An Opinion By Jan Bergemann 
President, Cyber Citizens For Justice, Inc.

Published March 27, 2012



Looking back at the legislative debate over HOUSE BILL 319 two things stand out:

  1. The attempt of the proponents of the Safe Harbor provisions to make it look like the amendments were just clarifying existing law.

  2. The claim of many legislators and proponents that there are many good provisions in the bill that would really help associations.

Both arguments in favor of H319 are fundamentally flawed!

You may ask why is he still talking about this bill after it unceremoniously died in the Florida Senate?

Easy explanation: The bill will be back next year, because the banks will not rest until they get more concessions from the legislature to protect themselves against liabilities caused by their own defective lending practices that caused the whole financial disaster.


Representative George Moraitis (R-District 91) made an attempt to make his bill look favorable when explaining his bill to the members of the Judiciary Committee. 


Many members of the Judiciary Committee agreed with him and claimed that there are many good provisions in the bill. 


Representative Charles McBurney (R-District 16), an attorney saying that he practices "some" in the area, went out of his way to praise the bill that contained provisions that are (his words) "very favorable for associations."


I contacted some of the legislators who claimed that there are "association-friendly" provisions in H319. 


Guess what? I either got no answer at all -- or just some general statements.

Rep. George Moraitis (R-District 91) 

Explanation of H319


No matter how these explanations were phrased, under the line most of these provisions wee seriously flawed, often caused by the wording created by the "experts" who wrote the bill. 

Make no mistake: In my opinion not one of the provisions in the bill was really association/owner friendly. Even the provisions that contained good "intentions" were so miserably worded that they would have done more harm than good!

Not all members of the Judiciary Committee bought Moraitis's explanation. Representative Ray Pilon (R-District 69), who has lived in homeowners' associations and condominium associations, made that very clear when he said: "I'm not convinced that to take one part that helps associations we are taking away the other side, some that will benefit."


Transcript Rep. Ray Pilon:  

"Well, I'm not an attorney, I don't practice in this area, but I am a member of a homeowners' and condominium association. And the previous one where I lived had over 1200 units. And right now, I'm not convinced that if you take one part that helps those associations, we're taking away on the other side some of their benefit. So I'm not happy with the fact that we are giving something good in this bill -- I think there is a lot good in this bill -- and I'm not satisfied with the debate going on what the other issue is that we've talked about ad infinitum here.


 So, I'm not going to be able to support the bill today for maybe the same reasons that some say

Rep. Ray Pilon (R-District 69)


they are going to support that want you to go forward and try to work this out. But I have seen lines drawn in the sand. You and I have talked -- I've been leaning and leaning, but I always want to make my decisions based on my feelings and my conscience, on what this bill is going to do. If you can not -- if these two sides can not get together with some further compromise, I don't think we've got enough time and I'm gonna end up on the floor hearing the same thing without any of this coming to conclusion. So, only for that reason -- 'cause there are a lot of great things in this bill that I like, but I just can't in good conscience vote for your bill today -- and I apologize for that to you."


But the real debate over the Safe Harbor amendments heated up in an exchange between Representative Richard Steinberg (D-District 106) and bill sponsor George Moraitis. Rep. Steinberg definitely asked questions that were never properly answered. But the main question that was left unanswered: "Why are we letting the banks off the hook?"


Transcript: Rep.Steinberg/Rep.Moraitis:
Steinberg: "...if associations had to incur legal fees -- uh, and I understand it's their choice -- but if they were faced with the situation of we can either incur legal fees and try to get title to the apartment while the bank is not doing it, while the bank is stalling the foreclosure or we can just get nothing and know that the banks are going to end up with the cap they have in place. If they make the decision to take on litigation because the bank is not moving diligently on the foreclosure, why should the bank be let off the hook for having to incur that cost that some courts have determine that they have to incur?"

Moraitis: "Again, when the association decides to foreclose its assessment lien they are doing it for

Rep. Richard Steinberg (D-District 106)


their own benefit. They are not doing it to rent the property and start paying the bank's mortgage. They would be doing it ostensibly to rent the unit and collect the rent themselves until the bank finally gets around to foreclosing it. So, I wouldn't agree that that would be relevant as to why the bank should either pay or not."

But the facts became really distorted when Michael Fields, lobbyist for the Bank of America, took the podium.  His statement: "This is not a change in the law, this is a clarification of the statute that is been in place since 1992" is factually absolutely wrong.


Transcript of Presentation by

Michael Fields (Bank of America):
Good morning, Mr. Chairman, I will be very, very brief. This is not a change in the law; this is a clarification of the statute that's been in place since 1992. 


I was part of the group that negotiated this part of the Condominium Study Commission to, to, at that point, have the lenders have two things: One, some responsibility to the condominium association in terms of protection of collateral; but two, to have certainty as to what their risks are. Any time you inject additional uncertainty as has come about recently, you impact two things: You impact either the availability of credit or the cost of that credit. And that has a significant impact on values. I would ask that you support the bill."

Michael Fields (Lobbyist) - Proponent
Florida President, Bank of America



Fields may be correct when it comes to condominium law (FS718), but his statement is absolutely wrong for homeowners' association law (FS720). Fields seems to ignore the fact that until 2007 -- after the foreclosure crisis already started -- there was NO Safe Harbor protection for banks in the existing statutes regulating homeowners' associations. FS 720.3085 was only added to FS 720 in the 2007 legislative session by Senate Bill 1844. Meaning, it's definitely not long- established law. Some attorneys even question if this law should be applied retroactively for mortgages that already existed before the provisions of the bill went into effect on July 1, 2007. Isn't a contract a contract?


Hopefully, next year cooler heads will prevail. We can only hope to see two bills running through the legislature:

  1. One bill that deals with all the issues that HELP ASSOCIATIONS/OWNERS deal with the daily problems our communities are facing on a daily basis; with provisions that will really help the still paying owners who are in financial distress caused by foreclosures and lack of consumer protection. 

  2. One bill that deals with the attempt to BAILOUT BANKERS.

That would make it even more clear who is for -- and who is against -- community association members. No more hiding behind fancy talk!


Representative Ray Pilon made it pretty clear: It makes no sense to have one bill that is favorable for associations, but contains provisions that take away things that help associations.


No matter what, we all should always remember the question Representative Steinberg asked bill sponsor Representative Moraitis: "If legal fees aren't paid by the bank, wouldn't the end result be that the legal fees have to be borne by the association and those who are paying the fees, those that are not in foreclosure, but those that are being good citizens within the association?"


That's actually not really a question; that's actually a fact that nobody can deny! Let's make no mistake: The two big law firms that supported the Safe Harbor provisions -- Becker & Poliakoff (CALL) and Katzman Garfinkel & Berger (CAN) -- are not the welfare office. They would not waive their legal bills because the associations can no longer collect them from banks and mortgage lenders. 


Representative Steinberg was 100% correct when he said that the burden of paying these legal fees would be borne by the good citizens who are still paying their association fees. And they are definitely the least guilty parties in this foreclosure disaster caused by the same entities that some legislators want to bail out, since they are counting on their campaign fund contributions!