Article Courtesy of The Sun Sentinel

By Joe Kollin

Published November 14, 2007

Paying for cable TV will continue to be mandatory in condo and homeowner association communities where the boards have signed contracts for bulk service.

Some owners had hoped a much-anticipated Oct. 31 meeting of the Federal Communications Commission would result in voiding the contracts. They didn't want to be forced to pay for service they don't want or pay twice to get a service the association's contractor doesn't provide, such as high definition.

But the FCC ruled only that a single company can't have the exclusive right to provide video service in an apartment building or community association. Experts say that doesn't apply to most South Florida condo and homeowner associations because boards have bulk contracts, which are different.

"There is no reason to think that the FCC intended to nullify bulk contracts through this ruling," said Bradley J. Gross, a Fort Lauderdale attorney who specializes in business technology law.

Gross said he sat through the hearings and "at no time was it mentioned or even implied" that the agency intended to cancel bulk contracts.

Bulk contracts provide lower rates for individual owners, a more desirable selection of channels and often a channel for the community's own use. In exchange, everyone must pay via association dues. The association pays the cable company with one check, saving the firm the cost of sending individual bills.

Regulators did say they will hold public hearings at some unspecified future date to consider banning bulk contracts. But Gary Resnick, a Fort Lauderdale attorney who deals with telecommunications law, said he doesn't believe the FCC will ban them.

"Federal statutes provide for bulk contracts, so the FCC may not have authority to do anything," he said.

Since Congress made bulk contracts legal, the FCC's trying to make them illegal "might be akin to a child disobeying his parents' orders," Resnick said.

Gary Poliakoff, whose law firm represents condo and homeowner associations, warns that the FCC shouldn't ignore the benefits of bulk contracts.

"Common-ownership housing communities frequently use leverage of size to negotiate contracts to get things like dedicated channels, enhanced menus of services and better prices," he said. "Bringing competition sounds good, but in the end it might not be better for the consumer."

Meanwhile, a Boca Raton resident points out a problem with bulk contracts: Owners are being forced to pay for their neighbors' cable, not just their own.

"Those bulk contracts are no bargain when defaults and foreclosures rise, spreading the delinquents' cost for cable across the community ... making everyone else's actual payment much higher than those bulk discount rates belie," said the resident, who fears becoming an outcast in her community if she were identified.

If cable companies disconnect delinquents' service and reduce the association's bill proportionately, the discount might mean something, she said. But cable companies have no reason to do that because associations are bound by contract to pay a specific amount.

In her association of about 700 houses, she said, 31 owners are in arrears. At about $25 a month, that would be $9,300 a year that could be used to pay other expenses or to reduce everyone else's dues.

Q&A

Q. At Kings Point in Tamarac, an owner has always played pinochle in the clubhouse with fellow residents. As they die, he invites friends from outside Kings Point to the friendly games.

The board says that on days the clubhouse is busy, each owner is limited to one guest. Can the board fine him or take away his clubhouse privileges for bringing in more than one guest?

A. Robert A. White, a Coral Springs attorney who deals with association issues, said yes, boards can enforce such a rule as long as it doesn't benefit or penalize one individual or group.

"A rule that is universally enforced is certainly appropriate and if a majority of the owners disagree with the rule they can either convince the board to change it, or they can change the board," White said.