Article Courtesy of The Sun Sentinel

By Joe Kollin

Published August 8, 2007

 Jane Consiglio has been trying for a year to sell her one-bedroom apartment in section 4 of High Point of Delray Beach.

She finally got an offer from a disabled Vietnam War veteran and his wife, but her condo board turned them down.

"How unfair is this?" Consiglio asked.

 
Boards statewide have begun toughening their standards because of concerns about applicants' ability to pay monthly maintenance fees. In the late 1990s and early 2000s, buyers were qualifying for low adjustable-rate mortgages with little or no money down. Unable to pay both their mortgage and association obligations, the new owners ignored their maintenance and special assessment obligations.

Boards were stuck. They couldn't foreclose because the new owners had no equity. That forced all other owners to pick up the unpaid share of the common expenses, such as water, insurance, pest control, pool maintenance and landscaping.

Consiglio's buyers qualified for a Veterans Affairs loan and had offered to have their monthly maintenance fees deposited directly into the association's account.

But her board said the couple had bad credit and defended its decision.

The criteria the board applied "is all detailed in our condo [documents] and it was handled according to the [documents]. That's all I can tell you," said the association president, Richard W. Tenney.

Boards have almost unlimited power to reject buyers and renters as long as their governing documents allow it and no illegal discrimination is involved, according to Randall K. Roger, whose Boca Raton-based law firm represents 600 associations in South Florida. State law recognizes the right of associations to determine who can buy and rent but doesn't set standards for boards to follow.

Roger said associations must use objective guidelines, such as a test to determine if the applicant is able "to meet the expectations of unit or homeownership" and the association must not deviate from them.

However, sellers lament that in today's real estate market, they face a lot of competition for buyers. According to Miami-based Keyes Co., about 47,000 houses and condos were for sale in Broward and 37,000 in Palm Beach County at the end of June.

Consiglio is weighing whether to battle on behalf of the veteran who wants her apartment.

"I'm not positive, to tell you the truth," she said. "We'd like to sell but wonder if we should continue fighting the board."

Marion Goldner doesn't plan to sell her two-bedroom apartment in the Cascades of Lauderhill until next year but she foresees a problem. Her association already requires one year's maintenance, about $3,000, from buyers. The money is held three years without interest and if an owner makes one late payment, the prepaid funds are held interest-free for another three years.

In addition, her association recently adopted a rule that prospective buyers prove they earn a total of $35,000 or $45,000 a year, depending on if they want a one- or two-bedroom apartment.

"This cuts out retired people, disabled people and people you would want as neighbors, such as teachers, firefighters and police officers," Goldner said. "You don't disqualify thousands of people indiscriminately."

But association Vice President Sheldon Schwartz said, "We want to make sure people can afford to pay the maintenance."

Q&A

Q. You wake up one day and find water gushing into your apartment through a wall or dripping from the ceiling onto your sofa. You want the problem repaired and paid for. Your board says it is your responsibility; your insurance company says it is the association's. Who is responsible?

A. We asked attorney Ken Wurtenberger, of Adorno & Yoss in Fort Lauderdale. He said most condo documents make pipes and walls common elements and, as such, they are the association's responsibility.

"If a leaking pipe behind the wall causes damage to a particular unit, then the association should be responsible for causing such damage to be repaired," he said. If the association's insurance doesn't meet the deductible, however, the board might be forced to assess all owners to get the money.

If the documents consider pipes an owner's responsibility, the association isn't involved.

"In the case where an upstairs unit's overflowing toilet causes water intrusion damage to a unit below, the question of responsibility is less clear," he said. "If the cause of the overflowing toilet is due to a problem with the pipes ... then the association would be responsible for the damage," assuming the pipes are common elements.

However, if the overflowing toilet results from a neighbor's negligence, then the neighbor is responsible, Wurtenberger said.

Q. Where can I go with my complaint? Where can I or get more information?

A. Here are some contacts:

State condo ombudsman: [email protected] ; 954-202-3234; 850-922-7671 (not toll free); www.myflorida.com/condos . The ombudsman's office answers questions for unit owners, tries to mediate disputes between owners and boards, monitors elections and educates owners.

Division of Florida Land Sales, Condominiums & Mobile Homes: 954-202-3982; 800-226-9101; www.state.fl.us/dbpr/lsc/condominiums/index.shtml . The division enforces state condo law.

State condo law: www.flsenate.gov/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0718/ch0718.htm 

State homeowner association law: www.flsenate.gov/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0720/ch0720.htm 

Cyber Citizens for Justice, a nonprofit representing Florida condo and homeowner association unit owners: www.ccfj.net .

Community Associations Leadership Lobby, an organization that represents boards and those who manage and advise associations: www.callbp.com .