Despite
pleadings from unit owners, state legislators failed to produce any
relief for condo associations in the form of new foreclosure reform
during the most recent legislative session.
With so many units in foreclosure, condos are having difficulty coping
with a decline in the association fees owners are paying. Several
legislators spoke about providing help to condos at the beginning of the
session but ended up focusing on the state budget, a move condo
association attorneys and advocates cite as proof no one was willing to
stand up to banking lobbyists in Tallahassee.
"There was discussion of it, but it never made it to vote on the
floor," said Ken Direktor of the law firm Becker & Poliakoff.
"The voters should be aware this was presented and no one
[sponsored] it."
Assessment collection and mortgage liability are the two main issues
with which owners hoped to receive help. Banks are only required to pay
the association the lesser of 1 percent of the original mortgage amount
or six months of association fees – proof, association leaders say,
that bankers drag their feet taking titles.
"I think we'll come
back with it next year, but so will the banking lobbyists,"
Direktor said. "Some communities have up to 50 percent not paying.
How can you go on?"
Some condos have had their electricity and water shut off due to
financial hardship.
Julio Robaina, a prominent figure in condo law during his career as a
state representative, hoped to increase a lender's liability for late
payments for up to two years while offering incentives for those who
initiate a foreclosure, but his bill failed. Other bills would have
increased lender liability to the lesser of 12 months of past-due fees
and special assessments or 20 percentage of the mortgage. Lenders would
lose the cap protections if they failed to pay the association with 30
days of taking title.
In a survey by the Community Association Leadership Lobby, conducted in
January and February, 90 percent of the 1,589 participants said first
mortgagees should pay more after they obtain title through foreclosure,
and more than half complained about the number of vacant homes in their
communities. Lisa Magill, president of CALL, wrote in a blog during the
height of the legislative session in February that "from the
community association's perspective, lenders are insulated from falling
home prices while bills for insurance, property maintenance, management
and other expenses must be paid."
One respondent to the CALL survey complained about community
associations receiving "the short end of the stick," while
elected officials "give in to the demands of the lobby groups of
the banking industry."
"Florida has always been the leader in condo law," Direktor
said. "There was nobody with the political will to take on the
banking lobbyists."