Was anybody outraged by the article that appeared in Sunday’s Miami Herald entitled Homeowner Associations Step Up Foreclosure Filings? I don’t know about you but our Courts are already clogged with Lenders filing foreclosure suits, do we really need Condo Associations and Homeowner Associations adding to the congestion with lawuits seeking to foreclose your home over some missed maintenance payments?
It is important for the readers to understand that instead of changing the governing documents to make it easier for owners to recoup their expenses by selling or renting their property, the Associations and their attorneys, are actually making it harder for individual owners to keep their properties from foreclosure.
Based upon the current economic climate and the collapse of Florida’s Real Estate Market, it is time to relax the leasing restrictions that make it impossible for owners to find qualified renters. One of my readers recently showed me an association’s amendment to the governing documents requiring prospective tenants to submit to a credit check. The amendment required prospective tenants to maintain a Credit Score over 700 in order to be approved! I would imagine that if they had a 700 Credit Score they would be buying the property and not renting.
While an Association seeking a foreclosure may get a foreclosing bank to pay back some of the past due maintenance, they cannot force them to run the air conditioning. As a Fort Lauderdale Condo Attorney that handles water damage and mold claims for owners, I have seen firsthand the severe mold contamination that can occur when properties are being maintained by banks and not the individual owners. Moreover, the mold does not just contain itself to one unit but spreads like a disease. The point is that Associations need to be looking into ways to help owners to keep their properties not look for ways to put them into foreclosure. I was appalled to read that at a recent meeting of Association Board Members and Association Attorneys the loudest applause came when an Association Attorney recommended that boards foreclose on units with past-due accounts, “the sooner, the better.” The Miami Herald and writer, Donna Gehrke-White should be ashamed at themselves for printing such a one sided story. Read the full article and decide for yourself if it is one sided: http://www.miamiherald.com/2011/02/05/2053040/condo-leaders-march-to-boot-camp.html#ixzz1DKuwkNl0
But what bothered me the most about the Herald article can be found in the following quote:
“State law allows community associations to rent foreclosed properties, even if the community’s documents prohibit owners from leasing units to tenants,”
I have been an attorney in Florida for over 20 years and am not aware of any Statutory or Case Law that expressly “allows community associations to rent foreclosed properties, even if the community’s documents prohibit owners from leasing units to tenants.” I can see how a weak argument could be made for this proposition. Florida Statutes Section 718.116 discusses an association’s power to purchase a property at a foreclosure and “hold, lease, mortgage, or convey it.” However, Section 718.111(9) of Florida’s Condo Act clearly states that the “association has the power, unless prohibited by the declaration, articles of incorporation, or bylaws of the association, to purchase units in the condominium and to acquire and hold, lease, mortgage, and convey them.” Although the language in the second sentence of 718.111(9) makes an exception by stating there “shall be no limitation on the association’s right to purchase a unit at a foreclosure sale” it does not extend this exception is silent to leasing. The plain reading of this section clearly would not allow an association to lease a purchased unit if the governing documents prohibit leasing, even if the unit were purchased at a foreclosure sale. Obviously this issue could present a case of first impression for Florida Courts. The offensive quote from the Herald Article has already sparked some lively debate. Jan Bergemann, President of Cyber Citizens for Justice (http://www.ccfj.net/ ), Florida’s largest state-wide property owners’ advocacy organization, raises an interesting question:
That would mean that peoples’ homes would be foreclosed because they were not allowed to rent it to save it from foreclosure, but then the association can rent out the same home after taking title at foreclosure?
The Miami Herald, Sun Sentinel and Palm Beach Examiner all published articles featuring Condo and Homeowner Association Issues solely from the perspective of Association Lawyers. The voices of the Individual Owners have yet to be heard. I welcome your voices here on this website and invite you to comment on these issues. I encourage you all to write a letter to the editor of these fine periodicals and ask that your voice be heard.