Monday, January 23, 2012

Condo petitions for reform: sound strategy or futile gesture?

The Broward Coalition has been in the news recently regarding petitions that they are collecting in order to advance two ideas this Session: clarifying that associations are not to be considered the "previous owner" for joint and several liability purposes as it pertains to past due association assessments and supporting two bills that will hopefully speed up bank foreclosures.

However, is this a well-thought out strategy designed to truly involve rank and file association members in the legislative process or is it merely a futile gesture or worse, grandstanding?

Ironically, the Broward Coalition is touting the fact that it worked with Lisa Magill of Becker and Poliakoff to create the petitions the Coalition is presumably using to take on bankers, while at the same time it is her law firm and its lobbying organization, CALL, that drafted the Safe Harbor amendment to HB 319 that reiterates the banks' preferred position over other title holders following foreclosure by capping the amount banks have to pay in past-due assessments owed to associations. Here is a link to CALL’s position paper and the actual amendment they drafted in order to alleviate any misconception that some have as to who actually drafted that amendment: http://bit.ly/wLKcmi.

The two petitions that the Coalition is distributing have nothing to do with repealing the CALL/Safe Harbor amendment discussed above. One petition is to add language in to 718.116 clarifying that associations should not be treated as the previous owner for joint and several liability purposes. If they remain current on Tallahassee happenings, the Coalition and its advisors should certainly have known that CAN already drafted and had included that very language into HB 319 way back in August.

CAN's language was intended to add late fees, interest, costs,and reasonable attorneys' fees to the unpaid assessments already owed by third party purchasers as well as to clarify that an association should not be treated as the previous owner with regard to joint and several liability for these amounts. The bill sponsor, Rep. George Moraitis, left the expansion of amounts owed but removed the language excluding associations from being treated as the "previous owner" due to his concerns that the merger doctrine would not allow the addition of this language.

The bill sponsor's concerns that there is a legal theory which prohibits including this language in HB 319 will certainly not be overcome by receipt of a petition no matter how many signatures it contains. He has now asked for input from the Florida Bar as to whether or not this language is advisable and whether or not it withstands a merger doctrine challenge.

The other petition concerns the Steube (HB 1149) and Passidomo (HB 213) bills which are designed to speed up bank foreclosures by giving courts greater leeway to sanction lenders and giving associations greater input into the court's management of the bank's foreclosure case. These bills have merit and are worthy of support. However, the Coalition's Petition on these bills is cumbersome for the average reader and most likely will be signed (or ignored) by folks who don't understand its contents. There is the additional and not insignificant hurdle that has not been discussed with folks being asked to sign these petitions that these bills don't currently have companions. Moreover, both house bills have four more committee stops including two policy subcommittees, a budget subcommittee and an overarching committee. Before whipping the "troops" up into a frenzy, wouldn't the sensible thing be to at least give folks an accurate picture of what they're up against?

Lastly, petitions are, in my opinion and the opinion of most legislative aides, the least persuasive way to effectuate change. Personal meetings with the legislators sponsoring and hearing these bills are the best. Individual phone calls and emails are runners-up. Bulk petitions simply don't carry the same weight. We might get lucky and the subject matter of both petitions might pass but it won't be because a petition was submitted. It will be due to all the hard work that has taken place over the last year and the ongoing commitment to educate our policy makers on these issues of importance to community associations.

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