Article Courtesy of The SUN SENTINEL

By Joe Kollin
Published March 12, 2005

Widowed grandmother Selma Feit almost lost her two-bedroom house in Tamarac over a $25 late fee.

Feit's problem -- her homeowner association filed a lien against her property even though the amount owed was so small -- isn't unusual in Florida.
That's why Sen. Gary Siplin, D-Orlando, has filed SB 2632, a bill to prohibit condo associations from filing liens and foreclosure suits for anything less than $2,500. The Legislature's annual session began Tuesday and runs through April. The bill will be amended to include homeowner associations.

Rep. Julio Robaina, R-Miami, last year included a similar measure in an overhaul of state condo and homeowner association laws. Although many of his reforms passed, the anti-foreclosure measure failed after being strongly opposed by attorneys who represent associations.

Robaina and Siplin said they will work together this year to get it approved.

"There are a lot of condos, not only in South Florida, but throughout the state. This will bring relief to the whole state," Siplin said.

Already, however, opposition is mounting.

Donna Berger, executive director of Community Association Leadership Lobby, e-mailed the thousands of associations it represents in an attempt to fight it.

"One can only conclude that its intent is to protect deadbeats who do not pay their assessments in a community while punishing the overwhelming majority of owners who do pay their assessments in a timely fashion," said Berger.

She said the proposed changes will hurt the ability of associations to do their jobs.

But Feit disagrees.

"What right do [associations] have to sue us over $25, and that's $25 for a late fee, not even for the maintenance?" she asked.

Feit said that two years ago she slipped her $114 maintenance check into the Cypress Greens Homeowner Association's mail drop on the third of the month. But shortly after the 10th, the treasurer said it hadn't been received.

Feit said she wrote another check but refused to add the $25 late fee. She battled the association, whose its attorney eventually filed a lien and threatened foreclosure. Six months later, the association dropped its case.

"As a lawyer, I've had clients sued for small amounts they don't even know about and end up in court," said Siplin. "It's unfair for people to lose their homes for $2,500 or less."

Siplin's bill could also change the law that makes it so lucrative for association attorneys to threaten owners. Now, condo law says that when an owner pays a debt, the money paid first goes to interest owed the association, then to the late fee, then to the attorney, and lastly to the debt.

Because the attorney gets money before the association, owners who don't pay the full amount never get out of debt.

Siplin's bill attempts to change that by not allowing any money paid by an owner to go to the association's attorney. It also would eliminate the requirement that the loser in a dispute pay the winner's attorney's fees.

"A homeowner or condo owner can owe $2,500 or less, but the attorney's fees might be $5,000 or $10,000 and they want the homeowner to pay, and that ain't right," Siplin said.

Berger said it's Siplin's proposal that is wrong.

"Lenders and contractors both have the ability to collect and apply payments towards attorney's fees," she said. "Why does this bill attempt to deny that right to community associations?"