Article Courtesy of The St.
Petersburg Times
By Marlene Sokol
Published May 18, 2009
Homeowner associations, the de facto local
government in much of Florida, are getting desperate.
Assessment payments are as low as 50 percent in some
communities, causing some board members to consider measures that might
include publicly shaming those who are delinquent.
"When I tell you it is an unadulterated
nightmare out there, I mean it," said Harry Burnard, who owns
Qualified Property Management in New Port Richey, plus a side business
that fronts the dues and collects the debts.
The problem exists
nationwide, most notably in communities built during the
boom years.
"I haven't seen bake sales yet
or carwashes," said association attorney Robert
Tankel of Dunedin. "But I have suggested that people
who don't pay need to consider doing that. Sell their
flat-screen TVs."
Things are so bad that the
Southpointe condominium association in Orlando sent a
letter to all of its members, listing units with unpaid
dues.
"I thought I'd be getting a lot
more rotten eggs," said Malcolm Galvin, an attorney
for the association. "I was kind of amazed that most
of the feedback was favorable to the association." |
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Glen
Crest, a former condominium complex in New Port Richey,
experienced so many delinquencies and foreclosures that the
remaining owners could not pay the maintenance. Pretty soon they
all fell into foreclosure as well, and now the place is deserted.
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The urge to shame
Most area attorneys are advising their boards against
any kind of public humiliation. "The nature of communities anymore is
that nobody knows their neighbors anyway," Tankel said.
But it's been suggested at a lot of homeowner
meetings.
IKare community newsletter publisher Karen Uhlig, when
asked if she would have a problem with such a practice, said,
"Personally, not at all. But professionally, I'd have to check for
legal advice."
One of her clients, the Nassau Pointe townhome section
of New Tampa's Heritage Isles, could be among the first to publicize
delinquent accounts.
"We've been tossing the idea around," said
board member Barbara Adams. "We don't want to do it, but we're just
having little choice when they ignore us."
About 30 percent of her neighbors are not paying the
$228 monthly fee. "In our community, it covers cable and water,"
she said. Dues also pay to landscape the grounds and repair the roof.
Uhlig, who serves on two boards in her own Wesley
Chapel community, knows associations that are filing liens over very small
amounts. Tankel advocates suing quickly instead of waiting for banks to
foreclose, essentially beating them to the courthouse steps.
Some boards have members literally knocking on doors,
a practice attorneys discourage.
"You never know when you are going to meet Mister
Doberman, or Mister 9-millimeter," Tankel said.
There is a case on appeal where an association sued a
man who invited the president up to the roof for a frank discussion about
issues related to his condo, and was going to throw him off the roof, Tankel
added.
Tampa real estate attorney Court Terrell agreed.
"What you tend to be met with is a very angry
resident," he said. "People are strapped financially and under a
lot of stress."
Not surprisingly, lawyers advise boards to use the
legal process, beginning with a series of warning letters. At least half of
the time, members pay up when they realize that the association could
ultimately seize their home over a debt of $300 or $400.
"You can give up one Starbucks a week and pay
that," Tankel said.
But some associations can scarcely afford to pay the
attorney.
That's why Burnard says his Forclosure Solutions,
which makes its profit from late fees and interest, is in great demand.
"I have been approached by association after association after
association," he said.
The impact varies
Just what the dues pay for varies among communities,
as do the amounts and the impact when they go unpaid.
Uhlig's Barrington neighborhood, in Northwood, uses
dues largely for landscaping. She pays $69.96 per month. It used to be
$60.96, but the board had to raise the amount to make up for those who
didn't pay.
Terrell has heard of lists posted in condominium
lobbies.
"There are a lot of boards that have the urge,
and rightfully so, quite honestly," he said. "If everybody else is
paying and these people are still getting a lot of benefits, there is an
urge for folks to say, 'Here are our bad actors.' They are riding the
coattails, leeching off everyone else."
Complex 'imploded'
Even small debts can add up.
Southpointe, the Orlando complex, faced a deficit of
$90,000 and the prospect of a special assessment when it sent out the list
of delinquents, Galvin said.
In New Port Richey, things got so bad at the 32-unit
Glen Crest condominiums that pretty soon no one could afford the dues, said
Burnard, whose firm managed the place. "It just imploded on
itself," he said.
Part of the problem was a block of absentee owners who
bailed when housing values fell. One by one, the condos went into
foreclosure and the residents moved out. Today the complex stands
weed-strewn and empty, with boards on some of the windows.
While the Glen Crest situation is extreme, managers
and lawyers worry that basic services in many communities will suffer as
owners neglect their obligations.
"The community association operations are really
the privatization of local government," Tankel said. "Government
is getting out of the business of government."
Stepping into that role, he said, are volunteers who
are elected by their neighbors.
"They have no salary and they have to do what's
necessary to maintain the financial integrity in their communities,"
Tankel said. "And no one's bailing them out."
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