| Dear Senator Atwater:
By way of introduction,
I am former president of the Orange County Homeowners Association Alliance
which has nearly 200,000 homeowners in more than 240 homeowners associations
under its umbrella.
We understand that some
members of Cyber Citizens for Justice (which has only 132 members) is attempting
to organize rallies at your district offices to persuade you to include
a homeowners association member ombudsman in S. 2984. Apparently,
they will demonstrate sometime around noon on Monday, April 12th, oblivious
to the fact that your bill will be heard by the committee on Regulated
Industries at 12:30 p.m. on the same day.
Please be assured that
this small, radical minority does not represent anywhere near a majority
of homeowners who live in mandatory associations. In fact a survey
by the Community Associations Institute (conducted by the Gallop organization)
revealed that the profound majority of homeowners are very pleased with
their associations.
The creation of such
an ombudsman's office will be a very, very expensive operation running
counter to the Governor's objectives of reducing the cost of operating
the departments of State government. Further, it would be an invitation
to chaos. The Governor's task force on homeowners associations wisely
declined to include such a recommendation and we are hopeful that you will
agree not to include it in the bill.
Thank you and kindest personal regards.
Richard L. Spears
3-9-2004
Distinguished Ladies & Gentlemen:
Your committee will
consider this bill (HB 1223) on Wednesday afternoon. As such, it
is important that you be aware of its serious shortcomings as they relate
to the citizens of Florida who have chosen to live in condominiums.
Before I deal with them,
however, you should be alerted to the fact that a noisy minority, unable
to resolve issues on their own, will be pushing to make the ombudsman provision
of HB 1223 apply to single family homeowners associations in addition to
condominiums. This is an attempt to sneak the "camel's nose under
the tent flap" of homeowners associations as a beginning of a state agency
to regulate them -- which proposition flies in the face of property rights,
property values and the traditional treatment of homeowners associations
as a solemn contract/agreement between owners as a group without government
interference. Should such an amendment be offered, I urge you to defeat
it if for no other reason that condominiums and single family homes are
far different things -- one being traditional housing and the other being
a child of the law.
As to HB 1223 itself, there
are a number of things that this bill proposes to do. Among them
are several undesirable provisions including the following. The bill
proposes:
1. To divest
owners of multiple units of more than one vote. This would deprive
owners of more than one unit a voice equal to their financial investment
in the community. I believe this is both an unconstitutional taking
of the property rights of existing owners and a disincentive to further
development of condominiums in Florida since it fails to make an exception
for units owned by condominium developers. (Proposed change to S. 718.104(4)(j),
Fla. Stat.)
2. To create a
second class of owners with rights different from existing owners. Those
new owners could not be restricted by amendments duly adopted by the members
of the association that could operate to “ ....restrict[...] unit owners'
rights relating to the rental of units, keeping of pets, or allocation
of parking spaces.” The language of the proposal is unnecessary vague.
For example, does a limit on the number of occupants in a unit to prevent
overcrowding, or the setting of a minimum rental period to prevent short
term hotel-like operations, restrict rental rights? Does the designation
of pet-free zones such as elevators, to assist allergic or pet averse persons
restrict pet rights? Also, the creation of a second class of owners
whose rights are dependent entirely upon when they bought creates equal
protection problems when imposed by state action, and the courts have uniformly
stricken private amendments that attempt to do the same thing. (Proposed
addition of 718.110(13), Fla. Stat.)
3. To restrict
who can serve on the volunteer Board of Directors of a condominium association
by:
(A)
Prohibiting anyone who hasn't actually lived in the condominium for at
least one-quarter of the year preceding the election from serving. (No
provision is made concerning non-election appointments.) This has
the effect of preventing investor owners and others who, because of illness,
business, travel or other exigencies of life have been absent from their
property from acting fully to protect their investments, particularly when
the Condominium Act allows Directors to attend Board meetings via speakerphone,
and
(B)
Imposing term limits of two (2) years on any serving director, and
(C)
Requiring criminal background checks on all volunteer candidates, These
checks would be available to all owners (and hence available for
further dissemination, notwithstanding any public records exceptions) not
to mention that they are prohibitively costly, and
(D)
Prevent persons within a wide degree of relationship (e.g. second cousins,
half and step relations, and even great uncles and aunts) from serving
on a Board of Directors at the same time.
The pool of candidates
who are available and willing to serve in these usually thankless positions
is small enough without making it smaller through use of arbitrary and
unfair distinctions. The invasiveness of these proposals is enough, we
feel, to drive off the typical, well-intentioned volunteer.
The language also neglects
to differentiate the actions of condominium developers, thus preventing
developers from controlling boards for more than two (2) years during development
and build-out, or preventing members of family owned development companies
from having their family members serving on the developer-controlled board
(Proposed addition of Section 718.1125, Fla. Stat.)
4. To prevent associations
from fully collecting unpaid assessments, interest, costs and late fees,
and delaying when a condominium may act to collect a delinquent account.
As any person can understand, to maximize collections you need to minimize
the amount you are trying to collect. By delaying the collection
process the bill only increases the likelihood that not all assessments
and related charges will be recovered. When a condominium fails to collect
from one owner, all of the others must make up the difference. Also,
by changing the order in which partial payments are applied and preventing
some debt from becoming the subject of a lien, associations will likely
have to forget collection of interest and late fees, something that is
required of no other Florida business. Finally, by attempting to
increase by five (5) fold, the potential liability for unpaid assessment
imposed on first mortgage holders, the proposal will reduce the availability
of mortgage financing for owners and incur the enmity of the mortgage banking
interests. (Proposed amendments to Section 718.116, Fla. Stat.)
5. To impose
criminal liability for maliciously imposing a lien for the purpose of trying
to acquire a unit. While I suspect that this sort of action is quite
rare, I foresee that counterclaims based on this theory will be interposed
in many, many lien foreclosure actions, as an attempt to impose personal
liability and take retribution on directors who have to make the difficult
decision to foreclose the association’s lien. (Proposed addition
of Section 718.116(6)(e), Fla. Stat.)
6. To interfere
with the performance by the association of its necessary and statutory
duties, such as maintaining, repairing and replacing the common elements.
This occurs through the use of this vague proposed language:
.... any action of
the board, even those characterized as special assessments, that imposes
a financial hardship on any or all of the unit owners must be ratified
by a majority of the voting interests at a duly convened meeting of the
association to be held within 60 days of such action or such action shall
be void.
As you may know, most
associations face real problems with apathy. If a majority of the
members cannot be cajoled into voting on a necessary repair, it cannot
be undertaken. Consider what will occur in a natural disaster when
the members are disbursed and difficult to find at the very time when necessary
action is most needed. In an apathetic or highly absentee community essential
services may go begging, simply because a single owner alleges “financial
hardship.” As bad, the proposal fails to give any objective standard
for what constitutes a financial hardship. A single owner operating
in bad faith could downgrade the standards of an entire community. (Proposed
addition of Section 718.3025(4), Fla. Stat.)
7. To require competitive
bidding for all goods and services, even as to its employees. I suspect
that it will be unrealistically hard to find three (3) maintenance workers
willing to bid against each other for a part time job. (Proposed amendment
to Section 718.3026, Fla. Stat.)
8. To mandate
training by the Division of Florida Land Sales, Condominiums and Mobile
Homes for all new board members, thereby imposing yet new financial obligations
on an overburdened and shrinking state government. (Proposed amendment
to Section 718.501(1), Fla. Stat.)
9. To create
both an ombudsman and advisory council with broad powers and a mandate
to assist owners in disputes with their associations. Again, I believe
this is neither a wise use of tax resources, nor an appropriate balancing
of the rights of individual owners and their collective associations.
I respectfully suggest
that the proposals in the bill are vague, poorly drafted, ill-conceived
and not at all in the best interest of the citizens of the State of Florida
or your constituents.
As many of you
know, I have found myself in the position of a kind of Homeowners Association
"guru" as the result of many years of service in the field. I did
not seek such a position, but I do believe that all of us have a duty to
"give back" in our wonderful country and state. It is in that spirit
that I respectfully submit the foregoing.
Richard L. Spears |