There is an important debate concerning provisions of Florida House Bill 319 and its Senate counterpart, Senate Bill 680, which affect common interest ownership residential properties in Florida (condominiums, HOAs, and co-operatives and their residents). SCCA believes that this legislation is detrimental to you and your community and DOES NOT endorse HB 319/SB 680. Unfortunately this legislation has already passed the Florida House, but it is not too late to stop it in the Florida Senate. We urge you to contact your State Senators and ask them not to support these bills. (Email addresses are provide later below.)
Here is our take on why
these bills should not pass:
First Issue: While
debate about this first issue has not spilled out into the open to
the extent that the second issue has (see below), it is in our view
an even more substantial flaw in this legislation. That is, under
these bills, and applying to condos, co-ops , and HOAs,
any new owner, not just investors,
would not only be jointly liable with a previous defaulting owner
for past-due assessments, as is currently the case, they also would
become jointly liable for all the accumulated "late fees, interest,
costs, and reasonable attorney fees" owed by the previous owner.
What it will do is substantially increase the cost (or further lower
the value) of residential units that are already a drag on the
market in the current economic climate. We believe that the best
thing for most associations is to get new owners who will start
paying regular assessments into distressed units and that this
provision will likely cause many potential buyers to simply walk
away from the table and leave units in their abandoned status--a
drag on association finances and a source for mold and other
expensive maintenance issues.
Second issue:
This one has spilled out into the open, as shown by the links below.
This debate
centers around the so-called "safe harbor" provisions which
currently limit a mortgage company's liability for unpaid
assessments due to associations on foreclosure to the lesser of 1%
of the mortgage or 12 months past-due assessments. These bills
would specifically expand the mortgage company's protection beyond
past-due assessments to protecting them from any liability for "interest,
administrative late fees, reasonable costs and attorney fees, and
any other fee, cost, or expense incurred in the collection process
that became due before the mortgagee's acquisition of title."
In other words if these bills are passed no matter how much is owned
an association for all of these things, the maximum amount the
mortgage company would be liable to the association for would be the
lesser of 1% of the mortgage note or 12 months past-due assessments.
Any opportunity for an association to negotiate with mortgage
holders for at least a partial recovery of "late fees, interest,
costs, and reasonable attorney fees" owed by the defaulting previous
owner would be lost.
Contact the Florida Senate and Oppose This Legislation
Here are email links
for our Brevard County Senators (note that Sen. Haridopolos is
President of the Senate this year):
haridopolos.mike.web@flsenate.gov
altman.thad.web@flsenate.gov
Better yet, email
all Florida Senators in opposition to this legislation. You
will find their email addresses in a message highlighted later on
this page.
Links to
Sites Concerning Issue #2.
(We are not
currently aware of similar links concerning the first issue.)
A.
Against the changes made by these bills:
1. Critical Legislative News from Clayton and McCulloh
2.
Community
Counsel, a publication of Wean & Malchow, P.A. February 2012
3.
Information provided by Association Financial Services:
Note:
This message contains the email addresses
of all Florida Senators that you can use to voice your opposition to
this legislation!
e. The “Real” Truth About HB 319 (Webmasters Note: This external link no longer works and has been removed.)
4.
Letter from Goede Adamczyk, Attorney and Professional Counsel,
February 20, 2012
5.
Letter from Association Law Group, February 17, 2012
B. In the interest of fairness, while we
disagree with them, we are also providing links to sites that
support these bills.
1. HB 319: An Analysis of the Legal Issues and History
February 15, 2012, from Becker & Poliakoff's Florida Condo &
HOA Legal Blog.
2.
CALL Alert for February 16, 2012-HB 319 Seeks to Curb Predatory
Collection Agency Practices and Mounting Lawsuits against
Associations
3.
Safe Harbor Amendment battle heats up while condo and HOA owners
watch and wait
4.
CALL ALERT for Friday, February 24, 2012 – Legislative Update
5.
Mortgage Foreclosures / Construction Warranties and HB 319
February 27, 2012, from Becker & Poliakoff's Florida Condo & HOA Legal Blog.
6.
CALL ALERT for February 29, 2012 – HB 319 and HB 213 Pass the House
of Representatives