Relevant Items That Passed
SB 1196 contains numerous changes to existing condominium law. Among some of the more significant changes that will save condominium associations a great deal of money during the current economic downturn are the following:
- Delaying the date by which a condominium must retrofit its elevators for Phase Two Firefighter Services until July 1, 2013;
- Providing a condominium association the ability to opt out of retrofitting common areas with sprinklers with a majority vote of the voting interests of the condominium;
- Allowing condominiums to collect rent from tenants in delinquent units;
- Clarifying that the candidate certification form must be returned after the election is held not before;
- Removing the ability of a condominium board to buy or “force place” missing owner H0-6 insurance policies and removes the requirement that the association be added as an additional insured and loss payee on those individual owner policies;
- Providing certain protections for “bulk buyers’ who purchase more than 7 units in failed or floundering condominium projects
- Protecting certain sensitive information such as email addresses and personnel information from unit owner inspection requests.
Perhaps the most significant benefit conferred by SB 1196 is that it DOUBLES the amount of money banks owe to a condominium association in the case of a foreclosure from 6 months of a unit’s unpaid common expenses and regular periodic assessments or 1% of the original mortgage debt, whichever is lower, to 12 months of a unit’s unpaid common expenses and regular periodic assessments or 1% of the original mortgage debt, whichever is lower.
Relevant Items That Failed
SB 164 Relating to Foreclosure of Condominium Units
The bill would have required a first mortgagee to pay a certain portion of unpaid assessments to the condominium association prior to the transfer of title under certain circumstances. The bill had no companion and was never heard in committee.
HB 329 Relating to Condominium Foreclosures
This bill would have made several changes regarding condominium foreclosures, including requiring any condominium tenant to pay their landlord’s assessments via giving the condominium association all of or a portion of their rent payment if the landlord is over 30 days past due in paying assessments, denial of use of a condominium if an owner is more than 90 days past due to the condominium association, and increasing the amount of money owed to a condominium association by a bank in the case of a foreclosure. The bill was heard in the Civil Justice and Courts Policy Committee and defeated 9 to 4.
SB 1196 will be a tremendous help allowing Community Associations that are funded by residents / owners. Unfortunately it will not be a windfall answer to the owners who will still be on the hook for delinquent owners who fail to pay. This is why I am a big advocate to my current clients who have fallen on hard times, to stay current on the community assessments. While Home Owners Associations and Condo Associations are despised by many, owners who elected to purchase a home that involves one are legally responsible to maintain their accounts current, and the failure to pay is just as bad as stealing money from their neighbors. This is not my condoning all H. O. A.’s and C.A.’s because quite often many are improperly run by persons with specific agenda’s but a simple fact remains that many do serve a purpose where local governments are failing or have failed to maintain standards.
Unfortunately with the inability of SB 164 & HB 329 to pass, banks are getting a free ride in many cases leaving the H. O. A. or Condo Association high and dry for an extended period of time. With the number of associations in Florida, I think it wise to eventually looking at the requirement for these assessments to be escrowed similar to taxes and insurance as part of the mortgage payment. This would ensure that communities are properly and equally funded by all homeowners who purchase dwellings belonging to associations. It would still be up to the buyer to decide to purchase or not purchase as well as lenders to finance or not finance if they so wish.