An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc. 

Published April 13, 2009


Everybody knows that many community associations are on the brink of bankruptcy -- caused by the many homes and condo units that are no longer paying their fair share of association fees. Many financially responsible families are being pushed into financial ruin!


The Florida Banker Association has refused all requests to make any offer that would help to remedy the bad situation caused by the current language of the Florida statutes (FS 718.116 [Condos] and FS 720.3085 [HOA]). Everybody knows that something needs to be done in order to prevent a total collapse of the association system.


It seems that the Florida's bankers, who are widely to blame for much of the disaster in Florida's real estate market, have decided that they have no obligation to help repair the system -- a system that collapsed because of greed! Now that they received their stimulus money -- paid for with tax money paid by the same homeowners and condo owners -- they are clearly showing an attitude that says: We got what we wanted -- now you are all on your own!

Quite a few of them seem to forget that they would now be part of the long unemployment line, if the government hadn’t bailed them out!

Actually, unit owners and home owners are not asking for much -- it's actually nothing more than what banks should pay as their "FAIR SHARE". Currently the law which has not been changed since first adopted in 1992 limits the banks obligation to only six months of previous fees or 1% of the loan value. Whichever is less.

Asking for the law to be updated after 18 years to 12 months of the previous fees or 2% of the loan is not too much to ask for. The six months of previous fees requirement was first passed in 1991, while the lesser of six months or 1% of the loan provision was established in 1992 as a result of the 1991 Condo Study Commission findings. And here we are in 2009 and the Bankers are unwilling to compromise. Did these bankers ever hear of Cost of Living?

Actually, the bankers again seem to be very shortsighted. They didn't show much foresight when they created the financial real estate mess in the first place. They seem to forget that if the associations go, so goes the bankers' collateral. We have seen what happens with communities if the few owners left "standing" can't pay the bills. Here is the best example: 

Condo Complex Abandoned After Foreclosures Hit

And you can be sure: There are a lot more associations to follow this path of doom!


What are the bankers going to do then: Go back to Washington, asking for another stimulus package, because their greed caused the failure of even more financial institutions? How about the taxpayers then saying: Sorry, we are unwilling to compromise?


This is the statement you'll find on the Home Page of the Florida Banker Association:

Further, the mission of the FBA is to help maximize the ability of members to compete effectively and profitably while being a positive influence on the economic well being of all Floridians.

Big words, but obviously very empty! 

Like the saying goes: "All talk -- no action!"


These are the minimum changes associations need enacted in this legislative session in order to have a chance to survive in the near future:

1.) Mortgagees have to pay 12 months of previous fees or 2% of the loan (This would be a more than fair compromise!) 

2.) The Renters Language as proposed. Associations have to be able to collect maintenance fees from renters occupying units (homes) if owners don't pay.
3.) Stop high legal fees on first certified letter "Intent to Lien!" High legal fees already added to the first warning letter (often much higher than the amount owed) kill on many occasions owners' attempts to settle the debt. Here is the language that needs inserted: No attorneys fees or administrative fees or other costs of collection other than actual postage costs and a late fee as allowed under [insert: 720.3085(3)] or [718.116 (3)] above may be charged to the [parcel] [unit] owner in connection with this notice of intent to lien. [Red; depends on condo or HOA language!]


If these provisions are enacted during this legislative session quite a lot of associations may be able to avoid the fate of the condominium association shown in the above news report! Otherwise many families will lose their homes and their life savings. 


That leaves for legislators the big question: Should they listen to the pleas of their constituents and pass bills that help avoid a disaster in many of Florida's community associations -- or should they side with special interest -- the Florida Banker Association who paid lots if money into their campaign funds?


Legislators should never forget: The financial institutions already got bailed out with taxpayers’ money. They received a huge stimulus package! Shouldn't these banks fulfill their obligation toward Florida 's property owners?