What does the association do? Does the association deposit the check? Should the check be returned? The consternation fueled by the dilemma sometimes results in nothing being done, and the check is left in or on someone's desk.

This dilemma is not imaginary. It occurs daily. Doing nothing is not an option. Letting the check sit or placing it in a drawer without depositing the money, may be worse than the risks of a straight forward acceptance or rejection.

By "doing nothing" the association has not received the funds; yet, the owner is under the impression that the association has accepted the check. Therefore, the owner has no reason to believe that the association will require the owner to pay the remaining amounts due. Worse still, if the association does nothing with the check and proceeds to foreclose an assessment lien, then the court may rule that the association is barred from seeking the moneys proverbially "sitting in the drawer."

Most of the firm's association clients have adopted directors' resolutions strictly prohibiting unauthorized partial payments for delinquent assessments. Following these resolutions, the firm's policy, unless specifically requested by a client, is not to accept unauthorized partial payments. These rules and policies are grounded in practical principles.

Rejecting an unauthorized partial payment with an explanation clearly and definitively communicates to the owner the total amount due. The owner is placed on notice that the consequence of not paying the total is foreclosure. As a result, owners usually swiftly pay the total due. Thus, the risk of rejecting the partial payment is generally accepted as a practical business measure.

While no statute directly prohibits refusal of partial payments, two appellate court decisions, one announced recently, prompt a re-examination of the policies requiring rejection of partial payments. It is anticipated that most associations will continue rejecting unauthorized partial payments. Those associations without a written policy will undoubtedly be adopting a policy.

The two decisions were issued by the Fourth District Court of Appeals. The earliest of the two seemingly conflicting opinions appears at first glance to allow an association to refuse partial payments. In Quain v. Finance America Industrial Plan, Inc., 508 So. 2d 759, 12 Fla. L. Weekly 1437, (Fla. 4th DCA, July 16, 1987), the Appellate Court recognized that attorney's fee expenses are a necessary part of the collection process.

With the recognition that fees were an appropriate part of the process, the corollary would be that any amount tendered for less than the sum of the total principal amount due plus the attorneys' fees incurred is not good, or complete, tender. In the Quain matter the attorney's fees sought to be recovered were determined to be reasonable and necessary. Thus, when interest, attorney's fees, and costs are recoverable, reasonably and necessarily incurred, an association may refuse a partial payment which does not include amounts for interest, attorney's fees or costs.

However, in Ward v. The 3900 Condominium Association, Inc., 21 Fla. L. Weekly D828 (April 3, 1996) an opposite approach was taken. In Ward the appellate court held that when considering association attorney's fee claims, trial courts should take into account an association's refusal not to accept an owner's partial payment. The decision indicated a distaste for foreclosure litigation; however, the Court did not review the significant policies mandating assessment collection litigation.

The Ward Court justified its holding by focusing on whether refusing a partial payment resulted in litigation which could otherwise have been avoided. In Ward, the association made no attempt to mediate, arbitrate or otherwise resolve the dispute before initiating litigation. The Court concluded that acceptance of the partial payment would have reduced the amount in dispute which may have resulted in avoidance of litigation. Thus, the Court held that the attorney's fees awarded should be reduced.

While Ward does not prohibit a refusal of partial payments, the Court clearly frowns upon a refusal when there is no attempt to resolve the matter before the litigation. The Ward Court concluded that a refusal without an effort to avoid litigation was not reasonable; thus, the fees awarded would be reduced in that case.

Though associations can be assured that owners will rely upon the Ward decision, a careful review of the decision indicates that the Ward decision should be limited to its particular facts. The Ward decision's rationale that acceptance of the partial payment would have avoided litigation is usually not applicable in most association collection matters. Generally, even if a partial payment was accepted, then association would have to file suit to recover the remaining amounts due. Thus, litigation and the incurring of attorney's fees is ultimately not avoided.