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We
are all aware of the serious financial problems many of
Florida's condo associations and homeowners’ associations face.
Owners are being hit with special assessments and big
increases of monthly dues! The
financial welfare of many families is at stake -- and the number
of homeless people is quickly increasing.
And
as usual in our society, everybody is quickly trying to find
somebody but themselves to blame for the problem.
This resolution is now trying to blame the lending
industry, considering today’s media headlines, definitely the
easiest target!
Don’t
get me wrong: I’m
not trying to defend the lending industry.
But I’m trying to explain that there is a bigger picture
we need to look at!
Owners
say that special interests are finally killing The Goose That Laid
The Golden Eggs. Don’t
forget that the ones who profit most from the association system
in this country are special interests, not the owners.
Association
boards are being blamed for wasteful spending, financial decisions
lacking common sense and hiring lawyers to cover up their
wrongdoings and violations of the rules.
Management
companies and contractors are being blamed for fleecing naďve
owners who volunteer as board members and are often outwitted due
to lack of necessary knowledge.
Now
the attorneys, often blamed for much of the misery in our
associations, are blaming the banks and are pushing for the
foreclosure resolution that is being discussed here tonight.
Even
if this resolution is enacted by our state legislators, it will
only create a band-aid but it will not solve the actual problem.
It just helps one special interest – attorneys –
against the other special interest, banks.
Because it would allow the law firms like Becker &
Poliakoff and Katzman Garfinkel – just to name the two major
players in the region – to resume filing for foreclosures at
full speed.
If
we really want to help the OWNERS – don’t forget that the
owners pay the bills, not the associations!
We need to find solutions that stop many of the reasons why
our associations are in such a mess.
All
the parties involved have to make concessions.
Just making scapegoats out of banks and mortgage companies
will not really help to solve the problems owners face.
A
few issues must be considered and should be part of the solution
offered:
-
Add
provision for 45-day Demand Letter [see FS 720.3085(4)(a) +
(b)] into FS 718.116, including provision that these
“warning” letters can’t include legal fees, just late
fees and interest. Adding
legal fees at this stage increases financial hardship for
owners already suffering from financial problems.
That provision would save associations legal fees if
demand turns out to be wrong – such as, false accounting of
management firm.
-
Add
provision that all legal actions in regard to liens and
foreclosures must be approved by the board in a public meeting
to avoid unwanted legal cost caused by management companies
and/or attorneys acting without official approval.
-
Stop
associations from initiating foreclosure proceedings for petty
amounts.
-
The
resolution calls for remedies for foreclosures initiated by
banks or mortgage companies.
What about the foreclosures initiated by the
associations?
-
Set
up a provision that would require communication between
association and mortgage holder before starting legal
foreclosure procedures. Why
spend money twice for legal fees – foreclosure proceedings?
-
Require
boards to do necessary research before hiring and paying
contractors. Lots
of financial losses have been caused by hiring contractors
that don’t have a license and/or that have records of
fraudulent behavior.
-
Require
membership approval for board projects that are not regular
maintenance. Recently
we have seen cases where “non-payment of dues” was used as
excuse to levy special assessments and increase dues, only to
see boards go on spending sprees to paint hallways or for
expensive landscaping at the entrance gate.
(Just examples!)
-
Stop
boards from spending outrageous amounts of money on legal fees
for frivolous lawsuits and for defending board violations.
We saw at the meetings of the House Select Committee
where boards used attorneys to avoid producing records as
required by law at high expense – including travel cost.
There
is no argument that laws need to be changed to protect the
financial welfare of
Florida
’s community association members.
Admittedly, our bad economy highlights the downfall of the
association system used in the
USA
. It fails to protect
the welfare of the owners.
But
it is obvious that just blaming banks for the downfall will not
solve the problem. All
parties involved need to make concessions.
Together we can find ways to tackle the issue.
If
we really want to help the owners living in these associations –
according to the invitation that is supposed to be the goal – we
need to create substantial changes.
Everybody has to give – not just a scapegoat!
And a final question: Why
are there different laws for different kinds of associations? The
problems are the same, only the shape of the building differs.
Because we have different provisions, we only create
confusion – even among the specialized attorneys!
Remember
the KISS principle?
"Keep
It Simple, Stupid" |