Thursday, April 29, 2010

Community Association Bill, 1196, Passes the House 107-4!


When the 2010 Legislative Session in Florida started back in March there were dozens of community association bills filed covering everything from lender reform to making it easier for buyers of bulk units to invest in failed or floundering condominium projects.

As typically happens, most of those bills were eventually folded into one fast-moving legislative “train” which would up being SB 1196 (sponsored by Sen. Mike Fasano and Sen. Jeremy Ring) and HB 561 (sponsored by Rep. Ellyn Bogdanoff and Rep. Matt Hudson). This 102-page bill does the following:

• The amount of past due assessments that condominiums could collect from foreclosing lenders would be doubled from 6 months to 12 months!

• Condominium boards would be able to suspend the common area use rights and voting rights of delinquent owners subject to notice and hearing requirements.

• Troublesome provisions regarding H0-6 individual unit policies (including the requirement that the association be allowed to force place missing policies and that the association be named an additional insured/loss payee) would be removed.

• The condominium candidate certification requirements would be clarified to require such form be submitted after an election not before so any confusion as to whom should be included on the ballot would be removed.

• Expensive retrofits for sprinklers, elevators and smoke detectors would be delayed and, in certain instances, removed through exemptions or membership approvals.

• A time-limited bulk buyer provision would encourage investors to purchase abandoned units in failed and floundering communities.

• Condominium boards would be able to collect rent from tenants in delinquent units.

The bill is expected to make its way over to Governor Charlie Crist as early as today or tomorrow. The Governor then has 15 days to either sign the bill, veto the bill or allow it to pass into law without any action on his part. Given the fact that this bill contains language which would DOUBLE the amount of past due assessments that the banks must pay to condominium associations when they foreclose on a property in the community, it is imperative that Governor Crist sign this bill! How often do the bankers agree to pay more? How many owners are one special assessment away from being put on the path to foreclosure after paying for months for owners who preceded them on that path?

Notwithstanding the pressure being put on the Governor by the Fire Sprinkler Industry to veto this bill, this time the stakes are too high. Rather than just alienating the folks living in 6,000 sprinkler-impacted buildings, if he kills 1196, the Governor will, in fact, alienate every single person living in a condominium association by removing their ability to pursue double the amount of past due assessments owed by lenders. Governor Crist has several big decisions to make tomorrow and this is one of them.

12 comments:

  1. Here we go again! Lumping Condo's with HOAs. Not only does it confuse the heck out of the average HOA homeowner, it makes most owners in the Homeowner Associations get very confused as to which parts or the Florida Statues is of concern to their everyday quality of life. Why can't we separate FS 720 and let it stand on its own?

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  2. If this bill is signed by Crist, would that mean a unit owner can not even enter their unit from the common area ?
    Is that not a voilation of con- stitutional rights ?

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  3. No it does not mean that. If Governor Crist signs the bill, one of the provisions contained therein would allow a condominium board to suspend the common area use rights (after notice and a hearing) of delinquent owners. That means a delinquent owner could be prevented from using the Clubhouse,the pool, tennis courts and other areas for which they are not paying the upkeep. It does not mean that if they have to traverse the common areas to get to their unit they cannot do so. Ingress and Egress to a unit cannot be impeded.

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  4. Just wondering, if the Governor signs the bill that suspends a homeowners rights to use the common elemnents of the community, how does the association enforce such a law? Do they drag the offending unit owner from the pool, tennis court, clubhouse kicking and screeming? and then who actually will perfom this strong armed tactic? What if its a Senior Citizen or for that fact a Child belonging to the offending homeowner? Did anyone actually give any consideration to the enforcement of this bill? Will the association hire a Bouncer to do the dirty work? This is feel good bill that won't be enforced. Who is going to pull Granma out of the pool?

    Ken Kaufman
    Broker/Owner
    HOMES For You Realty, Inc.

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  5. Hi Ken,

    You are correct that there is a difference between being able to do something and having the enforcement mechanism to do something easily and painlessly.

    Most communities use keys or fobs to gain entry to recreational facilities such as the pool, tennis courts, Clubhouse, etc. In those communities, it is not difficult to simply deactivate the fob. Of course, that does not prevent someone from slipping in with someone else's key or fob. Some communities do have staff that monitor the common areas. The ability to suspend use rights is one more tool but like all tools, its effectiveness depends, in large part, on field conditions.

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  6. Donna,

    Regarding Ken's point about how an HOA can actually enforce the suspension of use rights, what does Florida law allow? I have not been able to find any examples of how use rights suspensions have been enforced in the past. Can the security guard on premises use force? Can the cops be called? Can the board fine the person who continues to use the facilities?

    Very interesting.

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  7. Some communities will deactive keys or fobs which would ordinarily provide access to certain common areas. Others will use association employees to report if a suspended owner is attempting to use or using the common areas. In those instances, they can threaten to call the police to remove them as a trespasser or actually call. I would not recommend having an association security guard engage in the forceful removal of someone as it leaves the door open for assault charges, claims of injury, etc. Most folks who are told that their rights have been suspended will not risk the embarassment of attempting to use the premises after such notification. For others that will not be a deterrent and the board must adopt a reasonable protocol as a result with the recognition that there will be those few cases that present absolute enforcement headaches.

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  8. Hi Donna, we are a British couple and find your laws very confusing and unfair. We have a vacation condo in a small 3 unit block. One of the units is in foreclosuer and we have been told that we will have to now pay 1/2 the annual insurance premium to cover the delinquent owner. We are loathed to do this as we are already paying monthly fees which pays his untilities.

    What will happen to us if we refuse to pay the extra amount above our normal 1/3rd share?

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  9. Ms. Dimaggio: Can you refer me to a SC attorney. Our HOA has raised condo fees for units without elevators and lowered rates for units with elevators. In the past, owners with condos/elevators paid more than owners without. Now, we all pay the same fee whether we have elevators or not. For example 2bdr owners pay $265 mo, 2 bdr w/study pay $304 but 2bdr w/elevator only pay $265. 3bdr units pay $332 with or without elevators. Why do I have too pay $304 w/a 2bdr w/study while a 2bdr w/elevator pays $265..a study doesn't affect any common areas/expense like an elevator. Shouldn't I only have to pay $265 as well?

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  10. The only SC attorney I know that blogs about community associations is D. Ryan McCabe in Columbia, SC. His contact information is: Rogers, Townsend and Thomas, PC Synergy Business Park 220 Executive Center Drive Suite 109 Columbia, South Carolina, 20210 P (803) 744-1826 F (803) 343-7017 rmccabe@rtt-law.com

    I am not familiar with SC association law, but in Florida, an association could not change the percentage by which owners pay their assessments without 100% membership and lienholder approval unless otherwise provided in the originally recorded governing documents. Good luck.

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  11. Dear Ms. DiMaggio,
    I am a Condo owner that is delinquent on the association fees. I find that the new law is not clear on this issue. Does the new law state that the association can collect the entire rent from the tenent or only the amount equal to what the condo fees are for that month?
    Thank you very much.

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  12. Hopefully it can help out a lot of people. Thanks for the information, keep up the good work.

    Paula M

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