LEGAL FEES, LEGAL FEES -- AND MORE LEGAL FEES!

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

Published March 15, 2011

 

Once you fall behind with the payment of monthly dues you will be realize that all the legal fees and administrative fees will be your financial ruin. The Florida legislature created laws that sound promising, but in reality the laws create enough loopholes to allow attorneys and management companies to bury you in fees -- legal fees and more legal fees.

 

In short, if you don't have the money to pay the full amount due in one paymen,t you might be better off to borrow the money from the Mafia instead of signing one of the payment plans the law is talking about.

 

How would you like this payment plan?  It’s all totally legal, courtesy of the Florida legislature.

 

Here are some examples to show who really makes out like a bandit by using these provisions that were supposed to help owners and associations in financial distress:

  • Your monthly dues are $250 -- but you haven't paid dues, for whatever reason, for four (4) months. You actually owe $1,000 in unpaid dues. So far, so good! You receive the so-called 45-day Notice by Certified Mail from the association attorney -- your debt has quickly grown to $1,500 -- with added late fees, interest and legal fees. You offer to pay $400 monthly -- $250 monthly dues, $150 toward your debt -- and the association accepts. You think: Great! It will be paid off in about a year, adding some little interest and fees. Far from the truth! Quite a few of the law firms charge a $100 "administrative fee" each time you make a payment, meaning only $50 of your payment reduces your debt, while $100 goes straight in the pockets of the attorneys. Considering that some more interest, etc., will be added you may be lucky if your debt is finally paid off in three (3) years. If you will ever get out of debt, you will have paid about $3,600 to the law firm just for accepting your monthly payments. Of the $5,500 you actually paid (what a chunk of money considering you only owed originally $1,000), your association gets only about $1,200. Meaning the Relief Act only relieved the attorneys,

  • Another issue:  The legal fees charged by the attorneys for foreclosure procedure in connection with rent demanded from renters. This is an example from South Florida : Owner didn't pay monthly dues, renter got demand letter from law firm to pay the full rent ($550) to the law firm. The original demand letter, dated July 10, 2010, was for $3,844.66. The owner in agreement with the renter was under the impression that by paying the full rent (in good faith) to the association -- instead of just the maintenance fee due monthly, as required by law [FS 718.116(11)] -- his debt would be slowly paid off, on the respective unit. The renter made six (6) payments, totaling $3,300. Nonetheless, the association attorney continued with the foreclosure proceedings and filed a Motion for Final Summary Judgment of Foreclosure in February 2011, dishonoring the payment plan. Despite receiving $3,300 the association attorney now demands payment of $3,731.85, meaning the payment of $3,300 reduced the amount owed only by $112.81. When the homeowners noticed this injustice, they immediately sought the help of a pro bono representing attorney. Through their new counsel, the owners challenged the amount of the "reasonable" attorney’s fees. The total fees, on an undisputed litigation, were in excess of 28 billable hours; of which 6.4 billing hours were billed for filing the simple forms involved in a verification of debt, without so much as complying with the legal requirements of the statute or FDCPA. When the association attorney was questioned about this, it was explained that correcting these mistakes would add more time to the billing hours. In other words, he expects the owner to pay for his mistakes and the necessary corrections to be made by the association's lawyers to meet the requirements under the law? Could such high fees be caused by the fact that the attorney of record was only admitted to the BAR about 6 months ago?  Twenty-eight plus billable hours at $200 an hour is an egregious charge in attorney's fees for an uncontested foreclosure action under a claim of lien -- that means, $5,600 in attorney's fees!!! Anyway, according to statements made by the association's attorney, NONE of the renter's payment in the amount of $3,300 actually reached the association, supposedly the beneficiary of the provisions in S1196. These amounts all went to cover attorney's fees, clearly in violation of the statute's legislative intent under FS 718.116(11)

  • Add to these outrageous legal fees the method of some law firms to demand from owners payment of legal fees for writing letters, letters advising the owners that they are in violation of certain deed restrictions. No hearings, no prevailing party -- totally ignoring FS 720.305. In one recent case a well-known Panhandle law firm, a Florida State Representative being one of its attorneys, charged the owner $929.98 for writing some letters accusing the owner of violating deed restrictions. When the owner refused to pay these legal fees, his use rights were revoked -- again without a hearing. It seems owners have no rights; statutes are only relevant if they favor associations and their attorneys. But obviously owners have the obligation to pay legal fees on demand -- according to the interpretation of certain law firms?

In short, besides outrageous legal fees Senator Fasano's ASSOCIATION RELIEF ACT turned into a nightmare for owners, now even burdened with more legal fees, without putting more money into association coffers -- as promised. Senator Fasano's bill plainly legalized methods to rip off owners who own property in Florida's mandatory community associations. Congratulations Senator Fasano.

 

In his State of the State Speech to the Florida legislature Governor Rick Scott said: "And finally, we need lawsuit reform. Every Floridian should have access to the courts for redress of harm. At the same time, we can’t allow frivolous suits and unreasonable awards to give our state a reputation that frightens away new jobs." 

 

But that goes as well for frivolous lawsuits and outrageous legal fees that give Florida a reputation that scares away new citizens. 

 

And Senator Fasano is on a mission to increase the number of frivolous lawsuits and outrageous legal fees. Last year it was S1196, this year it is S 530. Both bills contain nothing but provisions that increase the cost of owning property in Florida's mandatory community associations, higher cost for more than estimated 4 million owners in homeowners' associations, condominiums and co-ops. Instead of helping these owners already suffering from financial woes of their associations, the provisions of these bills do absolutely nothing but increase legal fees and management fees.

 

Senator Fasano's bills are clearly doing exactly the opposite of what Governor Rick Scott announced as his goals for lawsuit reforms. It will be interesting to see how Governor Rick Scott deals with his promised reforms. His words will be measured by his deeds!


FS 720.3085(4)  A homeowners' association may not file a record of lien against a parcel for unpaid assessments unless a written notice or demand for past due assessments as well as any other amounts owed to the association pursuant to its governing documents has been made by the association. The written notice or demand must:

 

         (a)  Provide the owner with 45 days following the date the notice is deposited in the mail to make payment for all amounts due, including, but not limited to, any attorney's fees and actual costs associated with the preparation and delivery of the written demand.

 

         (b)  Be sent by registered or certified mail, return receipt requested, and by first-class United States mail to the parcel owner at his or her last address as reflected in the records of the association, if the address is within the United States, and to the parcel owner subject to the demand at the address of the parcel if the owner's address as reflected in the records of the association is not the parcel address. If the address reflected in the records is outside the United States, then sending the notice to that address and to the parcel address by first-class United States mail is sufficient.

  

FS 718.116(11)   If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay the future monetary obligations related to the condominium unit to the association, and the tenant must make such payment. The demand is continuing in nature and, upon demand, the tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.

 
(a) If the tenant prepaid rent to the unit owner before receiving the demand from the association and provides written evidence of paying the rent to the association within 14 days after receiving the demand, the tenant shall receive credit for the prepaid rent for the applicable period and must make any subsequent rental payments to the association to be credited against the monetary obligations of the unit owner to the association.

  
(b) The tenant is not liable for increases in the amount of the monetary obligations due unless the tenant was notified in writing of the increase at least 10 days before the date the rent is due. The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the unit owner in the amount of monies paid to the association under this section.

   
(c) The association may issue notices under s. 83.56 and may sue for eviction under ss. 83.59-83.625 as if the association were a landlord under part II of chapter 83 if the tenant fails to pay a required payment to the association. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no duties under s. 83.51. 

  
(d) The tenant does not, by virtue of payment of monetary obligations to the association, have any of the rights of a unit owner to vote in any election or to examine the books and records of the association.

  
(e) A court may supersede the effect of this subsection by appointing a receiver.

 

720.305  Obligations of members; remedies at law or in equity; levy of fines and suspension of use rights.--

(1)  Each member and the member's tenants, guests, and invitees, and each association, are governed by, and must comply with, this chapter, the governing documents of the community, and the rules of the association. Actions at law or in equity, or both, to redress alleged failure or refusal to comply with these provisions may be brought by the association or by any member against:

(a)  The association;

   

(b)  A member;

   

(c)  Any director or officer of an association who willfully and knowingly fails to comply with these provisions; and

     

(d) Any tenants, guests, or invitees occupying a parcel or using the common areas.
 
The prevailing party in any such litigation is entitled to recover reasonable attorney's fees and costs. A member prevailing in an action between the association and the member under this section, in addition to recovering his or her reasonable attorney's fees, may recover additional amounts as determined by the court to be necessary to reimburse the member for his or her share of assessments levied by the association to fund its expenses of the litigation. This relief does not exclude other remedies provided by law. This section does not deprive any person of any other available right or remedy.

    

(2) If a member is delinquent for more than 90 days in paying a monetary obligation due the association, an association may suspend, until such monetary obligation is paid, the rights of a member or a member’s tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines of up to $100 per violation, against any member or any tenant, guest, or invitee. A fine may be levied for each day of a continuing violation, with a single notice and opportunity for hearing, except that a fine may not exceed $1,000 in the aggregate unless otherwise provided in the governing documents. A fine of less than $1,000 may not become a lien against a parcel. In any action to recover a fine, the prevailing party is entitled to collect its reasonable attorney’s fees and costs from the nonprevailing party as determined by the court. The provisions regarding the suspension-of-use rights do not apply to the portion of common areas that must be used to provide access to the parcel or utility services provided to the parcel.
    

(a) A fine or suspension may not be imposed without at least 14 days notice to the person sought to be fined or suspended and an opportunity for a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer director, or employee. If the committee, by majority vote, does not approve a proposed fine or suspension, it may not be imposed. If the association imposes a fine or suspension, the association must provide written notice of such fine or suspension by mail or hand delivery to the parcel owner and, if applicable, to any tenant, licensee, or invitee of the parcel owner.

    

(b) Suspension of common-area-use rights do not impair the right of an owner or tenant of a parcel to have vehicular and pedestrian ingress to and egress from the parcel, including, but not limited to, the right to park.

    

(3)  If the governing documents so provide, an association may suspend the voting rights of a member for the nonpayment of regular annual assessments that are delinquent in excess of 90 days.

  

GOVERNOR RICK SCOTT STATE OF STATE SPEECH (03-08-2011)

President Haridopolos, Speaker Cannon, Chief Justice Canady, members of the Supreme Court, members of the Cabinet, members of the Legislature, my fellow Floridians: It is an honor to appear before this body for the first time as Governor of the Great State of Florida.

I want to recognize our Lt Governor, Jennifer Carroll, and her husband Nolan. The new first lady of Florida is here, who’s been my first lady for 38 years, Ann Scott.

Tonight we are honored to be joined by General Titshaw, members of the Florida National Guard, and Florida soldiers and airmen who have returned from duty abroad. We are safe and comfortable here tonight because men and women like them stand guard in hard and dangerous places.

There are many humbling moments in life, but none more so than visiting with a wounded warrior, seeing the sacrifice and the courage. And we are joined tonight by two of those brave men who received the Purple Heart for their service: Staff Sergeant Alberto D. Porro and Air Force Staff Sergeant Christopher “Mark” McDuffie.

We are also honored by the presence of Phillip and Maureen Miller, the parents of Staff Sergeant Robert J. Miller, a Special Forces soldier who gave his life serving our country in Afghanistan. 

Staff Sergeant Miller was awarded the Medal of Honor for giving his life so that his fellow team members could move out of an ambush kill zone. His courage is an inspiration to all of us.

On behalf of the people of Florida, we thank all of you for your service.

We also want to recognize the bravery and the sacrifices of our law enforcement officers here in Florida. In the last two months, six public safety officers have lost their lives serving our state in the line of duty, including three brave men in St. Petersburg in just one month.

We’re honored tonight by the presence of Donna Malloy and her daughter Payton, the family of Colonel Greg Malloy, who laid down his life just a few weeks ago, while hunting down a fugitive. Thank you, for joining us here tonight and representing the families of our fallen law enforcement heroes. We honor their memory and pray that God will comfort their families.

We gather tonight at a momentous time in our state’s history. Bold reforms are underway.

Thousands of our fellow Floridians have assembled here in our Capital – some to criticize our budget priorities, and far more to thank us for our willingness to make hard choices.

For years, politicians have not dared to face the full extent of our financial problems. Politics prevailed, even when the numbers did not add up. All the cans that have been kicked down the road are now piled up in front of us. Floridians have been encouraged to believe that government could take care of us.

But government always takes more than it gives back.

Some thought that businesses could tolerate a strangling web of regulations, and that government could grow without starving the private sector or destroying jobs. The result of that experiment is in: Government grew way beyond its ability to pay for its promises, and the jobs disappeared.

The first step to better times is acknowledging that government cannot afford what some have come to expect.

Doing what must be done will not make me “Most Popular,” but I’m determined to make Florida “Most Likely to Succeed.”

On my first day in office, I ordered a review of every regulation in the pipeline and every contract exceeding $1 million.

These steps sent two clear signals. First, that Florida will not allow unreasonable regulations to stand in the way of job creation. And second, that we intend to watch state spending like a hawk. On my watch we will never allow another wasteful project like the “Taj Mahal” Courthouse to slip under the radar.

We also sold the state airplanes as I had promised to do. And we created the most fiscally conservative state budget in the country.

Our "jobs" budget is targeted to create private sector jobs, increase accountability and reduce the size of government.

Every day since elected Governor, I’ve gone job hunting for the people of Florida. In my business career I was never shy about picking up the phone and making a cold call to try to make something good happen. As Governor, I’ve been making those calls every day to recruit job creators, and I will continue making those calls until every Floridian has the opportunity to get back to work.

As we meet tonight, unemployment in Florida stands at 12 percent. While this legislative session is a regular session, it is, in many ways, an emergency session.

For the 1.1 million Floridians who are out of work, this is an emergency. They are running out of options. The unemployed have heard enough talk. They’re saying, “Show me the jobs.”

And tonight, I am here to show you some new jobs. We have a long way to go, but we’re on our way.

Joining us tonight are four business leaders: one who decided to move a business to Florida, and three who decided to expand their business here. I’d like to recognize them now.

Armand Lauzon is president of Chromalloy, an aviation parts manufacturing company that just opened a new, manufacturing plant in Tampa and created 400 jobs in Hillsborough County.

And we’re also joined tonight by David Meers, the Chief Operating Officer of Vision Airlines, a company that helps put tourists onto Florida’s beaches. Vision recently began flying to 23 cities from Destin less than a year after the economic damage from the Deepwater Horizon oil spill.

In Southwest Florida, Rheinhold Schmieding is founder and president of Arthrex, manufacturer of state-of-the-art medical devices. Tonight he’s here to announce that Arthrex is breaking ground on a 160,000-square-foot facility that will create 150 new jobs every year for the next five years.

And finally, Dean Minardi, CFO of Bing Energy, is here with us. Bing Energy, a California-based company, was courted by offers from several other states. Bing decided to come to Florida in December.

The reason Florida won? Mr. Minardi said it was our plan to eliminate the corporate tax.

These leaders, like me, share a positive view of Florida’s economic potential. On behalf of the people of Florida, I want to thank all of you for your faith in Florida’s future.

I urge every member of the Legislature to join me in making job recruitment a daily task. I want to encourage each of you to become a “Jobs Ambassador” and direct new prospects to me, so we can work together to recruit potential job creators.

Ask Florida business owners, “What can we do to help you expand your business?”

Ask business leaders around the world, “Why not move to Florida?”

Last July I submitted a detailed plan to the people of Florida to create 700,000 jobs over seven years. They reviewed the plan and voted to enact it.

Last month, I delivered to you a budget that puts that plan into action and cuts taxes by $2 billion. These tax cuts put money back in the hands of families and business owners who will grow private sector jobs.

An important priority in our "jobs" budget is to consolidate government’s economic development efforts into a single, highly focused agency. Working with our public-private partner, we will have the resources to be effective, and the flexibility to adapt to particularly promising opportunities. This agency will be headquartered two doors down from my office, and its work will never be far from my mind.

I come to the job of Governor after a 35-year career in the private sector. I want to use that business experience on behalf of the people of Florida. I’m asking this legislature and the people of Florida to give me the tools and hold me accountable for results.

Our "jobs" budget makes sure government is held accountable for every spending decision. And by focusing on the core missions of government – and only the core missions – this budget will give Florida a competitive edge in attracting jobs.

I know the members of this body have thoughtful, constructive modifications to our "jobs" budget.

But we must not lose our focus or blunt our momentum.

Business people in Florida and around the world are watching what we do in the weeks ahead. They can locate anywhere. They will be deciding whether to invest in Florida, based, in part, on our ability to work together to remove the obstacles to business success. I am convinced that putting this plan into action will put our state on the road to prosperity.

On behalf of the millions of Floridians who are desperate for new jobs, I ask you to pass our "jobs" budget promptly.

We also need to focus on our incredible opportunity to improve our K-through-12 education system. We now have real innovators offering a 21st century approach to education. And many of those new approaches offer better outcomes without increasing costs.

With so many Floridians out of work, and the exhaustion of one-time federal handouts, Florida educators will face challenges in managing limited resources. But our commitment to positive change must not waiver.

Let’s begin by agreeing on a few basic principles.

First, that individual student learning must be the touchstone for all our decisions. Practices that improve student learning must be adopted. Practices that impair student learning must be abolished.

Second, I think we can all also agree that the single most important factor in student learning is the quality of teaching. Florida has to recruit, train, support and promote great teachers, great school principals and great school superintendents.

Great educators are priceless. Every one of us has a teacher in our past who made a lifelong difference in our lives. Educators, like other professionals, should be rewarded based on the effectiveness of their work, not the length of their professional life. That’s why Florida needs to pay the best educators more and end the practice of guaranteeing educators a job for life regardless of their performance.

The third principle worth remembering is that we all improve through competition. Think of how exciting it will be when schools are recruiting our children, when every school in the state focuses on continual improvement in order to outperform every other school in attracting students. We need to expand the eligibility for opportunity scholarships to harness the power of engaged parents.

And I am calling for an increase in the number of charter schools – which are public schools that are allowed to work independently of their school board and can innovate in ways that encourage all schools to improve.

With us here today is the principal of a very successful charter school – Sonia Mitchell of Florida International Academy. This charter school moved from an “F” school to an “A” school. Ms. Mitchell attributes their success to the passion of great educators and weekly measurements of student outcomes.

And finally, we can all agree that measuring results is a key aspect of education. We must test our students, and we must evaluate our educators. Those measurements need to be fair and thoughtful, and they need to have rewards and consequences.

We must also analyze how much education money is spent in the classroom versus the amount spent on administration or capital outlays.

With these principles in mind, Florida can become the most innovative and effective place in the country to educate the workforce of the future.

In other areas where government has a role to play, we are offering cost-conscious reforms. Most Floridians have had to tighten their belts. The state needs to do the same thing.

We are streamlining the functions of state agencies to save money and provide better service for taxpayers. Reviewing every activity in every agency with a fresh eye, we are simplifying the structure of state government.

For example, I have asked the Division of Emergency Management to report directly to me. If a hurricane comes our way, I will be personally and continuously engaged in solving problems. Direct, clear lines of authority will expedite our efforts.

We will also modernize our state government. Florida is currently the only state where taxpayers pay for the entire pension of state workers. We need to secure the state’s pension system and be fair to the taxpayers of Florida. We will bring Florida’s retirement system in line with other states by having government workers contribute towards their own retirement, just like everyone else.

Providing a modern, health care safety net for our low-income and disabled citizens is an important state function, but the costs of this program have been spiraling out of control. Yet there are ways to save money and provide better care by adopting market principles and giving patients more choice.

Unfortunately, the federal government requires Florida to get approval before expanding the use of these innovative, cost-saving programs. The federal government seems to forget that federal revenues were recently the hard earned dollars of Floridians. But, with or without the cooperation of the federal government, we will find a way to meet these health care needs without jeopardizing other priorities.

Another government program with good intentions and potentially dangerous side-effects is our system of unemployment compensation. In times of high unemployment, the system provides a critical safety net. But its rising costs, which are borne by the very employers who are struggling to stay in business, threaten to create even more job losses.

The costs of unemployment insurance cannot be allowed to deter job creation. By working with the legislature, we will bring those costs down.

And finally, we need lawsuit reform.

Every Floridian should have access to the courts for redress of harm. At the same time, we can’t allow frivolous suits and unreasonable awards to give our state a reputation that frightens away new jobs.

I ask everyone to look beyond the short-term and imagine with me what Florida will be like once we turn our state around. Florida will be the leading job creator over the next eight years.

With no income tax, a phase out of the business tax, the expansion of the Panama Canal, the expansion of the economies of Central and South America, our beautiful weather, our beaches, the Everglades, world-class theme parks, Florida oranges, our universities and colleges, and the hardest working people in the world, Florida will become the most exciting place to live work and play.

With more than 700,000 new jobs, families will be able to build their own version of the American dream with the security of steady employment opportunities. Entrepreneurs will create a business climate that continually offers new goods and services. State government will be smart, lean, affordable and focused only on its core missions.

Let me close with this: It’s a rare blessing in life to be in a position to improve the lives of millions of people. The leaders in this room have the power to make that kind of difference. We have a unique opportunity to put government back in its proper place and show the nation how private-sector growth leads to prosperity.

Such a moment may not come again.

My “jobs” budget has plenty of critics. Some critics are accustomed to big government and will fight to protect special interests, and there are others who agree on our policy but say that our agenda is too bold – that we need to trim the sails of our imagination and settle for small improvements.

They’re wrong.

I did not fight to become the 45th Governor of the greatest state in the nation to settle for a status quo that does not promote the enormous potential of our people. I am completely committed to this mission. It is achievable.

A vast majority of legislators were elected, as I was, on our promise of smaller government, lower taxes, less regulation, support for job creation, individual opportunity, individual accountability, and more freedom.

Don’t blink. Don’t let special interests persuade you to turn your back on the people who elected you.

Keep faith with the Floridians who supported you because you said, “I believe in the American Dream.” Remember their faces when you decide what to do in the weeks ahead.

Working together we can do incredible things if we stand together with the courage of our convictions.

Ronald Reagan once described America as a place “Unimpressed with what others say is impossible.” I think that's especially true about Florida.

We are a state that has regularly done the impossible. We build magic kingdoms. We launch ships that fly to the moon. Florida can be the place where the American Dream continues to be a reality.

The world is watching, and God is watching over us. Our success will be the model for the nation.

With new jobs and an education system full of new energy, we’ll plot the course for a brighter future. May God bless our great state and all of you. Let’s get to work!
 

 


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