Financial relief for condo associations

Article Courtesy of 
Published April 12, 2009

TALLAHASSEE - Florida's foreclosure problems are increasing the financial pressure on condominium owners and associations, and one Florida lawmaker is proposing some changes.

Rep. Julio Robaina says he has a plan to bring relief to financially strapped condo associations.

He's pushing legislation that would force banks and other lenders to pay the maintenance fees on foreclosed units at the start of the foreclosure process instead of at the end, which is the practice now.

"It may take six months, a year, a year and a half to settle them. That means the association goes with no money for that long a period of time. What this would do is speed up the process and get them paid upfront, made whole at the beginning," Robaina said.

Condo buildings have fewer residents, so there's less money going to associations from condo fees. As a result, many associations are going bankrupt or they are raising their fees for the remaining residents to try to stay afloat.

Florida has more than 20,000 condominium associations and it's estimated up to 40 percent are struggling to survive. At the same time, condo owners who have faithfully paid their fees are also having a tough time paying the higher bills.

One Florida legislator is pushing a bill to help condominium associations.

Robaina's bill would also give condo boards the power to collect fees directly from renters if the landlord doesn't pay up. He says too many people have rented out their condos but are not continuing to pay the condo fees.

"Thus giving the board the power to collect from the tenant two checks, 'You'll send us first what you owe us and what our portion is and send then the remainder or the difference to your landlord."'

The bill would also create law enforcement jobs for condo associations. Robaina says problems with fraud are piling up and associations need help with investigating and cracking down on fraud.

"What this bill, for the first time, would establish is basically law enforcement positions just for the condominium associations, which will deal with nothing but investigating," Robaina said.

Robaina says his proposal includes relief for condo owners on insurance. Currently, Florida law requires them to carry content insurance, which can cost thousands of dollars a year. This bill eliminates the requirement for content insurance.