinion, it appears a delinquent owner who has not yet been turned over to the Association attorney for collections and/or foreclosure, but pays the Association with a check containing a restrictive endorsement language, is no longer obligated for any additional delinquent payments to the Association, if the Association cashes or deposits the check.
As always, if you have any questions or concerns with regarding this issue, please do not hesitate to contact our office.