Article Courtesy of The Miami Herald

By SUSANA MONTES-DELGADO

Published August 16, 2009 

A troubled Northwest Miami-Dade condo development seeks a new strategy to collect payments from delinquent owners.

Dealing with an ongoing crisis, the company that manages cash-strapped Mirassou Condominium wants to start a blanket receivership system to collect association fees from deadbeat owners.

Concerned residents and their families gathered at the Northwest Dade condominium's clubhouse for a board meeting Monday evening. An attorney representing property managers talked about the new legal strategy the company wants to adopt to collect assessments.

As budgets continue to worsen in South Florida condo associations, Mirassou's situation underscores the consequences communities are facing when unit owners enter foreclosure and discontinue paying association fees. Those fees normally cover flood and hazard insurance, maintenance, utilities and garbage collection.

By law, South Florida condominiums are required to have master hazard and flood insurance, which covers common areas and the exterior of the buildings.

But Mirassou doesn't have any.

The hazard insurance expired six months ago and the flood insurance expired in July, residents are saying.

Angelica Young, an attorney representing Florida Property Management, the company that manages Mirassou, said she did not know when the policies expired.

Four months ago, Miami-Dade County turned off the water to the 310-unit building , due to nonpayment of utilities. The water was reinstated after the condo settled an agreement with the county.

Young explained that the blanket receivership collection would allow the association to file for an emergency petition in the Miami-Dade County Court and then go after owners who rent their apartments, but do not pay their assessments.

"I want to bring as much money to this community in a creative and legal manner,'' Young said.

Assuming the court approves and appoints blanket receivership at Mirassou, a third party or "receiver'' could ask tenants for their rent, and leave the deadbeat landlord out of the equation, Young said. The receiver would file a report with the court every quarter.

Florida's Third District Court of Appeal ruled in favor of this strategy last month to help community associations collect rents and fees from delinquent owners. At least 18 condo associations in Miami-Dade and Broward counties use blanket receivership.

At Monday's meeting, Young said the condominium has a $70,000 deficit, but she did not offer specifics. She could not be reached when contacted for further comments.

Out of the 310 units in Mirassou, 172 are in foreclosure. And residents are concerned that this is not the end of it.

"The waves keep piling up. In the midst of hurricane season we are left without hazard insurance,'' said Katherine Rivera, a resident of Mirassou who attended the meeting. "Our community is being maintained by almost half of the owners that are left.''

When a community association has no insurance, owners cannot sell or rent their property.

The situation could also give rise to a claim from an individual owner against the board, the association or the manager, said Rosa De La Camara, an attorney at Becker and Poliakoff who specializes in community association law.

"Residents could file a lawsuit against the board members when there is no insurance and there is an accident. The management company would need to pay from its own pocket.''

To get insurance, Mirassou's board members said they would pass a special assessment to those owners who do pay their fees. They did not give a date when the assessments would start.

The management company spokeswoman told residents she received bids from three insurance companies, ranging from $87,000 to $90,000 per year. She asked residents to help out and find better options.

The cost of the insurance premium would be divided among 132 units that are still occupied.

"Owners would have to pay approximately $252 for three months to get the insurance back,'' said Silvia Hernandez, administrative director of Florida Property Management, who attended the meeting. "There is no other way around it.''

This money would be in addition to the approximately $230 per month in association fees that owners already pay, she said.

Residents said they could not afford an additional assessment and that the association has not been responsive to their concerns. Apart from the insurance, the condominium has also incurred more than $12,000 in code violations that still need to be paid, Rivera said.

"In a working-class community, this is not easy,'' Rivera said.

"I am a divorced parent of a 15-year-old. I invested my life's savings in order to give my son a safe decent place to live. Without hazard insurance, we could be left homeless.''

Miami-Dade water department turns off condo's water