SOUND LEGAL ADVICE -- 

OR CRAFTY INTERPRETATION OF STATUTES AND RULES?

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

Published February 12, 2011

As much as I understand that law firms, that make big bucks from foreclosures, do some advertising for their services, but it shouldn't go so far that crafty interpretations of the statutes may give board members a wrong impression of their rights.

Last Sunday the Miami Herald published an article under the headline: Homeowner associations step up foreclosure filings. In the article, among many other quotes from various people, was a quote from Donna Berger, Esq. -- partner in the law firm of Katzman Garfinkel and Berger. Donna Berger is as well the Executive Director of CANFL (Community Advocacy Network), the lobbying arm of the law firm claiming to lobby for community associations.

The quote immediately got my attention since I had never heard such a statement before from an attorney. This is the quote from the Miami Herald: "State law allows community associations to rent foreclosed properties, even if the community’s documents prohibit owners from leasing units to tenants, Berger says."

Considering that FS 718.111(9) is very explicit stating: "unless prohibited by the declaration, articles of incorporation, or bylaws of the association" -- I really wondered about this interpretation of the statutes. The actual wording in FS 718.116(6) and FS 720.3085(1) may -- but just may -- give some leeway for this interpretation, but FS 718.111(9) clearly speaks a different language -- and most likely reflects the legislative intent.

Otherwise, we would have a scenario allowing the association to rent out the same home/unit it acquired by taking title at foreclosure sale after the former owner couldn't save his home/unit -- being not allowed to rent it to save it from foreclosure and using the rent to pay for association dues and mortgage.

In short: The association could violate the same rule it used to prohibit the former owner from renting the place. In my opinion only a person with a very twisted mind could come up with such an interpretation.

We always hear these attorneys reiterating that the rules are there to be followed.  Obviously, they think those rules apply only to owners!  In the opinion of attorneys like Donna Berger, an association can blatantly violate its own rules if it fits the agenda. And these attorneys craftily interpret the statutes in order to find excuses for breaking these rules.

My first reaction was a posting under the article, doubting Donna Berger's far-fetched interpretation of the statutes. I was actually flabbergasted when reading that statement. Donna Berger responded, claiming that this is "just sound legal advice." Her quote of the statutes couldn't really convince me -- was she going to tell me that FS 718.111(9) doesn't mean anything? I left it with voicing my doubts, knowing that lawsuits are already pending.

For many years we have fought against these rental restrictions, especially since the economy is down the drain and many families are in financial dire straits. Many owners could have saved their homes/units -- if they had been allowed to rent out this home/unit. The rental income would have paid for mortgage payments and association dues. Many of these restrictions were created under the false pretense of protecting property values. The property values are no longer existent -- some have dropped more than 50% -- but the restrictions are still in place and do more harm than good!

But here comes the interpretation that allows associations to rent the same home/unit they would sue the owner for renting. Who will this interpretation really help? The associations and its still paying owners -- or the attorneys? My bet is on the attorneys, because if these interpretations don't hold up in court the attorneys still get their money while the associations/owners will lose a bundle!

With our economy, the high unemployment rate and the more or less non-existent real estate market we should see to it that rules don't prevent owners from trying to save their homes/units from foreclosure.

I have absolutely nothing against renting homes and/or condo units, but let's please create an even playing field: What's good for the association should be good for its owners.  Remember "What's good for the goose is good for the gander"?  Just in case you forgot: It means EQUAL RIGHTS!

So if an association feels it needs to create income by renting out homes/units acquired by foreclosure -- PLEASE REMOVE ALL RENTAL RESTRICTIONS FIRST!

There is even more to consider -- besides possible violation of association rules -- before thinking about  RENTING FORECLOSED UNITS: If you are a board member, please think twice before spending money.  Explore all your options before spending the first dime. Don't forget: Many of these homes/units can't be rented out without a significant investment being made, an investment that can't be recovered if the bank finally forecloses. Many of these units are full of mold, and/or the owners removed much of the interior. I have seen pictures where even sinks and toilet bowls were removed. These homes/units will need major refurbishing before they comply with the Residential Landlord-Tenant Act!

Remember the case where the attorney claimed he even got the first mortgage removed at foreclosure? He called his strategy "THE MORTGAGE TERMINATOR."

The secret of his so-called success? The units were in such bad shape that the banks were only too happy to get rid of the liability. The cost of bringing the units back in shape would have been more expensive for the banks than the amount still owed on the mortgages.

And don't forget:  Before an association can take title, legal fees must be paid.  That is money the association will NEVER recover.