S. Florida condo owners face foreclosure

after getting big hurricane-repair bills

Article Courtesy of The Sun Sentinel

By Joe Kollin

Published 10-19-2006

It isn't easy telling an elderly widow living on Social Security or a young laborer with a wife and kids that they must come up with thousands of dollars in a matter of months or face foreclosure of their homes.

But that's what condo and homeowner association boards throughout South Florida are telling owners after last year's hurricanes left them facing huge, unbudgeted bills for repairs and for new insurance, which in some cases has doubled or tripled.

"We're getting about a dozen calls a day from frantic owners," said Danille R. Carroll, the state condo ombudsman. "We tell them there's not anything they can do but pay the assessment and that they aren't alone, that associations all over the state are doing the same thing."

While state law requires boards to maintain the value of the community's common property and keep it insured, owners can petition the board to change the terms of its assessments. That could mean allowing for longer repayment or stretching out the time needed for repairs. If that doesn't work, owners can try to recall board members or file a lawsuit against the board.

If that fails, owners who can't pay face liens on their property and bills for their association's legal fees. Ultimately, their homes can be foreclosed, although no figures are available on how often this is happening.

Steve Weiss owns a three-bedroom townhouse in the 358-unit Shaker Village complex in Tamarac. The association's law firm has filed a lien on his uninhabitable unit because he is having trouble coming up with the $2,500 special assessment.

Hurricane Wilma last October damaged the wiring in his building. Later, rain damaged the roof and his ceilings collapsed.

Since then, the 45-year-old maintenance worker, his wife, Cherylann, and their four children, ages 5 to 12, have been living in hotels, paying $60 to $80 a day. He also must pay the $786 insurance and mortgage on the townhouse, plus $255 a month maintenance.

Even with the special assessment payable over eight months, he hasn't been able to do it.

"We asked if we could wait and pay the assessment after we moved back in and didn't have the hotel to worry about, but the association said no," Weiss said.

Because he hasn't paid, the board turned him over to its law firm for collection and it accelerated the payments. Although the full amount isn't due until December, the lawyers since July have been demanding the full amount immediately.

Weiss said he tried arranging payments, but every time he inquires, the lawyers add attorney costs to his bill. In July, the lien included attorney fees of $472; by September it was $839. State law lets condo lawyers take their fees before turning payments over to associations.

Although the power in Weiss' townhouse is on again and the roof is fixed, the ceilings haven't been repaired and mold has become a major problem. The association tells Weiss that he might be able to move back around Christmas.

Bernice Klayman, president of Weiss' association, said the board needs almost $900,000 for repairs and insurance. It had to turn delinquents over to its law firm because "if we didn't, people wouldn't pay, and if they didn't pay, especially with no late fee on the assessment, how would we have the money to pay the contractors?"

Association directors, who must also pay the assessments, say they have no choice but to impose the special assessments. Forcing people to come up with extra money is never easy.

"You lose a lot of sleep over it," said Joel Leshinsky, president of the Inverrary Association of Lauderhill, which includes 31 condo and homeowner associations. "You have to make the hard decisions that enable you to protect everyone while remembering that you're not talking about doors or walls, you're talking about human beings.

"It's the crying I can't take from the 80-year-old woman in the walker who can't pay a $5,000 special assessment. It pulls on your heart, but you can't let your personal feelings be a factor. It's a tough thing to do."

Buying a home in a community with an association comes with the responsibility to maintain the commonly owned property, said Gary Poliakoff, whose Fort Lauderdale-based law firm represents 4,000 associations in Florida.

"Most unit owners do not appreciate the fact that they might be exposed to very burdensome common expenses," he said, especially insurance.

"Forty to 50 percent of the budgets of some associations now are going for insurance," Poliakoff said. "That's creating an enormous burden on boards."

Not every board is having problems.

The directors at the 235-unit Braemar Isle on the east side of the Intracoastal Waterway in Highland Beach needed almost $1 million. In March, they imposed an assessment that averages $4,000 per unit, due in July.

Almost everyone paid, said manager Mona Texeira, and the association took out a Small Business Administration loan to cover any extra expenses.

Statewide, boards are using several methods to collect special assessments. Some are telling owners to get it immediately any way they can. Others are borrowing money so they can pay expenses while letting owners pay them back over a longer period. Still others put off repairs until owners can get money.

State law requires boards to make their decisions in a specific way, Poliakoff said. In condos, owners must get personal notice of the meeting at which the special assessment will be considered. Boards must let owners see books and records with all backup information.

Condo owners who aren't told of the meeting or aren't allowed to see the books and records should file a complaint with the state Division of Florida Land Sales, Condominiums & Mobile homes or the condo ombudsman.

No state agency hears homeowner association complaints, so those owners must file lawsuits to see the books. The state does not track such suits.

Associations first file a lien against delinquents. If the owner doesn't pay, they have the option of filing a foreclosure suit.

When such suits are filed, owners can defend themselves in court, and judges usually try to get the parties to mediate their dispute. But if an owner loses the case or doesn't respond to the suit, the property is sold to the highest bidder. The money raised goes to pay the debt, with the owner getting anything left.

Joan Walter, a widow in her 70s, moved to the 7,200-unit Kings Point in Delray Beach 30 years ago from Brooklyn, N.Y., with her late husband, an upholsterer.

Walter's $271 monthly maintenance is going up $71, and the association just got word that its insurance is increasing $3.2 million for the year. That will add as much as $132 a month to the great-grandmother's costs.

"I've looked to get out but there is no place [to go]," she said. "I afforded it very well but I can't keep up with it. All I get is my late husband's Social Security. You think in old age you'll be comfortable and then this happens."

Some associations say they can tough it out.

Ron Pacella, president of Hollybrook Golf & Tennis Club in Pembroke Pines, says his board assessed each owner $1,700.

"Less than 100 of our 1,902 owners are dragging their feet, and if they don't pay by the end of the year, they will be liened for what they didn't pay," Pacella said. "Would we foreclose? No, we wouldn't do that. The lien would remain until they sell."

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