Article Courtesy of The Forum Publishing Group

By Fallan Patterson

Published July 31, 2009 

In defiance of state laws, some condo associations are seeking to use all means at their disposal to get condo owners who are behind on fees to pay up, including public humiliation.

A few years ago, not many boards would have asked to see a list of condo owners who were behind on association fees, because not many were delinquent. But in the midst of South Florida's foreclosure crisis, some associations have posted "deadbeat lists" in common areas in hope of turning up the heat on slow-to-pay owners — a move many say is illegal, unfair and unethical.

According to Florida law, debt collectors — including associations and managing agents — cannot use abusive language to collect unpaid fees, or contact the debtor between 9 p.m. and 8 a.m. unless there's a agreement involving all parties, or post deadbeat lists. Impersonation of an attorney or the use of attorney stationary or legal forms to attempt to collect debts is also illegal.

"While we are all familiar with the idiom 'drastic times call for drastic measures,' community leaders and property managers should understand that Florida law prohibits unfair or abusive tactics with regard to debt collection, including the collection of assessments," said Lisa Magill, an attorney with condo law firm Becker & Poliakoff.

Tempers are heating up in South Florida as threats are being made against both the association members who try to collect debts and those who feel victimized by the harsh tactics. Board members' cars have been keyed, and amenities such as gyms and pools have been declared off-limits, assistant condo ombudsman Bill Raphan said.

"Give me one good reason for putting these lists up. You put their name up, but it can be dangerous," Raphan said. "Boards want to keep [delinquents] out of the pool ... but you just can't do that in a condo."

Recently, courts have given better options to associations, particularly in the case of nonpaying landlords who lease out their units. One legal answer includes seeking a court-appointed receiver, or unbiased intermediary, who can bypass the foreclosed or delinquent owner and collect rent directly from the tenant, in place of having the tenant pay rent to the owner. The funds are deposited into a receivership account, where they are then divided up between those to whom the owner owes money.

"The program is very advisable if you have a lot of conversion condos," Magill said, referring to apartment buildings that have been made into condos.

Receiverships are popping up in areas hit hard by the foreclosure crisis, said local receiver Seth Heller of Heller and Company.

"It's a transparent type of relationship," Heller said. "In these times, this is the way receivers are being used."

Another option for associations is a three-party agreement signed by the owner, renter and association that allows board members to collect the rent from the tenant and apply it to the delinquency, giving the remainder to the owner.

Associations can also amend the governing documents to require a certain percentage as a down payment when the buyer moves in.

"People are far more willing to dump a property they don't have a significant investment in," Magill said.