DEBATE OVER H319 AT HOUSE JUDICIARY COMMITTEE

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

Published March 27, 2012

Looking back at the legislative debate over HOUSE BILL 319 two things stand out:

1. The attempt of the proponents of the Safe Harbor provisions to make it look like the amendments were just clarifying existing law.

2. The claim of many legislators and proponents that there are many good provisions in the bill that would really help associations.

Both arguments in favor of H319 are fundamentally flawed!

You may ask why is he still talking about this bill after it unceremoniously died in the Florida Senate?

Easy explanation: The bill will be back next year, because the banks will not rest until they get more concessions from the legislature to protect themselves against liabilities caused by their own defective lending practices that caused the whole financial disaster.

No matter how these explanations were phrased, under the line most of these provisions wee seriously flawed, often caused by the wording created by the "experts" who wrote the bill. 

Make no mistake: In my opinion not one of the provisions in the bill was really association/owner friendly. Even the provisions that contained good "intentions" were so miserably worded that they would have done more harm than good!

Not all members of the Judiciary Committee bought Moraitis's explanation. Representative Ray Pilon (R-District 69), who has lived in homeowners' associations and condominium associations, made that very clear when he said: "I'm not convinced that to take one part that helps associations we are taking away the other side, some that will benefit."

But the real debate over the Safe Harbor amendments heated up in an exchange between Representative Richard Steinberg (D-District 106) and bill sponsor George Moraitis. Rep. Steinberg definitely asked questions that were never properly answered. But the main question that was left unanswered: "Why are we letting the banks off the hook?"

Transcript: Rep.Steinberg/Rep.Moraitis: Steinberg: "...if associations had to incur legal fees -- uh, and I understand it's their choice -- but if they were faced with the situation of we can either incur legal fees and try to get title to the apartment while the bank is not doing it, while the bank is stalling the foreclosure or we can just get nothing and know that the banks are going to end up with the cap they have in place. If they make the decision to take on litigation because the bank is not moving diligently on the foreclosure, why should the bank be let off the hook for having to incur that cost that some courts have determine that they have to incur?"    Moraitis: "Again, when the association decides to foreclose its assessment lien they are doing it for

Rep. Richard Steinberg (D-District 106) WATCH THE VIDEO

But the facts became really distorted when Michael Fields, lobbyist for the Bank of America, took the podium.  His statement: "This is not a change in the law, this is a clarification of the statute that is been in place since 1992" is factually absolutely wrong.

Fields may be correct when it comes to condominium law (FS718), but his statement is absolutely wrong for homeowners' association law (FS720). Fields seems to ignore the fact that until 2007 -- after the foreclosure crisis already started -- there was NO Safe Harbor protection for banks in the existing statutes regulating homeowners' associations. FS 720.3085 was only added to FS 720 in the 2007 legislative session by Senate Bill 1844. Meaning, it's definitely not long- established law. Some attorneys even question if this law should be applied retroactively for mortgages that already existed before the provisions of the bill went into effect on July 1, 2007. Isn't a contract a contract?

Hopefully, next year cooler heads will prevail. We can only hope to see two bills running through the legislature:

1. One bill that deals with all the issues that HELP ASSOCIATIONS/OWNERS deal with the daily problems our communities are facing on a daily basis; with provisions that will really help the still paying owners who are in financial distress caused by foreclosures and lack of consumer protection. 

2. One bill that deals with the attempt to BAILOUT BANKERS.

That would make it even more clear who is for -- and who is against -- community association members. No more hiding behind fancy talk!

Representative Ray Pilon made it pretty clear: It makes no sense to have one bill that is favorable for associations, but contains provisions that take away things that help associations.

No matter what, we all should always remember the question Representative Steinberg asked bill sponsor Representative Moraitis: "If legal fees aren't paid by the bank, wouldn't the end result be that the legal fees have to be borne by the association and those who are paying the fees, those that are not in foreclosure, but those that are being good citizens within the association?"

That's actually not really a question; that's actually a fact that nobody can deny! Let's make no mistake: The two big law firms that supported the Safe Harbor provisions -- Becker & Poliakoff (CALL) and Katzman Garfinkel & Berger (CAN) -- are not the welfare office. They would not waive their legal bills because the associations can no longer collect them from banks and mortgage lenders. 

Representative Steinberg was 100% correct when he said that the burden of paying these legal fees would be borne by the good citizens who are still paying their association fees. And they are definitely the least guilty parties in this foreclosure disaster caused by the same entities that some legislators want to bail out, since they are counting on their campaign fund contributions!