FINALLY - A REMEDY THAT WORKS FOR ASSOCIATIONS

Over the last several years, the issue of delinquencies in our Florida community associations became worse and worse.  The more people didn’t pay, the more the good paying owners had to pay.  The more bank foreclosures, the less the association was receiving in badly needed revenue.

The real solution to the problem was changing the law to make a bank pay more money to the association when they foreclose on a property and then become the owner of that property after a foreclosure sale, instead of capping the bank’s liability at one year of unpaid assessments or 1% of the original amount of the mortgage.  Because of the banking industry’s power in the State of Florida, that simply never had a chance of happening.

Instead of taking the fight to the banks, The Florida Legislature created laws that took the fight from the association to the unit owners.  For example, there were laws passed that now prevented unit owners from using the common areas if they were delinquent, prevented them from running or serving on the Board and prevented them from voting.  In other words, if someone owed the association $10,000.00 in unpaid assessments, this new law that prevented the unit owner from now using the exercise room, was somehow going to make that delinquent owner pony up the $10,000.00 so he can now continue use of the treadmill.

At seminar after seminar, I am told that these new laws didn’t put any dollars in the hands of the association and that while they sounded nice, were simply not enough of a stimulant to get people to pay their delinquent assessments.

Finally though, a law was passed that had teeth.  This law directly went after the worst violator, the unit owner who owns a unit, rents it out, keeps the rent and stiffs the association.  In both condos and HOAs, the law provides:

If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligation due to the association, the association may make a written demand that the tenant pay to the association the subsequent rental payments and continue to make such payments until all monetary obligations of the unit owner related to the unit have been paid in full to the association. The tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit.

1. The association must provide the tenant a notice, by hand delivery or United States mail, in substantially the following form:

Pursuant to section 718.116(11), Florida Statutes, the association demands that you pay your rent directly to the condominium association and continue doing so until the association notifies you otherwise.

Payment due the condominium association may be in the same form as you paid your landlord and must be sent by United States mail or hand delivery to   (full address)  , payable to   (name)  .

Your obligation to pay your rent to the association begins immediately, unless you have already paid rent to your landlord for the current period before receiving this notice. In that case, you must provide the association written proof of your payment within 14 days after receiving this notice and your obligation to pay rent to the association would then begin with the next rental period.

Pursuant to section 718.116(11), Florida Statutes, your payment of rent to the association gives you complete immunity from any claim for the rent by your landlord for all amounts timely paid to the association.

2. The association must mail written notice to the unit owner of the association’s demand that the tenant make payments to the association.

3. The association shall, upon request, provide the tenant with written receipts for payments made.

4. A tenant is immune from any claim by the landlord or unit owner related to the rent timely paid to the association after the association has made written demand.

(b) If the tenant paid rent to the landlord or unit owner for a given rental period before receiving the demand from the association and provides written evidence to the association of having paid the rent within 14 days after receiving the demand, the tenant shall begin making rental payments to the association for the following rental period and shall continue making rental payments to the association to be credited against the monetary obligations of the unit owner until the association releases the tenant or the tenant discontinues tenancy in the unit.

(c) The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the landlord in the amount of moneys paid to the association.

(d) The association may issue notice under s. 83.56 and sue for eviction under ss. 83.59-83.625 as if the association were a landlord under part II of chapter 83 if the tenant fails to pay a required payment to the association after written demand has been made to the tenant. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no obligations under s. 83.51.

(e) The tenant does not, by virtue of payment of monetary obligations to the association, have any of the rights of a unit owner to vote in any election or to examine the books and records of the association.

(f) A court may supersede the effect of this subsection by appointing a receiver.

 

I have seen this law work well for community associations.  I personally encourage the use of this statute whenever possible because it hits the landlord in the pocket book and often times gets results.  It certainly gets a lot better results than threatening a delinquent owner with the inability to run for the Board.  In fact, there may be some Board members out there right now who would gladly pay to get of the Board.

 

P.S. Our Board Certification Seminar is now out for 2015 and we will be all over the state.  To register at a location near you, please go to: www.condocrazeandhoas.com.

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