Opinion By Jan Bergemann
President, Cyber Citizens For Justice, Inc.
May 4, 2010
legislative session is finally over. Many citizens can sleep better now
since legislators can't do more damage to Florida's citizens by passing bad bills. I have followed the action in Tallahassee
for the past 12 years, but I have never seen a session where more outrageous
bills were passed. In short: We citizens are dealing with a big mess left by
our esteemed elected officials in
associations and their members will have to deal with S1196/H 561. S
1196 ER is the version that will end up on the desk of Governor
Charlie Crist. Being an attorney, he will
hopefully look through the smoke screen of the so-called reform provisions
that actually will not do a lot of good. In my opinion there are a lot more
bad provisions in this bill than provisions that might really help.
emotions aside, let's take a look at what these provisions, touted to be the
condominiums, will really do. No emotions, no name-calling -- just the
straight facts using the wording of the bill.
Let's start with the provisions for Condos.
Let's take a look
at the specific provisions praised by Donna Berger from CAN, using her
statements from her dispatch to CAN members:
actual problem is in the wording of the bill: "The liability of a
first mortgagee is limited to the lesser of: 12
months immediately preceding the acquisition of title or One percent
of the original mortgage debt." Example:
Mortgage is $200,000; monthly dues $350. One percent of the mortgage is
$2,000. Six months of unpaid dues would be $2,100. According to sources, all
the bankers were "willing to agree to." My question: Why
should homeowners and condo owners pay for the mess created by
banks and mortgage companies?
Didn't the bankers get the stimulus money that we paid with our tax
many of the older, low-cost condos will not profit from this
"reform." There is nothing in the bill that will speed up the
foreclosure process. Beware of advice from attorneys to speed up the process
by pushing foreclosure from the association's side. You will never recover
any of the legal fees that you have to spend to achieve that. (Line 1245
boards would be able to suspend the common area use rights and voting rights
of delinquent owners subject to notice and hearing requirements.
matter what, this provision (for many years allowed in HOAs) will not really
put any money in the association coffers. Wasn't increasing revenue the
whole idea? Instead this provision allows board members and owners to harass
owners who don't/can't pay and may actually help to get rid of some
frustration. The bigger danger is in the actual wording: a
monetary obligation due to the association
(Line 1507). This allows as well for selective enforcement against
"disgruntled" owners. A lot of different things can be a monetary
like a fine, a special assessment, any fee the board sees fit to levy
against a specific owner. Example: Board levies a fine against a unit owner
who dares to speak up against a proposal pushed by the board. Either the
unit owner pays or his clubhouse and/or pool privileges are revoked! Great
way to blackmail opponents into shutting up!
is actually what sponsor Representative Ellyn Bogdanoff promised to do since
2008. Bogdanoff was the one who pushed this provision in the first place in
her bill H601.
That means that she did nothing else but correct the problem she herself had
created. Recent court and arbitration rulings more or less force owners to
insure their unit anyway. Even if the association (e.g. roof leak) or the
neighbor (e.g. washer leak) is causing damage to the property of the owner,
only the owner's insurance policy will pay for the damage (absent proof of
negligence). Yes, this provision may help, but also it might backfire! (Line
language now allows the already seated, decision-making board member to
submit the certificate 90 days after the election. A lot of damage could be
done in between. How about creating more confusion? A director who failed to
submit the certificate in a timely manner can submit the certificate at a
later time and immediately would be reinstated. The director, appointed to
fill the empty seat, has to step down! (Line 1024 ff.)
retrofits for sprinklers, elevators and smoke detectors would be delayed
and, in certain instances, removed through exemptions or membership
is a provision that may save money in the moment for some older buildings,
but comes with a high expense of endangering lives, health and safety of the
unit owners. A condo fire in
last month left four unit owners seriously injured. Quote from fire Chief: "It was an old building with no
sprinkler system." Especially endangered: Elderly retirees living
in old buildings! As we all know, votes to save money are easy to come by,
but once the disaster strikes, the same people will quickly file lawsuits
that could be as costly as the retrofit! And nothing has changed in regard
to the importance of lives, health and safety since Governor Jeb Bush vetoed
391 in 2006 and Governor Charlie Crist vetoed S
716 in 2009. See language of veto message: "It poses
an unacceptable safety risk, especially to Florida's elderly condominium residents." (Line
Condominium Relief Act allows a bulk buyer to buy units without buying
the obligations of a developer. It may -- or may not -- attract bulk buyers;
but it carries a very serious risk for the other condo owners that could
quickly backfire. A bulk buyer could buy sufficient units to retain the
permanent majority on the board, making the other unit owners puppets
without any rights. This would create the same chaos as in so-called condo
hotels, where the business interest uses association funds to improve its
income. Lots of lawsuits speak for themselves.(Line1871 ff.)
language in this provision (as well added to FS 720) is an open invitation
to a legal challenge. The convoluted language makes collection complicated
and requires expense of legal fees which are not recoverable. It is doubtful
whether it will help -- or will it only create more legal fees? We have a
renter’s market in Florida. If a renter feels harassed, he/she will move after not paying rent for two
months to recover the security deposit and the association will have another
unit not paying dues — and will be stuck with the legal bills. (Line1319
the provisions that are supposedly helpful and -- according to the sponsors
– will create "reforms" and/or "relief."
are as well provisions for condos in the bill that are outright bad -- and
for that reason they are never mentioned by the proponents of the bill.
do you like these provisions?
744: Exempts: "Personnel
records of association employees, including, but
not limited to, disciplinary, payroll, health, and insurance
records." That means that owners pay for personnel but are not allowed to know how much
personnel is being paid.
1173: Director or officer delinquencies: Another
dictatorial tool that can be used to remove an unwanted director from
the board. Board majority makes sure a high fine is levied against this
"outspoken" director and the director is told: Either you pay
or you are off the board! That can be repeated until this director
either gives up or is flat broke. (Line 1173 ff.)
1178: "A director or officer charged by
information or indictment
with a felony theft or embezzlement offense involving the association's funds ...." By
information can be
interpreted as: Accused by anybody without real proof. You can read in
history books where this has been leading to in certain dictatorships. (Line
Adding more bulk contracts to the list of allowed common expenses. "..
the cost of communications
services as defined in chapter 202, information services, or Internet
services." This means
obligating the paying owners to pay the share of the non-paying owners. This
even adds to the problem we see in many communities. (Line 1194 ff.)
are the provisions for condos only. The few provisions that may possibly
help -- it really has to be seen -- are for condos only. Most of
those provisions came from the original bill H561, which could have
been a good bill -- if it had been left standing by itself.
Also, original bill H561
needed some changes in regard to the wording that required a bit of
trimming. But then H561 was merged with S1196 -- a horrible bill from Day
One. The merged bill, merged at a very early stage that left committees no
chance to correct obvious mistakes, was confusing and the sheer size of the
bill didn't allow any specific discussions during committee meetings. The
merger created a bill with 103 pages (2977 lines).
Even most of the co-sponsors didn't really read the merged bill --
and definitely didn't understand it. When
you read media articles about this bill, you always see only the provisions
mentioned that the sponsors claim to be helpful. Nobody is talking about the
horrible language added to the bill, courtesy of lobbyist Peter Dunbar
and the law firm Becker & Poliakoff (CALL).
language for all the HOA provisions is vague -- on purpose -- and does
absolutely nothing to help associations to deal with the financial mess
created by unpaid dues and/or foreclosures. The provisions add to the
dictatorial powers of association boards, increase the profits of service
providers and help bankrupt developers to get rid of their golf curses!
No wonder that the sponsors of these provisions are too ashamed to talk
publicly about them. According to OPPAGA, about 2.5 million homes in Florida
are located within homeowners' associations. That means that about 2.5
million families are affected by HOA laws that nobody enforces or regulates.
And considering the provisions the legislators adopted by voting in favor of
S1196, it seems like our elected officials don't mind creating
are some of the provisions that S1196
creates for HOAs (FS 720):
2791: "A fine of
less than $1,000 may
not become a lien against a parcel." This sentence is an
insult to every homeowner living in a mandatory homeowners' association
in Florida. During the meetings of the HOA Task Force in 2003/2004 we
heard lots of testimony from owners with horror stories of bully tactics
and blackmail. That's why the lien/foreclosure provision for fines was
removed in 2004. This one sentence allows the enforcement of fines
levied by association kangaroo courts with liens and foreclosures. It
dictatorial boards a great tool to shut up opponents who dare to
criticize the board and/or manager. Who is the author of this sentence
than $1,000" means that they just have to
levy two fines to play the old bullying game. This provision will create
even more foreclosures. (Line 2791 ff.)
2892: The only provision that is added to FS 720 dealing with
the financial crisis is the language "allowing" associations
to collect dues from renters living in homes for which maintenance dues
are not being paid. The language is the same as in FS 718 -- see
above -- and will create exactly the same problems. (Line 2892
2560: including any
reasonable costs involving personnel fees and charges at an hourly rate
for vendor or employee time to cover administrative costs to the vendor
or association. That makes record requests by owners more
expensive. It allows managers to add outrageous costs to the initial
$0.50 per page maximum. Requesting five pages of a past board meeting
can suddenly cost you $72.50! What happened to TRANSPARENCY?
(Line 2545 ff.)
but not limited to, 2585 disciplinary,
payroll, health, and insurance records." That
means that owners pay for personnel but are not allowed to know how much
personnel is being paid. (See above FS 718). (Line 2583 ff.)
(12) COMPENSATION PROHIBITED.
The whole provision is a joke because it does exactly the opposite of what the headline says. The language used allows board members to pay
themselves using this paragraph: "(d) Any fee or compensation authorized in the governing documents." Since the bylaws are part of the governing documents
and bylaws can be changed by simple majority vote of the board: voila!
(Line 2724 ff.)
2849: Elections. Instead of using the proven language from FS 718, this language creates again more loopholes than solutions -- and will
create more confusion and election challenges. The language again allows the election regulated by the "governing
documents" -- allowing a sitting board to hold elections using rules that
assure that the sitting board will be re-elected. (Line 2849 ff.)
720.31 Recreational leaseholds; right to acquire; escalation
clauses. Courts turned down the purchase of golf
courses and the ability of boards to make club membership mandatory.
Many recent examples from all over Florida show that golf courses are a
sure bet to bankrupt associations and owners! Even the PGA admits that
interest in golf is fading fast and the cost of maintaining golf courses
is increasing quickly. Sachs Sax Caplan, P.L., the law firm of Peter
Sachs, husband of House sponsor Representative Maria Sachs, has tried
all over Florida to make this possible -- and got beaten up in every
court they tried. This provision will help to bankrupt more community
associations and owners. (Line 2937 ff.)
720.315 Passage of special assessments.
Some owners will say: Great! Ever considered that the developer
can just make up for it by increasing the monthly dues? Nothing in this
provision to prevent this! (Line 2971 ff.)
a few condominiums may -- or may not -- profit from these provisions, many
others will not. And the provisions in this bill dealing with homeowners'
associations are outright bad!
you feel that this bill will really help you and your association to deal
with the multiple problems, please join the "Kumbayah"
singers who think that everything that comes from these specialized
attorneys must be just great.
case you don't -- especially after reading what all these provisions really
do --you might do what I will do:
WRITE GOVERNOR CHARLIE
CRIST A LETTER ASKING HIM TO VETO THIS OUTRAGEOUS BILL THAT REALLY DOES NEXT
TO NOTHING TO DEAL WITH THE REAL PROBLEMS OWNERS AND ASSOCIATIONS ARE FACING
ON A DAILY BASIS.
Honorable Charlie Crist
400 South Monroe Street
Tallahassee, FL. 32399-0001
SEND HIM AN E-MAIL:
UP! The bill sponsors want to hurry the bill to the Governor's desk in
order to have him sign the bill before receiving too many requests to veto
this bad bill.
LETTER ASKING TO VETO S 1196
1196 -- ENROLLED