Article Courtesy of The Orlando
By Mary Shanklin
Published November 24, 2009
associations in Florida see no immediate end in sight to the foreclosures,
delinquencies and revenue shortfalls that have beleaguered them in recent
years, a new survey shows.
More than 90 percent of the 777 Florida property owners surveyed expected
the financial troubles to continue or even to deepen next year, according
to findings by the Community Association Leadership Lobby. Most
respondents were board members of associations.
"We're really having a second wave of foreclosures," said Hobie
Fisher, past president of two homeowners associations in east Orange's
Avalon community, which has been particularly hard-hit by auctions and
With about 40 percent of property owners there late paying fees and
assessments, his association has foreclosed on six townhomes. The owners
of one of those units, Fisher said, owed $14,000 in fees.
Though Fisher's associations have not increased fees in the past year,
most have, the survey reported.
Sixty percent of survey respondents said they increased assessments to
compensate for budgetary gaps caused by delinquent owners. And two-thirds
of survey respondents noted an increase in the number of property owners
who are more than 60 days late paying fees and special assessments.
The plight of associations was highlighted during the summer when
Miami-Dade County briefly turned off the water at more than 300 units in
the cash-strapped Mirassou condominiums.
The squeeze on association revenues comes at a particularly bad time —
especially for condominium buildings — as the state has called for
upgrades to elevators, sprinklers and other equipment, experts say.
"I would say that they are in dire straits because the
mortgage-foreclosure crisis and new safety-upgrade requirements are being
called for at the same time they are having trouble collecting assessments
from owners," said Yeline Goin, a co-executive director of the lobby,
which was created in 2003 by Sarasota law firm Becker and Poliakoff.
Without any kind of remedy, Goin added, "I think we are going to
continue to see owners walking away from their units because they can't
afford their assessment, and the problems are just going to
The survey findings are expected to bolster legislative calls for laws
that would for allow associations to collect more late fees on
investor-owned properties and collect payments directly from tenants
renting homes, condos and townhomes.
Sen. Evelyn Lynn, R-Daytona Beach, is among a few legislators proposing
measures to shore up the sinking financials of homeowners associations.
One of her bills calls for banks to pay late homeowners fees as soon as
they begin foreclosure proceedings, rather than waiting for what can be a
year or more until the foreclosure is final.
"It's clear that the fear, anxiety and frustration are still out
there in very large quantities," said Alan Penchansky, a spokesman
for the lobby. "They're looking for some kind of relief."
The financial stresses are taking a toll. At Phillips Bay in south Orlando
for instance, property owners are trying to recall board members for
issues including failing to administer service contracts, obligating
community funds without a vote, and ignoring roof and window leaks.
Phillips Bay homeowner Ed Snyder said the frustrations have been
compounded because a contractor placed liens on all the properties for
work he thought he was owed and then association reserves have been
exhausted, largely because of mismanagement of contracts. Teams of
lawyers, he added, have just added more bills onto the pile.
"It's a financial nightmare, really," Snyder said.
"Everybody is sort of uptight about the whole thing because they can
see no way out."
Financial troubles have led other associations, such as those at Avalon,
to turn increasingly to foreclosures. Once the back fees pile up, the
association files a lien of foreclosure against the delinquent property
owner and a judge hands the title of the house to the association, Fisher
The banks are still owed their mortgage but, so far, have not bid on these
properties at auction and have not come to the association to collect the
mortgage, Fisher added. The properties are typically empty, although the
association has evicted several owners. The association cleans up the
house, rents it and applies the rental income to delinquent fees.
By taking steps that included foreclosing on some properties and then
renting them to responsible tenants, the association went from financial
struggles to the point where it now has $700,000 in reserves.
Fisher said he doesn't feel too bad about foreclosing on owners who
disregard all communications from associations and then expect their
neighbors to subsidize their lawn maintenance, painting and garbage
"The people who need help, we bend over backwards for them,"
Fisher said. "One man broke his collarbone, and we told him to stop
paying and come back next year. We go to mitigation; we don't go straight
(LOBBYING GROUP OF LAW FIRM OF BECKER&POLIAKOFF) IS BLOWING SMOKE
AGAIN, GETTING EVERYBODY ALL EXCITED.
IT COMES DOWN TO PUSHING THESE BILLS THE CALL LOBBYISTS ARE NOWHERE TO BE
SEEN -- SEE THE 2009 SPRING SESSION!
WHERE WAS "CALL" WHEN WE OWNERS