Article Courtesy of The Orlando Sentinel

By Mary Shanklin

Published February 8, 2013

Homeowners behind on their community-association dues would have to make good on the full amount before fighting the charges, under proposed legislation that would also bring state oversight to Florida's homeowner associations.

Sen. Alan Hays, R-Umatilla, filed a bill this week that would essentially fast-track community associations' ability to foreclose on houses or condo units with unpaid dues. If a homeowner did not deposit the unpaid balance in a special registry as directed by a court, the association could foreclose immediately on the house. Currently, owners can contest associations' charges in a process that can stretch out for years.

One grass-roots group supports Hays' proposal as a way to shore up the finances of homeowner associations, which were hit hard by the housing slump and recession, during which large numbers of investors and other owners failed to pay their HOA dues.

In response to the drop in revenue, community associations cut back on spending and are now more likely to foreclose on properties in hopes of forcing payment. Meanwhile, a community's dues-paying owners have had to shoulder more of the association's operating costs in place of the delinquent owners.

"If you want to fight and prolong it, you have to pay up first," said Jan Bergemann, president of the nonprofit Cyber Citizens for Justice, a DeLand-based focused on associations. "… They somehow have $2,000 to pay for a defense attorney, who will only prolong the process when there really is no defense for not paying."

The pay-up-now proposal is just one provision of a bill that also would make the state Department of Business and Professional Regulation responsible for Florida's least-regulated form of government: homeowner associations. An estimated 60,000 subdivisions, neighborhoods and developments across the state are governed by such associations.

Hays said Wednesday that the bill is a starting point for discussion and subject to amendments, but he said he wants to level the playing field in the way associations are governed.

"My purpose in sponsoring the bill is to try to establish more fairness in the homeowner-association community and try to have a better balance between the residents and the developers," he said.

The bill calls for homeowners in an association to pay $4 annually to cover the costs of state regulation and oversight, including a government ombudsman for associations. The bill also calls for associations to have secret-ballot elections for board members. Homeowners now can show up for their first association meeting and find themselves elected to their board with a simple raising of hands.

The bill would also prohibit board members from serving if they have been charged with a felony related to association business. For example, in Polk County's Bimini Bay development, not far from Walt Disney World, developer David Meadows continues to serve on the association board despite his arrest in September on four felony charges related to theft, fraud and embezzlement from the organization.

"That's needed because, especially when a state attorney has evidence against a person that they are stealing from the HOA, why should they be allowed to continue serving on the HOA?" asked Bimini Bay resident Cathi Mead. "It's not right."

A group of Bimini Bay homeowners has been withholding HOA payments since Meadows' arrest.

Fort Lauderdale lawyer Donna Berger, who specializes in homeowner associations, said she is skeptical of some provisions in Hays' bill and wants to study it further. She said the Community Advocacy Network, a group for homeowner associations, is surveying its members to determine their views on it.

Among other things, she questioned forcing delinquent homeowners to immediately pay all of their back dues before allowing them to challenge whether they actually owe that money.

"Is that really consumer-friendly?" she asked. "What if there are reasons they are contesting — because they never got notified, the special assessment wasn't properly passed or the management company is off by thousands of dollars? Yes, that happens."